<PAGE>
As filed with the Securities and Exchange Commission
on April 19, 1996
1933 Act Registration Number 33-24263
1940 Act Registration Number 811-5661
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ / /
Post-Effective Amendment No. 12 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 15 /X/
------------------
Weitz Series Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
Suite 600
1125 South 103 Street
Omaha, NE 68124-6008
(Address of Principal Offices)
Registrant's Telephone Number, including Area Code:
402-391-1980
Wallace R. Weitz
Suite 600
1125 South 103 Street
Omaha, NE 68124-6008
(Name and Address of Agent for Service)
------------------
Copies of all communications to:
DONALD F. BURT, ESQ.
Cline, Williams, Wright, Johnson & Oldfather
1900 FirsTier Bank Building
Lincoln, NE 68508
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective.
It is proposed that this filing will become effective immediately upon filing,
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933.
The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Registrant last filed a Rule 24f-2 Notice on or about May 12,
1995.
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- --------------------------------------------------------------------------------
<PAGE>
THIS AMENDMENT IS BEING FILED SOLELY TO AMEND EXHIBITS
5(a), 5(b), 5(c), 5(d) AND 14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 19th day of April,
1996. By execution hereof, the undersigned hereby certifies that this Post-
Effective Amendment meets all the requirements for effectiveness under Rule
485(b) of the Securities Act of 1933.
WEITZ SERIES FUND, INC.
By: /s/ Wallace R. Weitz
-----------------------------------
Wallace R. Weitz, President
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in the
capacities indicated on April 19th, 1996:
Signature Title
--------- -----
/s/ Wallace R. Weitz President, Principal Executive Officer,
- ----------------------------------- Principal Financial and Accounting
Wallace R. Weitz Officer and Director
/s/ John W. Hancock Director
- -----------------------------------
John W. Hancock
/s/ Thomas R. Pansing, Jr. Director
- -----------------------------------
Thomas R. Pansing, Jr. /s/ Wallace R. Weitz
---------------------------
Wallace R. Weitz
Attorney-in-fact
/s/ Carroll E. Fredrickson Director
- -----------------------------------
Carroll E. Fredrickson
/s/ Richard D. Holland Director
- -----------------------------------
Richard D. Holland
<PAGE>
Exhibit No. Description
----------- -----------
5.(a) Management and Investment Advisory Agreement
-Fixed Income Portfolio
5.(b) Management and Investment Advisory Agreement
-Value Portfolio
5.(c) Management and Investment Advisory Agreement
-Government Money Market Portfolio
5.(d) Management and Investment Advisory
Agreement-Hickory Portfolio
14. Prototype Individual Retirement Account
<PAGE>
EXHIBIT 5(a)
INVESTMENT ADVISORY AGREEMENT - FIXED INCOME
<PAGE>
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This amended and restated Agreement dated February 2, 1996 amends and
restates the Agreement dated September 12, 1988 between WEITZ SERIES FUND, INC.,
a Minnesota corporation (hereinafter called "Fund") and WALLACE R. WEITZ &
COMPANY, a Nebraska corporation (hereinafter called "Adviser");
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT OF INVESTMENT ADVISER
The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Fixed Income Portfolio and to administer Fund's
affairs, subject to the supervision of the Board of Directors of the Fund for
the period and on the terms set forth herein. The Adviser hereby accepts such
appointment and agrees during such period, at its own expense, to render the
services and to assume the obligations herein set forth, for the compensation
herein provided. The Adviser shall not be liable to the Fund for any act or
omission by the Adviser or for any losses sustained by the Fund or its
shareholders except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
2. DUTIES AND EXPENSES OF ADVISER AND FUND
(a) The Fund shall, at all times, inform Adviser as to the securities held
by it, the funds available or to become available for investment by it, and
otherwise as to the condition of its affairs.
(b) Adviser shall furnish to the Fund and specifically to the Fixed Income
Portfolio, at the regular executive offices of the Fund, advice and
recommendations with respect to the purchase and sale of securities and
investments and the making of commitments; shall place at the disposal of the
<PAGE>
Fund such statistical, research, analytical and technical services, information
and reports as may reasonably be required; shall furnish the Fund with office
facilities in the offices of the Adviser, including space, furniture and
equipment and supplies; and with administrative, clerical and bookkeeping
personnel; and in general shall superintend the affairs of the Fund, subject to
the supervision of the Board of Directors of the Fund. The Adviser shall also
pay or reimburse the Fund for the compensation, if any, of the officers of the
Fund.
The officers of the Fund or the Adviser shall use their best efforts to
obtain the most favorable execution available from brokers or dealers in
purchasing and selling securities. In so doing, such officers may consider such
factors which they may deem relevant to the Fund's best interest, such as price,
the size of the transaction, the nature of the market for the security, the
amount of commission, the timing of the transaction taking into account market
prices and trends, the reputation, experience, and financial stability of the
broker-dealer involved and the quality of service rendered by the broker-dealer
in other transactions. Subject to the foregoing considerations, at the Fund's
expense, such officers may place orders for the purchase or sale of portfolio
securities with brokers or dealers who have provided research, statistical or
other financial information and services to the Fund or the Adviser. Such
officers shall have discretionary authority to utilize broker-dealers who have
provided brokerage and research information of the type or nature referred to in
Section 28(e) of the Securities Exchange Act of 1934 to the Fund or the Adviser
even though it may result in the payment by the Fund of an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction,
providing, however, that the Fund officers have determined in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and
-2-
<PAGE>
research services provided by the broker-dealer effecting the transactions,
viewed in terms of either that particular transaction or their responsibilities
with respect to the accounts for which said officers exercise investment
discretion.
(c) Except as otherwise expressly provided herein, the Fund shall pay the
following items:
(1) the charges and expenses of any custodian or depository appointed
by the Fund for the safekeeping of its cash, securities and other property;
(2) the charges and expenses of auditors for the Fund;
(3) the charges and expenses of any transfer agents and registrars
appointed by the Fund;
(4) broker's commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is a
party;
(5) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies;
(6) the cost of stock certificates representing shares of the Fund;
(7) compensation of the directors of the Fund (other than directors
who are officers of the Adviser), and all expenses of Fund shareholders'
and directors' meetings and of preparing, printing and mailing reports to
shareholders of the Fund;
(8) charges and expenses of legal counsel for the Fund in connection
with legal matters relating to the Fund, including without limitation,
legal services rendered in connection with the Fund's corporate existence,
corporate and financial structure, relations with its stockholders and the
issuance of securities; and
(9) all other costs, charges and expenses of the Fund, without
limitation.
-3-
<PAGE>
3. FEES OF ADVISER
For the services and facilities to be furnished by the Adviser hereunder,
the Fund shall, commencing with the effective date of the first public offering
of shares of the Fund, pay Adviser an annual fee equal to one-half percent
(1/2%) of the average net asset value of the Fixed Income Portfolio as
ascertained on each business day and paid monthly.
The compensation for the period from the effective date hereof to the next
succeeding last day of the month shall be prorated according to the proportion
which such period bears to the full month ending on such date, and provided
further that, upon any termination of this Agreement before the end of any
month, such compensation for the period from the end of the last month ending
prior to such termination to the date of termination, shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. For the purpose of the Adviser's
compensation, the value of the Fund's net assets shall be computed in the manner
specified in its Articles of Incorporation or By-Laws in connection with the
determination of the net asset value of its shares.
4. INDEPENDENT CONTRACTOR
Adviser shall, for all purposes herein, be an independent contractor and
shall have no authority to act for or represent the Fund in its investment
commitments unless otherwise provided. No agreement, bid, offer, commitment,
contract or other engagement entered into by Adviser whether on behalf of
Adviser or whether purported to have been entered into on behalf of the Fund
shall be binding upon the Fund, and all acts authorized to be done by Adviser
under this Agreement shall be done by it as an independent contractor and not as
agent.
-4-
<PAGE>
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing shall restrict the right of Adviser or any of its directors,
officers, or employees who may be directors, officers or employees of the Fund
to engage in any other business or to devote time and attention to the
management or other aspects of any other business whether of a similar or
dissimilar nature or to render services of any kind to any other corporation,
firm, individual or association. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services hereunder be not
impaired thereby.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective on the effective date of the first
public offering of the Fund's shares, and shall continue in effect unless sooner
terminated as herein provided until March 31, 1990, and thereafter shall
continue in effect only if approved at least annually: (a) by the Board of
Directors of the Fund; or (b) by the vote of a majority of the outstanding
shares of the Fund (as defined in the Investment Company Act of 1940) and, in
addition, (c) by the vote of a majority of the directors of the Fund who are not
parties hereto nor interested persons of any party, as required by the
Investment Company Act of 1940, provided that the first such approval by
directors under (a) or (c) shall take place within ninety days prior to March
31, 1989, and each subsequent annual approval shall take place within ninety
days prior to March 31 in each year thereafter, and if approval made by vote of
shareholders, such approval shall be made at a meeting held prior to March 31 in
any calendar year, and each such approval whether under (a) and (c) or under (b)
and (c) shall be effective to continue such contract for a period ending March
31 of the next succeeding year.
-5-
<PAGE>
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by a vote of a majority of
the outstanding voting securities of the Fund, in either case upon not less than
sixty (60) days' written notice to Adviser, and it may be terminated by Adviser
upon sixty (60) days' written notice to the Fund.
7. ASSIGNMENT OF AGREEMENT PROHIBITED
This Agreement will automatically be terminated in the event of its
assignment. It may not be transferred, assigned, sold, or in any manner
hypothecated or pledged; nor may any new agreement become effective without the
affirmative vote of a majority of those directors of the Fund who are not
parties to such Agreement or interested persons of any such party, and ratified
by a vote of the majority of the outstanding voting securities of the Fund,
provided that this limitation shall not prevent any minor amendments to the
Agreement which may be required by federal or state regulatory bodies.
8. INTERESTED PERSONS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Adviser (or any successor thereof) as
directors, officers, agents, stockholders or otherwise; that directors,
officers, agents, and stockholders of the Adviser are or may be interested in
the Fund as directors, officers, agents, stockholders or otherwise; and that the
Adviser (or any such successor) is or may be interested in the Fund as
stockholder or otherwise.
9. DEFINITIONS
For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person" and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940 as now or hereafter in effect.
-6-
<PAGE>
10. PROPRIETARY INTEREST OF ADVISER
The parties hereto acknowledge and agree that the name "Weitz" is
proprietary to and the sole and exclusive property of the adviser. Adviser
hereby licenses the use of the name "Weitz" to the Fund for a term concurrent
with the term of this Agreement. From and after a date which is one hundred
eighty (180) days after the termination of this Agreement, Fund shall not do
business under any name containing the word "Weitz" without the prior written
consent of Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
WEITZ SERIES FUND, INC.
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Secretary
WALLACE R. WEITZ & COMPANY
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Assistant Secretary
-7-
<PAGE>
EXHIBIT 5(b)
INVESTMENT ADVISORY AGREEMENT - VALUE
<PAGE>
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This amended and restated Agreement dated February 2, 1996 amends and
restates the Agreement dated March 10, 1995 between WEITZ SERIES FUND, INC., a
Minnesota corporation (hereinafter called "Fund") and WALLACE R. WEITZ &
COMPANY, a Nebraska corporation (hereinafter called "Adviser");
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT OF INVESTMENT ADVISER
The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Value Portfolio (the "Portfolio") and to
administer its affairs, subject to the supervision of the Board of Directors of
the Fund for the period and on the terms set forth herein. The Adviser hereby
accepts such appointment and agrees during such period, at its own expense, to
render the services and to assume the obligations herein set forth, for the
compensation herein provided. The Adviser shall not be liable to the Fund for
any act or omission by the Adviser or for any losses sustained by the Fund or
its shareholders except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
2. DUTIES AND EXPENSES OF ADVISER AND FUND
(a) The Fund shall, at all times, inform Adviser as to the securities held
by it, the funds available or to become available for investment by it, and
otherwise as to the condition of its affairs.
(b) Adviser shall furnish to the Fund, at the regular executive offices of
the Fund, advice and recommendations with respect to the purchase and sale of
securities and investments and the making of commitments; shall place at the
disposal of the Fund such statistical, research, analytical and
<PAGE>
technical services, information and reports as may reasonably be required; shall
furnish the Fund with office facilities in the offices of the Adviser, including
space, furniture and equipment and supplies; and with administrative, clerical
and bookkeeping personnel; and in general shall superintend the affairs of the
Fund, subject to the supervision of the Board of Directors of the Fund. The
Adviser shall also pay or reimburse the Fund for the compensation, if any, of
the officers of the Fund.
The officers of the Fund or the Adviser shall use their best efforts to
obtain the most favorable execution available from brokers or dealers in
purchasing and selling securities. In so doing, such officers may consider such
factors which they may deem relevant to the Fund's best interest, such as price,
the size of the transaction, the nature of the market for the security, the
amount of commission, the timing of the transaction taking into account market
prices and trends, the reputation, experience, and financial stability of the
broker-dealer involved and the quality of service rendered by the broker-dealer
in other transactions. Subject to the foregoing considerations, at the Fund's
expense, such officers may place orders for the purchase or sale of portfolio
securities with brokers or dealers who have provided research, statistical or
other financial information and services to the Fund or the Adviser. Such
officers shall have discretionary authority to utilize broker-dealers who have
provided brokerage and research information of the type or nature referred to in
Section 28(e) of the Securities Exchange Act of 1934 to the Fund or the Adviser
even though it may result in the payment by the Fund of an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction,
providing, however, that the Fund officers have determined in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and
-2-
<PAGE>
research services provided by the broker-dealer effecting the transactions,
viewed in terms of either that particular transaction or their responsibilities
with respect to the accounts for which said officers exercise investment
discretion.
(c) Except as otherwise expressly provided herein, the Fund shall pay the
following items:
(1) the charges and expenses of any custodian or depository appointed
by the Fund for the safekeeping of its cash, securities and other property;
(2) the charges and expenses of auditors for the Fund;
(3) the charges and expenses of any transfer agents and registrars
appointed by the Fund;
(4) broker's commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is a
party;
(5) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies;
(6) the cost of stock certificates representing shares of the Fund;
(7) compensation of the directors of the Fund (other than directors
who are officers of the Adviser), and all expenses of Fund shareholders'
and directors' meetings and of preparing, printing and mailing reports to
shareholders of the Fund;
(8) charges and expenses of legal counsel for the Fund in connection
with legal matters relating to the Fund, including without limitation,
legal services rendered in connection with the Fund's corporate existence,
corporate and financial structure, relations with its stockholders and the
issuance of securities; and
(9) all other costs, charges and expenses of the Fund, without
limitation.
-3-
<PAGE>
3. FEES OF ADVISER
For the services and facilities to be furnished by the Adviser hereunder,
the Fund shall, commencing with the effective date of the first public offering
of shares of the Fund, pay Adviser an annual fee equal to one percent (1%) of
the average net asset value of the Portfolio as ascertained on each business day
and paid monthly.
The compensation for the period from the effective date hereof to the next
succeeding last day of the month shall be prorated according to the proportion
which such period bears to the full month ending on such date, and provided
further that, upon any termination of this Agreement before the end of any
month, such compensation for the period from the end of the last month ending
prior to such termination to the date of termination, shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. For the purpose of the Adviser's
compensation, the value of the Fund's net assets shall be computed in the manner
specified in its Articles of Incorporation or By-Laws in connection with the
determination of the net asset value of its shares.
4. INDEPENDENT CONTRACTOR
Adviser shall, for all purposes herein, be an independent contractor and
shall have no authority to act for or represent the Fund in its investment
commitments unless otherwise provided. No agreement, bid, offer, commitment,
contract or other engagement entered into by Adviser whether on behalf of
Adviser or whether purported to have been entered into on behalf of the Fund
shall be binding upon the Fund, and all acts authorized to be done by Adviser
under this Agreement shall be done by it as an independent contractor and not as
agent.
-4-
<PAGE>
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing shall restrict the right of Adviser or any of its directors,
officers, or employees who may be directors, officers or employees of the Fund
to engage in any other business or to devote time and attention to the
management or other aspects of any other business whether of a similar or
dissimilar nature or to render services of any kind to any other corporation,
firm, individual or association. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services hereunder be not
impaired thereby.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective on the effective date of the first
public offering of the Fund's shares, and shall continue in effect unless sooner
terminated as herein provided until March 31, 1988, and thereafter shall
continue in effect only if approved at least annually: (a) by the Board of
Directors of the Fund; or (b) by the vote of a majority of the outstanding
shares of the Fund (as defined in the Investment Company Act of 1940) and, in
addition, (c) by the vote of a majority of the directors of the Fund who are not
parties hereto nor interested persons of any party, as required by the
Investment Company Act of 1940, provided that the first such approval by
directors under (a) or (c) shall take place within thirty days prior to March
31, 1988, and each subsequent annual approval shall take place within ninety
days prior to March 31 in each year thereafter, and each approval made by the
vote of shareholders shall be made at a meeting held prior to March 31, in any
calendar year, and each such approval whether under (a) and (c) or under (b) and
(c) shall be effective to continue such contract for a period ending March 31 of
the next succeeding year.
-5-
<PAGE>
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by a vote of a majority of
the outstanding voting securities of the Fund, in either case upon not less than
sixty (60) days' written notice to Adviser, and it may be terminated by Adviser
upon sixty (60) days' written notice to the Fund.
7. ASSIGNMENT OF AGREEMENT PROHIBITED
This Agreement will automatically be terminated in the event of its
assignment. It may not be transferred, assigned, sold, or in any manner
hypothecated or pledged; nor may any new agreement become effective without the
affirmative vote of a majority of those directors of the Fund who are not
parties to such Agreement or interested persons of any such party, and ratified
by a vote of the majority of the outstanding voting securities of the Fund,
provided that this limitation shall not prevent any minor amendments to the
Agreement which may be required by federal or state regulatory bodies.
8. INTERESTED PERSONS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Adviser (or any successor thereof) as
directors, officers, agents, stockholders or otherwise; that directors,
officers, agents, and stockholders of the Adviser are or may be interested in
the Fund as directors, officers, agents, stockholders or otherwise; and that the
Adviser (or any such successor) is or may be interested in the Fund as
stockholder or otherwise.
9. DEFINITIONS
For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person" and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940 as now or hereafter in effect.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
WEITZ SERIES FUND, INC.
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Secretary
WALLACE R. WEITZ & COMPANY
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Assistant Secretary
-7-
<PAGE>
EXHIBIT 5(c)
INVESTMENT ADVISORY AGREEMENT - GOVERNMENT MONEY MARKET
<PAGE>
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This amended and restated Agreement dated February 2, 1996 amends and
restates the Agreement dated April 23, 1991 between WEITZ SERIES FUND, INC., a
Minnesota corporation (hereinafter called "Fund") and WALLACE R. WEITZ &
COMPANY, a Nebraska corporation (hereinafter called "Adviser");
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT OF INVESTMENT ADVISER
The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Government Money Market Portfolio to monitor
compliance and make determinations for the Board of Directors under Rule 2a-7 of
the Investment Company Act of 1940 and to administer Fund's affairs, subject to
the supervision of the Board of Directors of the Fund for the period and on the
terms set forth herein. The Adviser hereby accepts such appointment and agrees
during such period, at its own expense, to render the services and to assume the
obligations herein set forth, for the compensation herein provided. The Adviser
shall not be liable to the Fund for any act or omission by the Adviser or for
any losses sustained by the Fund or its shareholders except in the case of
willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
2. DUTIES AND EXPENSES OF ADVISER AND FUND
(a) The Fund shall, at all times, inform Adviser as to the securities held
by it, the funds available or to become available for investment by it, and
otherwise as to the condition of its affairs.
(b) Adviser shall furnish to the Fund and specifically for the Government
Money Market Portfolio, at the regular executive offices of the Fund, advice and
recommendations with respect to
<PAGE>
the purchase and sale of securities and investments and the making of
commitments; shall place at the disposal of the Fund such statistical, research,
analytical and technical services, information and reports as may reasonably be
required; shall furnish the Fund with office facilities in the offices of the
Adviser, including space, furniture and equipment and supplies; and with
administrative, clerical and bookkeeping personnel; and in general shall
superintend the affairs of the Government Money Market Portfolio and the Fund,
subject to the supervision of the Board of Directors of the Fund. The Adviser
shall also pay or reimburse the Fund pro rata with the other Portfolios of the
Fund based upon net assets, for the compensation, if any, of the officers of the
Fund.
The officers of the Fund or the Adviser shall use their best efforts to
obtain the most favorable execution available from brokers or dealers in
purchasing and selling securities. In so doing, such officers may consider such
factors which they may deem relevant to the Fund's best interest, such as price,
the size of the transaction, the nature of the market for the security, the
amount of commission, the timing of the transaction taking into account market
prices and trends, the reputation, experience, and financial stability of the
broker-dealer involved and the quality of service rendered by the broker-dealer
in other transactions. Subject to the foregoing considerations, at the Fund's
expense, such officers may place orders for the purchase or sale of portfolio
securities with brokers or dealers who have provided research, statistical or
other financial information and services to the Fund or the Adviser. Such
officers shall have discretionary authority to utilize broker-dealers who have
provided brokerage and research information of the type or nature referred to in
Section 28(e) of the Securities Exchange Act of 1934 to the Fund or the Adviser
even though it may result in the payment by the Fund of an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker-dealer would have charged for
-2-
<PAGE>
effecting that transaction, providing, however, that the Fund officers have
determined in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by the
broker-dealer effecting the transactions, viewed in terms of either that
particular transaction or their responsibilities with respect to the accounts
for which said officers exercise investment discretion.
(c) Except as otherwise expressly provided herein, the Fund shall pay the
following items:
(1) the charges and expenses of any custodian or depository appointed
by the Fund for the safekeeping of its cash, securities and other property;
(2) the charges and expenses of auditors for the Fund;
(3) the charges and expenses of any transfer agents and registrars
appointed by the Fund;
(4) broker's commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is a
party;
(5) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies;
(6) the cost of stock certificates representing shares of the Fund;
(7) compensation of the directors of the Fund (other than directors
who are officers of the Adviser), and all expenses of Fund shareholders'
and directors' meetings and of preparing, printing and mailing reports to
shareholders of the Fund;
(8) charges and expenses of legal counsel for the Fund in connection
with legal matters relating to the Fund, including without limitation,
legal services rendered in
-3-
<PAGE>
connection with the Fund's corporate existence, corporate and financial
structure, relations with its stockholders and the issuance of securities; and
(9) all other costs, charges and expenses of the Fund, without
limitation.
3. FEES OF ADVISER
For the services and facilities to be furnished by the Adviser hereunder,
the Fund shall, commencing with the effective date of the first public offering
of shares of the Fund, pay Adviser an annual fee equal to one-half percent
(1/2%) of the average net asset value of the Government Money Market Portfolio
as ascertained on each business day and paid monthly.
The compensation for the period from the effective date hereof to the next
succeeding last day of the month shall be prorated according to the proportion
which such period bears to the full month ending on such date, and provided
further that, upon any termination of this Agreement before the end of any
month, such compensation for the period from the end of the last month ending
prior to such termination to the date of termination, shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. For the purpose of the Adviser's
compensation, the value of the Fund's net assets shall be computed in the manner
specified in its Articles of Incorporation or By-Laws in connection with the
determination of the net asset value of its shares.
4. INDEPENDENT CONTRACTOR
Adviser shall, for all purposes herein, be an independent contractor and
shall have no authority to act for or represent the Fund in its investment
commitments unless otherwise provided. No agreement, bid, offer, commitment,
contract or other engagement entered into by Adviser whether on behalf of
Adviser or whether purported to have been entered into on behalf of the Fund
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<PAGE>
shall be binding upon the Fund, and all acts authorized to be done by Adviser
under this Agreement shall be done by it as an independent contractor and not as
agent.
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing shall restrict the right of Adviser or any of its directors,
officers, or employees who may be directors, officers or employees of the Fund
to engage in any other business or to devote time and attention to the
management or other aspects of any other business whether of a similar or
dissimilar nature or to render services of any kind to any other corporation,
firm, individual or association. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services hereunder be not
impaired thereby.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective on the effective date of the first
public offering of the Fund's shares, and shall continue in effect unless sooner
terminated as herein provided until March 31, 1993, and thereafter shall
continue in effect only if approved at least annually: (a) by the Board of
Directors of the Fund; or (b) by the vote of a majority of the outstanding
shares of the Fund (as defined in the Investment Company Act of 1940) and, in
addition, (c) by the vote of a majority of the directors of the Fund who are not
parties hereto nor interested persons of any party, as required by the
Investment Company Act of 1940, provided that the first such approval by
directors under (a) or (c) shall take place within ninety days prior to March
31, 1993, and each subsequent annual approval shall take place within ninety
days prior to March 31 in each year thereafter, and if approval made by the vote
of shareholders, such approval shall be made at a meeting held prior to March 31
in any calendar year, and each such approval whether under (a) and (c) or under
(b) and
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<PAGE>
(c) shall be effective to continue such contract for a period ending March 31 of
the next succeeding year.
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by a vote of a majority of
the outstanding voting securities of the Fund, in either case upon not less than
sixty (60) days' written notice to Adviser, and it may be terminated by Adviser
upon sixty (60) days' written notice to the Fund.
7. ASSIGNMENT OF AGREEMENT PROHIBITED
This Agreement will automatically be terminated in the event of its
assignment. It may not be transferred, assigned, sold, or in any manner
hypothecated or pledged; nor may any new agreement become effective without the
affirmative vote of a majority of those directors of the Fund who are not
parties to such Agreement or interested persons of any such party, and ratified
by a vote of the majority of the outstanding voting securities of the Fund,
provided that this limitation shall not prevent any minor amendments to the
Agreement which may be required by federal or state regulatory bodies.
8. INTERESTED PERSONS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Adviser (or any successor thereof) as
directors, officers, agents, stockholders or otherwise; that directors,
officers, agents, and stockholders of the Adviser are or may be interested in
the Fund as directors, officers, agents, stockholders or otherwise; and that the
Adviser (or any such successor) is or may be interested in the Fund as
stockholder or otherwise.
9. DEFINITIONS
For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting
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<PAGE>
securities," "assignment," "affiliated person" and "interested person" shall
have the respective meanings specified in the Investment Company Act of 1940 as
now or hereafter in effect.
10. PROPRIETARY INTEREST OF ADVISER
The parties hereto acknowledge and agree that the name "Weitz" is
proprietary to and the sole and exclusive property of the adviser. Adviser
hereby licenses the use of the name "Weitz" to the Fund for a term concurrent
with the term of this Agreement. From and after a date which is one hundred
eighty (180) days after the termination of this Agreement, Fund shall not do
business under any name containing the word "Weitz" without the prior written
consent of Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
WEITZ SERIES FUND, INC.
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Secretary
WALLACE R. WEITZ & COMPANY
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Assistant Secretary
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<PAGE>
EXHIBIT 5(d)
INVESTMENT ADVISORY AGREEMENT - HICKORY PORTFOLIO
<PAGE>
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This amended and restated Agreement dated February 2, 1996 amends and
restates the Agreement dated January 29, 1993 between WEITZ SERIES FUND, INC., a
Minnesota corporation (hereinafter called "Fund") and WALLACE R. WEITZ &
COMPANY, a Nebraska corporation (hereinafter called "Adviser");
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT OF INVESTMENT ADVISER
The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Hickory Portfolio (the "Portfolio"), to monitor
compliance and to administer the Portfolio's affairs, subject to the supervision
of the Board of Directors of the Fund for the period and on the terms set forth
herein. The Adviser hereby accepts such appointment and agrees during such
period, at its own expense, to render the services and to assume the obligations
herein set forth, for the compensation herein provided. The Adviser shall not
be liable to the Fund for any act or omission by the Adviser or for any losses
sustained by the Fund or its shareholders except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
2. DUTIES AND EXPENSES OF ADVISER AND FUND
(a) The Fund shall, at all times, inform Adviser as to the securities held
by it, the funds available or to become available for investment by it, and
otherwise as to the condition of its affairs.
(b) Adviser shall furnish to the Fund and specifically for the Portfolio,
at the regular executive offices of the Fund, advice and recommendations with
respect to the purchase and sale of securities and investments and the making of
commitments; shall place at the disposal of the Fund
<PAGE>
such statistical, research, analytical and technical services, information and
reports as may reasonably be required; shall furnish the Fund with office
facilities in the offices of the Adviser, including space, furniture and
equipment and supplies; and with administrative, clerical and bookkeeping
personnel; and in general shall superintend the affairs of the Portfolio and
the Fund, subject to the supervision of the Board of Directors of the Fund. The
Adviser shall also pay or reimburse the Fund pro rata with the other Portfolios
of the Fund based upon net assets, for the compensation, if any, of the officers
of the Fund.
The officers of the Fund or the Adviser shall use their best efforts to
obtain the most favorable execution available from brokers or dealers in
purchasing and selling securities. In so doing, such officers may consider such
factors which they may deem relevant to the Fund's best interest, such as price,
the size of the transaction, the nature of the market for the security, the
amount of commission, the timing of the transaction taking into account market
prices and trends, the reputation, experience, and financial stability of the
broker-dealer involved and the quality of service rendered by the broker-dealer
in other transactions. Subject to the foregoing considerations, at the Fund's
expense, such officers may place orders for the purchase or sale of portfolio
securities with brokers or dealers who have provided research, statistical or
other financial information and services to the Fund or the Adviser. Such
officers shall have discretionary authority to utilize broker-dealers who have
provided brokerage and research information of the type or nature referred to in
Section 28(e) of the Securities Exchange Act of 1934 to the Fund or the Adviser
even though it may result in the payment by the Fund of an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction,
providing, however, that the Fund officers have determined in good faith
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<PAGE>
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer effecting the
transactions, viewed in terms of either that particular transaction or their
responsibilities with respect to the accounts for which said officers exercise
investment discretion.
(c) Except as otherwise expressly provided herein, the Fund shall pay the
following items:
(1) the charges and expenses of any custodian or depository appointed
by the Fund for the safekeeping of its cash, securities and other property;
(2) the charges and expenses of auditors for the Fund;
(3) the charges and expenses of any transfer agents and registrars
appointed by the Fund;
(4) broker's commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is a
party;
(5) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies;
(6) the cost of stock certificates representing shares of the Fund;
(7) compensation of the directors of the Fund (other than directors
who are officers of the Adviser), and all expenses of Fund shareholders'
and directors' meetings and of preparing, printing and mailing reports to
shareholders of the Fund;
(8) charges and expenses of legal counsel for the Fund in connection
with legal matters relating to the Fund, including without limitation,
legal services rendered in connection with the Fund's corporate existence,
corporate and financial structure, relations with its stockholders and the
issuance of securities; and
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<PAGE>
(9) all other costs, charges and expenses of the Fund, without
limitation.
3. FEES OF ADVISER
For the services and facilities to be furnished by the Adviser hereunder,
the Fund shall, commencing with the effective date of the first public offering
of shares of the Portfolio, pay Adviser an annual fee equal to one percent (1%)
of the average net asset value of the Portfolio as ascertained on each business
day and paid monthly.
The compensation for the period from the effective date hereof to the next
succeeding last day of the month shall be prorated according to the proportion
which such period bears to the full month ending on such date, and provided
further that, upon any termination of this Agreement before the end of any
month, such compensation for the period from the end of the last month ending
prior to such termination to the date of termination, shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. For the purpose of the Adviser's
compensation, the value of the Fund's net assets shall be computed in the manner
specified in its Articles of Incorporation or By-Laws in connection with the
determination of the net asset value of its shares.
4. INDEPENDENT CONTRACTOR
Adviser shall, for all purposes herein, be an independent contractor and
shall have no authority to act for or represent the Fund in its investment
commitments unless otherwise provided. No agreement, bid, offer, commitment,
contract or other engagement entered into by Adviser whether on behalf of
Adviser or whether purported to have been entered into on behalf of the Fund
shall be binding upon the Fund, and all acts authorized to be done by Adviser
under this Agreement shall be done by it as an independent contractor and not as
agent.
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<PAGE>
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing shall restrict the right of Adviser or any of its directors,
officers, or employees who may be directors, officers or employees of the Fund
to engage in any other business or to devote time and attention to the
management or other aspects of any other business whether of a similar or
dissimilar nature or to render services of any kind to any other corporation,
firm, individual or association. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services hereunder be not
impaired thereby.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective on the effective date of the first
public offering of the Fund's shares, and shall continue in effect unless sooner
terminated as herein provided until March 31, 1995, and thereafter shall
continue in effect only if approved at least annually: (a) by the Board of
Directors of the Fund; or (b) by the vote of a majority of the outstanding
shares of the Fund (as defined in the 1940 Act) and, in addition, (c) by the
vote of a majority of the directors of the Fund who are not parties hereto nor
interested persons of any party, as required by the 1940 Act, provided that the
first such approval by directors under (a) or (c) shall take place within ninety
(90) days prior to March 31, 1995, and each subsequent annual approval shall
take place within ninety (90) days prior to March 31 in each year thereafter,
and if approval made by the vote of shareholders, such approval shall be made at
a meeting held prior to March 31 in any calendar year, and each such approval
whether under (a) and (c) or under (b) and (c) shall be effective to continue
such contract for a period ending until the next succeeding year.
This Agreement may be terminated at any time, without payment of any
penalty, by the
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<PAGE>
Board of Directors of the Fund, or by a vote of a majority of the outstanding
voting securities of the Fund, in either case upon not less than sixty (60)
days' written notice to Adviser, and it may be terminated by Adviser upon sixty
(60) days' written notice to the Fund.
7. ASSIGNMENT OF AGREEMENT PROHIBITED
This Agreement will automatically be terminated in the event of its
assignment. It may not be transferred, assigned, sold, or in any manner
hypothecated or pledged; nor may any new agreement become effective without the
affirmative vote of a majority of those directors of the Fund who are not
parties to such Agreement or interested persons of any such party, and ratified
by a vote of the majority of the outstanding voting securities of the Fund,
provided that this limitation shall not prevent any minor amendments to the
Agreement which may be required by federal or state regulatory bodies.
8. INTERESTED PERSONS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Adviser (or any successor thereof) as
directors, officers, agents, stockholders or otherwise; that directors,
officers, agents, and stockholders of the Adviser are or may be interested in
the Fund as directors, officers, agents, stockholders or otherwise; and that the
Adviser (or any such successor) is or may be interested in the Fund as
stockholder or otherwise.
9. DEFINITIONS
For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person" and
"interested person" shall have the respective meanings specified in the 1940 Act
as now or hereafter in effect.
10. PROPRIETARY INTEREST OF ADVISER
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<PAGE>
The parties hereto acknowledge and agree that the name "Weitz" is
proprietary to and the sole and exclusive property of the adviser. Adviser
hereby licenses the use of the name "Weitz" to the Fund for a term concurrent
with the term of this Agreement. From and after a date which is one hundred
eighty (180) days after the termination of this Agreement, Fund shall not do
business under any name containing the word "Weitz" without the prior written
consent of Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
WEITZ SERIES FUND, INC.
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Secretary
WALLACE R. WEITZ & COMPANY
By /s/ Wallace R. Weitz
------------------------------------------
President
Attest /s/ Mary K. Beerling
--------------------------------------
Assistant Secretary
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<PAGE>
EXHIBIT 14
PROTOTYPE INDIVIDUAL RETIREMENT ACCOUNT
<PAGE>
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The Depositor whose name appears on the Application is establishing an
Individual Retirement Account under Section 408(a) to provide for his or
her retirement and for the support of his or her beneficiaries after
death.
The Custodian named on the Application has given the Depositor the
disclosure statement required under Regulations Section 1.408-6.
The Depositor has assigned the trust the sum indicated on the
Application.
The Depositor and the Custodian make the following agreement:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3) or an employer contribution to a Simplified
Employee Pension Plan as described in Section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in Section 402(a)(5),
402(a)(6), 402(a)(7), 403 (a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a Simplified Employee Pension Plan described in Section 408(k).
ARTICLE II
The Depositor's interest in the balance in the Custodial account is
nonforfeitable.
ARTICLE III
1. No part of the Custodial funds may be invested in life insurance
contracts, nor may the assets of the Custodial account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
2. No part of the Custodial funds may be invested in collectibles (within
the meaning of Section 408(m)) except as otherwise permitted by Section
408(m)(3) which provides an exception for certain gold and silver coins
and coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the Custodial account shall
be made in accordance with the following requirements and shall otherwise
comply with Section 408(a)(6) and Proposed Regulations Section 1.408-8,
including the incidental death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are herein incorporated by
reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and
1
<PAGE>
shall apply to all subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.
3. The Depositor's entire interest in the Custodial account must be, or
begin to be, distributed by the Depositor's required beginning date
(April 1 following the calendar year end in which the Depositor reaches
age 70 1/2). By that date, the Depositor may elect, in a manner
acceptable to the Custodian, to have the balance in the Custodial account
distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the
Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated
beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life
expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last
survivor expectancy of the Depositor and his or her designated
beneficiary.
4. If the Depositor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in
accordance with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election
of the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing
the fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments
over the life or life expectancy of the designated
beneficiary or beneficiaries starting by December 31 of the
year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving
spouse, then this distribution is not required to begin
before December 31 of the year in which the Depositor would
have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun
on the Depositor's required beginning date, even though payments
may actually have been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving
spouse, no additional cash contributions or rollover contributions
may be accepted in the account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual
2
<PAGE>
payments, to determine the minimum annual payment for each year, divide
the Depositor's entire interest in the Custodial Account as of the close
of business on December 31 of the preceding year by the life expectancy
of the Depositor (or the joint life and last survivor expectancy of the
Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the
case of distributions under paragraph 3, determine the initial life
expectancy (or joint life and last survivor expectancy) using the
attained ages of the Depositor and designated beneficiary as of their
birthdays in the year the Depositor reaches age 70 1/2. In the case of
a distribution in accordance with paragraph 4(b)(ii), determine life
expectancy using the attained age of the designated beneficiary as of
the beneficiary's birthday in the year distributions are required to
commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements described above. This
method permits an individual to satisfy these requirements by taking
from one individual retirement account the amount required to satisfy
the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Section 408(i)
and Regulations Sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor as prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) and related
regulations will be invalid.
ARTICLE VII
This Agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear on the Application.
ARTICLE VIII
8.01 Definitions: In this part of this Agreement (Article VIII), the words
"you" and "your" mean the Depositor, the words "we," "us" and "our" mean
the Custodian and "Code" means the Internal Revenue Code.
8.02 Notices and Change of Address: Any required notice regarding this IRA
will be considered effective when we mail it to the last address of the
intended recipient which we have in our records. Any notice to be given
to us will be considered effective when we actually receive it. You must
notify us of any change of address.
8.03 Representations and Responsibilities: You represent and warrant to us
that any information you have given or will give us with respect to this
Agreement is complete and accurate. Further, you agree that any
directions you give us, or action you take
3
<PAGE>
will be proper under this Agreement and that we are entitled to rely upon
any such information or directions. We shall not be responsible for
losses of any kind that may result from your directions to us or your
actions or failures to act and you agree to reimburse us for any loss we
may incur as a result of such directions, actions or failures to act. We
shall not be responsible for any penalties, taxes, judgments or expenses
you incur in connection with your IRA. We have no duty to determine
whether your contributions or distributions comply with the Code,
regulations, rulings or this Agreement.
8.04 Service Fees: We have the right to charge an annual service fee or other
designated fees (for example, a transfer, rollover or termination fee)
for maintaining your IRA. In addition, we have the right to be
reimbursed for all reasonable expenses we incur in connection with the
administration of your IRA. We may charge you separately for any fees or
expenses or we may deduct the amount of the fees or expenses from the
assets in your IRA at our discretion. We reserve the right to charge any
additional fee upon 30 days notice to you that the fee will be effective.
Any brokerage commissions attributable to the assets in your IRA will be
charged to your IRA. You cannot reimburse your IRA for those
commissions.
8.05 Investment of Amounts in the IRA:
a. Direction of Investment - You have exclusive responsibility for
and control over the investment of the assets of your IRA. You
shall direct all investment transactions, including earnings and
the proceeds from securities sales. Your selection of
investments, however, shall be limited to publicly traded
securities, mutual funds, money market instruments and other
investments that are obtainable by us and that we are capable of
holding in the ordinary course of our business.
In the absence of instructions from you or if your instructions
are not in a form acceptable to us, we shall hold any uninvested
amounts in cash and we shall have no responsibility to invest
uninvested cash unless and until directed by you.
All transactions shall be subject to any and all applicable
Federal and State laws and regulations and the rules, regulations,
customs and usages of any exchange, market or clearing house where
the transaction is executed and to our policies and practices.
After your death, your beneficiary(ies) shall have the right to
direct the investment of your IRA assets, subject to the same
conditions that applied to you during your lifetime under this
Agreement (including, without limitation, Section 8.03).
b. Our Investment Powers and Duties - We shall have no discretion to
direct any investment in your IRA. We assume no responsibility
for rendering investment advice with respect to your IRA, nor will
we offer any opinion or judgment to you on matters concerning the
value or suitability of any investment or proposed investment for
your IRA. We shall exercise the voting
4
<PAGE>
rights and other shareholder rights with respect to securities in
your IRA but only in accordance with the instructions you give to
us.
c. Delegation of Investment Responsibility - We may, but are not
required to, permit you to delegate your investment responsibility
for your IRA to another party acceptable to us by giving written
notice of your delegation in a format we prescribe. We shall
follow the direction of any such party who is properly appointed
and we shall be under no duty to review or question, nor shall we
be responsible for, any of that party's directions, actions or
failures to act.
8.06 Beneficiaries: If you die before you receive all of the amounts in your
IRA, payments from your IRA will be made to your beneficiaries.
You may designate one or more person or entity as beneficiary of your
IRA. This designation can only be made on a form prescribed by us and it
will only be effective when it is filed with us during your lifetime.
Each beneficiary designation you file with us will cancel all previous
ones. The consent of a beneficiary shall not be required for you to
revoke a beneficiary designation. If you do not designate a beneficiary,
your estate will be the beneficiary.
If the beneficiary payment election described in Article IV, Section 4(b)
of this Agreement is not made by December 31 of the year following the
year of your death, the following rules apply. If the beneficiary is
your spouse, the payment described in Article IV, Section 4(b)(ii) will
be deemed elected (that is, payments over the life or life expectancy of
your spouse). If the beneficiary or beneficiaries are or include anyone
other than your surviving spouse, the payment method described in Article
IV, Section 4(b)(i) will be deemed elected (that is the 5 year rule).
8.07 Termination: Either party may terminate this Agreement at any time by
giving written notice to the other. We can resign as Custodian at any
time effective 30 days after we mail written notice of our resignation to
you. Upon receipt of that notice, you must make arrangements to transfer
your IRA to another financial organization. If you do not complete a
transfer of your IRA within 30 days from the date we mail the notice to
you, we have the right to transfer your IRA assets to a successor IRA
custodian or trustee that we choose in our sole discretion or we may pay
your IRA to you in a single sum. We shall not be liable for any actions
or failures to act on the part of any successor custodian or trustee nor
for any tax consequences you may incur that result from the transfer or
distribution of your assets pursuant to this section.
If this Agreement is terminated, we may hold back from your IRA a
reasonable amount of money that we believe is necessary to cover any one
or more of the following:
* any fees, expenses or taxes chargeable against your IRA;
* any penalties associated with the early withdrawal of any savings
instrument or other investment in your IRA.
If our organization is merged with another organization (or comes under
the control of any Federal or State agency) or if our entire organization
(or any portion which
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includes your IRA) is bought by another organization, that organization
(or agency) shall automatically become the custodian or trustee of your
IRA, but only if it is the type of organization authorized to serve as an
IRA custodian or trustee.
If we are required to comply with Section 1.401-12(n) of the Treasury
Regulations and we fail to do so, or we are not keeping the records,
making the returns or sending the statements as are required by forms or
regulations, the IRS may, after notifying you, require you to substitute
another custodian or trustee.
8.08 Amendments: We have the right to amend this Agreement at any time. Any
amendment we make to comply with the Code and related regulations does
not require your consent. You will be deemed to have consented to any
other amendment unless, within 30 days from the date we mail the
amendment, you notify us in writing that you do not consent.
8.09 Withdrawals: All requests for withdrawal shall be in writing on a form
provided by or acceptable to us. The method of distribution must be
specified in writing. The tax identification number of the recipient
must be provided to us before we are obligated to make a distribution.
Any withdrawals shall be subject to all applicable tax and other laws and
regulations including possible early withdrawal penalties and withholding
requirements.
8.10 Required Minimum Distributions: We reserve the right to elect whether or
not life expectancies will be recalculated in connection with required
minimum distributions from your IRA, provided, however, that we give you
notice of our election. Alternatively, we may allow you to make such an
election.
As described in Article IV, Section 3, of this Agreement, you may make an
election to begin receiving payments from your IRA in a manner that
satisfies the required minimum distribution rules no later than April 1st
of the year following the year you reach age 70 1/2 . (This is called
the "required beginning date.") If you fail to make such an election by
your required beginning date, we can, at our complete and sole
discretion, do any one of the following:
* make no payment until you give us a proper payment request;
* pay your entire IRA to you in a single sum payment; or
* calculate your required minimum distribution from your IRA each
year based on your single life expectancy (not recalculated) and
pay those distributions to you until you direct otherwise.
We will not be liable for any penalties or taxes related to your failure
to take a distribution.
8.11 Transfers From Other Plans: We can receive amounts transferred to this
IRA from the custodian or trustee of another IRA. In addition, we can
accept direct rollovers of eligible rollover distributions from employer
plans as permitted by the Code. We reserve the right not to accept any
transfer or direct rollover.
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8.12 Liquidation of Assets: We have the right to liquidate assets in your IRA
if necessary to make distributions or to pay fees, expenses or taxes
properly chargeable against your IRA. If you fail to direct us as to
which assets to liquidate, we will decide in our complete and sole
discretion and you agree not to hold us liable for any adverse
consequences that result from our decision.
8.13 Restrictions On The Fund: Neither you nor any beneficiary may sell,
transfer or pledge any interest in your IRA in any manner whatsoever,
except as provided by law or this Agreement.
The assets in your IRA shall not be responsible for the debts, contracts
or torts of any person entitled to distributions under this Agreement.
8.14 What Law Applies: This Agreement is subject to all applicable Federal
and State laws and regulations. If it is necessary to apply any State
law to interpret and administer this Agreement, the law of our domicile
shall govern.
If any part of this Agreement is held to be illegal or invalid, the
remaining parts shall not be affected. Neither your nor our failure to
enforce at any time or for any period of time any of the provisions of
this Agreement shall be construed as a waiver of such provisions, or your
right or our right thereafter to enforce each and every such provision.
INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
Form 5305-A is a model Custodial account agreement that meets the requirements
of Section 408(a) and has been automatically approved by the IRS. An individual
retirement account (IRA) is established after the form is fully executed by both
the individual (Depositor) and the Custodian and must be completed no later than
the due date of the individual's income tax return for the tax year (without
regard to extensions). This account must be created in the United States for
the exclusive benefit of the Depositor or his or her Beneficiaries.
Individuals may rely on regulations for Tax Reform Act of 1986 to the extent
specified in those regulations.
Do not file Form 5305-A with the IRS. Instead, keep it for your records.
For more information on IRAs, including the required disclosure you can get from
your Custodian, get Pub. 590, Individual Retirement Arrangements (IRAs).
DEFINITIONS
Custodian: The Custodian must be a bank or savings and loan association, as
defined in Section 408(n), or other person who has the approval of the IRS to
act as Custodian.
Depositor: The Depositor is the person who establishes the Custodial account.
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IDENTIFYING NUMBER
The Depositor's social security number will serve as the identification number
of his or her IRA. An employer identification number is required only for an
IRA for which a return is filed to report unrelated business taxable income. An
employer identification number is required for a common fund created for IRAs.
IRA FOR NON-WORKING SPOUSE
Form 5305-A may be used to establish the IRA Custodial account for a nonworking
spouse.
Contributions to an IRA Custodial account for a nonworking spouse must be made
to a separate IRA Custodial account established by the nonworking spouse.
SPECIFIC INSTRUCTIONS
Article IV: Distributions made under this Article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of Section 408(a)(6) have been met.
Article VIII: Article VIII and any that follow it may incorporate additional
provisions that are agreed upon by the Depositor and Custodian to complete the
Agreement. They may include, for example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and termination, removal of Custodian,
Custodian's fees, State law requirements, beginning date of distributions,
accepting only cash, treatment of excess contributions, prohibited transactions
with the Depositor, etc. Use additional pages if necessary and attach them to
this form.
NOTE: Form 5305-A may be reproduced and reduced in size for adoption to
passbook purposes.
DISCLOSURE STATEMENT
RIGHT TO REVOKE YOUR IRA
If you receive this Disclosure Statement at the time you establish your IRA, you
have the right to revoke your IRA within seven (7) days of its establishment.
If revoked, you are entitled to a full return of the contribution you made to
your IRA. The amount returned to you would not include an adjustment for such
items as sales commissions, administrative expenses, or fluctuation in market
value. You may make this revocation only by mailing or delivering a written
notice to the Custodian at the address listed on the Application.
If you send your notice by first class mail, your revocation will be deemed
mailed as of the date of the postmark.
If you have any questions about the procedure for revoking your IRA, please call
the Custodian at the telephone number listed on the Application.
REQUIREMENTS OF AN IRA
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A. CASH CONTRIBUTIONS - Your contribution must be in cash, unless it is a
rollover contribution.
B. MAXIMUM CONTRIBUTION - The total amount you may contribute to an IRA for
any taxable year cannot exceed the lesser of $2,000 or 100 percent of
your compensation.
C. NONFORFEITABILITY - Your interest in your IRA is nonforfeitable.
D. ELIGIBLE CUSTODIANS - The Custodian of your IRA must be a bank, savings
and loan association, credit union, or a person approved by the Secretary
of the Treasury.
E. COMMINGLING ASSETS - The assets of your IRA cannot be commingled with
other property except in a common trust fund or common investment fund.
F. LIFE INSURANCE - No portion of your IRA may be invested in life insurance
contracts.
G. COLLECTIBLES - You may not invest the assets of your IRA in collectibles
(within the meaning of Internal Revenue Code (IRC) Section 408(m)). A
collectible is defined as any work of art, rug or antique, metal or gem,
stamp or coin, alcoholic beverage, or any other tangible personal
property specified by the Internal Revenue Service. Specially minted
United States gold and silver bullion coins and certain state-issued
coins are permissible IRA investments.
H. REQUIRED MINIMUM DISTRIBUTIONS - You are required to take minimum
distributions from your IRA at certain times in accordance with Proposed
Treasury Regulations Section 1.408-8. Below is a summary of the IRA
distribution rules.
1. You are required to take a minimum distribution from your IRA for the
year in which you reach age 70 1/2 and for each year thereafter. You
must take your first payout by your required beginning date, April 1 of
the year following the year you attain age 70 1/2 . The minimum
distribution for any taxable year is equal to the amount obtained by
dividing the account balance at the end of the prior year (less any
required distribution taken between January 1 and April 1 of the year
following the year you attain age 70 1/2) by the joint life expectancy of
you and your designated beneficiary. If you have not designated a
beneficiary for your IRA by your required beginning date, your single
life expectancy will be used.
2. Your single or joint life expectancy is determined by using the IRS
unisex life expectancy tables. You can find these tables in Treasury
Regulations Section 1.72-9.
We may establish a policy dictating whether or not life expectancies may
be recalculated in determining required minimum distributions from your
IRA. Alternatively, we may allow you to elect whether or not to
recalculate your life expectancies.
You may choose (within the limits set forth in the distribution rules and
our life expectancy recalculation policy) how you want your required
minimum distributions
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structured. You must make your payment elections no later than April 1
following your 70 1/2 year. If you do not make an election by that date,
we may do any one of the following:
(a) make no payment until you give us a proper payout request,
(b) pay your entire IRA to you in a single sum payment, or
(c) determine your required minimum distribution each year based on
your single life expectancy (not recalculated) and pay those
distributions to you until you direct otherwise.
3. If you name someone other than your spouse as your beneficiary, and your
beneficiary is more than 10 years younger than you, your required minimum
distributions must satisfy the Minimum Distribution Incidental Benefit
(MDIB) rule. The MDIB rule generally requires that your required minimum
distributions be calculated as if your beneficiary were exactly 10 years
younger than you.
4. If you die,
(a) on or after your required beginning date, distributions must be
made to your beneficiary or beneficiaries at least as rapidly as
under the method being used to determine minimum distributions as
of the date of your death.
(b) before your required beginning date, the entire amount remaining
in your account will, at the election of your beneficiary or
beneficiaries, either
(i) be distributed by December 31 of the year containing the
fifth anniversary of your death, or
(ii) be distributed in equal or substantially equal payments
over the life or life expectancy of your designated
beneficiary or beneficiaries.
Your beneficiary or beneficiaries must elect either option (i) or (ii) by
December 31 of the year following the year of your death. If no election
is made, distribution will be made in accordance with (ii) if the
beneficiary is your surviving spouse, and in accordance with (i) if your
beneficiary is not your surviving spouse. In the case of distributions
under (ii), distributions must commence by December 31 of the year
following the year of your death. If your spouse is the beneficiary,
distributions need not commence until December 31 of the year you would
have attained age 70 1/2, if later.
INCOME TAX CONSEQUENCES OF ESTABLISHING AN IRA
A. IRA Deductibility - If you are under age 70 1/2 and have earned income
from services rendered, you may make an IRA contribution of the lesser of
100 percent of compensation or $2,000. However, the amount of the
contribution for which you may take a tax deduction will depend upon
whether you (or your spouse) are an active participant in an
employer-maintained retirement plan. If you (and your spouse) are not an
active participant, your IRA contribution will be totally deductible. If
you (or your spouse) are an active participant, the deductibility of your
contribution will depend on your adjusted gross income (AGI) for the tax
year for which the contribution was made. AGI is determined on your tax
return (disregarding any deductible IRA contribution).
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Definition of Active Participant - Generally, you will be an active
participant if you are covered by one or more of the following
employer-maintained retirement plans:
1. a qualified pension, profit sharing, or stock bonus plan;
2. a qualified annuity plan of an employer;
3. a simplified employee pension (SEP) plan;
4. a retirement plan established by the Federal government, a State,
or a political subdivision (except certain unfunded deferred
compensation plans under IRC Section 457);
5. a tax sheltered annuity for employees of certain tax-exempt
organizations or public schools; and
6. a qualified plan for self-employed individuals (H.R. 10 or Keogh
Plan).
If you do not know whether your employer maintains one of these plans or
whether you are an active participant in it, check with your employer and
your tax advisor. Also, the Form W-2 (Wage and Tax Statement) that you
receive at the end of the year from your employer will indicate whether
you are an active participant.
If you are single, your threshold AGI level is $25,000. The threshold
level if you are married and file a joint tax return is $40,000, and if
you are married but file a separate tax return, the threshold level is
$0. If your AGI is less than $10,000 above your threshold level, you
will still be able to make a deductible contribution but it may be
limited in amount (but never less than $200).
The deductible amount of your contribution is determined by taking your
threshold AGI level plus $10,000 (e.g., $50,000 if you are married and
filing jointly, $35,000 if you are single) and subtracting from it your
AGI (determined prior to taking your itemized deductions). Multiply the
resulting number by .2 (or .225 if you are making spousal contributions)
to give you your personal deduction limit. You must round up the
resulting number to the next highest $10 if the number is not a multiple
of 10.
B. TAX-DEFERRED EARNINGS - The investment earnings of your IRA are not
subject to federal income tax until distributions are made (or, in
certain instances, when distributions are deemed to be made).
C. NONDEDUCTIBLE CONTRIBUTIONS - You may make nondeductible contributions to
your IRA to the extent that deductible contributions are not allowed. The
sum of your deductible and nondeductible IRA contributions cannot exceed
your contribution limit (the lesser of $2,000 or 100 percent of
compensation). You may elect to treat deductible IRA contributions as
nondeductible contributions.
If you make nondeductible contributions for a particular tax year, you
must report the amount of the nondeductible contribution on your federal
income tax return (using IRS Form 8606).
If you overstate the amount of designated nondeductible contributions for
any taxable year, you are subject to a $100 penalty unless reasonable
cause for the overstatement can be shown. Failure to file any form
required by the IRS to report nondeductible contributions (e.g., IRS Form
8606) will result in a $50 per failure penalty.
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D. TAXATION OF DISTRIBUTIONS - The taxation of IRA distributions depends on
whether or not you have ever made nondeductible IRA contributions. If you
have only made deductible contributions, any IRA distribution will be
fully included in income.
If you have ever made nondeductible contributions to any IRA, the
following formula must be used to determine the amount of any IRA
distribution excluded from income:
(Aggregate Nondeductible Contributions)
x (Amount Withdrawn) = Amount Excluded From Income
---------------------------
Aggregate IRA Balance
NOTE: Aggregate nondeductible contributions include all nondeductible
contributions made by you through the end of the year of the distribution
(which have not previously been withdrawn and excluded from income). Also
note that aggregate IRA balance includes the total balance of all of your
IRAs as of the end of the year of distribution and any distributions
occurring during the year.
E. ROLLOVERS - Your IRA may be rolled over to an IRA of yours, or may
receive rollover contributions, provided that all of the applicable
rollover rules are followed. Rollover is a term used to describe a
tax-free movement of cash or other property to your IRA from any of your
IRAs, or from your employer's Qualified Retirement Plan or Tax Sheltered
Annuity. The rollover rules are generally summarized below. These
transactions are often complex. If you have any questions regarding a
rollover, please see a competent tax advisor.
1. IRA to IRA Rollovers - Funds distributed from your IRA may be
rolled over to an IRA of yours if the requirements of IRC Section
408(d)(3) are met. A proper IRA to IRA rollover is completed if
all or part of the distribution is rolled over not later than 60
days after the distribution is received. You may not have
completed another IRA to IRA rollover from the distributing IRA
during the 12 months preceding the date you receive the
distribution. Further, you may roll the same dollars or assets
only once every 12 months.
2. Qualified Plan (or Tax-Sheltered Annuity) to IRA Rollovers -
Effective for qualified plan distributions received after January
1, 1993, you may roll over, directly or indirectly, any eligible
rollover distribution. An eligible rollover distribution is
defined generally as any distribution from a qualified plan (other
than distributions to nonspouse beneficiaries) unless it is part
of certain series of substantially equal periodic payments,
after-tax dollars or a required minimum distribution.
To qualify as a rollover, your eligible rollover distribution must
be rolled over to your IRA not later than 60 days after you
receive it.
If you elect to receive your rollover distribution prior to
placing it in an IRA, thereby conducting an indirect rollover,
your plan administrator will generally be required to withhold 20
percent of your distribution as a prepayment of income taxes.
When completing the rollover, you may make up the amount withheld,
out of pocket, and roll over the full amount distributed from your
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qualified plan balance, if you so choose. Alternatively, you may
claim the withheld amount as income and pay the applicable income
tax and, if you are under age 59 1/2, the 10 percent early
distribution penalty (unless an exception to the penalty applies).
As an alternative to the indirect rollover, your employer
generally must give you the option of directly rolling your
qualified plan balance over to an IRA. If you elect the direct
rollover option, your eligible rollover distribution will be paid
directly to the IRA (or other qualified plan) that you designate.
The 20 percent withholding requirements do not apply to direct
rollovers.
If you place your rollover contribution in a separate (i.e.,
conduit) IRA plan which holds just those dollars, you preserve the
right to later roll the money originating from the qualified plan
into another qualified plan.
3. Written Election - At the time you make a proper rollover to an
IRA, you must designate to the Custodian, in writing, your
election to treat that contribution as a rollover. Once made, the
rollover election is irrevocable.
F. CARRYBACK CONTRIBUTIONS - A contribution is deemed to have been made on
the last day of the preceding taxable year if you make a contribution by
the deadline for filing your income tax return (not including
extensions), and you designate that contribution as a contribution for
the preceding taxable year. For example, if you are a calendar year
taxpayer and you make your IRA contribution on or before April 15, your
contribution is considered to have been made for the previous tax year if
you designated it as such.
LIMITATIONS AND RESTRICTIONS
A. SEP PLANS - Under a Simplified Employee Pension (SEP) Plan that meets the
requirements of IRC Section 408(k), your employer may make contributions
to your IRA. Your employer is required to provide you with information
which describes the terms of your employer's SEP Plan.
B. SPOUSAL IRA - If you are married, have compensation for a particular year
and your spouse has no compensation (or elects to be treated as having no
compensation) for the year, you may make payments to an IRA established
for the benefit of your spouse. Your spouse must not have attained age
70 1/2 in that year, or any prior year, even if you are age 70 1/2 or
older. You must file a joint tax return for the year for which the
contribution is made.
The amount you may contribute to your IRA and your spouse's IRA is the
lesser of $2,250 or 100 percent of your compensation. However, you may
not contribute more than $2,000 to any one IRA.
C. DEDUCTION OF ROLLOVERS AND TRANSFERS - A deduction is not allowed for
rollover or transfer contributions.
D. ESTATE TAX EXCLUSION - The $100,000 federal estate tax exclusion
previously available has been repealed for individuals dying after
12/31/84. No exclusion will be
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allowed for individuals dying after that date. Transfers of your IRA
assets to a named beneficiary made during your life and at your request
or because of your failure to instruct otherwise, may be subject to
federal gift tax under IRC Section 2501 if made after October 22, 1986.
E. SPECIAL TAX TREATMENT - Capital gains treatment and the favorable five or
ten year forward averaging tax authorized by IRC Section 402 do not apply
to IRA distributions.
F. INCOME TAX TREATMENT - Any withdrawal from your IRA, except a direct
transfer, is subject to federal income tax withholding. You may, however,
elect not to have withholding apply to your IRA withdrawal. If
withholding is applied to your withdrawal, not less than 10 percent of
the amount withdrawn must be withheld.
G. PROHIBITED TRANSACTIONS - If you or your beneficiary engage in a
prohibited transaction with your IRA, as described in IRC Section 4975,
your IRA will lose its tax-exempt status and you must include the value
of your account in your gross income for that taxable year.
H. PLEDGING - If you pledge any portion of your IRA as collateral for a
loan, the amount so pledged will be treated as a distribution and will be
included in your gross income for that year.
FEDERAL TAX PENALTIES
A. EARLY DISTRIBUTION PENALTY - If you are under age 59 1/2 and receive an
IRA distribution, an additional tax of 10 percent will apply, unless made
on account of death, disability, a qualifying rollover, a direct
transfer, the timely withdrawal of an excess contribution; or if the
distribution is part of a series of substantially equal periodic payments
(at least annual payments) made over your life expectancy or the joint
life expectancy of you and your beneficiary. This additional tax will
apply only to the portion of a distribution which is includible in your
income.
B. EXCESS CONTRIBUTION PENALTY - An excise tax of 6 percent is imposed upon
any excess contribution you make to your IRA. This tax will apply each
year in which an excess remains in your IRA. An excess contribution is
any contribution amount which exceeds your contribution limit, excluding
rollover and direct transfer amounts. Your contribution limit is the
lesser of $2,000 or 100 percent of your compensation for the taxable
year.
C. EXCESS ACCUMULATION PENALTY - One of the requirements listed above is
that you must take a minimum distribution for the year you attain age
70 1/2 and for each year thereafter and that your designated
beneficiary(ies) is required to take certain minimum distributions after
your death. An additional tax of 50 percent is imposed on the amount of
the required minimum distribution which should have been taken but was
not. This tax is referred to as an excess accumulation penalty tax.
D. EXCESS DISTRIBUTION PENALTY - You will be taxed an additional 15 percent
on any amount received and included in income during a calendar year from
qualified retirement plans, tax-sheltered annuities and IRAs which
exceeds $150,000
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($112,500, indexed each year for the cost of living, for individuals who
made the grandfather election). Certain exceptions may apply. If you
receive an excess distribution as described above, you should see your
tax advisor to determine if these exceptions apply to you. This tax is
referred to as an excess distribution penalty.
E. EXCESS RETIREMENT ACCUMULATION PENALTY - Your estate will have to pay
additional federal estate tax if you die with an excess retirement
accumulation. The increased estate tax will be equal to 15 percent of the
excess retirement accumulation. An excess retirement accumulation exists
if, at the time of your death, the value of all of your interests in
qualified plans, tax-sheltered annuities and IRAs exceeds the present
value of an annuity with annual payments of $150,000 ($112,500, indexed
each year for the cost of living, for individuals who made the
grandfather election) payable over your life expectancy immediately
before your death. This tax is referred to as an excess retirement
accumulation penalty.
F. PENALTY REPORTING - You must file Form 5329 with the Internal Revenue
Service to report and remit any penalties or excise taxes.
OTHER
A. IRS PLAN APPROVAL - The Agreement used to establish this IRA has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to form. It is not an endorsement of
the plan in operation or of the investments offered.
B. ADDITIONAL INFORMATION - You may obtain further information on IRAs from
your District Office of the Internal Revenue Service. In particular, you
may wish to obtain IRS Publication 590, Individual Retirement
Arrangements.
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