EXHIBIT 14(c)
JANUS 403(b)(7) TAX-SHELTERED CUSTODY AGREEMENT
The Employer signing the accompanying Application on behalf of the Employee
named in said Application establishes this Custodial Agreement with Investors
Fiduciary Trust Company as authorized by Section 403(b)(7) of the Internal
Revenue Code in order to provide for the Employee's retirement. This Custody
Agreement shall be effective upon acceptance by Investors Fiduciary Trust
Company of its appointment as Custodian as specified in the Application.
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ARTICLE 1 - DEFINITIONS
As used in this Custody Agreement, the following terms shall have the meaning
hereinafter set forth, unless different meaning is plainly required by the
context:
1.01 Account means the Account established hereunder for the benefit of the
Employee.
1.02 Application means the Application by which this Custody Agreement, as may
be amended from time to time, is established by the Employer on behalf of the
Employee. The statements contained in the Application shall be incorporated into
this Custody Agreement.
1.03 Beneficiary means the person or persons (including a trust or estate)
designated in writing by the Employee to receive any benefit vested under this
Custody Agreement in the event of such Employee's death.
1.04 Code means the Internal Revenue Code of 1986, as amended from time to time.
1.05 Custodian means Investors Fiduciary Trust Company or any successor thereto.
1.06 Custody Agreement means this Agreement and the Application, as the same may
be amended from time to time.
1.07 Employee means a person:
(a) who performs services as an Employee directly for the Employer; and
(b) who has entered into a Salary Reduction Agreement with the Employer under
which the Employer will reduce the Employee's salary by the amount specified in
the most recent Salary Reduction Agreement and contribute such amount to the
Account in accordance with this Custody Agreement.
1.08 Employer means the Employer named in the Application, which shall be any
corporation or other entity that is:
(a) exempt from taxation under Section 501(a) of the Code by virtue of
qualification under Section 501(c)(3) of the Code; or
(b) a state, political subdivision of a state, or an agency or instrumentality
of any one of the foregoing, provided the Employee performs services for an
educational organization described in Section 170(b)(1)(A)(ii) of the Code.
1.09 Plan Year means the calendar year.
1.10 Salary Reduction Agreement means the agreement between the Employer and the
Employee pursuant to which the Employer shall reduce the Employee's salary by a
designated amount and periodically contribute such amount to the Account.
1.11 Shares means the Shares of those regulated investment companies whose
investment advisor is Janus Capital Corporation, or its successors, and which
Shares are authorized by the Sponsor for the investment of contributions to the
Account.
1.12 Sponsor means Janus Capital Corporation.
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ARTICLE 2 - ESTABLISHMENT OF ACCOUNT
The Custodian shall open an Account established by the Employer for the benefit
of the Employee. The Employee shall be the beneficial owner of all Shares held
in or credited to the Account.
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ARTICLE 3 - CONTRIBUTIONS
3.1 Receipt of Contributions: All contributions to the Account shall be made in
cash. The Custodian shall accept and hold in the Account such contributions as
it may receive from time to time and shall invest such contributions in the
class(es) of Shares most recently specified by the Employee in accordance with
Article 4.
3.2 Employer Contributions: The Employer shall make contributions to the
Employee's account in accordance with the Salary Reduction Agreement described
in Section 1.10, subject to the limitations in Section 3.5. In addition, the
Employer may make contributions to the Account on behalf of the Employee in
accordance with any retirement plan, fund or program covering the Employee and
established by the Employer.
3.3 Employee Contributions: The Employee may make voluntary after-tax
contributions to the Account. All such contributions shall be separately
maintained and shall not be commingled with Employer contributions.
3.4 Transfers: The Employee or the Employer may transfer, or cause to be
transferred, in cash or Shares, to the Account:
(a) all or a portion of the assets of an annuity contract or another custodial
account established pursuant to Section 403(b) of the Code; or
(b) all or a portion of the assets of an Individual Retirement Account or
Individual Retirement Annuity, provided such assets are attributable solely
to a rollover contribution from one or more such annuity contracts or
custodial accounts.
Similarly, the Employee may arrange for the transfer of all or a portion of the
assets in the Account to an annuity contract or another custodial account
established pursuant to Section 403(b) of the Code, or to an Individual
Retirement Account or Individual Retirement Annuity.
3.5 Contribution Limitations: Annual contributions (excluding amounts
representing rollover contributions from a prior 403(b) plan or Individual
Retirement Account or Annuity) to an Employee's Account may not exceed the
limitations specified in Sections 403(b)(2), 402(g) or 415(c)(1) of the Code
unless an election is made by the Employee under Section 415(c)(4) of the Code.
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ARTICLE 4 - INVESTMENT OF ACCOUNT ASSETS
Each contribution to the Account shall be applied to the purchase of full and
fractional Shares of the class(es) designated in the Application, and shall be
credited to and held in such Account with a notation as to cost. Contributions
shall continue to be invested in such Shares, unless subsequent contrary
telephone or written instructions, in a form acceptable to the Custodian, to
invest in another class of Shares are received by the Custodian from the
Employee. The Employee may exchange a class of Shares by submitting telephone or
written instructions to the Custodian.
All dividends and capital gains distributions received on the Shares held in the
Account (unless received in additional Shares) shall be reinvested in additional
Shares, which shall be credited to such Account.
If any distribution of such Shares may be received at the election of the
Custodian in additional Shares or in cash, the Custodian shall elect to receive
it in additional Shares. All Shares acquired by the Custodian shall be
registered in the name of the Custodian or its nominee.
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ARTICLE 5 - DISTRIBUTIONS
5.1 Retirement or Termination Benefits: If an Employee retires or leaves the
employ of the Employer for any reason other than death, the Employer shall make
no further contributions on such Employee's behalf, and the Custodian shall
maintain the Account until it receives written instructions from the Employee to
distribute the Account in accordance with Section 5.3. No distribution shall be
made to the Employee or his beneficiaries before the Employee attains age 59 1/2
unless the Employee or Beneficiary furnishes Custodian written notice and proof
that the Employee has:
(a) become disabled within the meaning of Section 72(m)(7) of the Code;
(b) died;
(c) left the service of the Employer; or
(d) been determined by the Employer to have encountered "financial hardship" as
defined and determined pursuant to Section 403(b)(7)(A)(ii) of the Code and
the regulations promulgated thereunder; PROVIDED, any distribution made due
to financial hardship may not exceed the amount of Employer contributions
made to the Account pursuant to a Salary Reduction Agreement, exclusive of
earnings thereon.
Furthermore, distributions from the Account must comply with the minimum
distribution requirements of Section 403(b)(10) of the Code and the regulations
thereunder.
5.2 Death Benefits: Each Employee shall have the right, by written notice on a
form approved by the Custodian, to designate or to change Beneficiary to receive
the benefit amount payable by reason of the Employee's death. Such benefit
amount shall consist of the balance of the Employee's account, and except as
otherwise herein provided, shall be paid or commenced to be paid to the
Beneficiary within thirty (30) days of the Custodian's receipt of proper
notification of the person(s) entitled thereto. Distribution of any such death
benefit shall be made in any of the forms specified in Section 5.3. The method
of distribution shall be determined by the Beneficiary, provided that in the
event of the Beneficiary's inability or failure to act within a reasonable
period of time, the Custodian shall distribute the Account in a single payment
in kind.
A designation of beneficiary form shall be deemed legally valid only when
submitted to the Custodian fully completed and duly executed. Any such
designation may be revoked by the Employee at any time, and shall be
automatically revoked upon receipt by the Custodian of a subsequent, valid
designation of beneficiary form bearing a later execution date.
If more than one Beneficiary shall have been designated, the amount of the
benefit shall be paid to the Beneficiaries as provided in the designation of
beneficiary form otherwise in equal parts. However, no part of any death benefit
shall be paid to a Beneficiary who is not living at the time of the Employee's
death. If any Beneficiary is then deceased, the parts to which the living
Beneficiaries are entitled shall be increased proportionately. If a Beneficiary
entitled to a distribution under the provisions of this Section 5.2 should die
before receiving full distribution of the amount to which he or she is entitled,
the remaining balance shall be distributed in a single payment to the deceased
Beneficiary's spouse, children, or personal representative, in accordance with
the class distribution and preference order as set forth in the next following
paragraph. In all such cases, the Custodian shall determine the person(s) to be
paid, at its absolute discretion and with full immunity.
If no Beneficiary should survive the Employee, or in the absence of a valid
designation of beneficiary in effect at the time of an Employee's death, the
Custodian shall, upon receipt of a certified copy of the death certificate or
other appropriate evidence of the fact of death satisfactory to the Custodian,
make distribution of the deceased Employee's Account to the person(s) of the
following class and in the following order of preference:
(a) the deceased Employee's spouse, but if no such spouse shall survive the
Employee; then to
(b) the descendants, per stirpes, of the deceased Employee, but if there should
be no descendants; then to
(c) the personal representative of the deceased Employee.
The Custodian may conclusively rely upon the accuracy of all matters reported to
it by any source ordinarily presumed to be knowledgeable respecting the matters
so reported. The Custodian shall have no higher duty than the exercise of good
faith, and shall incur no liability by reason of any action taken in reliance
upon inaccurate or fraudulent information reported by any source assumed to be
reliable, or by reason of incomplete information in its possession at the time
of such distribution.
Any distribution of the Account of an Employee may be made in cash or in Shares
(or partly in each), and shall be made within thirty (30) days following receipt
by the Custodian of information deemed by it sufficient upon which to base such
distribution; PROVIDED, however, that the Custodian shall incur no liability
respecting fluctuations in the value of the Account of a deceased Employee in
the event of a delay occasioned by the Custodian's good faith decision to await
additional evidence or information bearing on the Beneficiary.
Upon full and complete distribution of the Employee's Account pursuant to the
provisions of this Section 5.2, the Custodian shall be fully discharged from all
liability respecting such Account. In the event of reasonable doubt respecting
the proper course of action to be taken, the Custodian may at its sole and
absolute discretion resolve such doubt by judicial determination, which shall be
binding on all parties claiming any interest in the Account of the deceased
Employee. In such event, all court costs, legal expenses, reasonable
compensation for time expended by the Custodian in the performance of its
duties, and other appropriate and pertinent expenses and cost shall be collected
by the Custodian from the deceased Employee's Account.
Notwithstanding any provision elsewhere herein to the contrary, (a) if the
Employee dies on or after the date on which payment from the Account has
commenced but before the entire interest in such Account has been distributed,
the remaining portion of such interest shall be distributed to the Employee's
Beneficiary at least as rapidly as under the method of distribution being used
as of the date of such Employee's death, and (b) if the Employee dies before any
such distribution has commenced, the entire interest of such Employee in the
Account shall be distributed to the Beneficiary within five years of the death
of the Employee; PROVIDED, however that if (i) any portion of the Account is
payable to (or for the benefit of) a designated Beneficiary (within the meaning
of Section 72(s)(4) of the Code), (ii) such portion is to be distributed over
the life of such designated Beneficiary over a period not extending beyond the
life expectancy of such designated Beneficiary (determined as of the date of the
Employee's death), and (iii) such distribution begins no later than one year
after the Employee's death, then the foregoing five-year limitation shall not
apply to such portion of the deceased Account.
5.3 Distribution Options: At the time benefits are paid in accordance with
Section 5.1 or 5.2, the entire value of the Employee's Account shall be
distributed in cash or Shares in any of the following ways as directed by the
Employee, or, in the event of death, by the Beneficiary:
(a) in a lump sum;
(b) in equal or substantially equal installments over a period of time, not
extending beyond the life expectancy of the Employee (or Beneficiary),
determined as of the commencement of such installments; or
(c) in equal or substantially equal installments over a period of time not
extending beyond the joint and last survivor expectancies of the Employee
and his or her spouse, determined as of the commencement of such
installments.
In determining the installments specified in (b) and (c) above, the Employee (or
Beneficiary) shall ensure that the payment amounts will comply with the Code and
regulations promulgated thereunder with respect to required minimum payments in
such cases (with life expectancy payments to include any current earnings on the
unpaid balance of the Employee's Account).
(CONTINUED ON NEXT PAGE)
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Funds distributed by Janus Distributors, Inc. Member NASD (1/97)
JANUS 403(b)(7) TAX-SHELTERED CUSTODY AGREEMENT (Continued)
5.4 Withdrawal of Excess Contributions: If the Custodian should at any time
receive notice from the Employer or Employee that any contribution on behalf of
the Employee exceeded the limitations set forth in Article 3 of this Agreement,
the Custodian shall, as soon as practical after the receipt of such
notification, distribute to such Employee from the Account, Shares representing
the amount of such excess contribution and the net income attributable thereto.
If the excess contribution is not withdrawn before the end of the Employee's
taxable year, the amount of the excess contribution must be included in the
Employee's taxable income and shall be subject to a 6% penalty tax for each
taxable year until the excess is eliminated. Notwithstanding any of the above
provisions, if such excess contribution is not withdrawn before the end of the
Employee's taxable year, the Employee may direct the Custodian to retain the
excess contribution in the Account, providing such excess is used to reduce the
permissible contribution for the current taxable year.
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ARTICLE 6 - THE CUSTODIAN
6.1 Limitations on Custodian's Responsibilities: The Custodian shall not be
responsible in any way for determining the permissible amount of contributions,
the collection of contributions under this Custody Agreement, the purpose or
propriety of any distribution made pursuant to Article 5 hereof, or any other
action or non-action taken at the direction of the Employee, Employer or
Beneficiary. The Employee, Beneficiary, and the executor or administrator of
either of them, as appropriate, shall at all times fully indemnify and save
harmless the Custodian, its successors and assigns, from any liability arising
from distributions so made or actions or non-actions so taken, and from any and
all other liability whatsoever which may arise in connection with this Custody
Agreement, except liability arising from the negligence or willful misconduct of
the Custodian.
The Custodian shall be under no duty to take any action other than as herein
specified with respect to the Account unless the Employee shall furnish the
Custodian with instructions in proper form and such instructions shall have been
specifically agreed to by the Custodian in writing; or to defend or engage in
any suit with respect to the Account unless the Custodian shall first have
agreed in writing to do so and shall have been fully indemnified to the
satisfaction of the Custodian.
The Custodian may conclusively rely upon and
shall be protected in acting upon any written order from the Employer, Employee
or Beneficiary, or any other notice, request, consent, certificate, or other
instrument or paper believed by it to be genuine and to have been properly
executed, and, so long as it acts in good faith, in taking or omitting to take
any other action. No amendment to this Custody Agreement shall place any greater
burden on the Custodian without its written consent.
The Custodian may appoint such agents, attorneys, or other parties and delegate
to such persons such ministerial and limited discretionary duties, including,
but not limited to:
(a) acceptance and investment of contributions;
(b) maintenance of Employee's Account records;
(c) maintenance of Employee's beneficiary designations; and
(d) collection and remittance of Custodian fees.
The Custodian may submit any question arising hereunder or in respect of the
Account to counsel, including its own counsel, and shall be protected in the
acting on the advice of such counsel.
6.2 Reports: The Custodian shall keep accurate and detailed records of all
receipts, investments, disbursements, and other transactions hereunder. The
Custodian shall keep such records, and file with the Internal Revenue Service
such returns and other information concerning the Account, as may be required of
it under the Code and any regulations promulgated thereunder.
The Employee and Custodian shall furnish to each other such information relevant
to the Account as may be required under the Code and any regulations issued, or
forms adopted, by the Treasury Department thereunder.
6.3 Voting and Other Action: The Custodian shall deliver or cause to be
delivered to the Employee all notices, prospectuses, financial statements,
proxies and proxy soliciting materials relating to the Shares held in the
Account. The Custodian shall not vote any Shares held hereunder except in
accordance with the written instructions of the Employee.
6.4 Fee and Expenses: In consideration of its services hereunder, the Custodian
shall receive an annual maintenance fee according to the published fee schedule
which has been delivered to the Employee. Any income taxes or other taxes of any
kind whatsoever that may be levied or assessed upon, or in respect of the
Account, shall be paid from the assets of the Account. Any transfer taxes
incurred in connection with the investment of the assets of the Account, and all
other administrative expenses incurred by the Custodian in the performance of
its duties, including fees for legal services rendered to the Custodian, shall
similarly be paid from the assets of the Account.
The Custodian may change the published fee schedule with respect to Plan Years
beginning at least forty-five (45) days after the Custodian gives the Employee
written notice of such change.
6.5 Resignation or Removal: The Custodian may resign at any time upon thirty
(30) days' notice in writing to the Sponsor, and the Custodian may be removed by
the Sponsor at any time upon thirty (30) days' notice in writing to the
Custodian. Upon such resignation or removal, the Sponsor shall appoint a
successor Custodian, which successor shall be a "bank" as defined in Section
408(n) of the Code.
Upon receipt by the Custodian of written acceptance of such appointment by the
successor Custodian, the Custodian shall transfer and pay over to such successor
the assets of the account and all records pertaining thereto, provided that any
successor Custodian shall agree not to dispose of any such records without the
Custodian's consent. The Custodian is authorized, however, to reserve such sum
of money or Shares as it may deem advisable for payment of all its fees,
compensation, costs, and expenses, or for payment of any liabilities
constituting a charge on or against the assets of the Account or on or against
the Custodian, with any balance of such reserve remaining after the payment of
all such items to be paid over to the successor Custodian. The successor
Custodian shall hold the assets paid over to it under terms similar to those of
this Plan that qualify under Section 403(b) of the Code.
If, within thirty (30) days after the Custodian's resignation or removal, the
Sponsor has not appointed a successor Custodian which has accepted such
appointment, the Custodian may appoint such successor. The Custodian shall not
be liable for the acts or omissions of such successor, whether or not it makes
such appointment.
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ARTICLE 7 - AMENDMENT
The Custody Agreement may at any time and from time to time be amended in whole
or in part by the Sponsor mailing to the Employer and Employee a written copy of
such amendment; provided, however, the Sponsor shall not have the right to amend
the Custody Agreement in such a manner as to: (a) deprive any Employee of any
benefit to which he or she was entitled under the Custody Agreement by reason of
contributions made prior to the amendment, unless such amendment is necessary to
conform the Custody Agreement to, or satisfy the conditions of, any law,
governmental regulation or ruling, and to permit the Custody Agreement and the
Account to meet the requirements of Section 403(b) of the Code or any similar
statute; (b) cause or permit the Account to be diverted to purposes other than
for the exclusive benefit of the Employee or Beneficiary; or (c) cause or permit
any part of the Account to revert to or become the property of the Employer.
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ARTICLE 8 - TERMINATION OF ACCOUNT
The Custodian may elect to terminate the Account if, within thirty (30) days
after its resignation or removal pursuant to Section 6.5, the Sponsor has not
appointed a successor Custodian which has accepted such appointment.
Upon termination of the Account in any manner provided for in this Article 8 and
in Article 6, this Custody Agreement shall be considered to be rescinded and of
no force and effect, and the Custodian shall be relieved from all further
liability with respect to this Custody Agreement, the Account and all assets
thereof so distributed, and any determination by the Custodian of the mode of
distributing the assets of the Account.
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ARTICLE 9 - MISCELLANEOUS
9.1 Prohibited Diversion: At no time shall it be possible for any part of the
assets of the Account to be used for, or diverted to, purposes other than for
the exclusive benefit of the Employee or the Employee's Beneficiary except as
specifically provided in this Custody Agreement.
9.2 Inalienability of Benefits: Except as provided in Sections 3.4 and 6.4, the
assets of the Account shall be nonforfeitable and non-transferable, and shall
not be subject to the claims of the Employee's creditors or to alienation,
assignment, trustee process, garnishment, attachment, execution or levy of any
kind except by the Custodian for its fees and for the expenses of the Account;
and no attempt to cause such assets to be so subjected shall be recognized
except to such extent as may be required by law or provided for herein;
provided, however, that nothing contained in this Custody Agreement prevents the
Custodian from complying with the provisions of a qualified domestic relations
order (as defined in Section 414(p) of the Code). This Custody Agreement
specifically permits distribution to an alternate payee pursuant to a qualified
domestic relations order at any time, irrespective of whether the Employee has
attained his earliest retirement age (as defined under Section 414(p) of the
Code) under this Custody Agreement. Nothing in this Section 9.2 gives an
Employee a right to receive distribution at a time otherwise not permitted under
this Custody Agreement, nor does it permit the alternate payee to receive a form
of payment not otherwise permitted under this Custody Agreement.
9.3 Taxes: The tax treatment of any contributions to the Account and of any
earnings of the Account depends, among other things, upon the nature of the
Employer, the relationship of the Employee to the Employer, and the amount of
contributions made in any Plan Year to the Account (and to other plans, accounts
or contracts with the benefit of special tax treatment) for the benefit of the
Employee. The Custodian and the Sponsor assume no responsibility with respect to
such matters, nor shall any term or provision of this Custody Agreement be
construed so as to place any such responsibility upon either one of them.
9.4 Condition of Custody Agreement: The Account is established with the intent
that it shall qualify under Section 403(b) of the Code as that section exists at
the time the Account is established. Notwithstanding any other provision
contained in this Custody Agreement, if the Internal Revenue Service determines
that because of some inadequacy in the provisions of this original Account, the
Account initially fails to so qualify, all of the assets of the Account shall be
distributed to the Employee, and the Custody Agreement shall be considered to be
rescinded and of no force and effect, unless such inadequacy is removed by a
retroactive amendment. The Sponsor forthwith shall notify the Custodian in
writing of any determination made with respect to the qualified status of the
Custody Agreement.
9.5 Notices by the Custodian: Any notice from the Custodian to the Employer,
Employee, or Beneficiary provided for in this Custody Agreement shall be
effective if sent by first class mail to such person at the last address on the
Custodian's records.
9.6 Construction: Wherever used in the Custody Agreement, the masculine gender
shall include the feminine gender, and singular shall include the plural, unless
the context indicates otherwise.
9.7 Governing Laws: This Agreement shall be construed and administered in
accordance with the laws of the State of Missouri.
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Funds distributed by Janus Distributors, Inc. Member NASD (1/97)