NTC Custody Agreement
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2016 © Newport Trust Company – all rights reserved.
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT (the “Agreement”) is entered into as of ___________________________ by and between the entity named on the signature page hereof (the “Plan Sponsor”) and Newport Trust Company (the “Custodian”), a New Hampshire chartered trust company.
WHEREAS, the Plan Sponsor has adopted the City of Ripon 457 Deferred Compensation Plan (the “Plan”); and WHEREAS, the Plan Sponsor desires to appoint the Custodian as non-discretionary directed custodian of Plan assets and the Custodian desires to serve as such.
NOW THEREFORE, the parties hereby agree as follows:
ARTICLE I. DEFINITIONS
The use of defined terms in this Agreement shall have the following meanings:
1.01 “Account” shall mean the custodial account established pursuant to Article II.
1.02 “Authorized Person” shall mean one or more persons, including a recordkeeper of the Plan, to whom the Plan Administrator may delegate any or all of the duties, responsibilities, or authority imposed upon or granted to the Plan Administrator or the Plan.
1.03 “Code” shall mean the Internal Revenue Code of 1986, as amended.
1.04 “Contracts” shall mean, collectively, life insurance policies, group annuities, guaranteed investment contracts, bank investment contracts or similar vehicles permitted under the Plan.
1.05 “Custodian” shall mean Newport Trust Company and any duly appointed successor custodian acting hereunder.
1.06 “Employer Securities” shall mean “qualifying employer securities” (as defined in Section 407 of ERISA).
1.07 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
1.08 “Indemnified Parties” shall have the meaning set forth in Section 13.02.
1.09 “Investment Manager” shall mean an “investment manager” as defined in Section 3(38) of ERISA appointed by the Plan Sponsor in accordance with Section 8.03 of this Agreement.
1.10 “Losses” shall have the meaning set forth in Section 13.02.
1.11 “Participant” shall mean an eligible employee (as defined in the Plan) who participates in the Plan.
1.12 “Permitted Investments” shall have the meaning set forth in Section 8.04.
1.13 “Plan” shall mean the retirement plan, and any amendments thereto, adopted by the Plan Sponsor as designated above, some or all of the assets of which are held by the Custodian pursuant to the terms of this Agreement.
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1.14 “Plan Administrator” shall mean the person, persons or entity appointed by the Plan Sponsor in accordance with Article V to act as a “plan administrator” (as that term is defined in ERISA).
1.15 “Plan Sponsor” shall mean the entity named on the signature page hereof and which is the “plan sponsor” of the Plan, as that term is defined in Section 3(16)(b) of ERISA.
ARTICLE II. THE CUSTODIAL ACCOUNT
2.01 Establishment of the Account. The Plan Sponsor hereby requests that the Custodian establish a custodial account for and in the name of the Plan and to hold, as Custodian, all assets deposited to or collected with respect to such account (the “Account”).
2.02 Acceptance; Role of Custodian. The Custodian, in consideration of the deposit by the Plan Sponsor of funds into the Account, and other valuable consideration, hereby agrees to act as non-discretionary, directed custodian of the Account on the terms and conditions of this Agreement. As custodian of the Account, Custodian shall take, hold, invest and distribute all of the assets of the Account in accordance with the terms of this Agreement. The Custodian is responsible for maintaining custody of the assets held in the Account, and for investing those assets as directed by the Plan Sponsor, Plan Administrator, or Authorized Person. The Custodian shall not be obligated to provide detailed accounting for the Account or for any individual investment option, such as with respect to contributions, distributions, loan activity, and rollovers.
2.03 Exclusive Use. Except as may otherwise be permitted by law or by the terms of the Plan or related trust, at no time prior to the satisfaction of all liabilities with respect to the Participants and their beneficiaries shall any part of the corpus or income of the Account be used for, or diverted to, purposes other than for the exclusive benefit of the Participants and their beneficiaries and for defraying the reasonable expenses of administering the Plan.
2.04 Participant Direction. If the Custodian is advised by the Plan Sponsor that the provisions of the Plan and related trust documents so permit, and the Plan Sponsor so requests, the Custodian shall establish separate Participantdirected sub-accounts and all references to the Plan Sponsor under this Agreement shall be deemed to be references to the Participant who is directing investment of such sub-account.
ARTICLE III. PLAN SPONSOR REPRESENTATIONS AND WARRANTIES
3.01 The Plan Sponsor hereby represents and warrants that:
a. All directions or authorizations under this Agreement by the Plan Sponsor, Plan Administrator, Investment Manager, or other Authorized Person will be made in accordance with the terms of the Plan and not contrary to ERISA.
b. The terms of the Plan do not impose any duties or obligations upon the Custodian that are not contained in, or are inconsistent with, this Agreement.
c. The Plan Sponsor has full power and authority under applicable law, and has taken all action necessary, to enter into and perform this Agreement, and the person executing this Agreement on its behalf is duly authorized and empowered to execute and deliver this Agreement. d. This Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
e. No consent or authorization of, filing with, or other act by or in respect of any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement. f. The execution, performance and delivery of this Agreement shall not result in a violation of any applicable law or impairment of any of its contractual obligations.
ARTICLE IV. STANDARD OF CONDUCT
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4.01 The Custodian shall discharge its duties hereunder solely in the interest of the Participants and their beneficiaries for the exclusive purpose of providing benefits to Participants and for defraying reasonable expenses of administering the Account. The Custodian shall perform all of its duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, or in accordance with such other standard as may, from time to time, be required by law, and in accordance with the Plan and this Agreement, insofar as they are consistent with ERISA.
4.02 Except as permitted by ERISA, the Custodian will not maintain the indicia of ownership of any assets of the Account outside the jurisdiction of the district courts of the United States.
ARTICLE V. PLAN ADMINISTRATOR
5.01 The Plan Sponsor shall appoint in writing a Plan Administrator. If no such person, persons or entity is so designated, such term shall mean the Plan Sponsor. The Plan Administrator shall have exclusive responsibility for administration of the Account and, unless an Investment Manager is appointed under Section 8.03, the direction of the investment of the Account.
5.02 The Plan Administrator may delegate any or all of the duties, responsibilities, or authority imposed upon or granted to the Plan Administrator under the Plan or this Agreement to one or more Authorized Persons; provided however that any such delegation may not violate the provisions of ERISA, and provided further that the Custodian must be notified in writing prior to the effective date of any such delegation of duty, responsibility or authority of the Plan Administrator to any Authorized Person.
ARTICLE VI. INSTRUCTIONS
6.01 Reliance on Instruction. The Custodian may rely in all respects, without having to make further inquiry, upon instructions by the Plan Sponsor, Plan Administrator, Investment Manager or Authorized Person, including investment instructions under Article VIII of this Agreement. The Custodian shall be deemed to have received proper instructions upon receipt of written instruction given to the Custodian in a form and manner required by or acceptable to the Custodian.
6.02 Conflicting Instructions. In the event of any ambiguous or conflicting instructions to, or adverse claims or demands upon, the Custodian, the Custodian shall be entitled, at its option, to refuse to comply with any such instruction, claim or demand as long as such ambiguity or conflict shall continue, and in so refusing the Custodian may elect not to make any payment or other disposition of assets held pursuant to this Agreement. The Custodian shall not be or become liable in any way for its failure or refusal to comply with any such ambiguous or conflicting instructions or adverse claims or demands, and it shall be entitled to continue to so refrain from acting until such ambiguous, conflicting or adverse demands (a) have been resolved and it has been notified in writing thereof or (b) have finally been determined in a court of competent jurisdiction.
ARTICLE VII. CONTRIBUTIONS OR TRANSFERS
7.01 Receipt of Contributions. The Custodian shall receive and accept for the Account all money, securities and other property transferred, assigned and delivered to it from any source by or at the direction of the Plan Sponsor, Plan Administrator or Authorized Person. The Custodian has no duty to inquire into the source of the assets transferred to it or the right of the transferor of such assets to transfer them to Custodian. The Custodian will maintain safe custody of such money, securities and other property it actually receives for the Account. The Custodian has no duty or authority to require any contributions or transfers to be made under the Plan to the Custodian, compute any amount to be contributed or transferred under the Plan to the Custodian, determine whether amounts received by the Custodian comply with the Plan, the Code or ERISA, if applicable. The Custodian will not be responsible for any transferred asset until it receives such asset. The Custodian will accept assets, records, statements, and reports as complete and accurate, and will have no duty to audit the same for accuracy, compliance with applicable law or consistency.
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7.02 Unidentified Assets. If the Custodian receives any money, securities or other property from a source other than the Plan Sponsor and has not received appropriate notification that such assets are to be accepted for the Account, the Custodian is authorized to return such assets to the person from whom they were received. The Custodian will not be liable for any assets returned in such circumstances.
7.03 Returns to Plan Sponsor. The Custodian will return contributions to the Plan Sponsor if the Plan Sponsor or the Plan Administrator provides instructions to the Custodian to do so. The Plan Sponsor is solely responsible for ensuring that an instruction to return any amount to the Plan Sponsor meets all applicable requirements, including those of ERISA, as applicable.
ARTICLE VIII. INVESTMENT AND ADMINISTRATION OF THE CUSTODIAL ACCOUNT
8.01 Administrative Functions. Administrative functions, such as accounting for Participant accounts and any reporting or disclosure obligations imposed under the Code or ERISA, related to the Account will be the responsibility of the Plan Sponsor, Plan Administrator or Authorized Person. In general, the Custodian will not be responsible for administrative functions.
8.02 No Discretion. The Custodian shall have no discretionary control over, or any other discretion regarding, the investment or administration of the Account. The Plan Sponsor understands and acknowledges that the Custodian is not under any duty to supervise the investment of, or to advise or make recommendations to the Plan Sponsor with respect to the sale or other disposition of assets of the Account or to advise or recommend the purchase of any assets with the funds available under the Account. It shall be the responsibility of the Plan Sponsor to determine the diversification policy with respect to the investment of Account assets, for monitoring adherence to such policy, and for advising the Custodian with respect to its compliance with any investment limitations contained in the Plan. The Plan Sponsor hereby instructs the Custodian to act solely in accordance with instructions from the Plan Sponsor, Plan Administrator, Authorized Person or Investment Manager with respect to the investment of the assets held in the Account. To the full extent permitted by applicable law, the Custodian shall have (a) no duty to inquire whether such instructions conform to the Plan or applicable law, including, but not limited to Section 404(c) of ERISA, and (b) no liability or responsibility for following any such instruction, or for failing to act in the absence of such instruction.
8.03 Investment Manager. The Plan Sponsor may appoint an Investment Manager to direct investment of the Account in whole or in part. The Plan Sponsor shall notify the Custodian in writing of its appointment of any Investment Manager. Each appointment of any person as an Investment Manager shall constitute the representation and warranty to the Custodian by the Plan Sponsor that the Plan Sponsor has determined that such person either is, and so long as such appointment is effective remains, (i) registered as an investment advisor under the Investment Advisors Act of 1940, or (ii) a bank as defined in the Investment Advisors Act of 1940, or (iii) an insurance company qualified to perform the services hereinafter described under the laws of more than one State.
8.04 Permitted Investments. The Plan Sponsor, Plan Administrator or Investment Manager may direct the Account be invested in property of any character, real or personal, including but not limited to the following securities: stocks (whether common or preferred) of any kind or class of any corporation, including shares of open-end or closedend investment companies (i.e., mutual funds) and small business investment companies; bonds; notes or debentures (including bonds, notes or debentures, options, futures or warrants); unit investment trusts; U.S.
Treasury obligations and other governmental obligations; shares or units of participation in qualified common trust funds, qualified pooled funds or pooled investment funds of any insurance company qualified to do business in the state; or any other investments that the Plan Sponsor, Plan Administrator or Investment Manager believes are proper and consistent with the terms and purposes of the Plan, without being limited by nonfederal laws covering the investment of custodial accounts, but taking into account the requirements of ERISA and the Plan (individually and collectively, “Permitted Investments”).
8.05 Nondiscretionary Powers of the Custodian. Pursuant to instruction from the Plan Sponsor, Plan Administrator, Investment Manager or Authorized Person, the Custodian shall have the following nondiscretionary powers:
(a) Invest and reinvest the principal and income of the Account in Permitted Investments and keep the same invested without distinction between principal and income.
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(b) Invest and reinvest all or any portion of the assets comprising the Account in any group trust fund which at the time of the investment provides for the pooling of the assets of plans qualified under Section 401(a) of the Code. This authorization applies solely to a group trust fund exempt from taxation under Section 501(a) of the Code and the trust agreement which satisfies the requirements of Revenue Ruling 81-100. The provisions of the group trust fund agreement, as amended from time to time, are incorporated by reference within this Agreement. The provisions of the group trust fund will govern any investment of Plan assets in that fund. The Plan Administrator must specify, in a form acceptable to the Custodian, to which group trust fund(s) this authorization applies.
(c) On the direction of the Plan Sponsor, Plan Administrator, Investment Manager or other Authorized Person, as the case may be, with any cash at any time held by it, to purchase or subscribe for any authorized investment and to retain such authorized investment in the Account. (d) To make disbursements out of the Account to such persons, in such manner, in such amounts, and for such purposes as may be specified in such direction.
(e) To sell for cash or on credit, convert, redeem, exchange for another authorized investment, or otherwise dispose of any authorized investment at any time held by it; (f) To retain uninvested all of any part of the Account for which investment instructions have not been received, it being understood that Custodian shall not be required to pay interest on any such uninvested balance; (g) To purchase authorized investments at a premium or discount; (h) To engage such agents, actuaries, accountants, attorneys, investment advisors or managers, subcustodians and such other advisors, and, anything contained herein to the contrary notwithstanding, to engage in such legal or administrative proceedings as are deemed reasonably required in connection with the administration of the Account, and to compensate any persons so engaged at such wages, fees, remuneration consideration or otherwise, and upon such terms and conditions as Custodian shall deem reasonable under the circumstances. Unless otherwise noted in this Agreement, such compensation shall be a charge upon the Account and shall in no event be deducted from any commissions or other compensation payable to Custodian; and
(i) To cause any investment in the Account to be registered in, or transferred into, its name as Custodian, or the name of its nominee or nominees or to retain them unregistered or in form permitting transfer by delivery, but the books and records of Custodian shall at all times show that all such investments are part of the Account.
8.06 Employer Securities. Pursuant to the Plan, the Account may be invested in Employer Securities to the extent necessary to comply with investment instructions under this Agreement. The Custodian shall have no responsibility for determining whether any Employer Security is a “qualifying employer security” or whether any acquisition or disposition of Employer Securities is consistent with applicable law, including (without limitation) the prohibited transaction restrictions of ERISA and the exemptions to those restrictions. The Custodian shall acquire and dispose of such securities in open market transactions or in such other manner as Instructed. If the Account consists of Employer Securities that are not traded on a recognizable market, or the information necessary to ascertain the fair market value is not readily available, the Plan Administrator shall provide to the Custodian the value of such securities for all purposes under the Plan and this Agreement, and the Custodian shall be entitled to rely upon the value of such Employer Security provided by the Plan Administrator. If the Plan Administrator fails or refuses to instruct the Custodian on the value of such Employer Security, the Custodian, in its sole discretion, may engage an independent appraiser to determine the fair market value of such Employer Security and shall be entitled to rely upon the value placed upon such Employer Security by the independent appraiser. Any expenses with respect to such appraisal shall be a charge against the Account and may be paid from the Account as provided in this Agreement. The Custodian shall have no responsibility or liability with respect to the acceptance, distribution, collection, tabulation or remittance of proxies and accompanying materials and other shareholder communications issued with respect to Employer Securities.
8.07 Prohibited Transactions. The Company understands that certain transactions are prohibited for tax-exempt retirement plans under ERISA and under Code Section 4975. The Company will not direct the purchase or sale of NTC Custody Agreement 6 of 11
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any Account asset to or from a “disqualified person” as defined in Code Section 4975(e), or a “party-in-interest” as defined in ERISA Section 3(14), or in any other way direct an investment or other transaction that would be deemed a non-exempt “prohibited transaction” with respect to the Plan under applicable law. The Custodian shall have no duty to determine whether any transaction is, or has the potential to be, a “prohibited transaction.”
8.08 Proxies. For securities held in the Account other than Employer Stock, Custodian will cause all proxies and accompanying materials to be mailed to the Plan Administrator within a reasonable time after the receipt by Custodian. In no case will Custodian be under any duty to determine how, or if, proxies are voted or to take any other action in connection with any proxies. Custodian shall be under no obligation to forward or return any other corporate material received on behalf of the Account unless required by law. If the Account allows a Participant to invest in Employer Stock, proxies and accompanying materials will be the sole responsibility of the Plan Sponsor, Plan Administrator or Authorized Person and Custodian will have no responsibility or liability with respect to the acceptance, distribution, collection, tabulation or remittance of such materials.
8.09 Taxes. The Custodian may execute, as custodian, any declarations or certificates pertaining to the Account that may be required under any tax law(s) or governmental regulation(s) now or hereafter without prior approval of the Plan Sponsor.
ARTICLE IX. RECORDS AND ACCOUNTS
9.01 Records. The Custodian shall maintain true, accurate, and detailed accounts of all investments, receipts, disbursements and other transactions hereunder. All accounts, books, and records relating thereto shall be open to inspection and may be audited from time to time by any person designated by the Plan Administrator during the Custodian’s regular business hours as mutually agreed to in writing by the parties.
9.02 Written Accounts. As soon as reasonably practical after the close of each Plan year, and within ninety (90) days after the removal or resignation of the Custodian, the Custodian shall render to the Plan Sponsor a written statement of account of all investments, receipts and disbursements, and all other financial transactions relating to the Account, including the value of the assets held by the trust. Upon the expiration of ninety (90) days from the date of filing such account, the Custodian shall be forever released and discharged from all liability as to all items and matters included in such accounting as if settled by the decree of a court of competent jurisdiction, except with respect to any such action or transaction to which the Plan Sponsor shall, within such ninety (90) day period, file written objections with the Custodian. The liability of the Custodian to persons other than the Plan Sponsor or Plan Administrator shall be limited to actions under ERISA brought within the period permitted by law for bringing of such action. Nothing herein contained, however, shall be deemed to diminish the right of the Custodian to have its accounts judicially settled by a court of competent jurisdiction.
9.03 Valuation. The assets of the Account shall be valued as of each valuation date at fair market value as determined by the Custodian based upon sources of information as it may deem reliable. For those assets whose value cannot be determined by readily available sources, the Plan Sponsor will direct the Custodian as to the fair market value of those assets. Should the Plan Sponsor in its sole discretion determine that an independent appraisal of some or all of such assets is necessary, the Plan Sponsor will be responsible for hiring a qualified independent appraiser and reporting the appraised value to the Custodian.
ARTICLE X. COMPENSATION AND EXPENSES
10.01 Compensation. The Custodian shall receive compensation for the performance of its services in accordance with its schedule of compensation (attached hereto as “Exhibit A”) in effect when such services are rendered. Such compensation shall constitute a charge to be paid by the Account, unless the Plan Sponsor elects to pay all or any part of such compensation, in which case the Plan Sponsor shall be billed for the performance of such services. The Plan Sponsor expressly acknowledges and agrees that the Custodian may retain as additional compensation for its services any earnings (which are determined daily and which the Custodian expects will be generated at the prevailing federal funds rate) with respect to:
(a) amounts credited to non-interest bearing cash accounts; NTC Custody Agreement 7 of 11
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(b) moneys during the period between the time the moneys are received by the Custodian and actually forwarded to implement investment instructions; and
(c) distributions between the time a disbursement is issued and presented for payment.
Moneys shall be invested as soon as practicable following receipt of the moneys and complete investment instructions, but not later than two business days following receipt of both the moneys and the complete investment instructions. Distribution checks shall be prepared and mailed as soon as practicable following receipt of a proper request for a distribution check, but not later than three business days following receipt of the request.
10.02 408(b)(2) Disclosure. The Custodian shall provide the Plan Sponsor with such information related to the expenses incurred hereunder as it may reasonably request or as otherwise may be required by law in order to enable the Plan Sponsor to comply with applicable reporting and disclosure requirements of ERISA.
10.03 Expenses. Expenses for legal, accounting and all other proper charges and disbursements of the Custodian in connection with the administration of the Account shall constitute a charge to be paid by the Account. However, nothing herein shall prohibit the Plan Sponsor from paying such amounts if the Account is sufficient and the Plan Sponsor so elects.
10.04 Withdrawal from Account. The Custodian may withdraw from the Account amounts sufficient to pay any proper charge against the Account. The Plan Sponsor shall be responsible for payment of any deficiency. To the extent permitted by applicable law, the Plan Sponsor may reimburse the Account for any charges paid from the Account.
ARTICLE XI. REMOVAL OR RESIGNATION OF CUSTODIAN; APPOINTMENT OF SUCCESSOR
11.01 Resignation; Removal of Custodian. The Custodian may resign at any time upon sixty (60) days’ written notice to the Plan Sponsor and the Plan Sponsor may remove the Custodian, with or without cause, upon at least sixty (60) days’ prior written notice to the Custodian.
11.02 Successor. Upon resignation or removal of the Custodian, the Plan Sponsor shall appoint a successor custodian who shall have substantially the same powers and duties as those conferred upon the Custodian hereunder. The appointment of a successor custodian shall be by written instrument delivered to the Custodian. Upon the failure of Plan Sponsor to appoint, or the failure of the effectiveness of the appointment by Plan Sponsor of, a successor custodian within sixty (60) days, the Custodian may apply to any court of competent jurisdiction for the appointment of a successor custodian, the costs of which shall be borne by the Account unless Plan Sponsor otherwise agrees to pay such costs. Upon the successor custodian’s acceptance of its appointment as successor custodian, the Custodian shall assign, transfer and pay over to such successor custodian the funds and other property then constituting the Account; provided, however that the Custodian may reserve such sum of money as it may deem advisable for payment of its fees and expenses in connection with the settlement of its account or for the payment of all taxes that may be lawfully assessed upon or in respect of the Account or the income thereof for the period prior to the removal or resignation of the Custodian, or otherwise. Any balance of the amount so reserved remaining after the payment of all such fees, expenses and taxes shall be paid over to the successor custodian.
11.03 Termination of Liability. When the assets comprising the Account have been transferred and delivered to the successor custodian, and the accounts of the Custodian have been settled pursuant to Section 9.02, the Custodian shall be released and discharged from all further accountability or liability for the Account and shall not be responsible in any way for the further disposition of the Account or any part thereof.
ARTICLE XII. AMENDMENT AND TERMINATION
12.01 Amendment. Any amendment to this Agreement shall be in writing and signed by both parties.
12.02 Termination of Agreement. Either party may terminate this Agreement at any time upon sixty (60) days’ written notice to the other party.
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12.03 Termination of Plan. If the Plan is terminated, this Agreement will continue in effect until the earlier of the date as of which all assets of the Account have been distributed or the Agreement is terminated pursuant to Section
12.02. ARTICLE XIII. LIMITATION OF LIABILITY AND INDEMNIFICATION
13.01 Limitations of Liability. The Custodian shall not be liable to Plan Sponsor for any act, omission, or determination made in connection with this Agreement except for its gross negligence, willful misconduct or breach of fiduciary duty. Without limiting the generality of the foregoing, the Custodian will have no liability for any losses arising from (i) its compliance with instructions from the Plan Sponsor, Plan Administrator, Investment Manager or Authorized Person or its failure to act in the absence of any such instruction or (ii) the acts of any prior or successor trustee(s) or custodians.
13.02 Indemnification. The Plan Sponsor agrees to indemnify, defend and hold harmless the Custodian and the Custodian’s directors, officers, employees, agents and affiliates (the “Indemnified Parties”) from any and all damages, losses, costs, judgments, fines, penalties and expenses (including attorney’s fees and disbursements) to which the Indemnified Parties may become subject to in connection with any matter arising out of this Agreement (“Losses”), except to the extent such Losses were caused by the Custodian’s gross negligence, willful misconduct or breach of fiduciary duty. In addition to and not in derogation of the foregoing, the Plan Sponsor agrees to indemnify, defend and hold harmless Indemnified Parties from any and all Losses resulting from (i) their reliance upon any notice, instruction, direction or approval purporting to have been delivered by the Plan Sponsor, Plan Administrator, Investment Manager or Authorized Person or actions not taken in the absence of any such instruction, (ii) Plan Sponsor’s failure to make any contribution to the Account or the insufficiency of the Account to discharge any liabilities under the Plan, (iii) the failure of any participant directed account or participant loan to satisfy the requirements of the Plan and applicable law, (iv) any loss or diminution of the Account resulting from changes in the market value of the Account assets, (v) the Custodian’s refusal to act on any unclear or ambiguous direction or, any direction that on advice of the Custodian’s counsel, is determined to be in contravention of this Agreement or any applicable law, (vii) any act or failure to act by the Plan Sponsor, Plan Administrator, Authorized Person or Investment Manager, and (viii) the acts of any prior or successor custodian(s).
ARTICLE XIV. USA PATRIOT ACT NOTIFICATION
14.01 The following notification is provided to Plan Sponsor pursuant to Section 326 of the USA Patriot Act of 2001, 31 USC Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product. What this means for the Plan Sponsor: When Plan Sponsor opens an account, if the Plan Sponsor is an individual, the Custodian will ask for the Plan Sponsor’s name, taxpayer identification number, residential address, date of birth, and other information that will allow the Custodian to identify Plan Sponsor, and, if Plan Sponsor is not an individual, Custodian will ask for the Plan Sponsor’s official name, taxpayer identification number, business address, and other information that will allow the Custodian to identify the Plan Sponsor. The Custodian may also ask, if the Plan Sponsor is an individual, to see a valid driver’s license or other identifying documents, and, if the Plan Sponsor is not an individual, to see the Plan Sponsor’s legal organizational documents or other identifying documents.
ARTICLE XV. GENERAL
15.01 Plan Qualification. The Plan Sponsor acknowledges that it has the responsibility for the design of the Plan, and, if applicable, for the initial and continued qualification of the Plan under law. The Custodian does not assume responsibility for the determination of the initial qualification or continued compliance of the Plan with the applicable Code.
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15.02 Effective Date. This Agreement shall be effective as of the later of the date hereof or the first date on which the assets are transferred to the Account.
15.03 Governing Law. To the extent that state law shall not have been preempted by the provisions of ERISA, this Agreement shall be construed and enforced according to the laws of the State of Delaware, without regard to the choice of law principles thereof.
15.04 Conflict with Plan. The rights, duties, responsibilities, obligations and liabilities of the Custodian are as set forth in this Agreement, and no provisions of the Plan or any other document shall be deemed to affect such rights, duties, responsibilities, obligations and liabilities. If there is a conflict between provisions of the Plan and this Agreement with respect to any subject involving the Custodian, including but not limited to the responsibility, authority or powers of the Custodian, the provisions of this Agreement shall be controlling.
15.05 Bond Not Required. Except as required under ERISA Section 412, the Custodian shall not be required to furnish any bond or security for the performance of its powers and duties hereunder.
15.06 Bankruptcy. The Custodian shall have no duty, in the event of the Plan Sponsor’s bankruptcy or insolvency, to take any action until directed to do so by the bankruptcy trustee or a court that has jurisdiction over Plan assets.
15.07 Severability. If any provision of this Agreement is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement. On the contrary, the remaining provisions shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been inserted therein.
15.08 Non-Assignability of Interest. No benefit to which a Participant or beneficiary or an alternate payee is or may become entitled under the Plan shall at any time be subject in any manner to alienation or encumbrance, nor be resorted to, appropriated or seized in any proceeding at law, in equity or otherwise. No Participant or other person entitled to receive a benefit under the Plan shall, except as specifically provided in such Plan, have power in any manner to transfer, assign, alienate or in any way encumber such benefit under such Plan, or any part thereof, and any attempt to do so shall be void.
15.09 Waiver. No waiver by either party of any failure or refusal to comply with an obligation hereunder shall be deemed a waiver of any obligation hereunder or any subsequent failure or refusal to comply with any other obligation hereunder.
15.10 Assignment. Either party may assign this Agreement to an affiliate or successor in interest upon written notice to the other party. The provisions of this Agreement shall be binding upon the successors and assigns of the parties hereto.
15.11 Notice. Except as the parties may otherwise agree in writing, all notices, reports, accounts and other communications from the Custodian to the Plan Sponsor, Plan Administrator, Investment Manager or any Authorized Person shall be in writing and deemed to have been duly given as of the first date on which the Custodian transmits or otherwise makes the communication available. Except as the parties may otherwise agree in writing, all notices, instructions and communications to the Custodian shall be in writing and shall be deemed to have been given when received by the Custodian at the following address:
Newport Trust Company
c/o Newport Group, Inc.
ATTN: Newport Trust Company
45 South 7th Street
Suite 2208
Minneapolis, MN 55402
Fax: (916) 605-4024
15.12 Force Majeure. The Custodian shall have no liability for any losses arising out of delays in performing the services which it renders under this Agreement, when such delays result from events beyond its control, including without limitation, interruption of the business of the Custodian due to acts of God, acts of governmental authority, NTC Custody Agreement 10 of 11
03312016
2016 © Newport Trust Company – all rights reserved.
acts of war, terrorism, riots, civil commotions, insurrections, labor difficulties (including, but not limited to, strikes and other work slippages due to slow-downs), unauthorized access to its systems, or any action of any courier or utility, mechanical or other malfunction, or electronic interruption.
15.13 Confidentiality. The parties hereto agree that they and their directors, officers, employees, and other staff shall keep in confidence all information, data and records relating to the business and affairs of the other parties to this Agreement (collectively, “Confidential Information”) that may be acquired pursuant to or in connection with this Agreement or the relationships contemplated by this Agreement. During and after the term of this Agreement, disclosure of Confidential Information shall be restricted to those employees of a party hereto with a need to know to fulfill that party’s obligations under this Agreement. Confidential Information shall not be disclosed to a thirdparty not otherwise authorized in the Agreement to receive such information, without the prior written permission of the owner of such Confidential Information. All parties hereto agree that they shall exercise the same care and diligence in protecting the Confidential Information of another party hereto as they would in the protection of its own confidential and proprietary information. The foregoing obligations shall not apply to Confidential Information that: (i) becomes known publicly through no fault of any party hereto; (ii) is received from a third party who is authorized to disclose it; (iii) is already known to the other party to this Agreement; or (iv) is independently developed by the other party to this Agreement.
15.14 Entire Agreement. This Agreement, including all documentation submitted in connection with the engagement of the Custodian, including any fee schedules, contains the entire understanding between the parties relating to the subject matter hereof, and supersedes all prior agreements or understandings between the parties relating to the subject matter hereof, whether written or oral, express or implied.
15.15 Status as Independent Contractors. Nothing in this Agreement shall cause or be deemed to cause any party (including, but not limited to, its officers, directors, or employees) to be an employee, partner, joint venture, or agent of any other party hereto. The sole relationship of the parties hereto is that of independent contractor.
15.16 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and no other counterpart need be produced. Telephonic or electronic facsimile copies of original signatures, writings or initials on this Agreement shall be valid as the original signatures, writings or initials.
15.17 Survival. The following provisions shall survive termination of this Agreement: Article III (Plan Sponsor Representations and Warranties), Article X (Compensation and Expenses), Section 11.02 (Successor), Section
11.03 (Termination of Liability), Article XIII (Limitation of Liability and Indemnification), and Article XV (General). [signatures on following page]
NTC Custody Agreement 11 of 11
03312016
2016 © Newport Trust Company – all rights reserved.
IN WITNESS WHEREOF, the Plan Sponsor and Custodian have caused this Agreement to be executed by their respective duly authorized officers on the date or dates shown below.
CITY OF RIPON
Signature:
Name:
Title:
Date:
NEWPORT TRUST COMPANY
Signature:
Name:
Title: Trust Officer
Date:
EXHIBIT A
2-2021 Fee Schedule 1
FEE SCHEDULE
ANNUAL NEWPORT TRUST COMPANY FEES
Annual Market Value Fees: <$500,000 $500,000 - $5,000,000 $5,000,000+ Plan Assets* 0.10% 0.065% 0.05%
Additional Flat Rate Fee: $250
*Fees will be billed quarterly and will be based on total plan asset values on the last business day of the applicable quarter and fee payment will remain the same as current trust and custody fees. Additional fees may be charged for extraordinary services for which other compensation is not expressly stated, for checks received with insufficient funds and for administration of special assets including transaction and outgoing wire fees for special assets, ETFs and individually directed accounts.
FEE SCHEDULE PROVISIONS
1. It is agreed that any interest earned on cash balances maintained by Newport Trust Company (“Newport”) on behalf of the Plan, while awaiting instructions, shall accrue to the benefit of Newport. Plan Sponsor expressly acknowledges and agrees that Newport may retain as additional compensation for its services any earnings (generally determined daily and calculated on the basis of the then-current Federal Funds Rate) with respect to (a) amounts credited to non-interest bearing cash accounts; (b) moneys during the period between the time the moneys are received by Newport and actually forwarded to the investment provider; and (c) distributions between the time a distribution check is requested and the distribution check is presented for payment.
Moneys shall be invested as soon as practicable following receipt of the moneys and investment instructions, but not later than two business days following receipt of both the moneys and the investment instructions. Distribution checks shall be prepared and mailed as soon as practicable following receipt of a request for a distribution check, but not later than three business days following receipt of the request.
2. As a result of the investment of assets in certain securities, Newport, its affiliates or custodians may be entitled to “revenue sharing” fees (i.e., 12b-1 fees and sub-transfer agent fees) from investment companies (such as mutual funds) or their service providers. Revenue sharing is paid in exchange for Newport’s assumption of administrative and regulatory obligations that the funds would otherwise be responsible for had the fund shares been purchased directly by an individual. For example, Newport may be responsible for enforcing “late trading” and redemption fees under SEC rules 22c-1 and 22c-2 and providing other administrative services on behalf of the funds. Unless the parties agree otherwise, Newport will collect and pass through to a Revenue Holding Account one hundred percent (100%) of the revenue sharing fees on a quarterly basis.
This Fee Schedule and the investment revenue schedule data provided herewith sets forth the revenue sharing Newport will receive for its services. This Fee Schedule, and investment revenue schedule data together are intended by Newport to satisfy the fee disclosure requirements set forth in Department of Labor regulation Section 2550.408b-2(c)(1). The Company represents that the fee and compensation information specified herein was provided to the Company and that the Company had a reasonable opportunity to review and ask questions with respect to such information before entering into the Agreement. The Company has reviewed this Fee Schedule, the investment revenue schedule, the Agreement, and understands the nature and amounts of the Fees and indirect compensation disclosed therein, and has determined that Newport is receiving reasonable compensation for the services in its Agreement with the Company.
EXHIBIT A
2-2021 Fee Schedule 2
3. Newport fees do not include any brokerage or other sub-custodian commissions. They also do not include mutual fund sales charges/loads or brokerage commission of any other broker-dealer or mutual fund family. Any waiver of mutual fund sales charges/loads at the plan level is only based on the qualifications set forth in the fund’s prospectus, as well as the completion by the plan sponsor of appropriate documentation if required by the fund’s sponsor. Newport fees also do not include any fees charged by an Investment Manager/Consultant. Retirement Accounts will have Newport fees directly debited, unless otherwise instructed in prior agreements with Newport Group, Inc. or its predecessors for trust and custody fees.
4. Annual Market Value fees cover:
Custody of Standard Assets and, if applicable, acting as a Directed Trustee Receipt of Plan Contributions
Mutual Fund daily pricing and trade execution
Dividend/Income Posting
Electronically delivered annual trust report and additional statements upon request Mutual Fund revenue-sharing invoicing and collection
Compliance with applicable fee disclosure requirements
5. Newport reserves the right to periodically review the fees charged for acceptability based on the time/effort required to service the account, and to propose to the client changes in the fee agreement if needed. If fees are not paid within 90 days, Newport reserves the right to charge interest on the outstanding balance in the amount of 1.5% per month and/or deduct the outstanding amount directly from the account.
Plan Sponsor Authorized Signature Name and Title Date
Bryan Simmons Trust Officer
Newport Trust Company Authorized Signature Name and Title Date