STATE FARM FUNDS
XXXX INDIVIDUAL RETIREMENT ACCOUNT PLAN
CUSTODIAL ACCOUNT AGREEMENT
Article IX
INTRODUCTION
SECTION 1 BACKGROUND
The Depositor and Custodian, by signing the Application have created this
Custodial Account Agreement (hereinafter referred to as the "Agreement"). The
Application is hereby made a part of this Agreement.
This Agreement is established in accordance with interim IRS guidance
regarding Xxxx IRAs and will be established in accordance with the State Farm
Funds Xxxx Individual Retirement Account Plan which will be drafted and
submitted to the IRS for formal approval once more complete IRS guidance is
provided (hereinafter referred to as the "Plan").
Participation in the Plan is limited to individuals who qualify to purchase
shares in the State Farm Funds, i.e. Agents and Employees of the State Farm
Insurance Companies and their family members. In the event the Depositor
becomes ineligible to purchase shares in the State Farm Funds, no additional
contributions may be made to the Custodial Account established under this
Agreement until the Depositor again becomes eligible to purchase such shares.
The Agreement is intended to qualify as a "Xxxx individual retirement
account" within the meaning of section 408A of the Internal Revenue Code of
1986, as amended (Code). The Depositor has made an initial contribution (or
authorized a compensation deduction) to the Custodial Account as indicated on
the Application. The Depositor and Custodian agree that the terms and
conditions of the Custodial Account are as set forth in this Agreement.
SECTION 2 DEFINITIONS
a. Depositor means the individual who has signed the Application and
makes contributions in the manner prescribed herein.
b. Custodian means Commerce Bank, Bloomington, Illinois, and any
successor thereto as herein provided.
c. State Farm Fund or State Farm Funds means the Investment Company or
Companies specified in the Application, in which assets of the Plan may be
invested; provided that no Investment Company will be deemed available for
investment hereunder (i) prior to the date the prospectus for such Investment
Company discloses such availability, or (ii) with respect to any Depositor who
resides in any state with respect to which shares of the Investment Company
are not available for sale.
d. Shares means shares of common stock of the State Farm Funds.
e. Plan means the State Farm Funds Xxxx Individual Retirement Account
Plan and any amendments thereof.
f. Plan Sponsor means State Farm Interim Fund, Inc.
SECTION 3 ESTABLISHMENT OF DEPOSITOR'S CUSTODIAL ACCOUNT
The Custodian shall establish and maintain a Custodial Account for the sole
benefit of Depositor and his/her Beneficiaries. The Custodial Account shall
be kept in a manner which will permit an accurate determination of the
contributions and any other transactions made by the Depositor. The Depositor
shall promptly notify the Custodian in writing of any change in Depositor's
name or address.
SECTION 4 CONTRIBUTIONS
a. ACCEPTANCE OF CONTRIBUTIONS. The Custodian may accept contributions
by check or compensation deduction as deposits to the Custodial Account from
or on behalf of Depositor, except as limited herein.
b. AMOUNTS OF CONTRIBUTIONS. Contributions for a given taxable year may
be made during such year or not later than the time prescribed by law for
filing Depositor's Federal income tax return for such taxable year (not
including extensions of time for filing). All contributions (except Rollover
Contributions) must be made by check or compensation deduction and are subject
to the minimum investment requirements established by the State Farm Funds.
Contributions shall be invested pursuant to written instructions on a form
provided (or permitted) by the Custodian specifying the State Farm Fund in
which they are to be invested. If the Depositor becomes ineligible to
purchase Shares of the State Farm Funds in accordance with eligibility rules
established from time to time by the State Farm Funds, the Custodian shall not
accept contributions to the Custodial Account during the period of such
ineligibility.
c. ROLLOVER CONTRIBUTIONS. The Depositor shall execute such forms as the
Custodian may require describing the source of the Rollover Contribution.
SECTION 5 INVESTMENT OF ASSETS OF CUSTODIAL ACCOUNT
a. INVESTMENT OF CONTRIBUTIONS. The Custodian shall invest all
contributions in Shares of the State Farm Funds as directed by Depositor on a
form provided or permitted by the Custodian. If such directions are not
received by Custodian; or are received but are, in the opinion of the
Custodian, unclear; or if the accompanying contribution exceeds $2,000 and is
not identified as a Rollover Contribution; or if the Depositor is ineligible
to purchase Shares; the Custodian may hold or return all of the contribution
uninvested without liability for loss of income or appreciation and without
liability for interest pending receipt of proper instructions or
clarification.
b. CHANGE OF INVESTMENT. A Depositor (or a Beneficiary of a deceased
Depositor) may change the State Farm Fund in which his/her account is invested
by filing with the Custodian directions on such form as is provided or
permitted by the Custodian at such times as the Depositor (or a Beneficiary of
a deceased Depositor) shall deem appropriate. No such change of investment
shall be effective until received by the Custodian and, once effective, shall
remain in effect until properly changed.
c. DIVIDENDS AND DISTRIBUTIONS. All income dividends and capital gain
distributions received in respect of Shares held in the Custodial Account
shall be reinvested in Shares of the State Farm Funds from which they were
received and such Shares shall be credited to the Custodial Account. Such
reinvestment shall be made on the date specified by the State Farm Funds for
reinvestment of the distributions. If any distributions may be received at
the election of the shareowner in additional Shares or in cash, the Custodian
shall elect to receive such distributions in additional Shares.
d. REGISTRATION AND OWNERSHIP OF SHARES. Shares acquired by the
Custodian shall be registered in the name of the Custodian or its nominee. The
Custodian shall deliver, or cause to be delivered, to Depositor all
prospectuses, confirmations, notices, reports or other material as may be
required under applicable securities laws. The Custodian shall not vote any
such Shares except in accordance with written instructions received from
Depositor.
e. MISCELLANEOUS. The Custodian does not undertake to render any
investment advice to the Depositor. The responsibility of the Custodian to
invest in Shares is not an endorsement of any State Farm Fund.
SECTION 6 PAYMENT OF BENEFITS
a. EXCESS CONTRIBUTIONS. Anything herein to the contrary
notwithstanding, if the Custodian should at any time receive written notice
from the Depositor that any contribution made by or on behalf of the Depositor
was an Excess Contribution (as described in section 408(d)(4) of the Code) and
Depositor directs that such Excess Contribution should be distributed to
him/her, the Custodian shall distribute to the Depositor from the Custodial
Account the amount of such Excess Contribution and, if withdrawn pursuant to
section 408(d)(4) of the Code, the net income attributable thereto in Shares
or cash, in the sole discretion of the Custodian.
b. LOSS OF EXEMPTION. On written notice from the Depositor or the IRS to
the Custodian that for any taxable year the Depositor's account has lost its
exemption, including loss of exemption as provided in section 408(e)(2) of the
Code, the Custodian shall, on or before the close of the ninety (90) day
period beginning with the date of the receipt of such notice, distribute to
such Depositor the Depositor's entire interest in the Custodial Account in
Shares or cash in the sole discretion of the Custodian. The Custodian is
authorized, however, to reserve funds as described in Section 9.a.
c. CONFIRMATIONS. The Custodian will confirm to the Depositor the
redemption of Shares made pursuant to any distribution from the Custodial
Account.
SECTION 7 CUSTODIAN FEES AND EXPENSES OF THE ACCOUNT
a. ANNUAL MAINTENANCE FEE. With the consent in writing of the Plan
Sponsor, the Custodian may impose an Annual Maintenance Fee from time to time
on at least forty-five (45) days' notice in writing to the Depositor.
b. PAYMENT OF FEES AND EXPENSES. Any income, gift, estate, inheritance
taxes and other taxes of any kind whatsoever that may be levied upon or
assessed against or in respect of the Custodial Account, the Annual
Maintenance Fee, and all administrative expenses incurred by the Custodian in
the performance of its duties, including fees for legal services rendered to
the Custodian, shall be paid from the assets of the Custodial Account. The
Custodian may, at its option, collect any amounts so charged from the amount
of any contribution or distribution from the Custodial Account or by sale or
liquidation of the Shares credited to the Custodial Account and, if the assets
of the Custodial Account are insufficient to satisfy such charges, the
Depositor shall pay any deficit therein to the Custodian.
SECTION 8 ADDITIONAL PROVISIONS REGARDING THE CUSTODIAN
a. CUSTODIAL ACCOUNT STATEMENTS. The Custodian shall keep accurate and
detailed records of all transactions it is required to perform hereunder.
Within sixty (60) days after the close of each calendar year (or after the
Custodian's resignation or removal pursuant to Section 9 hereof), the
Custodian shall deliver to the Depositor a written statement of the
transactions effected by the Custodian during such year (or period ending with
such resignation or removal) and the fair market value of the assets of the
Custodial Account as of the close of such year. Upon expiration of the sixty
(60) day period following the date on which the foregoing statement is
delivered by the Custodian, the Custodian shall (to the extent permitted by
applicable law) be forever released and discharged from all liability and
accountability to anyone with respect to its acts in transactions shown on or
reflected by such statement, except with respect to any such acts or
transactions as to which the Depositor has filed written objections with the
Custodian, within the sixty (60) day period. Nothing herein contained shall be
deemed to preclude the Custodian from its right to have its accounts
judicially settled by a court of competent jurisdiction.
b. MISCELLANEOUS. The Custodian shall not be liable and assumes no
responsibility for any action taken at a Depositor's direction, nor shall the
Custodian have any duty or responsibility to determine whether information
furnished by a Depositor is correct. To the extent permitted by Federal law,
nothing contained in the Plan, either expressly or by implication, shall be
deemed to impose any powers, duties or responsibilities on the Custodian other
than those set forth in this Agreement.
The Custodian shall be indemnified and saved harmless by the Depositor from
any and all liability whatsoever which may arise in connection with this
Agreement, except the obligation of the Custodian to perform in accordance
with the Agreement and with the applicable Federal law.
The Custodian shall be under no duty to take any action other than as
herein specified with respect to the Custodial Account unless the Depositor
shall furnish the Custodian with instructions in proper form and such
instructions shall have been specifically agreed to by the Custodian. The
Custodian shall be under no duties to defend or engage in any suit with
respect to the Custodial Account unless the Custodian shall have first agreed
in writing to do so and shall have been fully indemnified to the satisfaction
of the Custodian. The Custodian shall be protected in acting upon any written
order or direction from a Depositor or any other notice, request, consent,
certificate or any other instrument 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.
Before making any distribution in the case of the death of the
Depositor, the Custodian shall be furnished with such certified death
certificates, inheritance tax releases, indemnity agreements and other
documents as may be required by the Custodian. Before making any distribution
in the case of the disability of a Depositor, the Custodian shall be furnished
with proof of disability.
The Custodian shall be an agent for the Depositor to receive and
invest contributions as directed by the Depositor, hold and distribute such
investments, and keep adequate records and report thereon, all in accordance
with this Agreement. The parties do not intend to confer any fiduciary duties
on the Custodian, and none shall be implied. The Custodian may perform any of
its duties through other persons designated by the Custodian from time to
time, and the Custodian intends initially to delegate all such duties to State
Farm Investment Management Corp. No such delegation or future change therein
shall be considered as an amendment to this Agreement.
SECTION 9 RESIGNATION OF OR REMOVAL OF CUSTODIAN
a. The Custodian may resign at any time upon at least thirty (30) days'
notice in writing to the Depositor and to the Plan Sponsor, and Custodian and
Depositor agree that the Plan Sponsor may remove the Custodian at any time
upon at last thirty (30) days' notice in writing to the Custodian and
Depositor. Upon such resignation or removal, the Plan Sponsor shall appoint a
Successor Custodian. Upon receipt by the Custodian of a written acceptance of
such appointment by a Successor Custodian, the Custodian shall transfer to
such Successor the assets of the Custodial Account and all records pertaining
thereto. The Custodian is authorized, however, to reserve such a portion of
such assets as it may deem advisable for payment of all its fees,
compensation, costs and expenses or for payment of any other liabilities
constituting a charge on or against the assets of the Custodial 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 the terms of
this Agreement.
b. The Custodian shall not be liable for the acts or omissions of any
Successor Custodian.
c. The Custodian and every Successor Custodian appointed to serve under
this Agreement must be a bank as defined in section 408(n) of the Code or such
other person who demonstrates to the satisfaction of the Secretary of the
Treasury or his delegate that the manner in which such other person will
administer the Custodial Account will be consistent with the requirements of
section 408A of the Code.
d. After the Custodian has transferred the Custodial Account assets
(including any reserve balance as contemplated above) to the Successor
Custodian, the Custodian shall be relieved of all further liability with
respect to this Agreement, the Custodial Account and the assets thereof.
SECTION 10 TERMINATION OF CUSTODIAL ACCOUNT
a. TERMINATION BY CUSTODIAN. The Custodian may elect to terminate the
Custodial Account if, within sixty (60) days after its resignation or removal
pursuant to Section 9, the Plan Sponsor has not appointed a Successor
Custodian which has accepted such appointment. Termination of the Custodial
Account shall be effected by distributing to Depositor all assets of the
Custodial Account in a lump-sum payment in cash or Shares, at the sole
discretion of Custodian, subject to Custodian's right to reserve funds as
described in Section 9.a.
b. TERMINATION BY DEPOSITOR. The Depositor may elect to terminate the
Custodial Account at any time. Depositor shall give written notice of his/her
election to terminate the Custodial Account to the Custodian by registered or
certified mail. After receipt of such notice, the Custodian shall terminate
the Custodial Account and distribute all assets in the Custodial Account
pursuant to directions furnished by Depositor and agreed to by Custodian. If
Depositor fails or is unable to furnish such directions, the Custodian shall
distribute to Depositor all assets of the Custodial Account in a lump-sum
payment in cash or in Shares, at the sole discretion of Custodian, subject to
Custodian's right to reserve funds as described in Section 9.a.
c. TERMINATION OF AGREEMENT. Upon distribution of all assets of the
Custodial Account in accordance with the provisions herein, this Agreement
shall terminate and have no further force and effect. The Custodian shall be
relieved from all further liability with respect to this Agreement, the
Custodial Account and all assets thereof so distributed.
SECTION 11 AMENDMENT
a. Subject to the provisions of paragraphs (b), (c), and (d) herein, the
Depositor and Custodian agree that the Plan Sponsor may, at any time,
unilaterally amend this Agreement in any respect (including retroactive
amendments). Any such Amendment shall be effective on a stated date which
shall be at least sixty (60) days after giving written notice of the Amendment
(including its exact terms) to Depositor and Custodian. The Depositor and
Custodian shall be deemed to have consented to such Amendment unless, within
thirty (30) days after the notice to Depositor and Custodian is mailed, either
(i) Depositor elects to terminate the Custodial Account as provided under
Section 10, or (ii) Custodian elects to resign as provided in Section 9.
b. No amendment shall be made at any time under which any part of the
Custodial Account may be diverted to purposes other than for the exclusive
benefit of Depositor and his/her Beneficiaries.
c. No amendment shall be made retroactively in a manner so as to deprive
any Depositor of any benefit to which he/she was entitled under this Agreement
by reason of contributions made before the Amendment, unless such Amendment is
necessary to conform the Plan or Agreement to, or satisfy the requirements of,
the Code or other applicable law.
d. No amendment shall place any greater burden on the Custodian without
its written consent.
e. This Section 11 shall not be construed to restrict the freedom of the
Custodian to impose an Annual Maintenance Fee in the manner provided in
Section 7.a and no such change shall be deemed an Amendment of this Agreement.
SECTION 12 MISCELLANEOUS
a. Any notice, report or material required to be delivered by the
Custodian to the Depositor shall be deemed delivered and effective on the date
mailed by the Custodian to the Depositor at the Depositor's last address of
record filed by the Depositor with the Custodian.
b. This Agreement and Beneficiary Designations, and all property rights,
including rights to distributions after the death of the Depositor, under the
Plan, shall be construed in accordance with the laws of the State of Illinois,
other than its laws with respect to the choice of laws.
