All About Traditional, Rollover, and Roth IRAs - Union Bank · All About Traditional, Rollover, and Roth IRAs Disclosure and Agreement EffEctivE January 1, 2012 UBC2868_84363_TradROTH_AllAbout_F.indd

All About Traditional, Rollover, and Roth IRAsDisclosure and Agreement

E f f E c t i v E J a n u a r y 1 , 2 0 1 2

UBC2868_84363_TradROTH_AllAbout_F.indd 1 11/14/11 3:25 PM

1

nOn-LiaBiLity fOr faiLurES Of OtHEr cOMPaniESEffective processing of your financial transactions may depend on the readiness of service providers other than the Bank. Such other service-providing companies include, but may not be limited to, originators of payments due you, recipients of payments you make, your Internet service provider (if you have one), and companies that provide your utilities and telecommunications services. To the maximum extent permitted by law, the Bank disclaims responsibility and liability for any delays, disruptions, or failures caused by such other companies.

taBLE Of cOntEntS

UNION BANK INDIVIDUAL RETIREMENT ACCOUNT (IRA) DISCLOSURE STATEMENT ..........................................................................1

INTRODUCTION .................................................................................................1

IMPORTANT INFORMATION ABOUT YOUR UNION BANK IRA ..............................................................................................1Traditional IRA ...........................................................................................................1Roth IRA ......................................................................................................................1Amendments .............................................................................................................1Customer Due Diligence ........................................................................................1Contacting You by Telephone ...............................................................................1Customer Identification Program (CIP) .............................................................1Definition of Terms...................................................................................................1Fees ...............................................................................................................................1Headings ....................................................................................................................2Heroes Earnings Assistance and Relief Tax

(HEART) Act of 2008 ........................................................................................2Hurricane-Related Relief .......................................................................................2IRA Application and Adoption Agreement ......................................................2Non-Personal Transaction or Instruction Requests ......................................2Notice of Withdrawal .............................................................................................2Opening Additional Accounts..............................................................................2Other Agreements ..................................................................................................2Severability ................................................................................................................2Unlawful Internet Gambling Compliance with Laws

and Regulations .....................................................................................................2Waivers.......................................................................................................................2

GENERAL IRA INFORMATION ................................................................2How to Obtain More Information .......................................................................2Right to Revoke .........................................................................................................2IRA Account Ownership ........................................................................................2

TRADITIONAL AND ROLLOVER IRAs ................................................3Traditional IRA Contribution Requirements ...................................................3Traditional IRA Contribution Limits ...................................................................3Traditional IRA Contribution Deadline ..............................................................3Traditional IRA Automatic Contribution Deadline ........................................3Spousal Traditional IRA Contribution Requirements and Limits ...............3Traditional IRA Contribution Deductibility ......................................................3Excess Contributions ..............................................................................................3Tax Credit (“Saver’s Credit”) ................................................................................4Rollover IRA Contributions ..................................................................................4Rollover IRA Types ..................................................................................................4Traditional IRA and Rollover IRA Transfers .....................................................4Traditional IRA Distributions................................................................................4Early Distributions ...................................................................................................4Required Minimum Distributions (RMD) .........................................................4Requirements at Death ..........................................................................................5Distribution Withholding Rules ..........................................................................5Escheatment of Inactive Accounts After Age 701/2 .......................................5

ROTH IRAs ............................................................................................................6Roth IRA Contribution Requirements ...............................................................6Roth IRA Contribution Limits ...............................................................................6Roth IRA Contribution Deadline ..........................................................................6

Roth IRA Automatic Contribution Deadline ....................................................6Spousal Roth IRA Contribution Requirements and Limits ...........................6Roth IRA Contribution Deductibility ..................................................................6Roth Rollover IRA .....................................................................................................6Roth IRA Transfers ..................................................................................................6Roth IRA Conversions ............................................................................................6Roth IRA Conversions 2010 and Thereafter ....................................................6Recharacterizations ................................................................................................7Excess Contributions ..............................................................................................7Roth IRA Distributions ...........................................................................................7Roth IRA Distributions at Death ..........................................................................7

BANK AND BROKERAGE IRAs ...............................................................7FDIC Insurance .........................................................................................................7Bank IRAs and Variable Rate IRA Time Deposits ..........................................8Fixed Rate IRA Time Deposits .............................................................................8Promotional Rate IRA Time Deposits ..............................................................10

BROKERAGE IRAs .........................................................................................10Brokerage IRA Fees ...............................................................................................10Core Account Investment Vehicle ....................................................................10Mutual Fund Disclosure Statement ..................................................................10Consent to the Use of Proprietary Mutual Funds .........................................10Market-Linked Certificate of Deposit (MLCD) .............................................10Investment Guidelines .........................................................................................10Expected Returns .................................................................................................... 11

PROHIBITED IRA TRANSACTIONS ..................................................... 11Prohibited Transaction Rules ............................................................................. 11Use of IRA as Security for a Loan ...................................................................... 11Estate and Gift Taxes ............................................................................................ 11

IRA REPORTING ............................................................................................. 11Reporting Requirements for IRA Holders ........................................................ 11Statements and Bank Reporting Requirements ............................................. 11

GENERAL IRA ACCOUNT INFORMATION .................................... 12Access to IRA Funds ............................................................................................. 12Adjustments ............................................................................................................ 12Change of Name or Address .............................................................................. 12Check Endorsement .............................................................................................. 12Claim of Loss ........................................................................................................... 12Currency Transaction Reporting ....................................................................... 12Deposits ................................................................................................................... 12Lost Items................................................................................................................. 12Power of Attorney.................................................................................................. 12Telephone Monitoring .......................................................................................... 12

CUSTODIAL/TRUSTEE FEES ................................................................. 12

UNION BANK, N.A., INDIVIDUAL RETIREMENT ACCOUNT CUSTODIAL AGREEMENT FOR TRADITIONAL IRAs ............ 13

UNION BANK, N.A., ROTH INDIVIDUAL RETIREMENT ACCOUNT CUSTODIAL AGREEMENT .............................................. 16

UNIONBANC INVESTMENT SERVICES LLC AGREEMENT—APPLIES TO BROKERAGE IRAs FOR BOTH TRADITIONAL IRA AND ROTH IRA PLANS ..................................................................... 19Securities Available Through UnionBanc Investment Services ............... 19Meanings of Words in This Agreement .......................................................... 19Retirement Plan Provisions ................................................................................. 19Bank/Investment Services Accounts .............................................................20General .................................................................................................................... 22Payment for the Order Flow .............................................................................. 23Notice to Customers ............................................................................................ 23

BROKERAGE ACCOUNT PREDISPUTE ARBITRATION AGREEMENT ................................................................................................... 23

FINANCIAL DISCLOSURE ........................................................................ 24

ENDNOTES ........................................................................................................ 26

uniOn BanK inDiviDuaL rEtirEMEnt accOunt (ira) DiScLOSurE StatEMEnt

intrODuctiOnWelcome to Union Bank®, N.A. Union Bank is one of the West’s oldest and largest banks and enjoys a reputation as being a premier provider of retirement plans and investments for individuals and for employers.1 With over 300 banking offices in California, Oregon, and Washington, Union Bank, its subsidiaries, and its affiliates, including UnionBanc Investment Services, can provide you with the resources to meet your retirement savings needs.2

iMPOrtant infOrMatiOn aBOut yOur uniOn BanK iraThis booklet contains the Union Bank Traditional Individual Retirement Account Disclosure Statement and the Union Bank Roth Individual Retirement Account Disclosure Statement (Disclosure Statement(s)). These disclosures describe the rules and regulations that pertain to the Union Bank Traditional and Roth IRAs. This booklet also contains your IRA Custodial Agreement(s) and other terms and conditions applicable to your account, and a copy of the UnionBanc Investment Services Agreement.

Eligibility to participate in and deduct contributions made to an IRA is subject to Internal Revenue Service (IRS) rules. Consult your tax advisor.

Except as otherwise required by law, the provisions of this booklet are governed by, and interpreted according to, California and federal law. Your transactions will not be effective until we receive and process them in California, Oregon, or Washington.

When you sign the IRA Application and Adoption Agreement, you agree to the terms and conditions described in this booklet, including this Disclosure Statement, the Mutual Funds Disclosure Statement, the IRA Custodial Agreement, and, if applicable, the UnionBanc Investment Services Agreement.

This disclosure supersedes all previous disclosures.

traditional iraUnion Bank’s Traditional IRA is the Internal Revenue Service (IRS) model custodial account agreement, Form 5305-A, that meets the requirements of Section 408(a) of the Internal Revenue Code and has been approved by the IRS. As provided on Form 5305-A, beginning with Article VIII, Union Bank has added provisions specific to the Union Bank Traditional IRA. These provisions comply with the applicable requirements of California, Oregon, and Washington state law and the Internal Revenue Code and Regulations.

roth iraThe Roth IRA Custodial Agreement can be found in the middle of this booklet and is designed to qualify for the favorable federal income tax treatment afforded Individual Retirement Accounts (IRAs) under the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), Section 408(a) of the Internal Revenue Code, and related regulations. Your Roth IRA is based on the IRS model trustee account agreement, Form 5305-RA, and has been approved as to its form by the IRS. As provided on Form 5305-RA, beginning with Article IX, Union Bank has added provisions specific to the Union Bank Roth IRA. These provisions comply with the applicable requirements of California, Oregon, and Washington state law and the Internal Revenue Code and Regulations.

amendmentsWe may amend the terms of the Traditional and/or Roth IRA Custodial Agreement and/or the UnionBanc Investment Services Agreement by mailing you notice of the amendment(s) and giving you a reasonable period of time to respond. Normally, if no response is received within the time period, you agree to the change. We may amend all other rules, terms, or conditions regarding Union Bank’s Traditional and/or Roth IRA program(s) and our fees by delivering or mailing a notice or disclosure booklet to you

at the last address on file for your Traditional and/or Roth IRA. By using our services after changes become effective, you agree to the changes.

customer Due DiligenceTo aid the Bank in complying with the Bank Secrecy Act and related laws and regulations, we may ask you for specific information regarding the nature of anticipated activity, as well as certain other financial transactions. This information may include the purpose of the transactions, the relationship you have with the payees or remitters, the anticipated frequency of similar transactions, the source of funds, the ultimate beneficiary of funds, and other questions that may help to clarify the origin and purpose of transactions.

The Bank may, at its sole discretion, elect not to open an account, or to close any existing account, with or without cause. This will typically be done if we are not able to understand the purpose of the account, the structure of an organization, the authority of the signers, the documentation provided, or the general risk associated with the establishment of the account. The Bank may elect not to disclose the specific reason.

contacting you by telephoneBy opening or maintaining an account or safe deposit box with us, you give us and our authorized representatives your express consent to contact you by telephone, whether cellular (mobile) phone or landline, to communicate with you about any aspect of your banking relationship with us, including without limitation debts or other obligations that may arise from time to time under this Agreement or under any agreement referenced herein. You expressly consent to the use of pre-recorded messages, artificial voices, and/or autodialed calls when we contact you by telephone.

customer identification Program (ciP)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 and/or entity that opens an account, as well as understand the anticipated activity of the account(s).

What this means to you: when you open an account, we will ask for your name, street address, date of birth (for individuals), and other information that will allow us to identify you. We will also ask to see your driver’s license, tax identification number, or other identifying documents.

Definition of termsIn this booklet, where the word “cash” is used, it also includes check, draft, wire, and item. Also, the words “we,” “our,” “us,” “Bank,” “trustee,” and “custodian” refer to Union Bank, and the words “you,” “your,” “depositor,” and “participant” refer to the owner of the account. See the UnionBanc Investment Services Agreement contained in this booklet for terms relevant to that Agreement.

feesThe bank charges an annual custodial fee for maintaining your IRA. This fee, and all other fees and commissions applicable to your IRA that are not described in this disclosure booklet, are described in our separate Union Bank brochure Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts or the UnionBanc Investment Services Standard Fee and Commission Schedule. You authorize us to charge your IRA for any expenses we or our affiliates may incur as a result of administering your IRA.

If we increase the amount of any charge, impose a new fee, or change the method or frequency of computing or paying interest, causing a less favorable yield to be paid, a written disclosure statement of the change will be mailed to the address in our files for the account affected, unless the change is required by regulation or law. This notification will be mailed not less than 30 days prior to the date the change will become effective.

Union Bank reserves the right to change any of the charges, processes, and procedures described in this booklet at any time.

UBC2868_84363_TradROTH_AllAbout_F.indd 2-1 11/14/11 3:25 PM

32

HeadingsHeadings are used for convenience only and are not part of the terms of this Agreement.

Heroes Earnings assistance and relief tax (HEart) act of 2008 The Heart Act, signed into law in June 2008, made permanent certain provisions of the Pension Protection Act (PPA) of 2006 for military personnel. The law specifically offers tax-related benefits to employer-sponsored retirement plans, IRAs, and Coverdell Education Savings Accounts (ESAs). For more information, see your tax advisor or refer to Pension Protection Act of 2006 (PL 109-280) online at www.irs.gov.

Hurricane-related reliefIf you took a qualified hurricane-related relief distribution from an eligible retirement plan (refer to IRS Publication 4492—Information for Taxpayers Affected by Hurricanes Katrina, Rita and Wilma, online at www.irs.gov for more information regarding qualified individuals and qualified distributions), you may be eligible for favorable tax treatment on distributions and rollovers from your IRA.

ira application and adoption agreementIn order to ensure that our records remain current, we may from time to time ask you to sign a new IRA Application and Adoption Agreement, and update your beneficiary designation.

non-Personal transaction or instruction requestsTo protect your account from unauthorized access, we will accept transaction or instruction requests not made in person only if we can reasonably ensure your identity. We may use passwords or personal identification numbers (PINs), contact you by telephone, or use another means to authenticate your identity and validate your request. Unless you have made special arrangements with Union Bank, we have no obligation to act upon instructions you give us via facsimile transmission, text message, or email, or leave by voicemail or on a telephone answering machine.

notice of WithdrawalFederal regulations require the Bank to reserve the right to require seven days’ written notice for any withdrawal from a retirement account.

Opening additional accountsThe Bank may, at its option, open additional deposit accounts for your Traditional and/or Roth IRA based on your telephone or written instructions. Certain instructions received by email may not be executed and may require additional written or telephone contact to ensure authenticity.

Other agreementsExcept as otherwise stated in this Agreement, this Agreement does not alter or amend the terms or conditions of any other agreement you have with us.

SeverabilityIf any provision of this disclosure booklet is determined to be void or invalid, the rest of the disclosure booklet will remain in full force and effect.

unlawful internet Gambling compliance with Laws and regulationsWhen you do business with us, you agree to comply with all applicable laws, regulations, rules, or ordinances, and orders of governmental and governing authorities having jurisdiction over your organization, and federal and state privacy laws and anti-money laundering laws. You agree not to use your accounts or our services for unlawful Internet gambling transactions or any other illegal purposes.

WaiversWe may delay enforcing our rights under the terms included in this disclosure booklet without losing them. Any waiver by us shall not be deemed a waiver of other rights or of the same right at another time.

GEnEraL ira infOrMatiOn

How to Obtain More informationIf you have any questions, you should discuss them with your own legal counsel or tax advisor. Further information may also be obtained from Union Bank by calling:

Retirement Plan Center 1-800-304-3854

Union Bank Retirement Plan Center business days are Monday through Friday, excluding Bank holidays, from 8:00 a.m. to 4:45 p.m., Pacific Time.

Important Notice: Union Bank is not responsible for determining or maintaining records regarding your eligibility for tax benefits. As many of the rules for IRAs have been revised, you may want to contact a qualified tax advisor before opening an IRA or when selecting a beneficiary or distribution option. IRS Publication 590—Individual Retirement Arrangements may also be helpful in answering questions and identifying various options available to you. This publication is available from your local IRS office, from the IRS website at www.irs.gov, or by calling 1-800-TAX-FORM.

right to revokeYOU MAY REVOKE YOUR TRADITIONAL OR ROTH IRA AT ANY TIME WITHIN SEVEN (7) CALENDAR DAYS AFTER YOU RECEIVE THIS DISCLOSURE. WE WILL CONSIDER THE DISCLOSURE AS RECEIVED THREE (3) DAYS AFTER IT IS MAILED, UNLESS WE ARE NOTIFIED OTHERWISE. You may not revoke a contribution made to an existing IRA plan.

To revoke the IRA, mail or deliver a written notice of revocation to the banking office where you established your IRA. You may also mail your written notice of revocation to:

Union Bank Retirement Plan Center

P.O. Box 60319 Los Angeles, CA 90060-0319

We cannot accept a verbal notice of revocation. However, if you have any questions about revoking your IRA, you may call:

1-800-304-3854

When we receive your written revocation, we will return the entire amount you contributed and any fees, charges, or expenses charged to the account. Any interest earned on the amount contributed is forfeited, and the revocation is reported to the Internal Revenue Service and (if applicable) to the state of California or the state of Oregon.

If you mailed the notice, we consider it mailed on the date postmarked or, if by certified or registered mail, the date of certification or registration, provided it is mailed first class, postage prepaid, and properly addressed.

The overnight mailing address is:


445 S. Figueroa Street, 4-105-808 Los Angeles, CA 90071

ira account OwnershipAll of your IRA accounts will be established in the name of Union Bank as Custodian for the benefit of the Depositor, and any distributions or transfers must have the prior written approval of Union Bank. No account may be set up as “joint tenancy” or for the benefit of someone other than the Depositor. Your interest in the assets of your IRA cannot be given away or pledged.

traDitiOnaL anD rOLLOvEr iras3

traditional ira contribution requirements You are eligible to make regular contributions into a Traditional IRA if you have earned income and you have not attained the age of 701/2 years before the end of the taxable year for which the contribution is made. IRA contributions must be made in cash, unless it is a rollover contribution. Earned income is considered:

●● All wages and salary earned from employment●● Income from tips, professional fees, bonuses, and commissions●● Money earned as a sole proprietor or partner for personal services rendered●● Alimony reported on your tax return

Earned income does not include:

●● Money you receive from pensions, annuities, or other types of deferred compensation

●● Earnings on investments, interest, dividends, rental income, or proceeds from the sale of investments

traditional ira contribution LimitsThe total contribution for each taxable year is limited to the lesser of 100% of your compensation or the limits shown in the chart below.

IRA CONTRIBUTION LIMITS FOR UNDER AGE 50

Tax Year Limit

2011 and beyond$5,000 plus cost-of-living adjustments

(increments of $500)

Catch-up Contributions – Individuals who turn 50 years old or older before the end of the taxable year of the contribution may be eligible to contribute an additional amount as a catch-up contribution.

IRA CONTRIBUTION LIMITS FOR AGE 50 AND OLDER

Tax Year Limit



traditional ira contribution DeadlineThe income tax-filing deadline is the deadline for making contributions for a prior year, usually April 15 (not including extensions). You may designate your contribution as a contribution for the preceding year. For example, if you are a calendar year taxpayer, and you make your Traditional IRA contribution on or before the tax-filing deadline, your contribution can be made for the previous year if you designate it as such.

traditional ira automatic contribution DeadlineIf you have arranged for regular automatic deposits, Union Bank applies them to the tax year in which they are actually made. For example, for an automatic contribution to be reported for tax year 2011, it must be deposited no later than December 31, 2011.

Spousal traditional ira contribution requirements and LimitsIf you file a joint federal tax return and your spouse earns less than the Traditional IRA contribution limit, you may set up two custodial accounts, one for yourself and one for your spouse, known as a “Spousal IRA.” The spousal contribution limit is the lesser of (1) the Traditional IRA contribution limit for each spouse, or (2) 100% of your combined compensation between the two IRAs, so long as no more than the Traditional IRA contributions limit is contributed to either IRA.

If you have reached age 701/2, but your spouse is still under that age, you may still be able to contribute up to the Traditional IRA contribution limit (or 100% of your combined compensation, if less) to your spouse’s IRA.

traditional ira contribution Deductibility4

Contributions may be fully or partially deductible depending upon an individual’s active participation in an employer-sponsored retirement plan and Adjusted Gross Income (AGI).5

Generally, you can deduct the lesser of:

●● The contributions to your Traditional IRA for the tax year ●● The applicable limit (or spousal limit, if applicable) detailed below

This limit is reduced by any contributions made to a Section 501(c)(18) plan on your behalf.

Deductibility If Your Spouse, But Not You, Is an Active Participant – If neither you nor your spouse (if you are married) is an active participant in an employer-sponsored retirement plan, you may make and deduct a contribution to your IRA and to your spouse’s IRA as described under “Traditional IRA Contribution Limits.”

If a married, filing jointly couple’s AGI is more than $167,000, but less than $177,000, your IRA contribution will only be partially deductible. If the couple’s AGI is $177,000 or greater, no IRA deduction may be taken.

If you are married, filing separately, your IRA contribution will only be partially deductible if your AGI is less than $10,000 and will not be deductible if your AGI is $10,000 or greater.

Deductibility If You Are an Active Participant – If you are an active participant in an employer-sponsored retirement plan, deductible contributions to an IRA may be made if below a threshold income level. The maximum annual contribution amount is reduced proportionately over a phase-out range. Active participants with income above the phase-out range are not entitled to any deduction.

Individual Traditional IRA Deductibility Phase-Out Limits

Tax Year Single FilerMarried

Filing JointlyMarried

Filing Separately

2011 $56,000–66,000 $89,000–109,000 $0,000–10,000

In the future, these ranges will be adjusted for cost-of-living increases, when applicable.

Excess contributionsContributions that exceed the allowable maximum IRA contribution limits per year are considered excess contributions.

Withdrawals on or Prior to Tax-Filing Deadline – If some portion of your contribution exceeds the limits, you may withdraw the non-deductible amount plus earnings prior to your tax-filing deadline. The earnings attributable to the excess contribution are subject to regular income tax and a 10% federal premature distribution penalty if you are under age 591/2.

Some states may also assess a penalty tax on the interest portion of the excess contribution withdrawal if you are under the age of 591/2. California imposes a penalty tax of 21/2%.

Withdrawals After Tax-Filing Deadline – Any amount over the maximum annual contribution amount deposited as an annual contribution to a Contributory IRA for any one tax year may be an ineligible contribution. When an ineligible contribution is withdrawn after your tax-filing deadline, the earnings are not withdrawn. However, if your total contributions exceeded the maximum annual contribution amount and you withdraw the excess, you may have to include the distribution in income and pay a 6% penalty on the excess, plus a 10% early distribution penalty if you are under age 591/2.

Applying an Excess Contribution to a Later Year – If after the tax-filing deadline, you are eligible for an IRA contribution for any subsequent year, then you may correct the excess contribution by reallocating it as a current or future year contribution. You can reallocate the excess contribution by


54

your birthday in the distribution year and the factor corresponding to your age on the table. However, if your spouse is more than ten years younger than you and is your sole beneficiary, then your RMD would be determined using the joint life expectancy tables with both of your attained ages, instead of the Uniform Distribution Table.

Union Bank, as Custodian of your Traditional IRA, will inform you that a RMD for the calendar year with respect to your Traditional IRA is required and the date by which the amount must be distributed. And, upon request, we will calculate and report the amount of the RMD for that calendar year for you.

RMD After Death – If you die before your RBD and your spouse is the sole primary beneficiary for the entire year, your spouse may treat the Traditional IRA as his or her own, delay distributions until the year in which you would have reached age 701/2, or use the attained age method. If your spouse is not your sole beneficiary and there are other named beneficiaries of your Traditional IRA, your spouse will be treated as a non-spouse for calculation and distribution purposes, and may not do any of the above.

In the event you die after your RBD, and your spouse is the sole primary beneficiary, he or she may treat the Traditional IRA as his or her own, or apply a single life expectancy factor under the attained age method. A non-spouse beneficiary must calculate required distributions by using the single life expectancy of the beneficiary with the shortest life expectancy. If the non-spouse beneficiary is not an individual or a qualified trust, the single life expectancy factor will be calculated based on your age, determined in the year of your death, and reduced by one for each subsequent year. Amounts are calculated without reference to any beneficiary no longer having an interest in the Traditional IRA on December 31 of the year following your death.

requirements at DeathWe are not responsible for any beneficiary reporting until we are given written notice of your death either by your beneficiary or the Personal Representative of your estate. We may also freeze, refuse, and/or reverse deposits and transactions if we become aware of your death or incompetence.

Upon your death, your Traditional IRA assets will belong to the beneficiary(ies) you have designated. Your age at the time of your death directly affects the distribution options available to your beneficiary(ies). Your beneficiary will be subject to a 50% excise tax on the amount by which a distribution received by the beneficiary in any year is less than the minimum distribution required for the year. The beneficiary’s options are as follows:

Death on or After Your Required Beginning Date (RBD) – If you die on or after your RBD, your beneficiary has the option of taking a full distribution of the inherited Traditional IRA assets. This distribution will be includible in the beneficiary’s taxable income for the year distributed, but the beneficiary will not be subject to an early distribution penalty as death is an exception to this penalty. If not taking a full distribution, there are minimum distribution requirements that apply to the beneficiary, which depend upon whether or not the beneficiary is a spouse.

If your Designated Beneficiary is not your spouse, the distribution period is the longer of (i) the Designated Beneficiary’s life expectancy using his or her attained age in the year immediately following the year of death, or (ii) your remaining life expectancy using your age in the year of death, in either case, reduced by one for each subsequent year.

If the spouse is the sole Designated Beneficiary, then the distribution period is the longer of (i) the life expectancy of the surviving spouse using his or her attained age in the year immediately following the year of death, or (ii) your remaining life expectancy using your age in the year of death, in either case, reduced by one for each subsequent year.

If no Designated Beneficiary remains or an entity such as an estate, nonqualified trust, or charity is the beneficiary as of the end of the year following your death, then distributions are based on your life expectancy in the year of death, reduced by one for each subsequent year.

Death Prior to Your RBD – If you die prior to your RBD, the entire balance must be distributed to your beneficiary(ies) by December 31 of the fifth year after your death, except in the following circumstances:

●● If your beneficiary is a person other than your spouse, or your spouse is not the sole beneficiary, these beneficiaries may choose to receive periodic payments, but payments must begin by December 31 of the year following your death and must be distributed in substantially equal installments over a period no longer than the single life expectancy of your oldest beneficiary; or

●● If your sole beneficiary is your spouse, your spouse may assume the Traditional IRA as his or her own or receive substantially equal payments over his or her single life expectancy beginning no later than December 31 of the year:

(a) Following your death, or (b) In which you would have reached age 701/2

Spousal Assumption – Without regard to when you die, if your beneficiary is your spouse, he or she may either elect to take distribution from your Traditional IRA under one of the beneficiary options outlined, or he or she may elect to treat your Traditional IRA as his or her own IRA. If your spouse elects to treat your IRA as his or her own, he or she will roll over or transfer the funds from your Traditional IRA into an IRA in his or her own name. A non-spouse beneficiary or a spouse beneficiary who is not the sole beneficiary may not treat your Traditional IRA as his or her own.

Distribution Withholding rules Income tax will be withheld from Traditional IRA distributions unless you elect otherwise. The amount of tax withheld is generally 10% of each distribution for federal income tax, 1% for California state income tax, and 8% for Oregon state income tax. Each time you make a withdrawal, you must indicate on the Distribution Request form if you do not wish to have income tax withheld. If you are receiving regularly scheduled distributions, your decision about having tax withheld remains in effect until you change it. You may change it at any time.

Escheatment of inactive accounts after age 701/2

The funds held in your Traditional IRA will be classified as inactive if you do not respond by requesting a distribution or requesting any transactions. The inactive period begins on April 1 of the year following the year in which you reach age 701/2. When an interest-earning account is classified as inactive, it continues to earn interest.

We will turn the funds in your inactive Traditional IRA over to the appropriate state agency of your last-known address on file at the Bank if you do not do any of the following for the appropriate escheatment time period for that state (for example, three years in California, or five years in Washington and Oregon):

●● Increase or decrease the amount in the account (this does not include Bank-initiated transactions, such as service charges and interest payments);

●● Correspond in writing with us concerning the account; or ●● Otherwise indicate an interest in the account (for example, by a letter or other record on file with us).

Written notices may be sent to notify you that the funds may be turned over to the state. The requirement to send the notice is based on the account balance and if there is a valid address (no returned mail) on file. The timing of the notice and the minimum account balance required for the notice vary by state. You may be charged a notification fee.

You may reclaim account funds, which are turned over to the state, by presenting adequate proof of ownership to the appropriate state.

Note: Accounts with foreign addresses will be turned over to the state where the account is domiciled.

leaving the money in the IRA, leaving the earnings on the excess in the IRA, and paying the 6% penalty on the excess contribution for each year the excess remained in the IRA as excess. In some cases, reallocation will avoid the penalties involved in a withdrawal correction.

Ineligible Contributions – Any amount over the maximum annual contribution amount deposited as an annual contribution to a Contributory IRA for any one tax year may be an ineligible contribution. When an ineligible contribution is withdrawn after your tax-filing deadline, the earnings are not withdrawn. However, if your total contributions exceeded the maximum annual contribution amount and you withdraw the excess, you may have to include the distribution in income and pay a 6% penalty on the excess, plus a 10% early distribution penalty if you are under age 591/2.

tax credit (“Saver’s credit”)6

If you make eligible contributions to an employer-sponsored retirement plan or to an Individual Retirement Account (IRA), you may be able to take a tax credit. The amount of the Saver’s Credit you can receive is based on the contributions you make and your credit rate. Your credit rate will vary, depending on your AGI. Your credit rate also depends on your filing status. You may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly).

rollover ira contributions A rollover is a tax-free distribution to you of cash or other assets from your employer’s qualified retirement plan, a 457 deferred compensation plan of a state or local government, a 403(a) annuity plan, or a 403(b) tax-sheltered annuity plan. A rollover occurs when you contribute all or part of the distribution within 60 days to another qualified retirement plan or IRA. For example, when you change jobs or retire, you may be eligible to distribute your retirement plan assets from your prior employer and open a Rollover IRA.

Note: Effective for distributions after December 31, 2006, non-spouse beneficiaries of qualified 401(k), 457(b), 403(a), 403(b) plans and tax-sheltered annuities can roll over eligible amounts in a trustee-to-trustee transfer to an IRA that will be treated as an inherited IRA. Distributions from the inherited IRA are subject to the distribution rules applicable to beneficiaries. Non-spouse beneficiaries cannot roll such assets to their own IRA. For more information, consult your tax advisor or visit www.irs.gov.

rollover ira types7

There are three types of Rollover IRAs:

●● Direct Rollover IRA, when funds distributed from your employer’s qualified retirement plan are made payable to the custodian of your Rollover IRA.

●● Indirect Rollover IRA, when, within the general 60-day limit, you deposit funds you received from your employer’s qualified plan into an IRA.

●● IRA-to-IRA Rollover, when you move IRA assets from one IRA to another IRA.

Direct Rollover IRA – If you choose to have your eligible rollover distribution directly rolled over to an IRA, your employer will send your funds directly to the new trustee or custodian of your IRA, and tax withholding will not apply. The distribution check must be made payable to the custodian of your Rollover IRA.

Indirect Rollover IRA – If you participate in your employer’s qualified retirement plan, you may receive the money from that plan when you separate from service, become disabled, die, attain age 591/2, or your employer terminates the plan. If you choose to receive a distribution directly, your employer is required to withhold 20% federal income tax before distributing your funds. You can roll over only the amount you receive from your employer or you can add to that amount the 20% your employer withheld. You can roll over a distribution into more than one IRA, but all rollovers must be completed within the 60-day period. Amounts not rolled over within the 60-day period will be treated as a taxable distribution to you.

Note: In order to either directly or indirectly roll over a qualified plan distribution into an IRA, you must be one of the following individuals:

●● A participant in the qualified plan. ●● A surviving spouse or other named beneficiary of a deceased participant in the plan.

●● The recipient of your former spouse’s retirement plan assets due to a divorce agreement.

IRA-to-IRA Rollover – You can withdraw all or part of the assets from one IRA if you roll them into another IRA within 60 days from the day you receive the distribution. You are allowed to make an IRA-to-IRA Rollover only once in any 12-month period. Each IRA is treated separately when applying the 12-month rule.

traditional ira and rollover ira transfersYou may transfer Traditional IRA or Rollover IRA assets from one trustee or custodian to another:

Trustee-to-Trustee Transfer – This method instructs trustees to transfer Traditional IRAs or Rollover IRAs to other IRA trustees on behalf of their customers. There is no limit to the number of times that such transfers can be requested (although specific institutions may impose a fee to cover their costs).

You may transfer Traditional IRA Deposit Account assets internally at Union Bank.

traditional ira DistributionsDistributions from a Traditional IRA will generally be taxed as ordinary income when received if you take the distributions at age 591/2 or older. Consult your tax advisor regarding taxation of distributions, which includes non-deductible contributions.

Early DistributionsIf you withdraw funds from your Traditional IRA before you reach age 591/2 and do not roll over the funds into another qualified retirement vehicle within 60 days, the withdrawal is included in your gross income for the tax year in which it is received, and you must pay a 10% additional tax on the premature distribution. Early distributions must be reported on your federal income tax return.

No tax penalty will be imposed on distributions:

●● To your beneficiary after your death ●● After you become disabled ●● Of substantially equal periodic payments (at least annually) for your single life expectancy or the joint life expectancy of you and your Designated Beneficiary, in accordance with Section 72(t) of the tax code

●● For medical expenses exceeding 7.5% of your Adjusted Gross Income (AGI)●● For the purchase of health insurance if you have been receiving unemployment compensation at least 12 consecutive weeks

●● To pay “qualified higher education expenses” for you, your spouse, your children or grandchildren, or the children or grandchildren of your spouse

●● To a qualified first-time homebuyer for the purchase of a principal residence

In addition, no tax penalty will be imposed on a transfer for your former spouse or children under a qualified court order relating to divorce so long as such amount is transferred to another IRA or qualified plan.

required Minimum Distributions (rMD)You must begin distributions from your Traditional IRA by April 1 following the calendar year you reach age 701/2. Generally you must withdraw an amount at least equal to the minimum distribution by December 31 of each year. However, during your 701/2 year, you may wait to withdraw the minimum distribution until April 1 of the following year—your Required Beginning Date (RBD). This means that if you wait until April 1 of the following year to make your withdrawal for the 701/2 year, your total withdrawal in that year must equal the minimum distributions for two years (a withdrawal by April 1 and a second withdrawal by December 31). You will be subject to a 50% excise tax on the amount by which a distribution you receive in one year is less than the minimum distribution required for the year.

RMD After Age 70 1/2 – At your RBD, you are no longer required to elect a distribution calculation method (i.e., recalculation or non-recalculation method), nor must you choose joint or single life expectancy. Your RMD can be determined by the Uniform Distribution Table, which uses your age on


76

taxpayer files a separate return. A taxpayer may make a conversion at any time. The waiting period applicable to rollovers in the reconversion does not apply to conversion rollovers.

Methods of Conversion – A person may convert a traditional IRA to a Roth IRA by any of the following methods:

1. Rollover. The taxpayer may withdraw funds from a traditional IRA and reinvest the funds in a Roth IRA. Any amount distributed from a traditional IRA may be contributed (rolled over) to a Roth IRA within 60 days after the date of the distribution. The taxpayer must roll over into the Roth IRA the same assets that were received from the traditional IRA. The taxpayer may roll over part of the withdrawal and keep the rest of it. The amount that the taxpayer keeps is taxable, except for any part that is a return of nondeductible contributions. The amount that the taxpayer keeps may also be subject to 10% premature distribution tax on early withdrawals if the taxpayer is under age 591/2.

2. Transfer. The taxpayer may transfer amounts in a traditional IRA to a Roth IRA in a trustee-to-trustee transfer. The transfer may be made from one IRA to another at the same financial institution. The transfer is treated as a distribution from the traditional IRA and a rollover to the Roth IRA.

3. Redesignation. The taxpayer may change the designation of an IRA contribution from a traditional to a Roth IRA contribution, without making a rollover or transfer, simply by redesignating the traditional IRA as a Roth IRA. The taxpayer may use the redesignation method if the taxpayer maintains the IRA at the same financial institution after the redesignation.

Any converted amount is treated as a distribution from the traditional IRA and as a rollover contribution to the Roth IRA, even if the conversion is made by a trustee-to-trustee transfer or a transfer between IRAs of the same trustee.

Direct Rollover from Qualified Plan to Roth IRA – If you qualify for a Roth IRA Conversion, you can arrange a rollover of pre-tax, qualified retirement plan assets directly into a Roth IRA, without the need to first roll these assets over to a Traditional IRA.

SEP IRA or SIMPLE IRA to Roth IRA Conversion – If you have a SEP IRA or SIMPLE IRA, it can be rolled over to a Roth IRA under the same terms discussed above for a Traditional IRA to a Roth IRA Conversion. However, a distribution from a SIMPLE IRA during the two-year period that begins on the date that you first participated in the SIMPLE IRA may only be rolled over into another SIMPLE IRA. Once an amount in a SEP IRA or SIMPLE IRA has been converted to a Roth IRA, it is treated as a contribution to the Roth IRA. Any future contributions to the SEP IRA or SIMPLE IRA cannot be made to the Roth IRA.

recharacterizations If you make an annual contribution to a Traditional IRA and then decide that you would have preferred to contribute to a Roth IRA, you may recharacterize your IRA contribution. The contribution to the Traditional IRA and any earnings on the contribution are moved to a Roth IRA. If you recharacterize the contribution, it will be treated as if it had been made to the Roth IRA on the date that it was originally contributed to the Traditional IRA, and the earnings will be considered to have been earned in the Roth IRA. In the same way, you may recharacterize a Roth IRA contribution as a Traditional IRA contribution.

If you convert an amount held in a Traditional IRA to a Roth IRA and later discover that your AGI for the year of the conversion exceeded $100,000, you can correct the conversion by recharacterizing the converted amount and any interest earned to a Traditional IRA.

Excess contributionsAn excess contribution made to a Roth IRA is a contribution that exceeds the amount you are eligible to contribute. The excess amount must be corrected in a timely manner to avoid the 6% excise tax. The 6% excise tax will apply each year in which excess remains in your Roth IRA.

roth ira DistributionsYou can withdraw money or property from your Roth IRA at any time, without taxes and penalties, if you make a Qualified Distribution.

Qualified Distribution – A distribution taken from a Roth IRA that has been established for at least five calendar years (the five-year waiting period begins on January 1 of the first taxable year in which your contribution or conversion was made) AND includes one of the following:

●● Made on or after you reach age 591/2 ●● Made to a beneficiary or to your estate after your death, as defined in IRC Section 408A(d)(2)

●● Made because you are disabled, as defined in IRC Section 72(m) ●● Made as a qualified first-time homebuyer distribution

Under the first-time homebuyer exception, up to $10,000 may be distributed to acquire, construct, or reconstruct a principal residence, and the $10,000 is a lifetime exception.

A Qualified Distribution is not included in your gross income and is not subject to the additional 10% early withdrawal penalty tax.

Non-Qualified Distribution – Distributions received that do not meet both of the above requirements are potentially subject to ordinary income tax, and a 10% early distribution penalty tax would apply. The distribution order is first considered to come from contributions, then amounts converted, and finally earnings.

roth ira Distributions at DeathUpon your death, your Roth IRA assets go to the beneficiary(ies) you have designated. Minimum distributions are required after your death. Your beneficiary will be subject to a 50% excise tax on the amount by which a contribution received by the beneficiary in any year is less than the minimum distribution required for the year.

Non-Spouse Beneficiary(ies) – When your beneficiary is a person other than your spouse, he or she may choose either the five-year rule or life expectancy payments. If the non-spouse beneficiary does not choose an option by December 31 of the year following your death, your assets will be distributed under the life expectancy payments rule.

Five-Year Rule: The entire balance must be distributed to your beneficiary(ies) by December 31 of the fifth year after your death.

Life Expectancy Payments: The beneficiary(ies) must begin to receive periodic payments by December 31 of the year following the year of your death and the payments must be distributed in substantially equal installments over your beneficiary’s life expectancy.

Spouse Is Sole Beneficiary – When the beneficiary is your spouse, the spouse may either elect to take distribution from your Roth IRA under one of the beneficiary options outlined above, or he or she may elect to treat your Roth IRA as his or her own Roth IRA. If your spouse elects to treat your Roth IRA as his or her own, he or she will need to transfer the funds from your Roth IRA into a Roth IRA in his or her own name. A non-spouse beneficiary may not treat your Roth IRA as his or her own.

BanK anD BrOKEraGE iras

Union Bank offers a variety of FDIC-insured bank deposit accounts to match your retirement needs. In addition, UnionBanc Investment Services, a registered broker-dealer, investment advisor, member FINRA/SIPC, and subsidiary of Union Bank, N.A., offers Brokerage IRAs. You can invest in a variety of products, including mutual funds, stocks, bonds, and other securities.

fDic insuranceOn July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, which permanently raised the Standard Maximum Deposit Insurance Amount (SMDIA) to $250,000 per depositor, per insured

rOtH iras8

roth ira contribution requirements You are eligible to make regular contributions into a Roth IRA (reduced by any contributions you make into a Traditional IRA) regardless of your age, if you have earned income and your AGI is below allowable thresholds (see table below).

Earned income is considered:

●● All wages and salary earned from employment●● Income from tips, professional fees, bonuses, and commissions●● Money earned as a sole proprietor or partner for personal services rendered●● Alimony that you report on your tax return

Roth IRA Income Thresholds

EFFECT OF MODIFIED GROSS INCOME (AGI) ON ROTH IRA CONTRIBUTION

IF you have taxable compensation

and your filing status is: AND your AGI is: THEN:

Married Filing Jointly or Qualifying Widow or Widower

Less than $167,000 You can contribute up

to the maximum annual contribution limit

At least $167,000, but less than $177,000

The amount you can contribute is reduced

$177,000 or moreYou cannot contribute

to a Roth IRA

Married Filing Separately and you lived with your spouse at any time during the year

Zero (0)You can contribute up


More than zero (0), but less than $10,000


$10,000You cannot contribute

to a Roth IRA

Single, Head of Household, or Married Filing Separately and you did not live with your spouse at any time during the year

Less than $105,000You can contribute up


At least $105,000, but less than $120,000


$120,000 or moreYou cannot contribute

to a Roth IRA

roth ira contribution LimitsThe total contribution for each taxable year is limited to the lesser of 100% of your compensation or the limits shown in the chart below.

ROTH IRA CONTRIBUTION LIMITS FOR UNDER AGE 50

Tax Year Limit



Catch-up Contributions – Individuals who turn 50 years old or older by the end of the taxable year may be eligible to contribute an additional amount as a catch-up contribution.

ROTH IRA CONTRIBUTION LIMITS FOR AGE 50 AND OLDER

Tax Year Limit



roth ira contribution DeadlineThe income tax-filing deadline is the deadline for making contributions for a prior year, usually April 15 (not including extensions). You may designate your contribution as a contribution for the preceding year. For example, if you are a calendar year taxpayer and you make your Roth IRA contribution on or before the tax-filing deadline, your contribution can be made for the previous year if you designate it as such.

roth ira automatic contribution DeadlineIf you have arranged for regular automatic deposits, Union Bank applies them to the tax year in which they are actually made. For example, for an automatic contribution to be reported for tax year 2011, it must be deposited no later than December 31, 2011.

Spousal roth ira contribution requirements and LimitsSpousal Roth IRA contributions are allowed for married individuals who have no earned income or who elect to be treated as having no earned income (referred to as “non-compensated spouses”), and/or who would not be able to make a substantial IRA contribution based on their own income. To be eligible to establish and contribute to a Spousal Roth IRA, the following requirements must be met:

●● The couple must be married ●● One spouse must have compensation or earned income ●● A joint federal tax return must be filed ●● The AGI must not be above the phase-out range●● A Spousal Roth IRA is established for the non-compensated spouse

roth ira contribution Deductibility4

Contributions to a Roth IRA, including transfers, rollovers, and conversions, are not deductible.

roth rollover iraDistributions from another Roth IRA may be rolled over into your Roth IRA. A rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. The contribution to a second retirement plan is called a “rollover contribution.”

Roth IRA to Roth IRA Rollover – You must complete the rollover within 60 days after the day you receive the distribution from the other Roth IRA. You are allowed to make a Roth IRA to Roth IRA rollover only once in any 12-month period. Each Roth IRA Plan is treated separately when applying the 12-month rule.

Roth 401(k) or 403(b) Plan to Roth Rollovers – Elective Roth contributions from a 401(k) or 403(b) plan may be rolled over into your Roth IRA. Employer match contributions are considered pre-tax assets in the plan and may be rolled into a Traditional IRA.

roth ira transfersYou may transfer Roth IRA assets from one trustee or custodian to another:

Trustee-to-Trustee Transfer – This method instructs trustees to transfer Roth IRAs to other IRA trustees on behalf of their customers. There is no limit to the number of times that such transfers can be requested (although specific institutions may impose a fee to cover their costs).

roth ira conversions9

A Roth IRA can also be established by converting your Traditional IRA into a Roth IRA. A conversion is a distribution from a Traditional IRA that is rolled over into a Roth IRA. Roth IRAs established by conversion may be registered as a Roth IRA Conversion.

roth ira conversions 2010 and thereafter Commencing in 2010, a taxpayer with any amount of income may make a conversion from a traditional IRA to a Roth IRA. The $100,000 limitation does not apply. A married taxpayer may make a conversion even though the


98

deposit until maturity. Withdrawing interest before maturity will reduce earnings. Time Deposit accounts are non-negotiable.

We use the daily balance method to calculate the interest on your Fixed Rate IRA Time Deposit account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue on the business day you make a deposit of cash or non-cash items (for example, checks) to your Fixed Rate IRA Time Deposit. Interest is compounded daily, except on time deposits of $1,000,000 or more, which is simple interest. You may choose to have interest paid to your account on the last business day of the month or calendar quarter.

Automatic renewal provisions, Early Withdrawal and Compensating Fees, and grace periods apply to your Fixed Rate IRA Time Deposit account and are discussed below in the General Information About Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits section of this document.

Bonus Rate Rollover IRA Time Deposit – The Bonus Rate Rollover IRA Time Deposit is a Fixed Rate Time Deposit account with a term of 36 to 120 months, which is available for a qualifying new deposit. The term you choose determines how many months your account will initially earn interest at the “bonus” rate, which is 1/4% above the rate that applies for the remaining portion of the term.

●● You must contribute a minimum of $25,000 to open this account, and the entire amount must be a new deposit with Union Bank.

●● After the account is opened, you may not make additional contributions into or withdrawals from the account until the maturity date.

●● Your Bonus Rate Rollover IRA Time Deposit account is subject to the fees shown in the separate Union Bank brochure Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts.

Interest – The interest rate on your Bonus Rate Rollover IRA Time Deposit account is subject to market conditions and your account’s balance and term, and is set at our discretion. The initial interest rate and Annual Percentage Yield for your account are shown on your Time Deposit Account Receipt, which is part of this Agreement. If your account has a term of 36 to 59 months, you will be paid the initial “bonus” rate for the first 12 months of your account’s term. If your account has a term of 60 to 120 months, you will be paid the initial “bonus” rate for the first 24 months of your account’s term. After 12 or 24 months at the initial “bonus” rate, the interest rate will be the rate shown on the supplement to the Time Deposit Account Receipt. The Annual Percentage Yield for your account is shown on the Time Deposit Account Receipt.

The interest rates and Annual Percentage Yield described above are fixed during the term of your deposit, but are subject to change with each renewal. The “bonus” rate does not apply to renewals.

We use the daily balance method to calculate the interest on your Bonus Rate Rollover IRA Time Deposit account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue on the business day you make a deposit of cash or non-cash items (for example, checks). Interest is compounded daily and is paid to your account on the last business day of the calendar quarter.

The maturity date for your Bonus Rate Rollover IRA Time Deposit is shown on your Time Deposit Account Receipt. When you open this account, you agree to keep the principal in the account on deposit with us for the entire term. The Annual Percentage Yield for your account assumes interest will remain on deposit until maturity. Withdrawing interest before maturity will reduce earnings. Time deposit accounts are non-negotiable. Automatic renewal provisions, Early Withdrawal and Compensating Fees, and grace periods apply to your Bonus Rate Rollover IRA Time Deposit account and are discussed below in General Information About Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits.

General Information About Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits

Annual Percentage Yield – Annual Percentage Yield means the total amount of interest paid on an account based on the interest rate and the frequency of compounding for a 365-day period (366 days in a leap year), and is expressed as a percent. We pay 1⁄365th of the annual rate of interest, 365 days a year (366 days in a leap year).

Renewal Provision – Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits renew automatically for the same term and at the interest rate in effect on the account’s maturity date, unless the funds are withdrawn on the maturity date or within ten days after that date. We will notify you in writing before the original and all subsequent maturity dates.

If you withdraw your funds during the 10-day grace period, your account will not earn interest after the maturity date. However, if you let your account automatically renew, it will earn interest during the grace period and will continue to earn interest until the next maturity date. We reserve the right to close any Variable Rate or Fixed Rate Time Deposit account on the original or any subsequent maturity date, or change the terms or the method of interest calculation on any of these maturity dates after giving you written notice of our intention to do so.

Early Withdrawal Fee and Compensating Fee – When you invest in Variable Rate, Fixed Rate, or Bonus Rate Rollover IRA Time Deposits, you agree to keep the principal on deposit with us for the term you have selected. If you withdraw all or a portion of the principal prior to the maturity date, we may assess an Early Withdrawal Fee or Compensating Fee. It may be necessary to deduct all or a portion of the fee from the principal amount of the account.

Exempt Withdrawals – Certain withdrawals are exempt from our Early Withdrawal Fee or Compensating Fee. Withdrawals are exempt if they are one of the following:

●● Made from a Retirement Income IRA CD Account (12-Month Variable IRA)●● Made after you have reached 701/2●● Made after you have reached 591/2 and are part of a prearranged schedule of systematic payments made at least annually

●● Made after you have reached 591/2 and the funds are transferred to another Union Bank Retirement Time Deposit (IRA), and the funds are transferred no more than once within a 12-month period

●● Fully or partially made from an IRA account due to death, disability, or legal incompetence of the owner

●● Made from a Traditional IRA that is converted to a Roth IRA at Union Bank

The fee for withdrawing funds before the account’s maturity date is the greater of the Early Withdrawal Fee or the Compensating Fee.

Early Withdrawal Fee – The Bank’s Early Withdrawal Fee will be assessed as follows:

●● For time deposits with terms of 91 days or less, the Early Withdrawal Fee is 31 days’ simple interest at the rate being paid on the amount withdrawn or the Compensating Fee explained below, whichever is greater.

●● For time deposits with terms of 92 days to one year, the Early Withdrawal Fee is 91 days’ simple interest at the rate being paid on the amount withdrawn or the Compensating Fee explained below, whichever is greater.

●● For time deposits with terms greater than one year, the Early Withdrawal Fee is 181 days’ simple interest at the rate being paid on the amount withdrawn or the Compensating Fee explained below, whichever is greater.

Compensating Fee – The Compensating Fee applies to all of the Bank’s time deposit accounts and is designed to protect the Bank during periods of rising interest rates.

The Compensating Fee is calculated by first determining the rate differential. This is determined by subtracting the interest rate being paid on your time deposit from the rate we would pay on a new account on the amount of the principal sum being withdrawn, with a term equal to the number of days remaining in the term. Then the Compensating Fee is determined by calculating the amount of simple interest that could have been earned on

depository institution for each account ownership category. For more information on FDIC SMDIA, please reference the FDIC’s website at www.fdic.gov or by phone at 1-877-ASK-FDIC (1-877-275-3342).

Any deposits (including certificates of deposit) that you maintain in the same capacity directly with Union Bank or through an intermediary (such as with us or another broker), will be aggregated with deposits in your Deposit Accounts at Union Bank for purposes of the Maximum Applicable FDIC Deposit Insurance Amount. You are responsible for monitoring the total amount of deposits that you have with Union Bank in order to determine the extent of FDIC deposit insurance coverage available to you.

Bank iras and variable rate ira time DepositsYour deposit account options are the Variable Rate IRA Time Deposit, Fixed Rate IRA Time Deposit, Bonus Rate Rollover IRA Time Deposit, Promotional Rate IRA, and MoneyMarket Savings Account. From time to time, Union Bank may make special offers with more favorable interest rates and/or terms for its Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits, subject to you purchasing and/or maintaining other banking products or services.

MoneyMarket Savings Account – The MoneyMarket Savings Account is a deposit account that has tiered interest rates and no term. It is not subject to the Bank’s Early Withdrawal Fee or Compensating Fee.

●● You must contribute a minimum of $100 to open this account. Note: The $100 opening contribution is not required if you are opening a MoneyMarket Savings Account for a Direct Rollover IRA contribution or trustee transfer of funds.

●● Each additional electronic contribution must be at least $10, and each additional non-electronic contribution must be at least $25 for a Bank IRA and $100 for a Brokerage IRA.

●● The MoneyMarket Savings Account is subject to fees shown in the separate Union Bank brochure Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts.

Interest – Interest rates and Annual Percentage Yields (APY) for different balance ranges are listed on the Interest Rate Sheet, which is a part of this Agreement. Your daily balance will fall within one of the balance range tiers listed. The interest rate on your account is based on market conditions and is set at our discretion. Your interest rate and APY may change as often as daily.

We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue no later than the business day we receive credit for the deposit of non-cash items (for example, checks). That is, a deposited check results in a collected balance in the amount of the check on the day we receive credit from the bank on which it is drawn. We usually get credit for deposited checks in one or two banking days, depending primarily on the location of the banks on which they are drawn. Checks drawn on any Union Bank banking office in California, Oregon, or Washington and cash and electronic deposits are collected and earn interest from the business day of deposit. (A deposited check results in an uncollected ledger balance on the business day of deposit.) Interest on your MoneyMarket Savings Account is compounded daily and is paid to your account on the last business day of the month or quarter, and the interest accrued will be paid to the closing date.

Retirement Income IRA CD – The Retirement Income IRA CD is a Variable Rate Time Deposit with a 12-month term. Additional contributions may be made to your account.

●● You must be age 591/2 or older to open an account. ●● You must contribute a minimum of $25,000 to open this account.●● Each additional electronic contribution must be at least $10, and each additional non-electronic contribution must be at least $25.

●● Withdrawals from this account are allowed at any time without a Union Bank withdrawal fee.

●● Your Retirement Income IRA CD will not be subject to the annual Custodial Fee, but is subject to other fees shown in the separate Union Bank brochure Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts.

●● The interest rate for this time deposit is indexed to the U.S. Treasury One-Month Constant Maturity Bills, less 0.75%, will not be less than that rate, is reset monthly, and is set at our discretion. (This index can be accessed through the Federal Reserve Statistical Release at http://www.federalreserve.gov/Releases/H15/update.)

18-Month Variable Rate IRA Time Deposit – A deposit account with an 18-month term.

●● The interest rate on the 18-Month Variable Rate IRA Time Deposit is indexed to the U.S. Treasury One-Month Constant Maturity Bills, less 0.85%, will not be less than that rate, is reset monthly, and is set at our discretion. (This index can be accessed through the Federal Reserve Statistical Release at http://www.federalreserve.gov/releases/H15/update.)

●● You must contribute a minimum of $500 to open this time deposit. ●● Additional contributions may be made to your time deposit. Each additional electronic contribution must be at least $10, and each additional non-electronic contribution must be at least $25.

●● Your 18-Month Variable Rate IRA Time Deposit is subject to fees shown in the separate Union Bank brochure Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts.

●● When you open an 18-Month Variable Rate IRA Time Deposit account, you agree to keep the principal in the account on deposit with us for the entire term.

●● You may not make withdrawals from the 18-Month Variable Rate IRA Time Deposit account until the maturity date without incurring the applicable early withdrawal penalty.

Additional Information About Your Variable Rate IRA Time Deposit Account – The interest rate and Annual Percentage Yield (APY) for your Variable Rate IRA Time Deposit account are shown on your Time Deposit Account Receipt, which is part of this Agreement. This interest rate will remain in effect until the first business day of the next calendar month. We may change the interest rate on a Variable Rate IRA Time Deposit account monthly, effective on the first business day of the month.

The maturity date for your Variable Rate IRA Time Deposit is shown on your Time Deposit Account Receipt. The APY for your account assumes interest will remain on deposit until maturity. Withdrawing interest before maturity will reduce earnings. Time deposit accounts are non-negotiable.

We use the daily balance method to calculate the interest on your Variable Rate IRA Time Deposit account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue on the business day you make a deposit of cash or non-cash items (for example, checks) to your Variable Rate IRA Time Deposit. Interest is compounded daily, except on time deposits of $1,000,000 or more, which is simple interest. You may choose to have interest paid to your account on the last business day of the month or calendar quarter.

Automatic renewal provisions, Early Withdrawal and Compensating Fees, and grace periods apply to your Variable Rate IRA Time Deposit account and are discussed below in the General Information About Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits section of this document.

fixed rate ira time DepositsThe terms for Fixed Rate IRA Time Deposits are 90 days to 120 months.

●● You must contribute a minimum of $350 to open this account.●● After the account is opened, you may not make additional contributions into or withdrawals from the account until the maturity date.

●● Your Fixed Rate IRA Time Deposit is subject to the fees shown in the separate Union Bank brochure Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts and the General Information About Variable Rate, Fixed Rate, and Bonus Rate Rollover IRA Time Deposits section of this Agreement.

Interest – The interest on your Fixed Rate IRA Time Deposit is shown on your Time Deposit Account Receipt. When you open this account, you agree to keep the principal in the account on deposit with us for the entire term. The Annual Percentage Yield for your account assumes interest will remain on


1 11 0

●● Registered mutual funds (Qualified Retirement Plans only) that have been in operation for at least five years and have total assets in excess of $50 million, or a fund that is one of a group of funds that meets these requirements;

●● All HighMark Funds except those that are tax exempt; and ●● American Depository Receipts (ADRs) if listed on any U.S. exchange (i.e., if it has a CUSIP number).

In general, there are certain types of investments that the Trustee/Custodian normally finds unacceptable. These are as follows:

●● Investments that constitute prohibited transactions as defined under Section 408(a) or 4975 of the IRS Code;

●● Loans to the Grantor or to related family members;●● Second trust deed notes or unsecured loans; ●● Unregistered, closely held securities such as private or non-public issues; ●● Non-income-producing assets such as unimproved real property, gold, silver, and/or precious gems;

●● Any investment that is not readily marketable or that may require physical safekeeping, such as certain coins defined in Section 408(m)(3) of the IRS Code, and Series EE Bonds;

●● Purchase of personal property or leases on personal property;●● Purchase of any asset where the Trustee/Custodian would become a borrower;

●● Hedge funds, options (except for covered call writing), margin trading, or other leveraging transactions;

●● Original issues, common or preferred stocks, or entities going public for the first time (Qualified Retirement Plans only); and

●● Any investment, other than savings deposits at Union Bank, that cannot be purchased through UnionBanc Investment Services.

Expected returnsWhen the account is invested in a UnionBanc Investment Services Brokerage IRA and contains investments, including, but not limited to, securities, bonds, and other uninsured investments, it is impossible to predict what the projected growth of the account will be. The assets held in the Brokerage IRA account may fluctuate in accordance with market conditions depending upon the type of investment vehicle utilized, and neither Union Bank nor UnionBanc Investment Services can make a guarantee as to the amount that will be available when the account owner elects to withdraw funds pursuant to the Custodial Agreement. Investments in securities may lose value and are subject to risk of loss of principal, as well as fluctuation of income.

PrOHiBitED ira tranSactiOnS

Prohibited transaction rules Your IRA is exempt from current income tax unless you engage in a prohibited transaction. A prohibited transaction is any improper use of your IRA. Examples of prohibited transactions with an IRA include:

●● Borrowing money from an IRA ●● Selling property that you own to your IRA ●● Receiving unreasonable compensation for managing an IRA●● Using an IRA as security for a loan ●● Buying property for personal use (present or future) with IRA funds ●● Receiving certain bonuses or premiums because of the IRA

Generally, if you or your beneficiary engage in a prohibited transaction in connection with your IRA account at any time during the year, the account stops being an IRA as of the first day of that year.

This means that you or your beneficiary must include the fair market value of all of the IRA assets in your gross income for that year. You may also have to pay the 10% tax on early distributions.

use of ira as Security for a LoanYou should not use any part of your IRA account as security for a loan. If you do so, the amount used is considered to be a taxable distribution from your IRA which will also be subject to the 10% early distribution tax unless you are at least age 591/2 or you qualify for another exception to the tax.

Estate and Gift taxesYour IRA account balance is subject to federal estate tax and may be subject to applicable state death taxes. However, if your spouse is your IRA beneficiary, the amount of your IRA account balance may be a deduction on your federal estate tax return. If federal estate tax is paid, an income tax deduction for part of the estate tax paid may be available to your IRA beneficiary.

A transfer by you, during your life, to your beneficiary of the right to withdrawals from your IRA may be subject to federal gift tax.

You should consult with your tax advisor for additional information on estate and gift taxes.

ira rEPOrtinG

reporting requirements for ira HoldersContributions to your IRA must be reported on your tax return Form 1040 or 1040A and Form 8606, if you make a nondeductible contribution to your Traditional IRA. You must file IRS Form 5329 if you owe taxes due to:

●● An early distribution from your IRA●● Excess contributions to your IRA●● Not receiving the Required Minimum Distribution (RMD) from your IRA

Statements and Bank reporting requirementsAs custodian for your IRA, we provide periodic reports and statements concerning your account activity during the calendar year.

If our records indicate that we are to hold statements and notices, we may mail them to the last address on file for your IRA if they are not claimed within 60 days. We are not required to send statements for any account that is “inactive.” We are not responsible for notices, statements, and other documents that are lost, destroyed, or stolen while in the mail or in transit to you or a third party. If two consecutive statements or notices are returned to us by the Postal Service for any reason, we may hold subsequent statements and notices of every kind until we receive forwarding information from you. If your statement is late, you agree to notify us as soon as possible.

According to your instructions, these reports and statements will be mailed to the address on file for your account, or held at the banking office for pickup, as follows:

You will be sent a statement twice a year, as of June 30th and December 31st. The December 31st statement will reflect all transactions for the year and the year-end fair market value of your IRA. If you do not make a contribution for the prior year between January 1st and April 15th of the next year, the December 31st statement will be your substitute IRS Form 5498 — IRA Contribution Information. You agree that you are responsible for monitoring and reviewing the activity of your account. You should inspect your statement as soon as you receive it and report any irregularities to us immediately. If you do not report any irregularities within 30 days of the statement mailing date, the statement will be considered correct, and we will have no further responsibility or liability to you with respect to the statement.

Additionally, if you are over 701/2 years of age and taking your annual Required Minimum Distribution (RMD), your December 31st statement will include details informing you that you may request a calculation of your RMD amount for the next tax year from this IRA, and that your status as an over-701/2-year-old IRA holder will be reported to the IRS on Form 5498 —IRA Contribution Information.

If you withdraw $10 or more during the year, then the distribution is reported on IRS Form 1099-R by January 31st of the following year. A copy is supplied to the IRS and, if applicable, to the state of California, Oregon, or Washington.

IRS Form 5498 — IRA Contribution Information is prepared annually for the previous calendar year and mailed to you by May 31 of the following year. This report provides contribution and fair market value information for you, the IRS and, if applicable, to the state of California, Oregon, or Washington. Generally, you will only receive this form if you made a contribution for the

the amount withdrawn for the number of days remaining in the current term of your account at the interest rate equal to the rate differential determined above.

Example: If a $2,000 time deposit established for three years (36 months) at 4% were withdrawn after one year (12 months), we would first determine the rate for a new $2,000, 24-month account (the remaining term of the account). If this rate were 7%, we would calculate a fee equal to 24 months simple interest on $2,000 at 3% (the rate differential 7% minus 4%). The Compensating Fee is $120.00. We would also calculate 181 days’ simple interest on $2,000 at 4%. The Early Withdrawal Fee is $39.67. For this example, the $120 Compensating Fee would be the greater of the two fees.

Promotional rate ira time Deposits10

From time to time, we may offer special rates on IRA time deposit accounts for specific terms. These IRA time deposit accounts are considered to be “Promotional Rate IRA Time Deposits” and may not be offered at all times. Promotional Rate IRA Time Deposits have different minimum balance requirements, depending on rate, which are disclosed on the Interest Rate Sheet provided at the time of account opening. Your Promotional Rate IRA Time Deposit account will be automatically renewed for the same term, at the non-promotional or standard interest rate in effect on the account’s maturity date. Interest rates are set at our discretion and are subject to market conditions, your account balance and term, and your continuing to maintain a Union Bank checking account.

BrOKEraGE irasYou may also choose to have a UnionBanc Investment Services Brokerage IRA. With a Brokerage IRA, you may direct your retirement money into a variety of investments, including mutual funds, stocks, bonds, and other securities.

Securities available through UnionBanc Investment Services, LLC (With the exception of deposit sweep balances),

• Are NOT Bank deposits • Are NOT obligations of, or guaranteed by, UnionBanc Investment Services, LLC,

any bank, or any subsidiary or affiliate thereof:• Are NOT insured or guaranteed by the FDIC or, unless they are government securities,

by any other government agency;• Involve investment risk, including the possible loss of principal.

If you choose a Brokerage IRA, you will establish an account with UnionBanc Investment Services and select either the Bank Deposit Sweep Program or HighMark® Tax-Free Money Market Fund as the core account investment vehicle11,12 through which all contributions, investments and deductions will be transacted.

Brokerage ira feesFor information regarding fees that may apply to your Brokerage IRA, refer to the UnionBanc Investment Services Standard Fee and Commission Schedule. Please read the prospectus for any applicable mutual fund fees.

Union Bank’s custodian fee will be charged in accordance with its standard schedule for the Union Bank IRA. See Individual Retirement Accounts and Small Business Retirement Plans Services and Fee Schedule including Coverdell Education Savings Accounts for more information.

Union Bank fees and UnionBanc Investment Services fees and commissions are subject to change.

core account investment vehicleUnionBanc Investment Services provides customers the opportunity to earn income on un-invested cash in their brokerage account—through the Bank Deposit Sweep Program12 or the HighMark California Tax-Free Money Market Fund11 sweep option. The Deposit Sweep Option is the default Core Account Investment Vehicle for most types of UnionBanc Investment Services accounts, based on the type and nature of the account ownership. When the option you choose for your Core Account Investment Vehicle is the Bank Deposit Sweep Program, cash balances (or free credit balances)

are automatically "swept" into an interest-bearing deposit account at Union Bank, N.A. Please refer to the Bank Deposit Sweep Program disclosure document for that product’s specific product features. For the HighMark California Tax-Free Money Market Fund, carefully consider the investment objectives, risks, and charges and expenses before investing in a mutual fund. A prospectus, which contains this and other important information, may be obtained from a UnionBanc Investment Services Financial Advisor or by calling 1-800-634-1100. Please be sure to read the prospectus carefully before investing.

Mutual fund Disclosure StatementThe Bank or its affiliates may enter into contracts with a variety of unaffiliated mutual funds that are offered in the Bank’s products. The Bank or its affiliates will perform a variety of administrative or transfer agency-related services for these funds. Pursuant to the provisions of the respective funds’ sub-transfer agency, shareholder servicing, or recordkeeping agreements or the funds’ 12b-1 plans, and for the services provided, the Bank or its affiliates will be paid fees. Please read the fund prospectus carefully for details on fees, charges, and expenses.

consent to the use of Proprietary Mutual fundsApplicable fiduciary laws and regulations, including the Employee Retirement Income Security Act of 1974 (ERISA), as amended, require full disclosure of relevant fee information so that an independent fiduciary may monitor the reasonableness of the total fees being received by the Bank for its services. Sign the Adoption Agreement indicating you have read this disclosure and consent to the use of the above-referenced funds and to the Bank receiving fees.

When you sign the Adoption Agreement, you acknowledge you have received the prospectuses of the HighMark Funds. You also acknowledge that you have been offered a copy of Prohibited Transaction Exemption 94-86, the exemption the Bank relies on while investing assets of the account in proprietary mutual funds. You further acknowledge that you have read the information in this disclosure and authorize asset investment in any HighMark Funds portfolio.

You also approve HighMark Capital Management, Inc., or the Bank receiving fees in accordance with the above information, in the fund prospectuses, and in your account fee schedule.11

Market-Linked certificate of Deposit (MLcD)The Bank may issue a market-linked Certificate of Deposit (MLCD) that is only made available through brokerage accounts from UnionBanc Investment Services. A market-linked CD is an FDIC-insured certificate of deposit with the return tied to the performance of an underlying investment benchmark. The terms of these CDs will vary from one issue to the next. As with any investment (CD), potential investors should understand its terms and read the applicable disclosure statement, which includes features, risks, and fees. A market-linked CD may restrict redemptions or withdrawals prior to maturity. Customers who are over or approaching age 701/2 should maintain sufficient liquidity in other investments to satisfy required minimum distributions.

investment GuidelinesAll contributions made to a Brokerage IRA must be invested in “permissible investments” as permitted by Union Bank or our affiliates. In general, there are certain types of investments that the Trustee/Custodian would normally find acceptable for Brokerage IRAs. These are as follows:

●● Bonds, notes, and bills of the United States government or agencies of the government, or securities guaranteed by the United States government provided they are not tax exempt;

●● Debt obligations of domestic (United States) corporations, or certificates of deposit and other deposit accounts of major domestic commercial banks or major domestic savings and loan associations;

●● Publicly traded common stocks of domestic (United States) corporations, preferred stocks of domestic corporations, or stock of a major domestic bank or insurance company;


1 31 2

uniOn BanK, n.a., inDiviDuaL rEtirEMEnt accOunt cuStODiaL aGrEEMEnt fOr traDitiOnaL irasUnion Bank, N.A., as Sponsor, has adopted this Individual Retirement Account Custodial Agreement as an amendment of its previous Custodial Agreement.

The Depositor whose name and signature appear on the Adoption Agreement is establishing an individual retirement account under Section 408(a) of the Internal Revenue Code to provide for his or her retirement and for the support of his or her beneficiaries after death.

Union Bank, referred to as the Custodian, has given the Depositor the disclosure statement required under Regulation Section 1.408-6. The Disclosure is included in this booklet. The Depositor has deposited a sum of cash with the Custodian, and the Custodian and the Depositor agree as follows:

article i (contributions)Except in the case of a rollover contribution described in Section 402(e), 403(a)(4), 403(b)(3), 403(b)(8), 408(d)(3) or 457(e)(16); an employer contribution to a Simplified Employee Pension (SEP) plan as described in Section 408(k); or a recharacterized contribution described in Section 408A(d)(6), the Custodian will accept only cash contributions up to $5,000 for tax year 2010 and thereafter. For individuals who have reached the age of 50 before the close of the tax year, the contribution limit is increased to $6,000 for 2010 and thereafter. For tax years after 2010, the above limits may be increased to reflect a cost-of-living adjustment, if any.

article ii (vesting)The Depositor’s interest in the balance in the Custodial Account is non-forfeitable.

article iii (Prohibited investments) 1. No part of the Custodial Account funds may be invested in life insurance

contracts, nor may the assets of the Custodial Account be commingled with other property except in a common trust fund or common investment fund (within the meaning of Section 408(a)(5)).

2. No part of the Custodial Account funds may be invested in collectibles (within the meaning of Section 408(m)) except as otherwise permitted by Section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws of any state, and certain bullion.

article iv (Distributions)1. Notwithstanding any provision of this Agreement to the contrary, the

distribution of the Depositor’s interest in the Custodial Account shall be made in accordance with the following requirements and shall otherwise comply with Section 408(a)(6) and the regulations thereunder, the provisions of which are herein incorporated by reference.

2. The Depositor’s entire interest in the Custodial Account must be, or begin to be, distributed not later than the Depositor’s Required Beginning Date, April 1 following the calendar year in which the Depositor reaches age 70 1/2. By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the Custodial Account distributed in:

(a) A single sum or

(b) Payments over a period not longer than the life of the Depositor or the joint lives of the Depositor and his or her designated beneficiary.

3. If the Depositor dies before his or her entire interest is distributed to him or her, the remaining interest will be distributed as follows:

(a) If the Depositor dies on or after the Required Beginning Date and:

(i) The Designated Beneficiary is the Depositor’s surviving spouse, the remaining interest will be distributed over the surviving spouse’s life expectancy, as determined each year until such spouse’s death, or over the period in paragraph (a)(iii) below if longer. Any interest remaining after the spouse’s death will be distributed over such spouse’s remaining life expectancy as determined in the year of the spouse’s death and reduced by one (1) for each subsequent year,

or if distributions are being made over the period in paragraph (a) (iii) below, over such period.

(ii) The Designated Beneficiary is not the Depositor’s surviving spouse, the remaining interest will be distributed over the beneficiary’s remaining life expectancy as determined in the year following the death of the Depositor and reduced by one (1) for each subsequent year, or over the period in paragraph (a)(iii) below if longer.

(iii) There is no Designated Beneficiary, the remaining interest will be distributed over the remaining life expectancy of the Depositor as determined in the year of the Depositor’s death and reduced by one (1) for each subsequent year.

(b) If the Depositor dies before the Required Beginning Date, the remaining interest will be distributed in accordance with (b)(i) below or, if elected or there is no Designated Beneficiary, in accordance with (b)(ii) below:

(i) The remaining interest will be distributed in accordance with paragraphs (a)(i) and (a)(ii) above (but not over the period in paragraph (a)(iii) above, even if longer), starting by the end of the calendar year following the year of the Depositor’s death. If, however, the Designated Beneficiary is the Depositor’s surviving spouse, then this distribution is not required to begin before the end of the calendar year in which the Depositor would have reached age 701/2. But, in such case, if the Depositor’s surviving spouse dies before distributions are required to begin, then the remaining interest will be distributed in accordance with (a)(ii) above (but not over the period in paragraph (a)(iii) above, even if longer), over such spouse’s Designated Beneficiary’s life expectancy, or in accordance with (b)(ii) below if there is no such Designated Beneficiary.

(ii) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the Depositor’s death.

(c) If the Depositor dies before his or her entire interest has been distributed, and if the Designated Beneficiary is not the Depositor’s surviving spouse, no additional contributions may be accepted in the account.

4. The minimum amount that must be distributed each year, beginning with the year containing the Depositor’s Required Beginning Date, is known as the “Required Minimum Distribution” and is determined as follows:

(a) The Required Minimum Distribution under paragraph 2(b) for any year, beginning with the year the Depositor reaches age 701/2, is the Depositor’s account value at the close of business on December 31 of the preceding year, divided by the distribution period in the Uniform Lifetime Table in Regulations Section 1.401(a)(9)-9. However, if the Depositor’s Designated Beneficiary is his or her surviving spouse, the Required Minimum Distribution for a year shall not be more than the Depositor’s account value at the close of business on December 31 of the preceding year, divided by the number in the joint and last survivor table in Regulations Section 1.401(a)(9)-9. The Required Minimum Distribution for a year under this paragraph (a) is determined using the Depositor’s (or, if applicable, the Depositor’s and spouse’s) attained age (or ages) in the year.

(b) The required minimum under paragraphs 3(a) and 3(b)(i) for a year, beginning with the year following the year of the Depositor’s death (or the year the Depositor would have reached age 701/2, if applicable under paragraph 3(b)(i)), is the account value at the close of business on December 31 of the preceding year, divided by the life expectancy (in the single life table in Regulations Section 1.401(a)(9)-9) of the individual specified in such paragraphs 3(a) and 3(b)(i).

(c) The Required Minimum Distribution for the year the Depositor reaches age 701/2 can be made as late as April 1 of the following year. The Required Minimum Distribution for any other year must be made by the end of such year.

5. The owner of two or more Traditional IRAs may satisfy the minimum distribution requirements described above by taking from one Traditional IRA the amount required to satisfy the requirement for another in accordance with the regulations under Section 408(a)(6).

prior year between January 1st and April 15th. Otherwise, as stated above, your December 31st account statement will serve as a substitute Form 5498 — IRA Contribution Information.

Any notice you are required to give us by law or by this Disclosure must be mailed or delivered to us during normal banking hours at your office of account or any other address we specify. We will have a reasonable period of time to act upon any notice, order, or instruction you give us.

GEnEraL ira accOunt infOrMatiOn

access to ira fundsFunds deposited into your IRA are generally not immediately available to be distributed to you or transferred to another IRA. If you believe that funds you have deposited will need to be disbursed immediately, you should ask the banking office when the funds will be made available.

adjustmentsIn the event of an error, we will make adjustments and/or corrections to your account.

change of name or addressYou must notify us promptly of any change in your name or the identity of your Attorney-in-Fact on your account, as well as any change of address for you or your Attorney-in-Fact.

check EndorsementMarks that obscure a depository financial institution’s endorsement can lead to processing delays because of returned checks. You agree to hold us harmless from any loss, liability, or damage we incur due to endorsements, terms, carbon bands, or other marks that obscure the area reserved for the depository institution’s financial endorsement. The area reserved for a depository institution’s endorsement is located between one and one-half inches from the trailing edge and three inches from the leading edge of the checks you write or deposit. When looking at the front of a check, the leading edge is to the right and the trailing edge is to the left.

claim of LossIf you claim a credit or refund because of a forgery, alteration, or any other unauthorized withdrawal, you agree to cooperate with us in the investigation of the loss, including giving us an affidavit containing whatever reasonable information we require concerning your account, the transaction(s), and the circumstances surrounding the loss. You also agree to file a crime report if we request. You also agree to pursue all rights you may have under any insurance coverage you maintain before making a claim against us, and to provide us with all reasonable information about your coverage, including insurance carrier, policy number, policy limits, and applicable deductibles. Our liability is reduced by the amount of all insurance proceeds you receive or are entitled to receive. At our request, you agree to assign to us your rights under your insurance policy.

You agree that we have a reasonable period of time to investigate the facts and circumstances surrounding any claimed loss, and that we have no obligation to “provisionally” credit your account. Our maximum liability is the lesser of your actual damages proved or the amount of the forgery, alteration, or other unauthorized withdrawal reduced by an amount that could not have been realized by the use of ordinary care. In no event will we be liable for special or consequential damages, including loss of profits and/or opportunity, or for attorneys’ fees incurred by you.

Your account may be closed prior to the above time frames for nonsufficient available funds, overdrafts, or other unsatisfactory account activity, and a report may be made to a consumer reporting agency.

currency transaction reportingFederal and state laws and regulations require all financial institutions to report certain types of currency transactions to various federal and state

agencies. These reports are designed to aid the detection, investigation, and control of illegal activities.

Union Bank must complete a Currency Transaction Report at the time of each reportable transaction. In order to complete the report, we are required to obtain certain information about the individual conducting the transaction, as well as about the individual or organization for which the transaction is being conducted. This information includes the full name, permanent address, Social Security number and/or Employer Identification Number, driver’s license or passport, and occupation or profession for the individual conducting the transaction. We also require the account owner’s full name, permanent street address, Social Security and/or Employer Identification Number, and business, occupation, or profession.

If this information is not provided, we are required to refuse to handle the transaction. If you have any questions about these reporting requirements, contact your local IRS office.

DepositsWe may accept a deposit to your account from any source without questioning the authority of the source to make such deposit.

Lost itemsWe act only as your collection agent when receiving items for deposit or encashment. You should be aware that we reserve the right to reverse the credit for any deposited item, or charge your account for cashed items, should they become lost, mutilated, or destroyed while in the process of collection. Whether or not we reverse a credit, you agree to assist us in collecting the amount of any lost items by providing us with such information and other assistance as we request.

Power of attorneyIf you appoint a person to act for you by use of a Power of Attorney, you should discuss the situation with one of our officers. We will advise you if we will be able to recognize and act upon a Power of Attorney. If we honor a Power of Attorney, the person you designate to act for you is an authorized signer under this Agreement. All owners of a jointly held account must act together when you wish to authorize a person to act for you under a Power of Attorney.

telephone MonitoringSupervisory personnel in our client services departments may monitor telephone conversations with individuals to ensure the receipt of courteous and efficient service. We may record these and other conversations for your protection and our own, and we need not remind you of our recording before each such conversation.

cuStODiaL/truStEE fEESYou may prepay your annual custodial/trustee fee by mailing your payment to our Retirement Plan Center:


P.O. Box 60319 Los Angeles, CA 90060-0319

Payments must be received prior to January 15 to be credited for the current (calendar) year’s custodial/trustee fee. Prepayment must be made for the full amount of the annual fee. Partial payments will not be accepted. In the event that you do not remit your annual fee payment prior to on or about January 15, the fee will be assessed on or about February 15. If you close your retirement plan prior to the fee assessment date, we will deduct the fee when you close it. The fee may be collected from your IRA or Small Business Retirement Plan any time after the fee assessment date. If your account balance is equal to or below the annual custodial/trustee fee amount, we will deduct the full amount available and close your account.


1 51 4

article Xi (resignation, removal, or termination of the custodial agreement) 1. This Custodial Agreement will terminate:

(a) When the Custodian receives written instructions from the Depositor to transfer all of the assets of the Custodial Account to the trustee or custodian of another retirement plan or trust, or directly to the Depositor;

(b) Upon the distribution of all of the assets of the Custodial Account in accordance with Article IV;

(c) When the Custodian resigns from any particular Custodial Agreement or all Agreements upon 30 days’ written notice to the Depositor. If no response is received, this Custodial Agreement will be deemed terminated as to such Depositor or all Depositors and replaced with another qualified IRA or program chosen by the Custodian as the successor arrangement; or

(d) When the Custodian is removed by written notice from the Depositor, and receives acceptance by a successor trustee/custodian. However, the Custodian is authorized to reserve such funds as may be necessary for the payment of expenses and fees due or to be incurred.

2. Unless one of the events described in paragraph 1 occurs, this Custodial Agreement will continue even though no contributions are made to the Custodial Account for any particular year or years.

article Xii (Designation of Beneficiary) 1. The Depositor will file with the Custodian a written designation of his or

her beneficiary or beneficiaries. Any such designation may be changed from time to time by filing a new designation with the Custodian. Such designation may include contingent or successive beneficiaries. Each such election and designation will be on a form provided by or acceptable to the Custodian. The interest of any beneficiary will cease upon his or her death. If there is no Designated Beneficiary to receive any amount that becomes payable to a beneficiary, such amount will be payable first to the spouse of the Depositor and, if there is no surviving spouse, to the estate of the Depositor. In the event that a beneficiary is a minor, the Custodian will have discharged all its obligations by paying the minor’s parent or legal guardian, or an adult with whom the minor resides.

2. A beneficiary designation dated and signed by the Depositor will be valid even though not filed with the Custodian prior to the death of the Depositor if, and only if, it is so filed within 30 days after the Custodian has received notice of the death of the Depositor. If payments are made more than 30 days after receipt of notice of the death of a Depositor pursuant to the written designation then filed with the Custodian bearing the latest date, the Custodian will not be subject to any liability for failure to make payments pursuant to any other designation.

3. The Custodian is under no obligation to distribute funds if the Custodian has been given written notice that a beneficiary dispute exists. In this case, the Custodian may make payment after receiving either: written payout instructions containing witnessed signatures of all parties to the beneficiary dispute, or an order from a court of competent jurisdiction.

4. Neither the Depositor nor any beneficiary of the Depositor will have any right to pledge, borrow against, or in any way create a lien upon any assets of the Custodial Account. Notwithstanding the provisions of this paragraph, the Depositor may transfer part or all of his or her interest in the Custodial Account to his or her former spouse pursuant to a divorce decree or under a written instrument incident to such divorce, and any interest so transferred will be treated as an individual retirement account for the benefit of the former spouse.

article Xiii (Miscellaneous)1. No amendments or modification or termination of this Custodial

Agreement will cause any part of the Custodial Account to be used for or diverted to, or for the benefit of, anyone other than the Depositor and his or her beneficiaries; furthermore, the rights or responsibilities of the Custodian will not be changed without his or her written consent. In the event the Custodian wishes to amend this Custodial Agreement or offer

it to newly acquired customers as substitution for an existing qualified IRA program, the Custodian may do so by notifying such Depositors or customers of the amendment or substitution and giving them a reasonable period of time to respond. If no response is received within the time period stated, such Depositor or customer will be deemed to have consented to the amendment or to have adopted the provisions of this Custodial Agreement, and to be bound by them.

2. In the event that the Bank is converted into, merged or consolidated with, or sells and transfers any or all of its assets and business including its Individual Retirement Accounts to a corporation formed under the laws of the United States of America or any political subdivision thereof, such corporation shall thereupon become and be the Custodian or Trustee of this Custodial Agreement with the same effect as though specifically so named, but only if such surviving corporation is a bank, financial institution, or other organization approved by the IRS to hold assets of individual retirement accounts.

3. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Custodial Agreement.

4. The laws of the state of California will govern the provisions of the Custodial Agreement except to the extent that such laws are pre-empted by the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended from time to time.

article Xiv (fees, charges, and Expenses) 1. The Custodian will be entitled to reasonable compensation for its services

under this Custodial Agreement and to reimbursement for all reasonable expenses incurred in the management of the Custodial Accounts. The Custodian will notify the Depositor in writing of its fees and of any changes in fees.

2. The fee for services rendered will be such reasonable compensation as will be established from time to time by the Custodian, and may include, without limit, an annual custodial fee, processing fees, and other transaction fees.

3. The annual custodial fee provided for under paragraph 2 will be due and payable with respect to the IRA for each calendar year during which the IRA is in existence.

4. The Custodian may from time to time charge the processing fees and transaction fees provided for under paragraph 2.

5. The Depositor authorizes the Custodian to liquidate assets in the Custodial Account as needed to pay any fees, charges, and expenses allocated to the Custodial Account that have not been timely paid by the Depositor. The Custodian may allocate such fees and expenses among a Depositor’s accounts at such time or times and in such manner as the Custodian, in its reasonable discretion, determines. To effect the payment of fees and expenses from a Custodial Account, the Custodian may liquidate assets held in the Custodial Account and will have the sole discretion to determine whether, when, or which assets are to be liquidated.

article Xv (Dispute resolution by Judicial reference for fDic-insured individual retirement accounts; Waiver of right to Jury trial)Depositor agrees that as to each dispute, claim, demand, cause of action, and controversy (referred to below by the single word, “Dispute”) between the Depositor and the Custodian out of or relating to any IRA deposit account, (1) DEPOSITOR INTENTIONALLY AND DELIBERATELY GIVES UP HIS OR HER RIGHT TO A JURY TRIAL AS TO ANY SUCH DISPUTE and (2) Depositor agrees that any such Dispute may, at the option of either the Depositor or the Custodian, be submitted to a Judicial Referee, as described below.

By executing the Adoption Agreement, the Depositor waives his or her right to a trial by jury with regard to any Dispute between the Custodian and the Depositor. In addition, the Depositor agrees to the alternative Dispute resolution procedures described below.

Filing a Lawsuit: Request to the Court – If a Dispute cannot be resolved informally, either the Depositor or the Custodian may file a lawsuit in an

article v (reporting) 1. The Depositor agrees to provide the Custodian with all information

necessary to prepare any reports required by Section 408(i) and Regulations Sections 1.408-5 and 1.408-6.

2. The Custodian agrees to submit to the Internal Revenue Service (IRS) and Depositor the reports prescribed by the IRS.

article vi (controlling articles) Notwithstanding any other articles that may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling. Any additional articles inconsistent with Section 408(a) and the related regulations will be invalid.

article vii (amendments) This Agreement will be amended as necessary to comply with the provisions of the Code and the related regulations. Other amendments may be made with the consent of the persons whose signatures appear on the Adoption Agreement.

article viii (investments) 1. The following definitions will apply to terms used in Article VIII and

following:

(a) “Broker” will mean UnionBanc Investment Services LLC, a registered broker-dealer, investment advisor, member FINRA/SIPC, and subsidiary of Union Bank, N.A., or its successor.

(b) “Permissible Investment” will mean assets eligible for acquisition under the Custodial Account pursuant to Section 408 and related Regulations that are acceptable to the Custodian and that may be deposit accounts of the Custodian or acceptable investments purchased through the Broker.

2. Contributions and funds held in the Custodial Account will be invested in one or more Permissible Investments as directed by the Depositor. If the Depositor has elected the brokerage option, the Depositor will instruct the Broker about such purchases and sales in the Custodial Account. The Depositor expressly authorizes the Custodian and the Broker to execute transactions upon his or her instructions, and neither the Custodian nor the Broker will have any responsibility to review the investment directions of the Depositor, nor will they have any liability from any loss resulting from following such directions.

3. Furthermore, neither the Custodian nor the Broker will have any liability for losses resulting from the acts or omissions of the Depositor.

4. In the event a Depositor invests in or transfers in an asset that is not a Permissible Investment and is unacceptable to the Custodian, the Custodian will give written notice of the unacceptability of the investment(s) purchased by the Depositor, either by mail or actual delivery, and will seek direction from the Depositor as to the disposition of such investment(s), such as designation to another custodian. If the Depositor does not instruct the Custodian as to the disposition of the unacceptable investment(s) within the 30-day period after notice is either mailed or given, the Custodian, in its sole discretion, may either liquidate the investment(s) and invest in savings deposits of the Custodian, or distribute such unacceptable investment(s) to the Depositor in kind, and the Depositor will be deemed to have consented to such action and accepts any tax consequences that may arise out of the Depositor’s failure to invest only in Permissible Investments.

5. The Custodian will hold all investments of the Custodial Account in the name of the Custodian (for the benefit of the Depositor) subject to all federal and applicable state statutory and regulatory provisions and the internal rules and regulations of the Custodian, the Broker, and Union Bank.

article iX (Statements to the custodian) The Depositor agrees to provide the Custodian with such information as it requires to substantiate the Depositor’s or a beneficiary’s request to

withdraw funds from the Custodial Account in a form as may be acceptable to the Custodian.

article X (custodian) 1. Subject to any limitations stated elsewhere in this Custodial Agreement,

the Custodian will have the following powers, in addition to those powers held by a holder of a deposit, and any other powers conferred by law:

(a) To pay any tax, charge, or assessment attributable to any property or benefit, out of such property or benefit, upon receipt of appropriate written documentation.

(b) To employ and pay out of the assets of the Custodial Account counsel who may be counsel for the Custodian individually, and be fully protected in acting upon the advice of such counsel.

(c) To employ suitable agents and to delegate to them such ministerial and limited discretionary duties as the Custodian sees fit. If the Depositor has signed a separate agreement acceptable to the Custodian at the direction of the Depositor, the Custodian may also employ any broker-dealer providing brokerage services affiliated with the Custodian and compensate such broker-dealer in accordance with its normal schedule of charges.

(d) To invest in any registered mutual fund advised by the Custodian or any affiliate.

(e) To calculate the required mandatory distribution in paragraph 4 of Article IV using the Depositor’s single life expectancy if the Custodian does not know the age of the Designated Beneficiary.

2. All fees and expenses incurred by the Custodian and the Broker under this Custodial Agreement may be paid from the assets of this Custodial Account.

3. The Custodian will act solely in the interest of the Depositor and his or her beneficiaries and 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. The Custodian will be fully protected in taking or failing to take any action in reliance on the written instruction of the Depositor. The Depositor agrees to hold the Custodian harmless and indemnify it from all liability and expenses incurred in connection with any actions taken or failures to act in reliance upon the Depositor’s written instructions, or in the exercise of any right, power, or duty of the Custodian in good faith and with reasonable care.

4. As described in Article IV (Distributions) paragraph 2, the Depositor may make an election to begin receiving payments from his or her IRA or in a manner that satisfies the Required Minimum Distribution rules no later than April 1 of the year following the year the Depositor reaches age 701/2 (the Depositor’s “Required Beginning Date”). The Custodian can, at its complete and sole discretion, do any of the following:

●● Make no payment until the Depositor gives the Custodian a properly completed and signed Distribution Request form,

●● Pay the entire IRA to the Depositor in a single sum payment, or●● Calculate the Depositor’s Required Minimum Distribution each year based on the Uniform Lifetime Distribution Table or the Depositor’s single or joint life expectancy, and pay those distributions to the Depositor until the Depositor directs otherwise in writing, provided the Custodian is satisfied that such a method is acceptable to the IRS.

5. If the Custodian is unable to locate the Depositor after making reasonable efforts to do so, the Custodian is under no obligation to distribute funds to satisfy the minimum distribution requirements of Section 408(a)(6) and Proposed Regulations Section 1.408-8. The Custodian may, at the time and in the manner prescribed by law, comply with the Unclaimed Property Law of its state of domicile so long as the law provides for complete reinstatement if the Depositor or a beneficiary makes a claim.


1 71 6

the year of the Depositor’s death and subtracting 1 from the divisor for each subsequent year.

3. If the Depositor’s surviving spouse is the Designated Beneficiary, such spouse will then be treated as the Depositor.

article vi (reporting)1. The Depositor agrees to provide the Custodian with all information

necessary to prepare any reports required by Sections 408(i) and 408A(d)(3)(E), Regulations Sections 1.408-5 and 1.408-6, or other guidance published by the Internal Revenue Service (IRS).

2. The Custodian agrees to submit to the IRS and Depositor the reports prescribed by the IRS.

article vii (controlling articles)Notwithstanding any other articles that may be added or incorporated, the provisions of Articles I through IV and this sentence will be controlling. Any additional articles inconsistent with Section 408A, the related regulations, and other published guidance will be invalid.

article viii (amendments) This Agreement will be amended as necessary to comply with the provisions of the Code, the related regulations, and other published guidance. Other amendments may be made with the consent of the persons whose signatures appear on the Adoption Agreement.

article iX (investments)The following definitions will apply to terms used in Article VIII and following:

1. “Broker” will mean UnionBanc Investment Services LLC, a registered broker-dealer, investment advisor, and subsidiary of Union Bank, N.A., or its successor.

2. “Permissible Investment” will mean assets eligible for acquisition under the Custodial Account pursuant to Section 408 and related Regulations that are acceptable to the Custodian and which may be deposit accounts of the Custodian or acceptable investments purchased through the Broker.

3. Contributions and funds held in the Custodial Account will be invested in one or more Permissible Investments as directed by the Depositor. If the Depositor has elected the brokerage option, the Depositor will instruct the Broker as to such purchases and sales in the Custodial Account. The Depositor expressly authorizes the Custodian and the Broker to execute transactions upon his or her instructions, and neither the Custodian nor the Broker will have any responsibility to review the investment directions of the Depositor, nor will they have any liability for any loss resulting from the following of such directions.

4. Furthermore, neither the Custodian nor the Broker will have any liability for losses resulting from the acts or omissions of the Depositor.

5. In the event a Depositor invests in an asset that is not a Permissible Investment and is unacceptable to the Custodian, the Custodian may give 30 days’ written notice of the unacceptability of the investment(s) purchased by the Depositor, either by mailing or actual delivery, and may seek direction from the Depositor as to the disposition of such investment(s). If the Depositor does not instruct the Custodian as to the disposition of the unacceptable investment(s) within the 30-day period after notice is either mailed or given, the Custodian, in its sole discretion, may either liquidate the investment(s) and invest in savings deposits of the Custodian, or distribute such unacceptable investment(s) to the Depositor in kind, and the Depositor will be deemed to have consented to such action, and accepts any tax consequences, that may arise out of the Depositor’s failure to invest only in Permissible Investments.

6. The Custodian will hold all investments of the Custodial Account in the name of the Custodian (for the benefit of the Depositor) subject to all federal and applicable state statutory and regulatory provisions and the internal rules and regulations of the Custodian, the Broker, and Union Bank.

article X (Statements to the custodian)The Depositor agrees to provide the Custodian with such information as it requires to substantiate the Depositor’s or a beneficiary’s request to withdraw funds from the Custodial Account in a form as may be acceptable to the Custodian.

article Xi (custodian) 1. Subject to any limitations stated elsewhere in this Custodial Agreement,

the Custodian will have the following powers in addition to those powers held by a holder of a deposit, and any other powers conferred by law:

(a) To pay any tax, charge, or assessment attributable to any property or benefit, out of such property or benefit, upon receipt of appropriate written documentation.

(b) To employ and pay out of the assets of the Custodial Account counsel who may be counsel for the Custodian individually, and be fully protected in acting upon the advice of such counsel.

(c) To employ suitable agents and to delegate to them such ministerial and limited discretionary duties as the Custodian sees fit. If the Depositor has signed a separate agreement acceptable to the Custodian at the direction of the Depositor, the Custodian may also employ any broker-dealer providing brokerage services affiliated with the Custodian and compensate such broker-dealer in accordance with its normal schedule of charges.

(d) To invest in any registered mutual fund advised by the Custodian or any affiliate.

2. All fees and expenses incurred by the Custodian and the Broker under this Custodial Agreement may be paid from the assets of this Custodial Account.

3. The Custodian will act solely in the interest of the Depositor and his or her beneficiaries and 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. The Custodian will be fully protected in taking or failing to take any action in reliance on the written instruction of the Depositor. The Depositor agrees to hold the Custodian harmless and indemnify it from all liability and expenses incurred in connection with any actions taken or failures to act in reliance upon the Depositor’s written instructions, or in the exercise of any right, power, or duty of the Custodian in good faith and with reasonable care.

4. The Custodian may receive amounts transferred or rolled over to this Roth IRA from the custodian or trustee of another Roth IRA and such other types of IRAs and plans as permitted by law, statute, or regulation.

5. If the Custodian is unable to locate the Depositor after making reasonable efforts to do so, the Custodian may, at the time and in the manner prescribed by law, comply with the Unclaimed Property Law of its state of domicile so long as the law provides for complete reinstatement if the Depositor or a beneficiary makes a claim.

6. In the case of a conversion, the Custodian will not be responsible for determining whether the Depositor’s AGI for that tax year exceeds $100,000 or if the Depositor is married and files a separate return.

article Xii (resignation, removal, or termination of the custodial agreement)1. This Custodial Agreement will terminate:

(a) When the Custodian receives written instructions from the Depositor to transfer all of the assets of the Custodial Account to the trustee or custodian of another retirement plan or trust, or directly to the Depositor;

(b) Upon the distribution of all of the assets of the Custodial Account in accordance with Article V;

(c) When the Custodian resigns from any particular Custodial Agreement or all Agreements upon 30 days’ written notice to the Depositor. If no response is received, this Custodial Agreement will be deemed terminated as to such Depositor or all Depositors and replaced

appropriate Court. After a lawsuit has been filed, either the Depositor or the Custodian may then make a written request to the Court for Judicial Reference to resolve the Dispute in accordance with the provisions of this Agreement and applicable state law. This means that either the Depositor or the Custodian can require Judicial Reference to resolve the Dispute. (This also means that if neither the Depositor nor the Custodian makes a timely written request to the Court for Judicial Reference, then the Dispute will continue to be handled like any other lawsuit filed in the Court, except that there will be no jury.)

Choosing the Referee: Right to Object to a Referee Chosen by the Court – Once the Court approves a request for Judicial Reference, the Depositor and the Custodian agree to work together to choose a neutral individual to act as the “Referee.” The Referee must be a retired judge with at least five years of judicial experience in civil matters. If the Depositor and the Custodian are not able to agree upon an individual, then a judge of the Court where the lawsuit was filed shall appoint an individual with the required qualifications to serve as the Referee. Both the Depositor and the Custodian have the right to object to a Referee on the grounds of bias or, in general, for other reasons for which a judge of the Court might be disqualified from sharing a lawsuit.

The Referee’s Authority – The Referee —instead of a judge or a jury— has the authority to decide all issues of law or of fact involved in the Dispute. This means that the Referee also has the authority to resolve any disagreement about whether the Judicial Reference provisions of this Agreement apply to the Dispute and to decide on the interpretation, legality, and enforceability of this Agreement.

Matters the Referee Cannot Decide – If the Referee determines that part of the Dispute is not subject to this Agreement for Judicial Reference, then the Depositor and the Custodian agree to stay all legal proceedings involving that part of the Dispute that is not subject to Judicial Reference until after the Referee has decided the rest of the Dispute.

Other Legal Rights the Depositor and the Custodian Keep in Judicial Reference – This Agreement for Judicial Reference does not limit the rights the Depositor or the Custodian may have to exercise self-help remedies such as setoff, or to obtain or oppose provisional or ancillary remedies (such as an attachment or a restraining order) from a Court or competent jurisdiction before, during, or after the Judicial Referee proceedings. Pursuing or opposing any such remedies does not waive the Depositor’s right or the Custodian’s Judicial Reference pursuant to this Agreement.

Right to Counsel – The Depositor and the Custodian both have the right to be represented by legal counsel at every stage of the Judicial Reference proceedings.

The Referee’s Decision: Right to Appeal – The Referee must submit a written Statement of Decision to the Court promptly after all of the testimony has been given. Once the Referee’s Statement of Decision has been filed with the Court, it has the same legal effect as if a judge or jury in a Court of law had decided the Dispute. Among other things, this means that both the Depositor and the Custodian have the right to appeal the Referee’s Statement of Decision on any basis permitted by law.

Fees and Expenses – The fees of the Referee and other costs of the Judicial Reference shall be paid by the Bank, unless the Referee provides otherwise in the Statement of Decision.

uniOn BanK, n.a., rOtH inDiviDuaL rEtirEMEnt accOunt cuStODiaL aGrEEMEntUnion Bank, N.A., as Sponsor, has adopted this Roth Individual Retirement Account Custodial Agreement as an amendment of its previous Custodial Agreement, effective October 1, 2002.

The Depositor whose name appears on the Adoption Agreement is establishing a Roth Individual Retirement Account (Roth IRA) (under Section 408(a) of the Internal Revenue Code) to provide for his or her retirement and for the support of his or her beneficiaries after death.

Union Bank, referred to as the Custodian, has given the Depositor the disclosure statement required under the Income Tax Regulations under Section 1.408-6. This Disclosure is included in this booklet.

The Depositor has deposited a sum of cash with the Custodian and the Custodian and the Depositor agree as follows:

article i (contributions) Except in the case of a rollover contribution described in Section 408A(e), a recharacterized contribution described in Section 408A(d)(6), or an IRA Conversion Contribution, the Custodian will accept only cash contributions up to $5,000 for tax year 2010 and thereafter. For individuals who have reached the age of 50 before the close of the tax year, the contribution limit is $6,000 for 2010 and thereafter. For tax years after 2010, the above limits may be increased to reflect a cost-of-living adjustment, if any.

article ii (contribution Phase-Out & conversions)1. The annual contribution limit described in Article I is gradually reduced to

$0 for higher income levels. For a single Depositor, the annual contribution is phased out between Adjusted Gross Income (AGI) of $105,000 and $120,000; for a married Depositor filing jointly, between AGI of $167,000 and $177,000; and for a married Depositor filing separately, between AGI of $0 and $10,000. In the case of a conversion, the Custodian will not accept IRA Conversion Contributions in a tax year if the Depositor’s AGI for the tax year the funds were distributed from the other IRA exceeds $100,000 or if the Depositor is married and files a separate return. Adjusted Gross Income is defined in Section 408A(c)(3) and does not include IRA Conversion Contributions. Beginning January 1, 2010, the tax Increase Prevention and Reconciliation Act of 2005 removes conversion eligibility restrictions to Roth IRAs.

2. In the case of a joint return, the AGI limits in the preceding paragraph apply to the combined AGI of the Depositor and his or her spouse.

article iii (vesting)The Depositor’s interest in the balance in the Custodial Account is nonforfeitable.

article iv (Prohibited investments)1. No part of the Custodial Account funds may be invested in life insurance

contracts, nor may the assets of the Custodial Account be commingled with other property except in a common trust fund or common investment fund (within the meaning of Section 408(a)(5)).

2. No part of the Custodial Account funds may be invested in collectibles (within the meaning of Section 408(m) except as otherwise permitted by Section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws of any state, and certain bullion).

article v (Distributions)1. If the Depositor dies before his or her entire interest is distributed to

him or her and the Depositor’s surviving spouse is not the Designated Beneficiary, the remaining interest will be distributed in accordance with (a) below or, if elected or there is no Designated Beneficiary, in accordance with (b) below:

(a) The remaining interest will be distributed, starting by the end of the calendar year following the year of the Depositor’s death, over the Designated Beneficiary’s remaining life expectancy as determined in the year following the fifth anniversary of the Depositor’s death.

(b) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the Depositor’s death.

2. The minimum amount that must be distributed each year under paragraph 1(a) above is the account value at the close of business on December 31 of the preceding year, divided by the life expectancy (in the single life table in Regulations Section 1.401(a)(9)-9) of the Designated Beneficiary, using the attained age of the beneficiary in the year following


1 91 8

written request to the Court for Judicial Reference, then the Dispute will continue to be handled like any other lawsuit filed in the Court, except that there will be no jury.)

Choosing the Referee: Right to Object to a Referee Chosen by the Court – Once the Court approves a request for Judicial Reference, the Depositor and the Custodian agree to work together to choose a neutral individual to act as the “Referee.” The Referee must be a retired judge with at least five years of judicial experience in civil matters. If the Depositor and the Custodian are not able to agree upon an individual, then a judge of the Court where the lawsuit was filed shall appoint an individual with the required qualifications to serve as the Referee. Both the Depositor and the Custodian have the right to object to a Referee on the grounds of bias or, in general, for other reasons for which a judge of the Court might be disqualified from sharing a lawsuit.

The Referee’s Authority – The Referee —instead of a judge or a jury— has the authority to decide all issues of law or of fact involved in the Dispute. This means that the Referee also has the authority to resolve any disagreement about whether the Judicial Reference provisions of this Agreement apply to the Dispute, and to decide on the interpretation, legality, and enforceability of this Agreement.

Matters the Referee Cannot Decide – If the Referee determines that part of the Dispute is not subject to this Agreement for Judicial Reference, then the Depositor and the Custodian agree to stay all legal proceedings involving that part of the Dispute that is not subject to Judicial Reference, until after the Referee has decided the rest of the Dispute.

Other Legal Rights Depositor and the Custodian Keep in Judicial Reference – This Agreement for Judicial Reference does not limit the rights the Depositor or the Custodian may have to exercise self-help remedies such as setoff, or to obtain or oppose provisional or ancillary remedies (such as an attachment or a restraining order) from a Court or competent jurisdiction before, during, or after the Judicial Referee proceedings. Pursuing or opposing any such remedies does not waive the Depositor’s right or the Custodian’s Judicial Reference pursuant to this Agreement.

Right to Counsel – The Depositor and the Custodian both have the right to be represented by legal counsel at every stage of the Judicial Reference proceedings.

The Referee’s Decision: Right to Appeal – The Referee must submit a written Statement of Decision to the Court promptly after all of the testimony has been given. Once the Referee’s Statement of Decision has been filed with the Court, it has the same legal effect as if a judge or jury in a Court of law had decided the Dispute. Among other things, this means that both the Depositor and the Custodian have the right to appeal the Referee’s Statement of Decision on any basis permitted by law.

Fees and Expenses – The fees of the Referee and other costs of the Judicial Reference shall be paid by the Bank, unless the Referee provides otherwise in the Statement of Decision.

uniOnBanc invEStMEnt SErvicES LLc aGrEEMEnt—aPPLiES tO BrOKEraGE iras fOr BOtH traDitiOnaL ira anD rOtH ira PLanSThis Agreement governs the terms and conditions of my accounts with Union Bank, N.A., (Bank) and UnionBanc Investment Services (Investment Services), and shall become effective with Bank when accepted by Bank and with Investment Services and National Financial Services, LLC (NFS), as defined below, when they have accepted it in their respective offices.

Upon such acceptances, I will have an account(s) with Bank or Investment Services, or both, to be used for buying and selling securities and other properties according to my instructions.

In consideration for Bank and/or Investment Services accepting my account(s), “Account(s),” I agree to the following provisions.

Securities available through unionBanc investment ServicesSecurities available through UnionBanc Investment Services, LLC (with the exception of deposit sweep balances),


any bank, or any subsidiary or affiliate thereof:• Are NOT insured or guaranteed by the FDIC or, unless they are government securities,

by any other government agency;• Involve investment risk, including the possible loss of principal.

Meanings of Words in this agreementAs used in this Agreement, “I” and “me” refer to the person who signed this Agreement and others who are legally obligated on the Account and/or are authorized to take actions with respect to investments in the Account on my behalf or the entity on whose behalf this Agreement is executed. “You” and “your” refer to Bank and/or Investment Services as the context requires, and their officers, directors, agents, and/or employees. Unless reference is specifically made herein to an “Account with Bank” or an “Account with Investment Services,” references to “Account” shall apply to all accounts I have with Bank and/or Investment Services. References to “securities” mean securities of any kind and nature, whether for present or future delivery. The words “other property” mean investments other than securities, including precious metals and money market instruments and financial instruments, such terms to include but not be limited to certificates of deposit, bankers acceptances, and commercial paper. “Proprietary Money Market Mutual Fund” means any registered money market mutual fund advised by Bank or an affiliate that Investment Services has made available for my Account. References to “Retirement Plan,” “Retirement Account,” or “IRA” mean qualified retirement plans, Individual Retirement Accounts (Traditional and Roth), Coverdell Education Savings Accounts (ESAs), and similar tax-exempt retirement, education, or similar savings arrangements.

retirement Plan ProvisionsI represent and agree as follows:

a. I am a Participant or Grantor of that certain Retirement Account or the Employer or Participant of that certain Retirement Plan described above. I am of legal age and authorized to enter into this Agreement. I am entitled to direct investments in my IRA or Retirement Plan under the terms of such plan. I understand that all information supplied by the undersigned will be subject to verification and that the information on this application is correct. I understand that you have entered into an agreement with National Financial Services, LLC (NFS) (Member NYSE) to execute and clear all brokerage transactions. I understand that neither you nor NFS provides investment advice in connection with this Account for the purchase or sale of stocks or options, nor do you give advice or offer any opinion with respect to the suitability of any such stocks or options, and that no fiduciary relationship exists.

b. I understand that ownership of each Investment Services Account shall be held in the name of Union Bank, N.A., as Trustee/Custodian for me as an IRA Participant/Grantor or Retirement Plan Employer/Participant under the plan named above. I understand that all dividends and interest will be deposited into the Account at the Bank or swept into the designated money market fund indicated under Account Service Instructions.

c. I appoint you as agent for the purpose of carrying out my directions to you in accordance with the terms and conditions of this Agreement with you for my IRA or Retirement Plan and at the risk of my IRA or Retirement Plan with respect to the purchase or sale of securities. To carry out your duties, you are authorized to open or close brokerage accounts, place and withdraw orders, and take such other steps as are reasonable to carry out my directions. I acknowledge that I have received a copy of Union Bank’s current Guidelines for Investment Services Account and agree not to direct you to make purchases of investments that are not acceptable to the Trustee/Custodian. By directing you to make a purchase of securities, I understand that I automatically authorize Union Bank,

with another qualified IRA program chosen by the Custodian as the successor arrangement; or

(d) When the Custodian is removed by written notice from the Depositor, and receives acceptance by a successor trustee/custodian. However, the Custodian is authorized to reserve such funds as may be necessary for the payment of expenses and fees due or to be incurred.

2. Unless one of the events described in paragraph 1 occurs, this Custodial Agreement will continue even though no contributions are made to the Custodial Account for any particular year or years.

article Xiii (Designation of Beneficiary)1. The Depositor will file with the Custodian a written designation of his or

her beneficiary or beneficiaries. Any such designation may be changed from time to time by filing a new designation with the Custodian. Such designation may include contingent or successive beneficiaries. Each such election and designation will be on a form provided by or acceptable to the Custodian. The interest of any beneficiary will cease upon his or her death. If there is no Designated Beneficiary to receive any amount that becomes payable to a beneficiary, such amount will be payable first to the spouse of the Depositor and, if there is no surviving spouse, to the estate of the Depositor. In the event that a beneficiary is a minor, the Custodian will have discharged all its obligations by paying the minor’s parent or legal guardian, or an adult with whom the minor resides.

2. A beneficiary designation dated and signed by the Depositor will be valid even though not filed with the Custodian prior to the death of the Depositor if, and only if, it is so filed within 30 days after the Custodian has received notice of the death of the Depositor. If payments are made more than 30 days after receipt of notice of the death of a Depositor pursuant to the written designation then filed with the Custodian bearing the latest date, the Custodian will not be subject to any liability for failure to make payments pursuant to any other designation.

3. The Custodian is under no obligation to distribute funds if the Custodian has been given written notice that a beneficiary dispute exists. In this case, the Custodian may make payment after receiving either: written payout instructions containing witnessed signatures of all parties to the beneficiary dispute, or an order from a court of competent jurisdiction.

4. Neither the Depositor nor any beneficiary of the Depositor will have any right to pledge, borrow against, or in any way create a lien upon any assets of the Custodial Account. Notwithstanding the provisions of this paragraph, the Depositor may transfer part or all of his or her interest in the Custodial Account to his or her former spouse pursuant to a divorce decree or under a written instrument incident to such divorce, and any interest so transferred will be treated as an individual retirement account for the benefit of the former spouse.

5. The Depositor is not required to take a distribution from his or her Roth IRA at age 701/2. However, when the Depositor dies, the beneficiary(ies) must begin taking distributions in accordance with Article V (Distributions). If the Depositor’s spouse is the sole designated beneficiary, he or she may choose to assume the Roth IRA as his or her own as stated in Article V, paragraph 3, of the Custodial Agreement, or the Depositor’s spouse may choose to receive substantially equal payments over his or her life expectancy beginning no later than December 31 of the year in which the Depositor would have reached age 701/2.

article Xiv (Miscellaneous) 1. No amendments or modification or termination of this Custodial

Agreement will cause any part of the Custodial Account to be used for or diverted to, or for the benefit of, anyone other than the Depositor and his or her beneficiaries; furthermore, the rights or responsibilities of the Custodian will not be changed without his or her written consent. In the event the Custodian wishes to amend this Custodial Agreement or offer it to newly acquired customers as substitution for an existing qualified IRA program, the Custodian may do so by notifying such Depositors or customers of the amendment or substitution, and giving them a reasonable period of time to respond. If no response is received within the time period stated, such Depositor or customer will be deemed to have

consented to the amendment or to have adopted the provisions of this Custodial Agreement and to be bound by them.

2. In the event that the Bank is converted into, merged or consolidated with, or sells and transfers any or all of its assets and business including its Individual Retirement Accounts to a corporation formed under the laws of the United States of America or any political subdivision thereof, such corporation shall thereupon become and be the Custodian or Trustee of this Custodial Agreement with the same effect as though specifically so named, but only if such surviving corporation is a bank, financial institution, or other organization approved by the IRS to hold assets of Individual Retirement Accounts.

3. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Custodial Agreement.

4. The laws of the state of California will govern the provisions of the Custodial Agreement except to the extent that such laws are pre-empted by the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended from time to time.

article Xv (fees, charges, and Expenses)1. The Custodian will be entitled to reasonable compensation for its services

under this Custodial Agreement and to reimbursement for all reasonable expenses incurred in the management of the Custodial Accounts. The Custodian will notify the Depositor in writing of its fees and of any changes in fees.

2. The fee for services rendered will be such reasonable compensation as will be established from time to time by the Custodian, and may include, without limit, an annual custodial fee, processing fees, and other transaction fees.

3. The annual custodial fee provided for under paragraph 2 will be due and payable with respect to the IRA for each calendar year during which the IRA is in existence.

4. The Custodian may from time to time charge processing fees and transaction fees provided for under paragraph 2.

5. The Depositor authorizes the Custodian to liquidate assets in the Custodial Account as needed to pay any fees, charges, and expenses allocated to the Custodial Account that have not been timely paid by the Depositor. The Custodian may allocate such fees and expenses among a Depositor’s accounts at such time or times and in such manner as the Custodian, in its reasonable discretion, determines. To effect the payment of fees and expenses from a Custodial Account, the Custodian may liquidate assets held in the Custodial Account and will have the sole discretion to determine whether, when, or which assets are to be liquidated.

article Xvi (Dispute resolution by Judicial reference for fDic-insured individual retirement accounts; Waiver of right to Jury trial)Depositor agrees that as to each dispute, claim, demand, cause of action, and controversy (referred to below by the single word, “Dispute”) between the Depositor and the Custodian out of or relating to any IRA deposit account, (1) DEPOSITOR INTENTIONALLY AND DELIBERATELY GIVES UP HIS OR HER RIGHT TO A JURY TRIAL AS TO ANY SUCH DISPUTE and (2) Depositor agrees that any such Dispute may, at the option of either the Depositor or the Custodian, be submitted to a Judicial Referee, as described below.

By executing the Adoption Agreement, the Depositor waives his or her right to a trial by jury with regard to any Dispute between the Custodian and the Depositor. In addition, the Depositor agrees to the alternative dispute resolution procedures described below.

Filing a Lawsuit: Request to the Court – If a Dispute cannot be resolved informally, either the Depositor or the Custodian may file a lawsuit in an appropriate Court. After a lawsuit has been filed, either the Depositor or the Custodian may then make a written request to the Court for Judicial Reference to resolve the Dispute in accordance with the provisions of this Agreement and applicable state law. This means that either the Depositor or the Custodian can require Judicial Reference to resolve the Dispute. (This also means that if neither the Depositor nor the Custodian makes a timely


2 12 0

The Depositor/Investor agrees that the Depositor/Investor shall at all times be liable for the payment upon demand of any debit balance or other obligations owing in any of the Depositor’s/Investor’s Accounts, and the Depositor/Investor shall be liable to UnionBanc Investment Services for any deficiency remaining in any such Accounts in the event of the liquidation thereof, in whole or in part, by UnionBanc Investment Services or by the Depositor/Investor, and the Depositor/Investor shall make payment of such obligations and indebtedness upon demand. All transactions in any of the Depositor’s/Investor’s Accounts are to be paid for or securities delivered no later than 2:00 p.m. Eastern Standard Time on the settlement date. The Depositor/Investor agrees that if after demand, the Depositor/Investor fails to pay the indebtedness, UnionBanc Investment Services may close the Depositor’s/Investor’s Account and liquidate the assets in the Depositor’s/Investor’s Account in an amount sufficient to pay the Depositor’s/Investor’s indebtedness.

(c) Settlement Sweep/Bank Account. If the Depositor/Investor has designated BDSP12 or HIGHMARK CALIFORNIA TAX-FREE MONEY MARKET FUND as a core account investment vehicle (BDSP or HIGHMARK CALIFORNIA TAX-FREE MONEY MARKET FUND) for the Depositor’s/Investor’s UnionBanc Investment Services Account, the Depositor/Investor acknowledges receipt of the Program Disclosure or prospectus for HIGHMARK CALIFORNIA TAX-FREE MONEY MARKET FUND and the Depositor/Investor authorizes, but does not require, UnionBanc Investment Services to automatically invest in such core account investment vehicle, on a daily basis, the free credit balances in the Depositor’s/Investor’s UnionBanc Investment Services Account (such balances defined as cash that may be transferred without giving rise to interest charges), in excess of $1.00, including interest and dividends paid to the Depositor/Investor. The Depositor/Investor understands that any such automatic investment by UnionBanc Investment Services shall be subject to prior payment by UnionBanc Investment Services, and on the Depositor’s/Investor’s behalf, of any margin loan balances and any other obligation in the Depositor’s/Investor’s Account including, but not limited to, settlement of securities transactions. Amounts of less than $1.00 will be automatically invested weekly.

(d) Interest and Dividends. Interest and dividend payments with respect to the assets in my Account will be credited to my Settlement Account when paid. If I have an Investment Services Account, such credits will be made electronically. If I have not authorized use of a Settlement Account, settlement will be by check.

Unless you notify me otherwise, securities and other property in, and purchased/sold for, my Account with Bank will be held by Bank pursuant to the additional Custody or Safekeeping provisions herein; and unless you notify me otherwise, securities and other property in, and purchased/sold for, my Investment Services Account will be held by NFS.

5. Purchase of Precious Metals. I understand that the purchase of precious metals for my IRA is not permitted.

6. Options. I agree that in giving orders to sell, I will designate all “long” sale orders as “long.” By designating a sell order as “long,” I represent that I own the security and, if the security is not in your possession, I will deliver it on or before the settlement date. Short sale orders are prohibited.

7. Proprietary Money Market Mutual Funds. If I have authorized a Proprietary Money Market Mutual Fund to be used as my Settlement Account, I acknowledge that Bank performs various roles in connection with such Funds including, without limitation, investment advisory, sub-administrator, custodian, sub-fund accountant, sub-transfer agent, and shareholder servicing agent, and that the Bank receives fees from such Funds for such services in addition to any other fees Bank may receive pursuant to this Agreement. Investments in the Proprietary Money Market Mutual Funds are not deposits, and are not obligations of or endorsed or guaranteed in any way by the Bank or Investment Services, nor are they insured by the Federal Deposit Insurance Corporation. For those investments allocated to a money market fund, it is fundamental policy to use every effort to maintain a stable net asset value of $1.00. There is no assurance that a fund will be able to do so. Shares of HighMark Funds, like all mutual fund shares, involve risk, including possible loss of principal amount invested.11

8. Fees and Charges. I understand that you will charge commissions and other fees for execution of my transactions, and you may charge for the custody and/or safekeeping of my securities and other property if I have requested your custody and/or safekeeping services, as well as impose various service charges and other fees relating to my Account. Fees and charges will be made in accordance with your then-prevailing fee schedule. Your compensation may consist of certain fees and allowances, including service payments or a percentage of a sales load that you may receive from mutual funds as disclosed in the mutual fund prospectuses. In addition, you may receive distribution fees from a Fund under a fund’s 12b-1 plan. I understand that Bank and/or Investment Services employees may be paid a portion of any compensation received. I understand that purchases of no-load mutual funds directly from an insurer, principal underwriter, or distributor may be available without transaction fees. For further information, I will consult the prospectus to the funds. I understand that Bank or an affiliate may, if legally permissible, act as principal in the sale of certain securities and receive compensation for its services.

I agree to pay all such charges, commissions, and fees by check at your then-prevailing rates or, if I have a Settlement Account, I authorize you to debit my Settlement Account for the amount thereof. I also understand that charges, commissions, and fees may be changed from time to time, and I agree to be bound thereby.

9. Statement/Confirmations. I agree to promptly examine all statements and confirmations sent to me in connection with my Account. I understand that my Investment Services Account statement is provided in lieu of a confirmation, which may otherwise be provided. I will notify you of any objections to information reported to me within ten (10) days after you make the statement available to me and within five (5) days after you make a confirmation available to me. Otherwise, such information will be deemed approved. You may request that I provide such documentation as may be necessary to substantiate my claim. I may request a confirmation for any transaction effected on my behalf, and such confirmation shall be sent within the time prescribed by law.

The market values, ratings, and prices reported on statements represent the prices, ratings, and values provided to the Bank and Investment Services by third-party quotation services generally recognized as industry experts. The Bank does not guarantee the accuracy of such values, ratings, and prices. The actual price at which securities may be bought and sold may be significantly different from those shown on the statement.

10. Instruction and Recordings. Except as provided herein with respect to Safekeeping Services (as defined below), if I elect to subscribe to such services, I authorize you to act on telephone, telex, wire, written, fax, and any other instructions you believe in good faith that I authorized. For mutual protection, I authorize you to record any telephone conversation without further reminding me of the recording. I agree that UnionBanc Investment Services, NFS, or any transfer agent will not be liable for, and I agree to hold all of you harmless from, any claim or expense arising in connection with your or their complying with instructions or requests with respect to my Account that you believe in good faith that I authorized.

11. Advice. I assume all responsibility and risk for the investment, review, and reinvestment of all securities and other property in my Account. You shall make all purchases, sales, exchanges, investments, and reinvestments only upon receipt of and pursuant to my instructions. You shall have no duty or obligation to review or make recommendations for the investment or reinvestment of any securities or other property in the Account, including uninvested cash. You shall have no responsibility for monitoring financial publications for, or notifying me of, notices of redemption, conversions, exchanges, calls, puts, subscription rights, and script certificates (“Corporate Actions”), and shall not be obligated to take any action with respect thereto. You shall have no discretionary power or control over any decisions made by or on behalf of me, whether or not any advice you may render is used in my decision. I understand that any advice that you may render is solely incidental to the conduct of your business under this Agreement, that such advice will not serve as the primary basis for any decision by or on behalf of me, and that you may change your recommendations without notice to me. I further understand

N.A., as Trustee/Custodian to withdraw funds from the Core Account described above, but if it should be insufficient, from any savings account or certificate of deposit maintained at Union Bank, N.A., as an investment of my IRA or Retirement Plan, to cover the amount due on purchases by 2:00 p.m. Eastern Standard Time on settlement date. I agree to deliver any securities I have in my possession in sufficient time to be received by UnionBanc Investment Services on settlement date. I understand that a transaction fee may be paid to Union Bank, N.A. I agree to hold the Trustee/Custodian, Union Bank, N.A., and you harmless from any liability for early withdrawal penalties that might be assessed against my IRA or Retirement Plan by reason of withdrawals to pay for securities purchased at my direction. No provision of this Agreement concerning liens or security interest shall apply to the extent such application would be in conflict with any provisions of ERISA or the Internal Revenue Code relating to retirement accounts.

d. I agree that you shall be entitled to compensation for your services in accordance with your current schedule of charges for accounts for IRAs and Retirement Plans, and that you may deduct such charges from assets held in my Account.

e. I authorize you to release information regarding the status and history of my Account to others, including (without limitation) your parent company and affiliates. Information also may be released about my Account and the transactions I perform to third parties where it is necessary or helpful in verifying and completing transactions; to verify the existence and condition of my Account for account verification services; to consumer reporting agencies; to merchants with whom we are doing business; to financial institutions and members of a network which processes my electronic transfers; when I give you oral or written consent; to paying agencies after the death or incapacity of a recipient or beneficiary of recurring direct deposit payments; and to comply with the law or a court order.

Bank/investment Services accounts1. Authority and Ownership. I represent that I have the legal capacity to enter

into this Agreement and am authorized to do so. I will provide you with all necessary documentation authorizing the opening of, and effecting transactions in, my Account. I will be the owner of all securities and other property purchased, held, and sold in my Account or will otherwise have the authority to purchase, hold, and sell securities and other property. The information I provide you with respect to opening my Account is true and correct in all respects, and I will notify you of any material changes. If I am an employee of a bank, broker-dealer, municipal securities dealer, or am a client of a bank that has referred me to you, I will notify you thereof at or before the time my Account is opened, or at such later time as I become such. I authorize you to send duplicate confirmations to my employer or referring entity, respectively, if you are requested or required to do so.

2 Appointment of Bank/Investment Services as Agent. I appoint you as my agent for the purpose of carrying out my directions with respect to the purchase and sale and settlement of securities and other property in accordance with this Agreement, and I assume all risks with respect to the purchase and sale of securities and other property. I authorize you to take such steps as are reasonably necessary to carry out my directions and your duties including, but not limited to, appointing and using independent contractors or subagents including National Financial Services LLC (NFS) for Investment Services Accounts. To carry out my directions, you and such agents are authorized to open and close Accounts; maintain customer records; hold securities and other property in bearer, registered, or book entry form; and place and withdraw orders.

3. Clearing Broker Relationship. I understand that all information supplied by the undersigned will be subject to verification and that all information on this application is correct. I understand that you have entered into an agreement with National Financial Services LLC (NFS) (Member NYSE) to execute and clear all brokerage transactions. I understand that neither you nor NFS provides investment advice for the purchase or sale of options in connection with this Account, nor do you give advice or offer any opinion with respect to the suitability of any such stocks or options, and that no fiduciary relationship exists.

Transactions for securities and other property may also be executed through other entities including Bank and its affiliates and, if

permissible, that Bank or an affiliate may serve as principal and receive compensation. I understand that Investment Services may share with, remit to, or otherwise pay NFS for its services from Investment Services commissions and/or fees charged. I further understand that unless I instruct Investment Services otherwise, securities and other property purchased for my Investment Services Account will be held by NFS, and the securities and cash in my Investment Services Account will be protected by the Securities Investor Protection Corporation to the maximum amount allowed by law.

4. Purchase and Sale Orders/Settlement/Interest and Dividends.

(a) Purchase and Sale Order. Securities or other property I may have in my possession must be received by you in good transferable form prior to execution of any sell order. Unless I specify that the order be executed on a specific exchange or market and you have agreed to such execution, you will, at your sole discretion and without prior notice to me, execute any order to purchase or sell securities in any location or on any market or exchange, including a foreign exchange, where such security is traded.

I will not buy or sell any securities or other property of an insurer of which I am an affiliate, or sell any restricted securities, except in compliance with acceptable laws and regulations and with prior notice to you thereof.

Investment by check may be promptly credited to my Settlement Account. Investment credited to a Settlement Account that is invested in a Proprietary Money Market Mutual Fund will earn dividends, if any, as described in the fund’s prospectus. I understand that access to the redemption proceeds of shares of a Mutual Fund purchased with checks may be withheld for up to seven days, or 20 days for acceptable foreign checks, to assure that such checks have been collected. Such withholding may result in dishonor of checks or rejection of other debit items if monies are not otherwise available to me within my Account.

(b) Settlement. If the Depositor/Investor has designated a bank account as the Settlement Account in connection with the Depositor’s/Investor’s Account with the Bank and/or UnionBanc Investment Services, or if the Depositor/Investor has designated a core account investment vehicle (Bank Deposit Sweep Program (BDSP) or HIGHMARK CALIFORNIA TAX-FREE MONEY MARKET FUND) as the UB Deposit Account in connection with the Depositor’s/Investor’s UnionBanc Investment Services Account (in either or both cases, the “Settlement Account”), then the Depositor/Investor authorizes UnionBanc Investment Services to debit the Depositor’s/Investor’s Settlement Account for payment of all debit items to the Depositor’s/Investor’s Account including, but not limited to, checks, margin payments, securities, and other property purchased by the Depositor/Investor as such debts become due, and to credit the Depositor’s/Investor’s Settlement Account with the proceeds of securities and other property sold, and interest, dividends, and other payments received by UnionBanc Investment Services on the Depositor’s/Investor’s behalf. Redemptions of shares in a Proprietary Money Market Mutual Fund will be redeemed at its net asset value.

In the case of settlement through a bank account, the Depositor/Investor also authorizes and requests the designated bank to accept such debit and credit entries. The bank is to debit or credit the amount requested to the Depositor’s/Investor’s Account, without responsibility for the correctness of the transaction or the existence of any further authorization from the Depositor/Investor. The Depositor/Investor hereby ratifies any telephone instructions given that relate to this authorization.

The Depositor/Investor agrees to have a sufficient Collected Balance (as such term is defined herein) in the Settlement Account, or to deliver sufficient collected funds to UnionBanc Investment Services on or before the settlement date, for payment for all securities and other property purchased for the Depositor’s/Investor’s Account, including commissions and fees, and if the Depositor/Investor fails to do so, UnionBanc Investment Services may refuse to execute the Depositor’s/Investor’s transaction or cancel it without notice to the Depositor/Investor and the Depositor/Investor will be liable for any resulting loss. Deposits shall constitute “Collected Balances” as follows: deposit of cash shall be considered “collected” at the time of deposit; non-cash items shall be considered “collected” when the depository in which the item is deposited receives final credit on its books for the item.


2 32 2

nor guarantee its accuracy, non-infringement, security, completeness, timeliness, or sequence, nor give any express or implied warranties, including warranties of merchantability or fitness for a particular use. UnionBanc Investment Services and NFS do not guarantee investment performance, suitability, or profitability of a security or investment, or provide investment advice or recommendations, or provide legal, tax, or accounting advice.

(b) Limitations of Liabilities. I agree that Investment Services, NFS, and any other disseminating party shall not be liable or attributable to any inaccuracy, error, delay in, transmission or omission of non-performance, interruption, or unavailability of any information due either to any act or omission not constituting gross negligence or willful misconduct by such parties or to any “force majeure” (i.e., flood, weather conditions, earthquake, or other act of God, fire, war, insurrection, riot, labor dispute, accident, action of government, communications, power failure, or equipment, or software malfunction) or to any other cause beyond the reasonable control of such parties, and agree to indemnify and hold such parties harmless for any loss, damage, or expense for acting on my instruction. Investment Services, NFS, and any other disseminating party shall not be liable for any indirect, incidental, or consequential damages, including lost profits or trading losses arising out of reliance upon or the inability to access or use these services or any information.

(c) Confidentiality. Maintaining confidentiality of my account is my responsibility. I agree not to allow other persons or entities to access or use my Account for any purpose including order entry, inquiry, or for quotes. I agree to maintain my User Identification (ID) number and Personal Identification Number (PIN) in strict confidence and to immediately notify Investment Services if there is unauthorized use of my User ID, PIN, or other security data, or if there is a discrepancy in the account balance, stock position, or order status, or any other type of suspicious or unexplained occurrence relating to these services in my Account.

I agree that use of these services may involve the transmission of personal financial information, including the identity, number, and net dollar price of shares traded, and that neither Investment Services nor NFS guarantees the security of electronic transmission of this and other information over the Internet. I consent to the electronic transmission of such information through these services. Due to the inherently limited security mechanisms for the Internet, neither Investment Services nor NFS guarantees the privacy, security, or authenticity of electronic transmissions.

If I have already been assigned a User Identification (ID) number for another account or accounts with Investment Services, or am registering multiple accounts, I may, but am not required to, have different User IDs for each account. All users accessing via the same User ID are able to trade and obtain account information equally and from any and all accounts linked to that User ID.

(d) Re-dissemination. I agree not to cause or permit any information to be published, broadcast, retransmitted, reproduced, professionally or commercially exploited, or otherwise re-disseminated or to be used to create any derivative works, including databases.

(e) Trading. Investments placed through electronic services will be settled in the same manner as currently established for my Investment Services account. I understand that orders entered through electronic services may be subject to Investment Services’ review and approval. Receiving an order reference number online or an order number on the phone is not an indication of an approved order. An approved order will be given the status “Open” in the Order Status/Open Orders section of the electronic services system. In the event that Investment Services does not approve the order, Investment Services may attempt to contact me as soon as possible at my primary telephone number. Investment Services and NFS cannot be held responsible for any lost profits or increased losses that may result from their failure to accept my order through electronic services.

Trades placed through electronic services may be subject to broker review and release. Trades may experience a short delay prior to release to the market. Investment Services and NFS will not be held liable for

any lost profits or increased losses due to such delays. Trades placed through electronic services while the market is closed will be released to the market when it reopens.

(f) Termination. Investment Services reserves the right to terminate my electronic investing access if I do not log on to the online investment or telephone access secured area for 90 consecutive days.

Payment for the Order flowInvestment Services or NFS transmits customer orders for execution to various exchanges or market centers based on a number of factors. These include size of order, trading characteristics of the security, favorable execution prices (including the opportunity for price improvement), access to reliable market data, availability of efficient automated transaction processing, and reduced execution costs through price concessions for the market centers. Certain of the market centers may execute orders at prices superior to the publicly quoted market in accordance with their rules or practices. While a customer may specify that an order be directed to a particular market center for execution**, the order-routing policies, taking into consideration all the factors listed above, are designed to result in favorable transaction processing for customers.

Investment Services and/or NFS may receive remuneration, compensation, or other consideration for directing customer orders for equity securities to particular broker-dealers or market centers for execution. Such considerations may take the form of financial credits, monetary payments, or reciprocal business.

**Please note: Orders placed through any telephone, electronic, or online trading systems cannot specify a particular market center for execution.

notice to customersNew York Stock Exchange Rule 382 requires that Investment Services and NFS allocate between them certain functions regarding the administration of my brokerage account. The following is a summary of the allocation services performed by Investment Services and NFS. A more complete description is available upon request.

Investment Services is responsible for (1) obtaining and verifying brokerage account information and documentation, (2) opening, approving, and monitoring my brokerage account, (3) transmitting timely and accurate instructions to NFS with respect to my brokerage account, (4) determining the suitability of investment recommendations and advice, (5) operating and supervising my brokerage account and its own activities in compliance with applicable laws and regulations, and (6) maintaining of required books and records for the services it performs.

NFS shall, at the direction of Investment Services: (1) execute, clear, and settle transactions processed through NFS by Investment Services, (2) prepare and send transaction confirmations and periodic statements of my brokerage account (unless Investment Services has undertaken to do so). Certain pricing and other information may be provided by Investment Services or obtained from third parties that has not been verified by NFS, (3) act as custodian for funds and securities received by NFS on my behalf, and (4) follow the instructions of Investment Services with respect to transactions and the receipt and delivery of funds and securities for my brokerage account. NFS shall maintain the required books and records for the services it performs.

BrOKEraGE accOunt PrEDiSPutE arBitratiOn aGrEEMEnt THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT, THE PARTIES AGREE AS FOLLOWS:

(A) ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THEIR RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED.

that you believe your advice is based on information from sources you consider reliable, but you do not warrant the accuracy, completeness, or reliability of it. In this regard, if you supply a prospectus, offering circular, or other materials related to an investment, you similarly believe it is based on information from sources you consider reliable, but you do not warrant its accuracy, completeness, or reliability. I understand that you do not endorse any particular investment product specifically, including any mutual fund that is advised by you or your affiliates.

General12. Credit/Account Information. I authorize you and your agents at your/

their discretion to obtain reports and exchange information with others about my credit and business relationships. Upon my request, you will inform me whether you have obtained any consumer credit reports from a consumer reporting agency, and if so, you will provide me with the name and address of the consumer reporting agency that furnished it. Unless I instruct you otherwise, I authorize you to disclose my name, address, and securities positions to issuers in whose securities I hold a position. I authorize you to release information regarding the status and history of my Account to others, including (without limitation) your parent company and affiliates. Information also may be released about my Account and the transactions you perform to third parties where it is necessary or helpful in verifying and completing transactions; to verify the existence and condition of my Account for account verification services; to consumer reporting agencies; to merchants with whom I am doing business; to financial institutions and members of a network that processes my electronic transfers; when I give you oral or written consent; to paying agencies after the death or incapacity of a recipient or beneficiary of recurring direct deposit payments; and to comply with the law or a court order.

13. Indemnity/Limit of Liability. I agree to indemnify, defend, and hold you harmless from and against all claims, demands, proceedings, and all liabilities and expenses, including attorneys’ fees, in connection therewith, arising out of your acting in accordance with any instructions from me or someone purporting to be me, or otherwise in connection with this Agreement unless caused by your gross negligence or willful misconduct. I agree that I will pay or reimburse you for the reasonable costs and expenses of collection of the debit balance or any unpaid deficiency in my Account including, but not limited to, attorneys’ fees incurred by you. The provisions of this paragraph shall survive any termination of this Agreement and shall be binding on my successors and assigns.

14. Extraordinary Events. Neither Bank, Investment Services, nor NFS shall be liable for any loss or delay caused directly or indirectly by war, natural disasters, government restrictions, exchange or market rulings, extraordinary exchange or market conditions, telecommunications, utility or equipment failures, or other conditions beyond Bank’s, Investment Services’, or NFS’s control including, but not limited to, market volatility or trading volumes.

15. Security Interest. Any credit balances, securities, or other property in which I may have an interest held by NFS shall be subject to a general lien for the discharge of my obligations to you. And you may sell, transfer, or assign any such securities or other property to satisfy a margin deficiency or other obligation whether or not you have made advances with respect to such property. Without notice to me, such property may be carried in your general accounts, and all securities may be pledged, repledged, hypothecated, or rehypothecated separately or in common with other securities or any other property for the sum due to you, or for a greater sum, and without retaining in your possession and control for delivery a like amount of similar securities or other property. At any time in your discretion you may, without notice to me, apply or transfer any securities or any other property interchangeably between my Accounts, whether individual or joint, from any of my Accounts to any Account guaranteed by me.

You are specifically authorized to transfer to my Account, on the settlement day following a purchase made in that Account, excess funds available in any of my Accounts sufficient to make full payment of such cash purchase.

16. Governing Law and Applicable Regulations. Except as otherwise provided in paragraph 28, this Agreement, and all transactions hereunder, shall be governed by the laws of the state of California without giving effect to the choice of law or conflict of laws’ provisions thereof. All transactions for my Account shall be further subject to the regulations of all applicable federal, state, and regulatory agencies including, but not limited to, the Securities and Exchange Commission; the applicable self-regulatory organizations; the Board of Governors of the Federal Reserve System; the Office of the Comptroller of the Currency; and the constitution, rules, and customs of the exchange or market (and its clearing house, if any) where executed. Actual deliveries are intended on all transactions. I agree not to exceed the exercise limits and/or position limits set by the option exchanges for my own Account, acting alone or in concert with others.

17. Amendments/Termination. I understand that you may amend or terminate this Agreement or provide me with additional disclosures at any time, in any respect, effective upon sending notice to me. My use of the services provided hereunder after you send such amendment, notice, or disclosures shall constitute my agreement thereto. You may also, at your discretion, terminate or restrict the services contemplated hereunder at any time, effective upon sending notice to me. I have the right to terminate this Agreement at any time. I will continue to be responsible for any obligations I incurred prior to any termination.

18. Notices. All written communications shall be sent to me by first class mail, postage paid, at the address I have specified to you in writing. I shall send written communications to you by first class mail, postage paid, to the address indicated on the application. Any communication sent accordingly shall be considered delivered to the party to whom addressed, whether or not actually received, on the earlier of the actual delivery date or five days after it is sent. Any party may change the address at which notice may be given with ten (10) days’ prior written notice of such changes to the other party.

19. Entire Agreement. This Agreement, including any agreement incorporated herein by reference, constitutes the entire Agreement among the parties with respect to my Accounts. All previous agreements and instructions, whether written or oral between the Bank or Investment Services and me, with respect thereto, are hereby superseded.

20. Taxation of Account. I am responsible for filing any and all tax returns and for paying the taxes on all securities and other property and income of my Account.

21. Account Protection. Securities in accounts carried by National Financial Services, LLC (NFS) are protected by the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000, including $100,000 for claims for cash. Customers may obtain information about SIPC, including the SIPC explanatory brochure, by accessing the SIPC website at www.sipc.org or upon request by telephone at 1-202-371-8300. In general, SIPC protects customers of UnionBanc Investment Services, providing up to $500,000 securities protection, including $100,000 cash protection per customer. SIPC provides protection against certain losses if UnionBanc Investment Services fails financially and is unable to meet obligations to its securities customers. NFS has arranged for additional insurance protection for cash and securities to supplement its SIPC coverage. This additional protection covers total account net equity in excess of the $500,000/$100,000 coverage provided by SIPC. Neither coverage protects against a decline in the market value of securities.

22. Electronic Services. I hereby authorize and request that Investment Services and NFS provide me with access to and use of one or more of your electronic investment services (Telephone Investing, Online Investing, etc.). I agree that I will hold Investment Services harmless for any loss, liability, cost, or expense for acting on my instruction. I understand that the investments I place through electronic services will be settled in the same manner as currently established for my Investment Services account. By using your electronic services, I agree to the following terms and conditions:

(a) Disclaimers. Although investment and market data information available through these services is obtained from independent and reliable sources, Investment Services and NFS neither endorse this information


2 52 4

Projections using 1% interest rate. Insert your age at account opening and subsequent years to calculate the projected value of your account at ages 60, 65 and 70. Please refer to your certificate of deposit at account opening or contact your Union Bank branch for early withdrawal penalties on your account.

Enter your age at

account opening:

At the end of year:

Projected value of account (without early withdrawal

penalties):

Insert early withdrawal penalties (if applicable):

Net amount available at withdrawal:

1 $1,010.05

2 $2,030.25

3 $3,060.70

4 $4,101.51

5 $5,152.78

6 $6,214.62

7 $7,287.13

8 $8,370.42

9 $9,464.59

10 $10,569.76

11 $11,686.04

12 $12,813.54

13 $13,952.37

14 $15,102.64

15 $16,264.47

16 $ 17,437.98

17 $18,623.28

18 $19,820.49

19 $21,029.74

20 $22,251.14

21 $23,484.81

22 $24,730.88

23 $25,989.48

24 $27,260.72

25 $28,544.74

26 $29,841.67

27 $31,151.63

28 $32,474.75

29 $33,811.17

30 $35,161.02

(B) ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY’S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION IS VERY LIMITED.

(C) THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS, AND OTHER DISCOVERY IS GENERALLY MORE LIMITED THAN IN COURT PROCEEDINGS.

(D) THE ARBITRATORS’ AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING, AND ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.

(E) THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.

(F) THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT.

(G) THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT. CLIENT UNDERSTANDS THAT JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION.

IF THE CUSTOMER FILES A COMPLAINT IN COURT AGAINST UNIONBANC INVESTMENT SERVICES THAT CONTAINS CLAIMS THAT ARE SUBJECT TO ARBITRATION PURSUANT TO THIS PREDISPUTE ARBITRATION AGREEMENT, UNIONBANC INVESTMENT SERVICES MAY SEEK TO COMPEL ARBITRATION OF THE CLAIMS THAT ARE SUBJECT TO ARBITRATION, PROVIDED THAT UNIONBANC INVESTMENT SERVICES MUST AGREE TO ARBITRATE ALL OF THE CLAIMS CONTAINED IN THE COMPLAINT IF THE CUSTOMER SO REQUESTS.

THE CUSTOMER AGREES THAT ALL CONTROVERSIES THAT MAY ARISE BETWEEN THE PARTIES CONCERNING ANY ORDER OR TRANSACTION, OR THE CONTINUATION, PERFORMANCE, OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN US, WHETHER ENTERED INTO BEFORE, ON, OR AFTER THE DATE THIS ACCOUNT IS OPENED, SHALL BE DETERMINED BY ARBITRATION BEFORE A PANEL OF INDEPENDENT ARBITRATORS SET UP BY EITHER THE NEW YORK STOCK EXCHANGE, INC., OR FINRA, AS THE CUSTOMER MAY DESIGNATE. IF THE CUSTOMER DOES NOT NOTIFY UNIONBANC INVESTMENT SERVICES IN WRITING WITHIN FIVE (5) DAYS AFTER THE CUSTOMER RECEIVES FROM UNIONBANC INVESTMENT SERVICES A WRITTEN DEMAND FOR ARBITRATION, THEN THE CUSTOMER AUTHORIZES UNIONBANC INVESTMENT SERVICES TO MAKE SUCH A DESIGNATION ON THE CUSTOMER’S BEHALF. THE CUSTOMER UNDERSTANDS THAT JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION.

NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PREDISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION, OR WHO IS A MEMBER OF A PUTATIVE CLASS ACTION WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION, UNTIL:

(I) THE CLASS CERTIFICATION IS DENIED; OR

(II) THE CLASS IS DECERTIFIED; OR

(III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT.

SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.

financiaL DiScLOSurE

Growth in investment ira valueGrowth in the value of your IRA will depend completely on the investment decisions you make; we can’t make guarantees or projections.

Growth in fixed rate ira Deposits This supplemental projection is required by federal regulation even though the projections are not guaranteed and do not necessarily reflect the amounts the depositor would realize at the end of the respective period. Our projection of growth for regular contributions is based on the assumption that you will contribute $1,000 annually, deposited every year on the anniversary date of the opening of the IRA, at the interest rate of 1%, compounding daily. The rate of interest payable on the investment vehicles in which assets are invested is subject to changes and we cannot guarantee a constant rate for the duration of the IRA. In addition, a penalty may be required by federal regulations if withdrawal occurs prior to the maturity date of your investment certificate. Please see example below to calculate your net amount at withdrawal.

Example using 1% interest rateEnter your

age at account opening:

At the end of year:

Projected value of account:

Early withdrawal penalty (if applicable) Example uses 3 month

penalty (.25%)

Net amount available at withdrawal

50 1 $1,010.05 -$2.53 $1,007.52

51 2 $2,030.25 -$5.08 $2,025.17

52 3 $3,060.70 -$7.65 $3,053.05

53 4 $4,101.51 -$10.25 $4,091.26

54 5 $5,152.78 -$12.88 $5,139.90

31 $36,524.44

32 $37,901.56

33 $39,292.52

34 $40,697.46

35 $42,116.52

36 $43,549.84

37 $44,997.57

38 $46,459.85

39 $47,936.82

40 $49,428.64

41 $50,935.45

42 $52,457.40

43 $53,994.65

44 $55,547.35

45 $57,115.65

46 $58,699.71

47 $60,299.69

48 $61,915.75

49 $63,548.05

50 $65,196.76

51 $66,862.04

52 $68,544.06

53 $70,242.98

54 $71,958.97

55 $73,692.21

56 $75,442.87

57 $77,211.12

58 $78,997.14

59 $80,801.11

60 $82,623.21

Enter your age at

account opening:

At the end of year:

Projected value of account (without early withdrawal

penalties):

Insert early withdrawal penalties (if applicable):

Net amount available at withdrawal:


2 72 6

EnDnOtES1 Bank products available through Union Bank, N.A., such as Certificates of

Deposit, are FDIC insured within permissible limits.

2 Securities available through UnionBanc Investment Services, LLC (with the exception of deposit sweep balances),


any bank, or any subsidiary or affiliate thereof:• Are NOT insured or guaranteed by the FDIC or, unless they are government

securities, by any other government agency;• Involve investment risk, including the possible loss of principal.

3 Information provided is for informational purposes only and believed to be accurate. Consult your tax advisor, or IRS Publication 590 — Individual Retirement Arrangements by visiting www.irs.gov or by calling 1-800-TAX-FORM.

4 Consult your tax advisor regarding deductibility of Catch-up Contributions, Individual IRAs, Spousal IRAs and broker fees and commissions, and for specific applicability to your situation. Or, access IRS Publication 590 — Individual Retirement Arrangements online at www.irs.gov.

5 Adjusted Gross Income (AGI) is the amount of income earned before subtracting itemized deductions.

6 Consult your tax advisor regarding specific applicability of the Saver’s Credit to your situation. Or, access IRS Publication 590 — Individual Retirement Arrangements online at www.irs.gov.

7 Consult your tax advisor regarding Rollover IRA types and specific applicability to your situation. Or, access IRS Publication 590 — Individual Retirement Arrangements online at www.irs.gov.

8 Information provided is for informational purposes only and believed to be accurate. Consult your tax advisor and IRS Publication 590 —Individual Retirement Arrangements.

9 Consult your tax advisor regarding income limits and tax implications on Roth IRA Conversions, and for specific applicability to your situation. Or, access IRS Publication 590 — Individual Retirement Arrangements online at www.irs.gov.

10 For more information regarding Promotional Rate Time Deposits, requirements to open and maintain these accounts, and related fees, see the Union Bank All About Personal Accounts & Services Agreements and Disclosure or call Union Bank at 1-800-238-4486.

11 Mutual fund investing involves risk, including possible loss of principal. HighMark Funds Distributors, Inc., an affiliate of PFPC Distributors, Inc., is the principal underwriter of the HighMark Funds. HighMark Capital Management, Inc., a registered investment adviser, is a wholly owned subsidiary of Union Bank, N.A., and serves as investment adviser for HighMark Funds. Union Bank, N.A., a subsidiary of UnionBanCal Corporation, provides certain services to the Funds and is compensated for these services. NO BANK GUARANTEE, NOT FDIC INSURED, MAY LOSE VALUE. There is no guarantee that the Funds will meet their stated objectives.

12 Bank Deposit Sweep Program funds are FDIC-insured when they have been swept into a Union Bank deposit account and are SIPC-insured when they have been swept into a UnionBanc Investment Services brokerage account. Please note that FDIC and SIPC are two separate, unrelated insurance entities and have different types of coverage. For more information about FDIC coverage, please visit www.fdic.gov; and for more information about SIPC coverage, please visit www.sipc.org.

nOtES


2 92 8

nOtES nOtES


©2011 Union Bank, N.A. 84363 (11/11)

unionbank.com

UBC2868_84363_TradROTH_AllAbout_F.indd 30 11/14/11 3:25 PM

All About Traditional, Rollover, and Roth IRAs - Union Bank · All About Traditional, Rollover, and Roth IRAs Disclosure and Agreement EffEctivE January 1, 2012 UBC2868_84363_TradROTH_AllAbout_F.indd

Documents