Executive Summary

The Kingdom Trust Company (“KTC”) – Your Institutional Custody Solution. KTC serves as an Independent Qualified Custodian for the assets of clients of Registered Investment Advisors, Broker-Dealers, and Investment Sponsors, as well as their individual retirement account (“IRA”), nonqualified plans, and qualified defined contribution plans (401(k)’s). MyRA Services provides administrative services and support to KTC under a contract between the two companies. MyRA Services is a Kentucky limited liability company formed to be a full service administrator of individual and multi-participant tax-deferred retirement accounts. KTC/MyRA Services custody and administer the accounts of clients with absolute integrity by showing uncommon commitment to service that fulfills the unique needs of KTC’s clients. They are required to follow all KTC policies and procedures and are be subject to ongoing review and audit by KTC’s internal audit function. KTC and MyRA Services provide a “high touch” client services company that leverages industry leading technology to allow clients to have complete control over their retirement accounts.

The focus of our companies is to support the growing custody needs of our institutional partners. The regulatory environment continues to change in the finance and investment industry. Dodd-Frank Act and other consumer protection regulations make the landscape difficult to manage at times. However, Kingdom is committed to being an industry leader in understanding the regulatory and compliance environment for our partners.

KTC’s Non-depository Trust Charter defined as:

26 USC 408(a) defines Individual Retirement Accounts as trusts and requires that the trustee be “a bank (as defined in subsection (n)) or such other person who demonstrates to the satisfaction of the Secretary that the manner in which such other person will administer the trust will be consistent with the requirements of this section.” 26 USC 408(n) defines a bank as “a corporation which, under the laws of the State of its incorporation, is subject to supervision and examination by the Commissioner of Banking or other officer of such State in charge of the administration of the banking laws of such State.” By obtaining and holding a non-depository trust charter from South Dakota, Kingdom Trust is in compliance with these requirements.

The United States Treasury’s Code of Federal Regulation 31 CFR Section 103.11 defines a financial institution to include a commercial bank or trust company organized under the laws of any state of the United States. Therefore, all South Dakota chartered trust companies must develop and implement a Customer Identification Program (CIP) to comply with the USA Patriot Act. KTC has drafted a comprehensive Anti-Money Laundering Policy that, among other things, established the policy and procedures the company must employ to ensure compliance with the USA Patriot Act and other relevant legislation.

BUSINESS ORGANIZATION

The organizers of My Retirement Account Services and KTC have hired experienced and competent staff of seasoned industry professionals and advisers to begin this business. Our team of top industry professionals was uniquely brought together to ensure that the delivery, technology, compliance functions are all handled in a manner and to the expection of the industry.

Key Officers and Directors

Key positions, General Counsel, Chief Operation Officer, and Institutional Custody Solutions and Business Development Officer are held by veterans of in the self-directed retirement plan industry.

Doug Lawson, President and Chief Executive Officer is a 20 year banking and finance veteran. Prior to founding KTC he served as Market President for Heritage Bank in Murray, Kentucky. Mr. Lawson’s areas of specialization includes small to mid-market commercial business, real estate, and agricultural lending. He currently serves a Governor’s appointment as a Board Member of the Kentucky Agricultural Finance Corporation. This is his serving his fourth appointment under three different Governors of the Commonwealth of Kentucky.
Scott Foster, Vice-President of Business Development, has been providing alternative asset sales and business development solutions for the Self-Directed Industry for the last 4 years. His 25 year career has been steeped in Institution investing that centered in core growth and development of companies, most recently with Millennium Trust Company. Mr. Foster will be utilizing his skills to further the business development of KTC. His time with such companies as Global Fund Advisors, Susquehanna International Group, Credit Suisse, ABN-AMRO, and Shearson Lehman provide him with solid understanding of the custody solutions needed in the institutional space.
Tim Kuhman, Kingdom Trust’s General Counsel, was general counsel to Equity Trust Company and its sister company, Mid-Ohio Securities Corporation. He has significant experience with compliance and regulatory issues facing the trust industry in general and self-directed, nontraditional custodians in particular. Mr. Kuhman’s education and professional experience, his work in and knowledge of the Custody space, his legal and compliance background, and the understanding of the Self-directed Retirement Industry greatly enhance KTC and our mission.
Charles “Bo” Ives, MyRA Services’ Chief Operating Officer, has provided service to customers and financial advisors in the self-directed retirement plan industry for 12 years. Most recently, Mr. Ives was Assistant Vice President of Sterling Trust Company in Waco, TX, a company that administered approximately 71,000 retirement accounts. In this role, Mr. Ives managed over 50 employees who staffed the phones, processed transactions and reviewed alternative investments. He has practical, hands-on, day-to-day experience that make him ideally suited to the task of planning, implementing and running MyRA Services operations.
Mr. Eric Crigler, Director, Eric’s background in the Investment industry, experience, and leadership will be a valued addition to KTC. After a career in the NFL, Mr. Crigler went onto receive his MBA in Finance from the Indiana University Kelley School of Business, with honors. Mr. Crigler has spent his career working as an Portfolio Manager/Analyst with Strong Capital Management in Milwaukee, WI and then opened his own firm, Skyhawk Capital Management in Memphis, TN.

Strategic Partners and Service Providers

Kingdom Trust strategic partners are specialists in their profession. Our strategic partners were chosen because we think they represent the best in their industry, visionary leadership, and uncompromising integrity that is required to be a part of KTC. A key factor in selecting the company’s service providers was their knowledge of the institutional custody and self-directed retirement industry.

Accu-Tech Gold– KTC/MyRA Services will uses the Accu-Tech Gold trust accounting system from Accu-Tech Systems Corporation of Muncie, IN. Accu-Tech Systems Corporation (ASC) is the second largest Trust & Investment Management Accounting Software provider in the United States. AccuTrust Gold utilizes true 32-bit technology and a Windows 2000/SQL Server environment which allows for security, stability, and scalability. The system handles the record keeping and reporting, including identity verification, account opening, cash deposits and transfers, ban and cash reconciliations, reviewing and processing alternative asset transactions, administering the asset (i.e., reporting earned income, paying expenses related to the asset), processing required minimum distributions, and producing required IRS forms.
PenServ, Inc., Dallas, TX, Columbia, SC, and Philadelphia, PA. PenServ will be providing an array of technical products and services, and forms and documentation. They currently work with over 800 banks, mutual fund companies, brokerage firms, plan administrators and investment advisers. With over 25 years of experience PenServ brings us the experience and compliance oversight.
Corundum Trust Company KTC will use Corundum Trust to house is South Dakota headquarters and appointed Jim Riswold, one of Corundum’s founders its South Dakota resident director. Jim banking and trust experience will further strengthen KTC’s team. Jim is Corundum’s Chief Operating Officer and has been a member of the Board since its inception. He earned his CTFA designation in July 2005.
MPG Law Firm, Mr. Terry Pendergast – a prominent South Dakota law firm, with a specialization in Trust and Trust Companies, will be serving as the organizing law firm for Kingdom Trust.
Rayburn, Bates, and Fitzgerald, CPA’s. Brentwood, TN. RBF has been selected to provide the external auditing functions for MyRA Services and Kingdom Trust, as required, to ensure that all areas of policy and procedure are met per the regulatory requirements. Kingdom Trust will have an annual audit conducted by RBF. RBF has a long history of Bank oversight and auditing.
Stoll Keenon and Ogden PLLC. – Lexington, KY, SKO is a tradition rich firm that was started in the 1890’s. Their 160 lawyers have been widely recognized for their accomplishments. They serve such industries as healthcare, the Thoroughbred horse industry, energy, and a range of financial services. SKO will serve as our securities attorney and legal counsel for My Retirement Account Services, LLC in Kentucky.

KTC is a South Dakota corporation managed by a Board of Directors elected by the owner, My Retirement Account Services, LLC.

Directors and Officers

The Board of Directors of Kingdom Trust Co./MyRA Services, LLC.

Mr. Douglas E. Lawson, Chairman
Mr. Matthew C. Jennings. Cashier, Director
Mr. James S. Riswold, South Dakota Director
Dr. Randall K. Taylor, Director
Mr. Charles E. Baker, Director
Mr. Gerald Bell, Director
*Mr. Scott Foster, Director
*Mr. Eric Crigler, Director
Mr. Timothy Kuhman, Secretary of Board(s)
*Mr. Leslie Lilienthal, Director

(*) Denotes Board Member only to MyRA Services, the Parent Company to The Kingdom Trust Company

Officers of Kingdom Trust/MyRA Services

Mr. Douglas E. Lawson, President/CEO
Mr. Matthew C. Jennings, Executive Vice-President
Mr. Timothy M. Kuhman, Sr. VP/General Counsel and Trust Officer
Mr. Charles “Bo” Ives, SVP/COO
Mr. Scott Foster, SVP/Institutional Custody Solutions

Regulatory Risk

KTC operates in a regulated environment. The company has developed good relationships with the governmental agencies and departments involved in oversight of the industry. These agencies and department are charged with ensuring those under their jurisdiction comply with appropriate laws and regulations. These include, but are not limited to:

USA PATRIOT ACT – Under Section 326 of the Act, financial institutions must institute a Customer Identification Program (CIP) that contains reasonable risk-based procedures to:

Verify a customer’s true identity to the extent reasonable and practicable and defining the methodologies to be used in the verification process;
Collect specific identifying information from each customer when opening an account;
Respond to circumstances and defining actions to be taken when a customer’s true identity cannot be appropriately verified with “reasonable belief;”
Maintain appropriate records during the collection and verification of a customer’s identity;
Verify a customer’s name against specified terrorist lists; and
Provide customers with adequate notice that the bank is requesting identification to verify their identities.

SOUTH DAKOTA LAWS—DIVISION OF BANKING— As South Dakota charter trust company, KTC must comply with South Dakota laws and regulation governing and applicable to trust companies. KTC works closely with the Division Banking to ensure compliance and understand its responsibilities. Among the relevant sections SDCL are the following::

a) SB 103, section 18, defines trust administration and requires one or more of the following shall services to be performed wholly or partly in South Dakota at the chartered trust company’s registered place of business in South Dakota:

Annual account reviews;
Trust accountings;
Correspondence;
Audits physically performed in South Dakota;
Tax reports sent from South Dakota;
Governing board, committee, or other trust administration meetings with a quorum physically present in South Dakota; or,
Such other activities as approved by the director.

b) SDCL Chapter 51A-6A, The Creation of Trust Companies, contains relevant South Dakota laws governing trust companies chartered in South Dakota. It requires trust companies to, among other things:

Purchase of a fidelity bond and a director’s and officer’s liability insurance policy. The bond and insurance shall be in an amount of not less than one million dollars each.
Be subject to Examination by the Division of Banking at least once every thirty-six months or more frequently if the director considers it necessary to make a full and careful examination and inquiry into the condition of the affairs of the trust company.
Hold at least four regular meetings of the board of directors each year, at least one of which shall be held during each calendar quarter. The governing board or an auditor selected by them shall make a thorough examination of the books, records, funds, and securities held by the trust company at each of the quarterly meetings. The result of the examination shall be recorded in detail.
Make at least one report to the Director of the Division of Banking (director) during each year, at a time determined by the director. The director may require additional reports from each trust company if the director considers it advisable.

INTERNAL REVENUE CODE—INTERNAL REVENUE SERVICE— The Employee’s Retirement and Security Act, ERISA, created individual retirement accounts. The provisions of ERISA have been codified in chapter 26 of the Internal Revenue Code. Section 401, 408, and 4975 are among the most relevant. The code requires custodians to among other things:

Annually report the fair market value of each IRA’s assets on form 5498;
Use form 5305 a for the account agreement; and
Report the amount of required minimum distributions to IRA owners.

CLIENT INFORMATION – SAFETY & SECURITY

KTC has a formal, documented and comprehensive Information Security Program including a privacy statement, security policy, anti-fraud program, money laundering reporting program, policies and procedures and specific roles and responsibilities of those assigned to monitor the program.

Information Privacy

Information collected by the custodian includes but is not limited to identifying information, such as, social security numbers, driver’s license numbers, account numbers, names, and addresses. The custodian also collects account activity information, such as, deposit and transaction histories and information about your investment histories gathered from your transactions and experiences with the custodian and transactions done in your account with third parties. As required by the USA PATRIOT Act, the custodian collects information, including copies of the client’s driver’s license or state identification, and take actions necessary to verify the client’s identification.

Bank Security Act (BSA) compliance

KTC policies require prospective clients to submit the minimum information now required by the Act. KTC has also adopted policies that implement a Customer Identification Program as verification of that information. If the prospective client’s identity cannot be verified utilizing the non-documentary method, the Custodian requires a copy of the driver’s license or passport. KTC and MyRA Services adhere to a strict customer privacy policy and a terms and conditions agreement to protect our clients.

Business Continuity & Disaster Recovery

KTC has established comprehensive disaster recovery plan utilizing business continuity services provided by an external third party. Data will be backed-up and saved at a secure off-site data storage facility according to the plan.

Banking Relationships

KTC’s policies provide that all cash that the customers deposit with KTC is deposited daily into a in an interest bearing, FDIC insured, demand account at a bank or banks that KTC chooses. The interest earned on this account is paid to our customers on a monthly basis. KTC will only use depository banks with a Bauer Financial rating of 3.5 or higher. By utilizing this minimum, we will only utilize banks that the rating agency considers Good, Excellent, or Superior. The bank ratings will be monitored continuously and reported to Management quarterly for review.

INSURANCE

KTC and My Retirement Account Services, LLC currently carries $1MM in Errors and Omissions Liability, $1MM in directors and officers, Kentucky Workers Compensation Insurance and a Business Owners Policy, and a General Liability policy.

KTC maintains, pursuant to South Dakota law, a $1 Million directors and officers/errors and omissions insurance policy and also a $1 Million fidelity bond. It also has other insurance covering general liability, property insurance (for loss of premises or other assets, etc.), and a worker’s compensation insurance policy for its employees.

KTC and My Retirement Account Services, have the following insurance coverage:

WORKERS COMPENSATION,
EMPLOYER’S LIABILITY,
AUTOMOBILE LIABILITY,
COMMERCIAL GENERAL LIABILITY,
UMBRELLA/EXCESS LIABILITY OF $1,000,000,
PROFESSIONAL LIABILITY AND ERRORS AND OMISSIONS OF $1,000,000, AND
FIDELITY BOND/BLANKET CRIME COVERAGE OF $1,000,000.

KTC, MyRA Services, and Corundum Trust Company and individual board members are all be named insured(s).

INTERNAL CONTROLS

Compliance Officer:

KTC’s Compliance Officer is Mr. Tim Kuhman. As such, he is responsible for knowing and understanding the rules and regulations that govern the operation of KTC and insuring that the Company’s policies and procedures are within the scope of the same. He also insures that the Company’s administrative services agreements and those of the MyRA Services Company meet the requirements of all applicable laws. Working with the Chief Operations Officer, Mr. Kuhman insures that the operations departments of the Company are working in compliance with the Company’s Policy and Procedures Manual. He also works with the Chief Operations Officer to amend and modify the Policy and Procedures Manual to accommodate changes to governing rules and regulations.

Mr. Kuhman stays abreast of changes to the rules and regulations that govern KTC’s business as well as track legislation that may impact that business. He works with members of the South Dakota Department of Revenue and Regulation, Division of Banking and its auditors as the need arises.

Mr. Kuhman is also the General Counsel for KTC and MyRA Services. He monitors all claims and complaints against the Company and maintain a Complaint Log. The Complaint Log will track each complaint received and document the steps taken to resolve said complaints. He serves as the Company’s primary contact with its outside legal counsel and the Company’s Insurance Carriers.

In both capacities, Mr. Kuhman prepares and presents a report to the Company’s Board of Directors covering all legal and compliance issues as well as any changes to Company Policy requiring Board approval. The report is presented quarterly unless circumstances require Board input sooner.

Compliance Committee:

The Board of Directors of KTC created a Compliance Committee charged with general oversight of the Company’s compliance function. It consists of three members of the Board and the Compliance Officer. The committee reviews new policies and procedures as well as recommendations for modifications to existing policies and procedures. The committee reports its recommendations to the full Board for discussion and approval on a quarterly basis unless circumstances require action by the Board sooner.

Policies & Procedures

KTC and MyRA Services have a set of written policies and procedures to govern their businesses. KTC’s Compliance Officer is responsible for maintaining, reviewing and amending these policies and procedures. The policies and procedures are reviewed in their entirety annually but may be amended more frequently as required.

Internal Audit

The internal audit function is performed by a member of the Board of Directors. The members’ review the Company’s Policies and Procedures and its operations and report his or her findings to the Board’s Audit Committee on a quarterly basis. An internal auditor will be added to the Company’s staff and assume the internal audit functions performed by the member of the Board, at such time as deemed necessary. This internal auditor will then report his or her findings to the Board’s Audit Committee on a quarterly basis.

External Audit

Annual independent audit performed annually by Certified Public Accountants auditing KTC’s financial statements and evaluating the company’s internal controls and systems. Both KTC and MyRA Services have engaged the CPA firm of Rayburn, Bates, and Fitzgerald, of Brentwood, TN to conduct annual financial statement audits.

Their findings are to be reported to KTC’s Audit Committee as provided in the bylaws to the Board of Directors.

SYSTEMS SECURITY

Trust Accounting System Security

ASC, the trust systems vendor, maintains a comprehensive disaster recovery plan as well as a thorough set of controls to ensure that client information is properly stored and secured. ASC maintains an off-site storage facility and all processing is backed up to that site on a daily basis. ASC also maintains Co-Location hosting facilities for data backup and recovery. In addition, each building that houses systems, data, and information is a secure facility. Access to the buildings is controlled by secure card access so that only authorized personnel have access for entry.

ASC network technicians monitor traffic into and out of its networks and employ hardware firewalls for restricted access to its network. In an effort to ensure that the systems are completely protected, ASC engages a third party to perform annual penetration testing.

ASC also has designed the software to ensure that only those employees that need access to information have the ability to obtain that information. The system is set up so that employees’ access to the system is restricted based on user levels. These user levels are a way to ensure that there are proper checks and balances in the daily operations. ASC provides a module based system that we utilize as the company grows. There are appropriate levels of access allocated to the proper departments.

Data transmission

KTC has an established policy to ensure that any data submitted or transmitted to third party vendors are be encrypted and secure. This helps ensure that the information contained within the files is protected.

Disaster Recovery plan

KTC has a detailed plan outlined in the event of a disaster. It includes policies for operating the business as well as critical systems that will need to be in place to conduct business. As provided in this policy, this plan will be reviewed and tested annually to ensure that all components are properly working and that if the need arises the systems will be functional in a timely manner.

Web Site Security

KTC uses secure connections and file encryption for any and all data exchanged on KTC website.

Building Security

Our building is equipped with an alarm system that is monitored by a third party and wired into the local police station, along with a fire detection system. There only a limited number of executive level employees that have a key to gain access to the property. The Operations staff does not have entry without a Senior Executive on the premises. In addition, Kingdom Trust provides fireproof storage of original documents and access at the South Dakota office by computer to certain custodial documents of clients and customers. The company will review the building security on an annual basis to maintain its high standards of consumer account document protection.