0
XXXXXXX X.X. XXXXXXXX 0000 XXXX
Dated: October 14, 1997
between
XXXXXXX X.X. XXXXXXXX,
as Donor,
and
XXX X. XXXXXXXX,
as Trustee.
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INDEX
Page
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ARTICLE I
Disposition of Trust Income and Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
Trust Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
Survivorship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
Right to Revoke or Amend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IX
Acceptance of Trusteeship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Acknowledgments
SCHEDULE A
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XXXXXXX X.X. XXXXXXXX 0000 XXXX
TRUST AGREEMENT dated the 14th day of October, 1997, between
XXXXXXX X.X. XXXXXXXX, as Donor (the "Donor"), and XXX X. XXXXXXXX, as Trustee.
The Donor hereby assigns, transfers and delivers to the
Trustee the property listed on Schedule A hereto, which is to be held in trust
for the benefit of the Donor and his spouse and issue in accordance with the
provisions of this Agreement.
ARTICLE I
Disposition of Trust Income and Principal
A. The term of the trust (the "Trust Term") shall
commence on the date of the initial contribution of the trust property to the
trust (the "Contribution Date") and shall continue until the fifth (5th)
anniversary of the Contribution Date.
B. On the last day of each taxable year during the Trust
Term and on the last day of the Trust Term (each such date being hereinafter
referred to as an "Annuity Payment Date"), the Trustees shall pay to or apply
for the benefit of the Donor or, if he is not living on the Annuity Payment
Date, to the legal representatives of the Donor's estate (or, if the legal
representatives of the Donor's estate have distributed their right to receive
the Annuity Amount, as hereinafter defined, to beneficiaries under the Donor's
Will, to such beneficiaries (the "Estate Beneficiaries")) an amount equal to
twenty-four and seven-hundred eighty-two thousandths percent (24.782%) of the
initial net fair market value of the trust property (the "Annuity Amount"). In
determining the Annuity Amount, assets shall be valued as of the Contribution
Date, as such values shall finally be determined for federal gift or estate tax
purposes. Notwithstanding the foregoing, the Annuity Amount shall be prorated
on a daily basis for a short taxable year and for the taxable year in which the
trust terminates in accordance with Treasury Reg. Section 1.664-2.
C. The Annuity Amount shall be paid either from income
or principal, or a combination thereof, as the Trustees, in their absolute
discretion, shall determine. Any income of
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the trust for a taxable year not so paid or applied shall be added to principal
whenever convenient.
D. Upon the last day of the Trust Term, the trust shall
terminate and, subject to any obligation to repay any amount which the Trustees
are required to pay pursuant to the provisions of Paragraph 4 of Subdivision E
of this Article to the Donor, the legal representatives of the Donor's estate
or the Estate Beneficiaries, as the case may be, the Trustees shall distribute
all principal and any accrued and undistributed income of the trust in excess
of the final Annuity Amount as follows:
1. If the Donor is then living, such property
shall be distributed as follows:
a. If the Donor's spouse is then
living, such property shall be disposed of in accordance with the provisions of
Subdivision F of this Article.
b. If the Donor's spouse is not then
living, such property shall be distributed to the Donor's then living issue per
stirpes, subject to the provisions of Subdivision G of this Article. If none
of the Donor's issue is then living, such property shall be disposed of in
accordance with the provisions of Subdivision H of this Article.
2. If the Donor is not then living, such
property shall be disposed of as follows:
a. If any part or all of the assets of
the trust are includible in the Donor's estate for federal estate tax purposes,
an amount equal to all such assets that are so includible shall be distributed
to the legal representatives of the Donor's estate, to be disposed of as a part
thereof.
b. The balance of such property (or all
thereof, as the case may be) shall be distributed in accordance with the
provisions of Paragraph 1 of this Subdivision as if the Donor were living.
E. Notwithstanding any provision of this Agreement to
the contrary:
1. The Annuity Amount shall not be reduced by
any expenses of the trust.
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2. During the Trust Term, no part of the income
and principal of this trust, including the Annuity Amount, shall be paid or
applied to or for the benefit of (i) any person or entity other than the Donor
for so long as the Donor is living or (ii) to or for the benefit of any person
other than the legal representatives of the Donor's estate or the Estate
Beneficiaries, after the Donor's death.
3. No additional contributions may be made to
the trust after the initial contribution described on the attached Schedule A.
4. If the initial fair market value of the
assets constituting this trust is determined incorrectly by the Trustees, then
within a reasonable period after the final determination of the correct value,
the Trustees shall pay to the Donor, the legal representatives of the Donor's
estate or the Estate Beneficiaries, as the case may be, in the case of an
undervaluation, or shall receive from the Donor, the legal representatives of
the Donor's estate or the Estate Beneficiaries, as the case may be, in the case
of an overvaluation, an amount equal to the difference between the total sums
in respect of the Annuity Amount that the Trustees should have paid if the
correct value had been used and the total of such sums that the Trustees
actually paid, in accordance with Treasury Reg. Section 1.664-2(a)(1)(iii),
plus, if required by the Code, interest, compounded annually, computed for any
period at the rate of interest that the Federal income tax regulations
prescribe.
5. It is the Donor's intention that his right to
receive the Annuity Amount shall qualify as and be a "qualified annuity
interest" as defined in Section 2702(b)(1) of the Code, and shall meet all the
requirements of Treasury Reg. Section 25.2702-3. Accordingly, no authorization
or direction or other provision contained in this Agreement that would prevent
the trust from so qualifying shall apply to this trust, it being the Donor's
intention that any court having jurisdiction over this Agreement shall construe
it accordingly.
6. The Trustees shall have no power or authority
to commute at any time during the Trust Term the interests of the Donor, the
legal representatives of the Donor's estate or the Estate Beneficiaries.
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7. Notwithstanding any provision of this
Agreement to the contrary, until the expiration of the Trust Term, the Trustees
shall amend this trust in any manner required for the purpose of ensuring that
the interest retained by the Donor in the Annuity Amount qualifies as a
"qualified annuity interest" within the meaning of Section 2702(b)(1) of the
Code and the Treasury Regulations promulgated thereunder.
8. The taxable year of the trust shall be the
calendar year.
F. Pursuant to the foregoing provisions of this Article,
certain property is to be disposed of in accordance with the provisions of this
Subdivision. Such property shall be held by the Trustees in a separate trust
for the benefit of the Donor's spouse and issue, the income and principal
thereof to be disposed of as follows:
1. The Trustees are authorized, at any time or
from time to time, to pay or apply such part or all of the net income and
principal of this trust to or for the benefit of any one or more of the Donor's
spouse and issue living from time to time, in such amounts or proportions, and
to the exclusion of any one or more of them, as the Trustees determine in their
absolute discretion for any reason whatsoever, even though any such
distribution results in the termination of this trust. In exercising their
discretion under this Paragraph, the Trustees shall not be required to take
into account any other resources available to or for the benefit of any
beneficiary of this trust.
2. Upon the death of the survivor of the Donor
and the Donor's spouse, this trust shall terminate, at which time the remaining
principal thereof shall be distributed in equal shares to such of the Donor's
children as shall then be living or, if none is then living, to the Donor's
then living issue per stirpes, subject to the provisions of Subdivision G of
this Article. If none of the Donor's issue is then living, such property shall
be disposed of in accordance with the provisions of Subdivision H of this
Article.
G. Pursuant to the provisions of this Article, certain
property is to be disposed of subject to the provisions of this Subdivision.
Any such property distributable to a child, grandchild, or more remote issue of
the Donor who has not reached age forty (40) at the time fixed for distribution
shall not be distributed outright to such child, grandchild, or more remote
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issue, but instead shall be held by the Trustees in a separate trust for such
child, grandchild, or more remote issue (the "Beneficiary"), the income and
principal thereof to be disposed of as follows:
1. The Trustees are authorized, at any time or
from time to time, to pay or apply such part or all of the net income and
principal of this trust to or for the benefit of the Beneficiary as the
Trustees determine in their absolute discretion for any reason whatsoever, even
though any such distribution results in the termination of this trust. In
exercising their discretion under this Paragraph, the Trustees shall not be
required to take into account any other resources available to or for the
benefit of the Beneficiary and shall not take into account the interest of any
other beneficiary of this trust. Any net income not so paid or applied shall
be added to principal whenever convenient.
2. When the Beneficiary reaches age thirty (30),
one-third (1/3) of the remaining principal of this trust shall be distributed
to the Beneficiary outright, provided, however, that if the Beneficiary has
reached age thirty (30) but not age thirty-five (35) at the time this trust is
funded (or at the time property is added to this trust), one-third (1/3) of the
principal thereof (or of such added property, as the case may be) shall be paid
to the Beneficiary at the time of such funding or addition.
3. When the Beneficiary reaches age thirty-five
(35), one-half (1/2) of the remaining principal of this trust shall be
distributed to the Beneficiary outright, provided, however, that if the
Beneficiary has reached age thirty-five (35) but not age forty (40) at the time
this trust is funded (or at the time property is added to this trust),
two-thirds (2/3) of the principal thereof (or of such added property, as the
case may be) shall be paid to the Beneficiary at the time of such funding or
addition.
4. When the Beneficiary reaches age forty (40),
the remaining principal of this trust shall be distributed to the Beneficiary
outright.
5. If the Beneficiary dies before reaching age
forty (40) (or upon the later death of the Beneficiary if this trust is being
administered in continuing trust in accordance with the provisions of
Subdivision I of this Article), this trust shall terminate upon the death of
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the Beneficiary, at which time the remaining principal thereof shall be
distributed to the Beneficiary's surviving issue per stirpes or, if none, to
the then living issue per stirpes of the parent of the Beneficiary who was a
child of the Donor or, if none, to the Donor's then living issue per stirpes,
subject in each instance to the provisions of this Subdivision. If none of the
Donor's issue is then living, such property shall be disposed of in accordance
with the provisions of Subdivision H of this Article.
6. If the Beneficiary is a minor, the Trustees
are authorized, in their absolute discretion, whether or not one of them is
also acting as Guardian of the Beneficiary:
a. To pay or apply any part of the
income and principal of this trust to (i) enlarge any residence owned by the
Beneficiary's Guardian and used by the Beneficiary from time to time; (ii)
purchase a residence for the use of the Beneficiary from time to time; and
(iii) satisfy the taxes, maintenance and capital repair costs, rent and other
expenses (including for additional household help) related to any residence
used by the Beneficiary from time to time, in each instance whether or not such
Guardian and any members of such Guardian's family are also using such
residence from time to time;
b. To permit such Guardian, any members
of such Guardian's family and members of the Donor's family to use any such
residence from time to time without the payment of rent or any other charge
therefor; and
c. To lend to such Guardian such sum or
sums as the Trustees determine to be reasonably necessary in order to permit
such Guardian to enlarge a residence of such Guardian or to assist such
Guardian in purchasing a new residence, so as to provide adequate living
accommodations for the Beneficiary and, incident thereto, for such Guardian's
family and any other members of the Donor's family who are living from time to
time with such Guardian, with or without interest and upon such other terms and
conditions as the Trustees determine.
H. Any property directed to be disposed of in
accordance with the provisions of this Subdivision and any property not
otherwise effectively disposed of upon the termination of any trust hereunder
shall be distributed to the XXXXXXX AND XXXXXXX
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XXXXXXXX FAMILY FOUNDATION. Notwithstanding the preceding sentence, if such
foundation shall not be in existence or shall not be an Exempt Organization at
the time when property is distributable to it hereunder, such property shall
not be distributed to the XXXXXXX AND XXXXXXX XXXXXXXX FAMILY FOUNDATION but
shall instead be distributed to such one or more Exempt Organizations as the
Trustees determine in their absolute discretion.
I. 1. Notwithstanding any provision of this
Agreement to the contrary, but subject to the provisions of Subdivision J of
this Article, if the Trustees determine in their absolute discretion that it
would not be in the best interests of a child, grandchild, or more remote issue
of the Donor to receive outright any portion of the principal of any trust
created hereunder which would otherwise be distributable outright to such
person (the "Property"), the Trustees are authorized to hold or retain the
Property, or any portion thereof, in trust for such period of time as the
Trustees deem advisable, including for the lifetime of such person, until the
Trustees determine in their absolute discretion that such outright distribution
would no longer be against such person's best interests. During such period of
time, the Trustees shall have the absolute discretion to pay or apply such part
or all of the net income and principal of such trust to or for the benefit of
such person as the Trustees deem advisable for any reason whatsoever. In
exercising their discretion under this Paragraph, the Trustees shall not be
required to take into account any other resources available to or for the
benefit of such person and shall not take into account the interest of any
other beneficiary of such trust. Any net income not so paid or applied shall
be added to principal whenever convenient. Anything hereinabove to the
contrary notwithstanding, if such person is acting as a Trustee hereunder, such
person shall be disqualified from participating in the exercise of the
Trustees' discretionary power to hold, retain or distribute the Property, or
any portion thereof. Upon the death of such person while any of the Property
is held in trust in accordance with the provisions of this Paragraph, such
remaining Property shall be distributed in accordance with the provisions of
Paragraph 5 of Subdivision G of this Article.
2. If, pursuant to Paragraph 1 of this
Subdivision, a trust is created for any person to whom the Property would
otherwise be distributable outright, the Trustees of such
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trust shall be the same as the Trustees of any trust for such person appointed
under or pursuant to the authority granted in Article II hereof.
J. Notwithstanding any provision of this Agreement to
the contrary, each trust created under this Article shall terminate not later
than twenty-one (21) years after the death of the last survivor of all of the
issue of each of the parents of the Donor and each of the parents of the
Donor's spouse who were in being on the date of the Donor's execution of this
Agreement. Upon such termination, the remaining principal of such trust shall
be distributed to the primary beneficiary of such trust.
ARTICLE II
Trustees
A. 1. If at any time there is no individual Trustee
acting or appointed in accordance with the provisions of Subdivision B of this
Article, I appoint XX XXXXXX as Trustee hereunder.
2. Anything in this Agreement to the contrary
notwithstanding, the Donor shall be ineligible to be a Trustee hereunder.
B. The individual Trustees of any trust acting hereunder
are authorized, at any time or from time to time, by an instrument in writing,
signed and acknowledged, to appoint one or more individuals or a series of
individuals or a corporation with trust powers to act as Trustee of such trust
hereunder, in succession to or in addition to any Trustee herein appointed or
any other Trustee appointed pursuant to the power herein granted. A successor
Trustee may be appointed to succeed a particular Trustee or to succeed any
Trustee.
C. Any instrument appointing a successor Trustee
pursuant to the authority granted in Subdivision B of this Article may be
revoked at any time prior to the qualification of the appointee by the
individual Trustees at the time being in office, whether or not such Trustees
were the Trustees signing such instrument. In the event that the individual
Trustees, at any time in office, have executed more than one instrument
appointing successor Trustees, then the unrevoked instrument bearing the most
recent date shall govern.
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D. The ability of any co-Trustee to qualify or act
hereunder shall not be affected by any other co-Trustee's failing to qualify or
ceasing to act hereunder, except as otherwise provided herein or in any
designation made pursuant to the provisions of this Article.
E. Any individual Trustee may, at any time or from time
to time, by an instrument in writing, delegate any right, power, duty,
authority and privilege, whether or not discretionary, to any other Trustee for
such period or periods of time as may be specified in such written instrument,
provided, however, that any such instrument may be revoked at any time and that
no discretionary power may be delegated to any Trustee who is disqualified from
exercising such discretionary power. Any individual Trustee hereunder is
authorized to delegate to any suitable person or entity any ministerial duties
in connection with the rights, powers, duties, authorities and privileges
herein conferred, whether by means of a power of attorney or otherwise.
F. Ministerial duties of the Trustees (such as signing
checks and executing brokerage transactions) may be performed by any one
Trustee.
G. Wherever used in this Agreement, the terms "Trustee"
and "Trustees" shall refer to the trustees from time to time acting hereunder
as the context may require. Each Trustee acting hereunder shall have the same
rights, powers, duties, authorities and privileges, whether or not
discretionary, whether such Trustee is named herein or appointed pursuant to
the terms hereof.
H. No bond or other security shall be required of any
Trustee acting hereunder for the faithful performance of such Trustee's duties,
any law of any jurisdiction to the contrary notwithstanding; and if,
notwithstanding this direction, any such bond or other security shall be
required by any law, statute or rule of court, no sureties shall be required
thereon.
I. No beneficiary acting as a Trustee hereunder may
participate in the exercise of a discretionary power to distribute to himself
or herself the income or principal of any trust of which he or she is a
beneficiary.
J. No Trustee acting hereunder shall make any
distribution in discharge of personal legal obligations of such Trustee or of
the Donor.
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K. Any individual Trustee hereunder who shall have
disclaimed any interest in a trust hereunder or in property which, pursuant to
a disclaimer, passes to a trust hereunder shall be disqualified from
participating in the exercise of the Trustees' discretionary power to
distribute the income or principal of such trust.
L. If by reason of any provision hereunder, or the law
of any jurisdiction in which it may be necessary to perform any act, any
Trustee hereunder shall be disqualified from acting, then all of the acts
required to be performed in such jurisdiction shall be performed by such
Trustee's qualified co-Trustees then acting hereunder.
M. Any individual Trustee, at any time in office, is
authorized to resign by an instrument in writing, signed and acknowledged and
delivered to the remaining or successor Trustee. The resignation of any
individual Trustee acting alone hereunder shall be effective only upon the
appointment and qualification of a successor Trustee.
N. Except as otherwise provided herein, in every case in
which it would be necessary for all of the Trustees of any trust hereunder to
join in the taking of any action, such action may nonetheless be taken by a
majority, and any action so taken shall be as valid and effectual as though
taken by all.
O. Any corporation into which any corporation acting as
a Trustee hereunder shall be merged or converted or with which it shall be
consolidated, or any corporation resulting from any merger, conversion,
reorganization or consolidation to which it shall be a party, or any
corporation to which all or substantially all of its trust business shall be
transferred, shall be the successor of such corporation as a Trustee hereunder,
without the execution or filing of any instrument or the performance of any
further act and shall have the same rights, powers, duties, authorities and
privileges as though originally named in this Agreement.
P. Any person acting as a Trustee hereunder shall be
deemed to be incapacitated if the co-Trustees or, if none, the successor
Trustee, shall receive a certificate signed by two (2) qualified physicians,
including, if any, the physician then primarily responsible for such person's
medical care, stating that such person is unable to act prudently with respect
to
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financial matters because of accident, physical or mental illness,
deterioration, injury or otherwise, and such incapacity shall constitute the
resignation of such Trustee.
Q. Any appointment of a Trustee hereunder shall take
effect when accepted in writing.
R. Prior to the death of the Donor, the Trustees may, at
any time or from time to time, render an account of their transactions as
Trustees hereunder to the Donor. Nothing herein shall preclude the Trustees
from having their accounts judicially settled.
S. No successor Trustee shall be required to investigate
or audit the accounts or acts of any prior Trustee or to take any action with
respect thereto, either before or after qualifying.
T. The individual Trustees of any trust acting hereunder
are authorized to remove with or without cause any corporate Trustee of such
trust, such removal to be effective upon the appointment by them of a successor
corporate Trustee of such trust.
U. The title, powers, duties, immunities and discretion
conferred upon the Trustees by this Agreement shall continue after the
termination of this trust until final distribution.
V. 1. Each individual Trustee acting hereunder
shall be entitled to receive the commissions or other compensation for the
performance of his or her duties as a Trustee of each trust hereunder. In
addition to the foregoing provisions of this Subdivision, each individual
Trustee shall be entitled to reimbursement for reasonable expenses incurred by
such Trustee in connection with the performance of such Trustee's functions
hereunder.
2. XX XXXXXX shall be entitled to compensation
for the performance of its duties as Trustee of any trust hereunder at the
rates stipulated in its regularly published schedule of compensation in effect
at the time such compensation becomes payable, notwithstanding that such
stipulated compensation shall be greater than that now in effect or than that
allowed by applicable law.
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ARTICLE III
Trust Administration
A. In addition to all powers given to them by law or any
other provision of this Agreement, the Trustees shall have the following powers
with respect to any property, real or personal, at any time held by them,
exercisable in their absolute discretion upon such terms and conditions as they
deem advisable, without any liability therefor and without authorization by any
court:
1. To retain any such property (including,
without limitation, any residence or any partial interest therein) for any
period of time;
2. To hold any such property uninvested for any
period of time;
3. To sell, exchange or otherwise dispose of any
such property at any time and in any manner, at public or private sale, for
cash or on credit, without any obligation to solicit multiple offers or to
obtain an appraisal to establish the value thereof;
4. To invest and reinvest in and to acquire, by
purchase, exchange or otherwise, and retain for any period, any kind of real or
personal property, foreign or domestic, or undivided interests therein,
including, but not limited to, common or preferred stocks, bonds or other
unsecured obligations, mutual funds, futures contracts, options of any kind,
commodities, investments on margin, uncovered short sales, covered short sales,
mortgages, interests in investment companies or investment trusts, interests in
common trust funds (whether or not maintained by any Trustee hereunder),
interests in partnerships (general or limited) or other entities, and
securities, or to hold cash uninvested; and to acquire any such investment from
any person including any beneficiary hereunder, the estate of any deceased
beneficiary hereunder, or any estate or trust in which any beneficiary
hereunder has an interest;
5. To retain, hold, invest and reinvest in any
such property without diversification as to kind or amount and without being
limited to investments in which fiduciaries are authorized by law or any rule
of court to invest funds, even though such property shall be at such time (or
shall thereafter become) unproductive of income or speculative, and without any
liability for loss because of depreciation in value;
6. To continue to operate or participate in the
operation of any business enterprise or to dispose of any part or all of such
business enterprise;
7. To make or refrain from making any additional
investment in any partnership or other entity in which any trust created
hereunder has an interest to preserve the value of such interest or to maintain
or change such trust's proportionate interest therein or for any other reason;
8. To form one or more corporations,
partnerships (general or limited), joint ventures or associations with others,
in any jurisdiction; and to transfer any such property to such entity or
entities;
9. To exercise all rights, powers and privileges
with respect to stocks or other securities whether in person or by general or
limited proxy, discretionary or otherwise, including voting rights, warrants,
options and conversion, subscription or other rights; to make
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any necessary payments in connection therewith; and to sell any such rights or
to refrain from exercising any such rights by permitting them to expire;
10. To enter into voting trust agreements, alone
or with others, including the right to designate voting trustees (including any
Trustee hereunder) under any such agreement, for the maximum period allowable
under applicable state law, including extensions, even if such period extends
beyond the term of any trust hereunder;
11. To consent to, participate in or oppose any
reorganization, readjustment, recapitalization, foreclosure, consolidation,
merger, dissolution, liquidation, sale or purchase of assets, lease, mortgage,
contract or other plan, action or proceeding by any corporation or other
entity; to deposit securities or other property under, or become a party to,
any agreement or plan for any such action or proceeding or for the protection
of holders of such property; to subscribe to new securities issued pursuant to
any such action or proceeding; to delegate discretionary powers to any
reorganization, protective or similar committee; and to exchange any property
for any other property and to pay any assessments or other expenses in
connection with any of the foregoing;
12. To lease (including sublease), convey,
transfer or exchange upon any terms and conditions (including in the case of
any lease for a period exceeding the maximum terms specifically authorized by
law) any real property interest to any individual or entity; to receive in
payment or exchange therefor cash or other property; to renew or extend leases;
to amend or modify leases; and to grant options to lease and options to renew
leases for any period, regardless of whether any consideration is received in
exchange therefor;
13. To manage, operate and develop any such
property; to vacate and abandon any real property interest; to demolish any
buildings or improvements thereon; to erect, repair, alter and improve
buildings or improvements thereon; to subdivide any such property; to dedicate
any such property for public use; to grant easements; to adjust boundaries; to
partition and to pay any sums of money necessary for equality of partition; to
perfect the title thereof; from time to time to expend either from principal or
income or from both such amounts for the foregoing or for the development,
alteration, improvement, maintenance or repair of any such property or
buildings or improvement thereon; to establish any reserves for depreciation,
obsolescence, amortization or other waste with respect to any such property;
and to insure any such property against any risks, hazards and liabilities;
14. To mortgage any such property; to renew,
extend, modify, subordinate, reduce, pay off, satisfy or replace any mortgage,
note or bond, or any guarantee thereof; to waive or to forbear from suing or
enforcing any default in the performance of any covenant or condition of or
payment due under any mortgage, note or bond (including a guarantee thereof);
to foreclose any mortgage; to purchase any mortgaged property; to take a deed
in lieu of foreclosure and to pay consideration therefor; and to continue
mortgage investments after maturity, either with or without renewal or
extension;
15. To abandon, destroy or convey with or without
consideration any such property which they deem to be worthless, hazardous or
of insufficient value to warrant keeping or protecting and thereafter to have
no further responsibility with respect to such property; to abstain from the
payment of taxes, water rents, assessments, repairs, maintenance and upkeep of
any such property; or to permit any such property to be lost by tax sale or
other proceedings;
16. To drill, test, explore, mine, develop and
otherwise exploit any oil, gas, mineral or other interests of any kind in
natural resources (including interests commonly known as working interests in
oil, gas or any other mineral); to enter into pooling, unitization,
repressurization and any other type of agreement relating to the development,
operation and conservation of mineral properties, including an agreement
delegating discretionary and
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ministerial powers, in connection therewith; and to rely upon or adopt any
recommendation of the operator thereof without any duty to make an independent
investigation of any such recommendation in connection with any such properties
or interests;
17. To grant options, warranties, guaranties and
indemnities, for any term whether or not extending beyond the term fixed by any
law, at any time, whether or not consideration is received in exchange
therefor;
18. To borrow money from any person or entity,
including any Trustee hereunder, for any purpose, and give or not give security
therefor; to renew, modify or extend existing loans on similar or different
terms; and the lender shall have no obligation to inquire as to the application
of the sums loaned or as to the necessity or propriety of the loan;
19. To make any loans, either secured or
unsecured, in such amounts, upon such terms and to such persons (including any
beneficiary hereunder, the estate of any deceased beneficiary hereunder or any
estate or trust in which any beneficiary hereunder has an interest), trusts,
partnerships, corporations or other entities as they may determine;
20. To adjust, compromise, settle, abandon,
renew, release or submit to arbitration any claim, controversy or litigation;
to institute, prosecute or defend any proceeding in connection therewith; and
to extend the time for payment of any such claim, with or without security;
21. To hold property in their names as Trustees
or, to the extent permitted by law, in their names without designation of any
fiduciary capacity or in the name of a nominee or unregistered or in such form
as will pass by delivery;
22. To make any payment, receive any money or
other property, take any action, and make, execute, deliver and receive any
contract, deed, instrument or other document which is advisable to exercise any
of the powers herein or to carry into effect any provision contained herein;
23. To make any payment or distribution required
or authorized hereunder either in kind (at market value unless otherwise
directed herein) or cash, or a combination thereof; and to allocate any
property distributable hereunder, including an undivided interest therein, to
any trust, part, fund or share whether or not the same kind of property or a
fractional interest therein is allocated to other trusts, parts, funds or
shares, all without regard to the federal income tax basis of such property;
24. To determine in any case where there is
reasonable doubt or uncertainty as to the applicable law or relevant facts,
which receipts of money or other property shall be credited to income or to
principal, and which disbursements, commissions, expenses, costs, fees, taxes
and other charges shall be charged to income or to principal; and to apportion
any of such receipts and disbursements between income and principal; provided,
however, that any individual Trustee hereunder who is entitled to receive all
of the income of any trust created hereunder or who shall have disclaimed any
interest in any trust created hereunder or in property which, pursuant to a
disclaimer, passes to any trust created hereunder or who shall then have the
legal obligation to support any person then entitled to receive all of the
income of any trust created hereunder shall be disqualified from participating
in all determinations under the preceding provisions of this Paragraph;
25. To remove all or any part of the assets of,
or the situs of administration of, any trust hereunder from one jurisdiction to
another jurisdiction, either within or without the United States, at any time
or from time to time;
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26. With respect to all or any part of the
principal (including a pecuniary amount) of any trust created hereunder for the
primary benefit of only one individual, other than any trust with an inclusion
ratio of zero for purposes of Chapter 13 of the Code, by signed written
instrument, in an effort to reduce overall transfer taxes, (a) to give such
beneficiary a general testamentary power of appointment within the meaning of
Section 2041 of the Code (including a power that requires, during such
beneficiary's lifetime, the consent of the Trustees other than a beneficiary of
the affected trust) over any part or all of the principal of such trust; (b) to
eliminate such power for all or any part of such principal as to which such
power was previously created; and (c) to release irrevocably the right to
eliminate such power; provided, however, that any Trustee who is also a
beneficiary of the affected trust or who disclaims any interest in such trust
or in property which passes to such trust pursuant to a disclaimer shall be
disqualified from participating in the exercise of such authority;
27. To divide any trust hereunder, by signed
written instrument or otherwise, into two or more separate trusts in such
fractional shares as shall be deemed advisable, whether for generation-skipping
tax purposes or otherwise (and any property distributed in kind in satisfaction
of such division shall be distributed at market value); and to merge any trust
hereunder with any one or more trusts hereunder having identical terms and
conditions for the same beneficiary or beneficiaries;
28. In any case in which the Trustees are
required or permitted to divide any such property into shares, they are not
required physically to divide any of such property but may assign undivided
interests therein to the various shares;
29. To administer any two or more of the trusts
herein created or any part thereof as a single fund by holding the principal of
such trusts in one or more consolidated funds in which the separate trusts
shall have undivided interests;
30. After the termination of any trust hereunder,
to exercise all rights, powers and privileges herein conferred until the
complete distribution of the property held in such trust;
31. To act or refrain from acting in all respects
as if financially disinterested, regardless of the existence of any conflict of
interest between any individual Trustee hereunder and any trust or fund
hereunder, it being the Donor's intention to waive the rule of undivided
loyalty and any other conflict of interest rule which but for this provision
would be applicable to any such individual Trustee;
32. To employ and pay the compensation of any
accountants, custodians, experts, counsel, legal or investment, and other
agents (including, without limitation, for the purpose of preparing annual or
periodic accountings for any trust created hereunder), irrespective of whether
any person so employed shall be a Trustee hereunder and irrespective of whether
any firm or other entity so employed shall be one in which a Trustee hereunder
may be a partner, a member, or have an ownership interest or with which a
Trustee hereunder may have an employment relationship; and, except as otherwise
expressly provided herein, such compensation may be paid without diminution of
or charging the same against the commissions or compensation, if any, of any
Trustee hereunder; and any Trustee who shall be a partner, a member, or have an
ownership interest in or an employment relationship with a firm or entity so
employed shall nevertheless be entitled to his or her share of the compensation
paid to such firm or entity; and to delegate discretionary and ministerial
powers to, and to act or to refrain from acting upon information or advice
furnished by, such accountants, custodians, experts, counsel or other agents
without liability for any act done or omission made in good faith in reliance
upon such information or advice, provided, however, that if a corporation with
trust powers shall be acting as a Trustee hereunder, no payments shall be made
to such corporation with trust powers for its custodian or investment counsel
services or the preparation of tax returns;
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33. In connection with any such property
distributable to a minor and not otherwise directed to be held in trust
hereunder (including any discretionary distributions from any such trust), (i)
to distribute all or any portion thereof to such minor, or to a guardian of the
property of such minor wherever appointed without requiring ancillary
guardianship, or to any custodian under any Uniform Gifts to Minors Act,
Uniform Transfers to Minors Act or any similar statute of any jurisdiction,
with power to select any person or corporation with trust powers (including any
fiduciary hereunder) to be such custodian and with power to extend such
custodianship to age twenty-one (21), without any obligation to see to the use
or application thereof or to make inquiry with respect to any other resources
available to or for the use of such minor, the receipt of the individual to
whom any such distribution is so made being a complete discharge as to such
distribution; (ii) to set aside all or any portion thereof in a separate fund,
with title vested in such minor, and hold the same without bond, security or
any obligation to render periodic accountings until such minor attains age
twenty-one (21) or sooner dies, and at any time or from time to time to
distribute all or any portion of such property as provided in (i) hereof or to
pay or apply the same to or for the benefit of such minor for any reason
whatsoever (adding to the principal of the fund any income not so distributed
whenever convenient) and when such minor attains age twenty-one (21) or sooner
dies, to distribute the same to such minor or to the legal representative of
such minor's estate, as the case may be; and (iii) to appoint one or more
individuals or a series of individuals or a corporation with trust powers to
act as fiduciary of such fund, in succession to or in addition to such
fiduciary or any other fiduciary appointed pursuant to the power herein granted
(which appointment may be revoked at any time prior to the qualification of the
appointee by the then acting fiduciary of such fund);
34. In connection with any such property
distributable to a person who, by reason of advanced age, illness or other
physical or mental incapacity is incapable of handling or disposing of his or
her property, as determined by two (2) qualified physicians including, if any,
the physician then primarily responsible for the medical care of such person,
(i) to set aside all or any portion thereof in a separate fund, with the title
vested in such person, and hold the same without bond, security or any
obligation to render periodic accountings until such person is no longer under
such disability, or sooner dies, and at any time or from time to time to apply
all or any portion of such property directly to the health, care, comfort,
maintenance, support or use of such person (adding to the principal of the fund
any income not so distributed whenever convenient), and when such person dies,
to distribute the same to the legal representative of such person's estate;
(ii) to distribute all or any portion of such property to such person for any
reason whatsoever or to (a) the guardian, committee or other legal
representative, wherever appointed, of such person, (b) any individual with
whom such person resides, or (c) any other individual having the care and
control of such person, the receipt of the individual to whom any such
distribution is so made being a complete discharge as to such distribution; and
(iii) to appoint one or more individuals or a series of individuals or a
corporation with trust powers to act as fiduciary of such fund, in succession
to or in addition to such fiduciary or any other fiduciary appointed pursuant
to the power herein granted (which appointment may be revoked at any time prior
to the qualification of the appointee by the then acting fiduciary of such
fund);
35. Notwithstanding any provision of this
Agreement to the contrary, if any trust created hereunder holds stock in an "S
Corporation," as defined in Section 1361 of the Code (the "S Trust"), to (i)
distribute to the then eligible income beneficiary or beneficiaries thereof
such portion or all of the net income of the S Trust as shall be necessary to
qualify such trust as a "Qualified Subchapter S Trust" ("QSST") or "Electing
Small Business Trust" ("ESBT"), as the case may be, or (ii) hold any such stock
in a separate trust to be administered in the same manner as the S Trust,
subject however to the provisions of clause (i) of this Paragraph; and, in
addition, to perform all acts necessary to qualify any such S Trust or separate
trust created under this Paragraph as a QSST or ESBT, as the case may be,
including, without limitation, (x) obtaining beneficiary approval and election
under Section 1361(d) or 1361(e) of the Code to qualify any such trust as a
QSST or ESBT, as the case may be, and (y) modifying, reforming or
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revising any such trust or any other provision of this Agreement, and releasing
any discretionary powers with respect to any such trust;
36. To consolidate and hold as one trust any
trust or trusts created or to be created hereunder with any other trust created
or to be created hereunder or under any other instrument with identical
dispositive provisions, whether to achieve economies of administration, for tax
reasons or for any other reason;
37. In addition to the methods provided by law,
each fiduciary hereunder is authorized at any time and from time to time by
acknowledged instrument filed with such fiduciary's co-fiduciary or
co-fiduciaries to release any power, authority or discretion conferred upon
such fiduciary by this instrument or by law, whether discretionary or
ministerial, for such period of time as shall be specified in such instrument,
and during the effectiveness of such release, such power, authority or
discretion shall be exercised solely by the remaining qualified co-fiduciary or
co-fiduciaries; and
38. Generally, to exercise all such rights and
powers, do all such acts, and enter into all such agreements, as persons owning
similar property in their own right might lawfully exercise, do or enter into.
B. There shall be no apportionment of accrued income and
undistributed income on hand to any beneficiary whose interest therein shall
terminate by death or otherwise prior to the time when such accrued income is
due and payable to the Trustees or prior to the time when such undistributed
income is actually distributed to such beneficiary, as the case may be. The
whole of such accrued and undistributed income on hand shall, after the
deduction therefrom of any proper charges or advances against the same, be paid
to the next income beneficiary, if any, of the trust which produced such
accrued and undistributed income or, if there shall be no such income
beneficiary, then to the person or persons entitled to the principal of such
trust.
C. No disposition, charge or encumbrance on the income
or principal of any trust, or any part thereof, by any beneficiary hereunder by
way of anticipation shall be valid or in any way binding upon the Trustees, and
no beneficiary shall have the right to assign, transfer, encumber or otherwise
dispose of such income or principal, or any part thereof, until the same shall
be paid to such beneficiary by the Trustees, and no income or principal or any
part thereof shall be liable to any claim of any creditor of any such
beneficiary.
D. In any judicial proceeding relating to this Agreement
or any trust created hereunder, if a party to the proceeding has the same
interest as a person under a disability, it shall not be necessary to serve the
person under the disability.
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E. The right of any beneficiary to any payment or
distribution of income or principal shall in every case be subject to any
charge or deduction which the Trustees may make against such payment or
distribution under the authority granted to the Trustees by law or any
provision hereof.
F. No person dealing with any Trustee hereunder shall be
bound to see to the application or disposition of any property transferred to
such Trustee, or to inquire into the authority for or propriety of any action
by such Trustee.
G. The Donor, in a nonfiduciary capacity, without the
approval or consent of any person in a fiduciary capacity, shall have the power
to reacquire the trust corpus by substituting other property of an equivalent
value, provided that the Donor is authorized at any time and from time to time
by acknowledged instrument filed with the Trustees to release such power. The
Donor must certify to the other Trustees then acting that the substituted
property is of equivalent value to the reacquired property, and the Trustees
(other than the Donor) in their absolute discretion are authorized to verify
independently such certification of value, and if a dispute arises, such
dispute shall be settled in an appropriate judicial forum.
ARTICLE IV
Survivorship
In the event that any beneficiary under this Agreement and the
Donor or any other person upon whose death such beneficiary shall become
entitled to receive either income or principal hereunder shall die in a common
accident or disaster or under such circumstances that it is difficult or
impracticable to determine who survived the other, then for the purposes of
this Agreement such beneficiary shall be deemed to have predeceased the Donor
or such other person, as the case may be.
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ARTICLE V
Right to Revoke or Amend
A. This Agreement and the trusts hereby created shall be
irrevocable and shall not be subject to modification or amendment, except to
the limited extent provided in Subdivision B of this Article.
B. It is intended that the Donor shall not have retained
any interest in or power with respect to any portion of the property
transferred in trust hereunder which interest or power would cause such
property to be included in the Donor's gross estate for federal estate tax
purposes. This Agreement shall be construed in accordance with the foregoing
statement of intent and, subject thereto, it may be amended for the following
limited purposes: (i) to clarify the meaning of any provision so as to avoid
the necessity of instructions by a court; (ii) to alter or add to the
administrative powers of the Trustees for the better accomplishment of the
trust purposes; and (iii) to conform any provision to laws or regulations
(including any provision of the Code or any regulations promulgated thereunder)
affecting the federal or state transfer tax consequences of any trust
hereunder. All amendments of this Agreement shall be effected by written
instrument signed and acknowledged by all of the Trustees.
ARTICLE VI
Governing Law
This Agreement shall be construed, regulated and governed by,
and all questions pertaining to the validity, construction, effect and
administration of this Agreement and the trusts created hereunder shall be
determined by, the laws of the State of New York.
ARTICLE VII
Exculpation
No individual Trustee shall be liable for any act or omission
in administering any trust created hereunder, unless such act or omission is
the result of such Trustee's actual fraud, gross negligence or willful
misconduct. Notwithstanding the preceding sentence, if any individual Trustee
becomes liable for any such act or omission that is not the result of such
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Trustee's own actual fraud, gross negligence or willful misconduct, such
Trustee shall be entitled to indemnity out of the property of such trust. No
Trustee hereunder shall be responsible for any act or omission of any other
Trustee.
ARTICLE VIII
Definitions
A. Wherever used in this Agreement, the following
definitions shall apply: (1) the word "issue" shall include descendants of
whatever degree; (2) the words "child", "children" and "issue" shall include
persons legally adopted prior to reaching age six (6) and their issue; (3) the
word "minor" shall mean any person who has not reached age twenty-one (21); (4)
the word "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and shall include corresponding provisions of all subsequently
enacted federal tax laws; (5) the word "trust" shall include any separate fund
created by any fiduciary hereunder pursuant to the authority contained herein;
and (6) the term "Donor's spouse" shall refer to the individual who shall be
married to and living with the Donor at the time of the Donor's execution of
this Agreement or other applicable time as the context may require.
B. The terms herein shall be construed in the masculine,
feminine or neuter, and in the singular or plural, whichever construction is
consistent with the then prevailing facts.
C. In the event that a distribution hereunder is to be
made to the issue per stirpes of any person, the initial division into shares
shall be made at the level of such person's children, whether or not any child
of such person is then living, and within each share as to younger generations
the same principle shall be applied.
D. This Agreement shall be known as the XXXXXXX X.X.
XXXXXXXX 1997 GRAT.
E. Any reference herein to members of an individual's
family shall mean the issue of such individual's grandparents and the spouses
of such issue.
F. The term "Exempt Organizations" shall mean one or
more organizations which, at the time when any property is distributable to
such organizations hereunder, are
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described in Section 170(c) (without regard to Section 170(c)(2)(A)) of the
Code contributions to which are deductible for federal estate tax purposes and
deductible under the estate or other death tax laws of the state of New York.
ARTICLE IX
Acceptance of Trusteeship
XXX X. XXXXXXXX does hereby acknowledge receipt of the
property listed on Schedule A hereto, accepts the trusts created by this
Agreement and agrees to act as Trustee in accordance with the terms and
provisions hereof.
The undersigned parties have executed this Agreement as of the
date first above written.
-------------------------------
XXXXXXX X.X. XXXXXXXX, Donor
-------------------------------
XXX X. XXXXXXXX, Xxxxxxx
-00-
00
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
On this day of , 1997, before
me personally appeared XXXXXXX X.X. XXXXXXXX, to me known and known to me to
be the person described in and who executed the foregoing instrument, and he
duly acknowledged to me that he executed the same.
-------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 1997,
before me personally appeared XXX X. XXXXXXXX, to me known and known to me to
be the person described in and who executed the foregoing instrument, and he
duly acknowledged to me that he executed the same.
-------------------------------
Notary Public
25
SCHEDULE A
One Dollar ($1.00)
