Exhibit A
TRUST AGREEMENT made this 3rd day of November, 1995 between
XXXXXXX X. XXXXXX of Princeton, New Jersey, as "Grantor", and XXXXXXX X.
XXXXXX and XXXXXXX X. XXXXXX, of Scarsdale, New York, as "Trustees".
W I T N E S S E T H:
WHEREAS, the Grantor desires to create a trust of the property
hereinafter specified for the purposes hereinafter set forth and the
Trustees are willing to act as Trustees of such a trust, such trust to be
known as the "November 3, 1995 Xxxxxxx X. Xxxxxx GRAT",
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the Grantor does hereby assign,
convey, transfer and deliver to the Trustees the property described in
Schedule A hereto annexed, receipt of which the Trustees do hereby
acknowledge,
TO HAVE AND TO HOLD the same IN TRUST, NEVERTHELESS, to manage,
invest and reinvest the same, to collect the income thereof, and to
dispose of the net income and principal thereof for the following uses
and purposes and subject to the terms and conditions hereinafter set
forth:
FIRST: For a period of two years beginning with the date hereof
(the "trust term") the Trustees shall pay to or for the benefit of the
Grantor or to the legal representatives of the Grantor's estate in each
taxable year of the trust an annuity amount equal to fifty-eight and
twenty one thousandths percent (58.021%) of the net fair market value of
the assets of the trust as of the date hereof. The annuity amount shall
be paid in equal semi-annual installments from income and to the extent
income is not sufficient from principal. An annuity payment may be made
after the close of a taxable year, provided the payment is made no later
than the date by which the Trustees are required to file the trust's
United States income tax return for such taxable year (without regard to
extensions). Any income of the trust for a taxable year in excess of the
annuity amount shall be added to principal. If the net fair market value
of the trust assets as of the date hereof is incorrectly determined, then
within a reasonable period after the value is finally determined for
federal gift tax purposes the Trustees shall pay to the Grantor or the
legal representatives of the Grantor's estate (in the case of an
undervaluation) or shall receive from the Grantor or the legal
representatives of the Grantor's estate (in the case of an overvaluation)
an amount equal to the difference between the annuity amount properly
payable and the annuity amount actually paid.
SECOND: The taxable year of the trust shall be the calendar year,
and the first taxable year of the trust shall begin with the date hereof
and end on the next following December 31st. In determining the annuity
amount, the Trustees shall prorate the same on a daily basis for a short
taxable year including the trust's first taxable year and the taxable
year in which the trust term ends, provided the pro-rata portion thereof
must be payable for the final short period of the annuity interest.
THIRD: During the trust term, the Trustees shall not pay over or
apply any portion of the income or principal of the trust to or for the
benefit of any person other than the Grantor or the legal representatives
of the Grantor's estate, provided, however, that this provision shall not
be construed to prevent the payment by the Trustees of any expenses
properly chargeable to the trust estate.
FOURTH: No additional contributions shall be made to the trust
after the initial contribution.
FIFTH: The Grantor's or her estate's interest in the trust shall
not be commuted.
SIXTH: The Grantor shall have the power, exercisable in a
nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity at any time up to and including the final distribution
of the trust property, to reacquire the trust principal by substituting
other property of an equivalent value.
SEVENTH: Upon the expiration of the trust term, all principal and
income of the trust, after payment of the final annuity amount to the
Grantor or to the legal representatives of the Grantor's estate, shall be
paid to the Grantor's children, and if a child of the Grantor shall die
prior to such time, the share of trust assets which would have been paid
to said deceased child had he survived shall be paid to his estate.
EIGHTH: The Grantor intends by this Agreement to retain a
qualified annuity interest within the meaning of Section 2702 of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder. This Agreement shall be construed, and payments
made to the Grantor or to the legal representatives of the Grantor's
estate, and the trust created hereunder shall be administered, in
accordance with that intent.
If such section or regulations, or any successor section or
regulations, or any ruling, notice or other administrative pronouncement
issued thereunder, at any time requires that a qualified annuity interest
must contain provisions that are not expressly set forth herein, such
provisions shall be incorporated into this Agreement by reference and
shall be deemed to be a part of this Agreement to the same extent as
though they had been expressly set forth herein.
NINTH: This Agreement and the trust hereby created shall be
irrevocable, but the Trustees shall have the power to amend the trust to
the extent required for the sole purpose of ensuring that the Grantor's
interest qualifies and continues to qualify as a qualified interest
within the meaning of Section 2702 of the Internal Revenue Code of 1986
as amended from time to time.
TENTH: In the event that XXXXXXX X. XXXXXX shall cease to act as
Trustee hereunder, no successor Trustee need serve in her stead. In the
event XXXXXXX X. XXXXXX shall cease to act as Trustee hereunder, XXXXXX
X. XXXXXXXXX is hereby designated as successor Trustee.
ELEVENTH: To the extent consistent with Articles FIRST through
TENTH above, all Trustees acting hereunder shall be clothed with full
power, discretion and authority with respect to all matters herein
entrusted to them including (but without limiting the generality of the
foregoing or the powers given them by law) full power, discretion and
authority:
(A) To hold all or any part of the trust in the form in
which the same may be at the time of receipt thereof and to
continue to hold the same, without any obligation to convert the
same and without any regard to the limitations imposed by law on
the investment of trust funds, and without liability for any loss
of principal or income by reason of such retention.
(B) To invest and reinvest in any property, real or
personal, including but without limitation, common and preferred
stocks, investment trusts, cash or other funds, fixed
income-bearing securities (secured or unsecured), and any other
securities, obligations and/or property without regard to
limitations imposed by law on the investment of trust funds and
without liability for any loss of principal or income by reason
thereof.
(C) To sell at public or private sale all or any part of
the real or personal property belonging to the trust; to manage,
operate, exchange, mortgage, pledge, partition, protect, insure,
repair, alter, improve or demolish the same and pay out sums of
money therefor, to abandon the same, to lease or rent the same
for any term or terms, including terms exceeding ten (10) years
and including a period extending beyond the termination of the
trust, to foreclose any mortgage and settle any claim which may
arise in connection therewith, to modify, renew, extend, reduce,
pay off and satisfy mortgages, bonds, notes or other obligations
or any installment of principal or interest due thereon, or to
waive any default in the performance of the terms and conditions
thereof; to grant options, to execute and deliver any and all
deeds, bills of sale, assignments, bonds, mortgages, leases or
other instruments in connection with the foregoing, all at such
times, in such manner and upon such terms as the Trustees may
decide.
(D) To pay, collect, defer, extend, adjust, settle,
arbitrate, or compromise any claim by or against the trust.
(E) To vote in person or by proxy (discretionary or
otherwise) in respect of all securities belonging to the trust;
to become a party to the reorganization, consolidation or merger
of any corporation or other entity, the securities of which they
may hold; to assent to the dissolution and liquidation of any
such corporation or entity; to become a party to a voting trust;
to exchange or surrender securities; to deposit securities with
voting trustees or with creditors', bondholders', or
stockholders' committees or other protective groups; to pay all
assessments, subscriptions and other sums for the protection of
securities; to exercise any options or conversion privileges or
subscription rights with respect thereto; and generally to
exercise all the rights and powers (whether hereinabove
enumerated or not) with respect to all property belonging to the
trust as are or may be lawfully exercised by persons holding
similar property in their own right; and for such purposes to
execute any agreements or consents, and to participate in or take
any steps to effectuate the same, whether or not any specific
plans have been formulated therefor.
(F) To take and hold in their own names as Trustees, or in
the name of a nominee or nominees or in bearer form, any property
or securities coming into their hands as Trustees, and to deposit
the same with a custodian or custodians.
(G) To employ investment counsel and to charge the
expenses thereof to the trust, but the Trustees may in their
absolute discretion follow or refrain from following the
recommendations of such investment counsel and such
recommendations shall not in any way limit the discretionary
power and authority herein conferred on the Trustees with respect
to investments.
(H) To incur and pay the expenses of the administration of
the trust, including (but not by way of limitation) reasonable
attorney's fees, accountant's fees, custodian fees, and the like;
to employ or engage the services of such other person or persons,
firm or firms as the Trustees may consider necessary, proper or
desirable to perform any services for the trust or in connection
with the care or maintenance of any property belonging to the
trust, and to pay such sums as the Trustees may deem reasonable
for all services rendered.
(I) To borrow money without personal liability therefor
and to secure its repayment by bond and mortgage, pledge or
hypothecation; and to lend money, securities or other property
with or without collateral, upon such terms and conditions as the
Trustees may consider advisable.
(J) To make any distribution in cash or in kind, or partly
in cash and partly in kind, including the power to distribute
property in kind to the Grantor or her estate in satisfaction of
her right to the annuity amount, without making pro rata
distributions of specific assets and to determine the fair market
valuation thereof at the time of distribution, and to sell
property to the Grantor or her estate at its fair market value on
the date of sale.
(K) To delegate to other persons such ministerial duties
as they may deem necessary for the expeditious administration of
the trust.
(L) To do any and all such other acts as may be necessary,
proper or advisable to effectuate the powers specifically
conferred upon them by this Agreement.
TWELFTH: To the extent consistent with Articles FIRST through
TENTH above, the following provisions in addition to all others herein
shall apply to all Trustees acting hereunder to the extent permitted by
law: (A) No Trustee, whether named herein or otherwise designated or
appointed, shall be required to give any bond or security in any court or
jurisdiction.
(B) They shall not be required to file in Court any
account of their proceedings or of the property which may come
into their possession.
(C) They shall not be liable for any act performed by them
or any of them in good faith or for any error of judgment or
mistake of fact or law, save only each for his or her individual
act of willful misconduct.
(D) They may consult with counsel and shall be fully
protected in any course of conduct taken in good faith in
accordance with the advice of counsel.
(E) No person or corporation dealing with the Trustees in
any transaction affecting the trust shall be required to inquire
or investigate into their authority to entering into such
transaction or to see to the application made by the Trustees of
the proceeds of any such transaction.
(F) Whenever in this Agreement reference is made to the
Trustees, such reference shall be deemed to include the
masculine, feminine and neuter genders, the singular and the
plural, and not only the Trustees and successor Trustee herein
named, but also all Trustees duly qualified and acting hereunder.
(G) Any Trustee hereunder may resign at any time by
written instrument delivered to the other Trustee then acting if
there is one, and if none, then to the resigning Trustee's
successor.
(H) No Trustee shall be disqualified in the exercise of
any powers hereunder because of any interest or connection he or
she may have in any venture, business or other enterprise and the
Trustees may participate with themselves as Trustees in any
matters, including but not limited to the right to purchase from
the trust or sell to it any property or other thing.
THIRTEENTH: This Agreement shall be construed and administered
and the validity of the trust hereby created shall be determined under
the laws of the State of New Jersey.
XXXXXXX X. XXXXXX and XXXXXXX X. XXXXXX accept the trust hereby
created and covenant that they will faithfully perform and discharge all
duties of the office of Trustee.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals the day and year first above written.
(L.S.)
Xxxxxxx X. Xxxxxx, Grantor and Trustee
(L.S.)
Xxxxxxx X. Xxxxxx, Trustee
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , 1995, before me personally came
XXXXXXX X. XXXXXX to me known to be the individual described in and who
executed the foregoing Trust Agreement, and she acknowledged to me that
she executed the same.
--------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , 1995, before me personally came
XXXXXXX X. XXXXXX to me known to be the individual described in and who
executed the foregoing Trust Agreement, and he acknowledged to me that he
executed the same.
--------------------------------
Notary Public
SCHEDULE A
Three hundred fifty-seven thousand seven hundred fifteen (357,715) Common
Shares of American Biltrite Inc.
