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Home My WebLink About94-00998 \~.,,- g~/""T-i:~~0'. ,,,,,,,,.C!,.',,f'- ;'-" P-'-'" .~l-)., '""-',.'" ". ," . ' No. 21-94-998 ~-,;"",'~.<~r";.~:,'__ h'~1tj ,.. Estate of , Deceased TRUMAN L. HEISHMAN DECREE OF PRODA TE AND GRANT OF LETIERS AND NOW NOVEMBER 25 19..11-, In consideration of the petition on the re~erse side hereof, satlsractory proor having been presented berore me, IT IS DECREED that the Instrument(s) dattd SEPTEMBER 22,1989 described therein be admitted to probate and filed of record as the last will or TRUMAN L. HEISHMAN TESTAMENTARY FARMERS TRUST CO. and Lellers are hereby granted to '-m~ ('J. X'L..;" no. p.~ (\ri\ Realller 01 willi FEES Probate, Lellers, Etc. 0 0 . . . . . .. $ Short Certlficates( 6)'. 0.:..0... $ Renunciation ................ S ~c~ages $ 200.00 18.00 Ivo V. Otto, III, Esquire A TIORNBY ISup fl. I D. Np.l Martson, Deardorf , Willisms & Otto Ten East High Street, Carlisle, PA 17013 ADDRESS 717-243-3341 Flled 1~.8.8 TOTAL _ $ 235.00 ... 0" N01lEMBER. .25.,.19.911..... PHONB l, . , I I ( (".J .,1 ':>. '''J ('i: '..~ . ;;.; (j U PETITION FOR PROBATE and GRANT OF LETIERS c;.J - 9 'I- -9'1 rr Eslale of TRUMAN I.. HEISIlMAN also known os No. To: Register or Wills for the Deceased. County of Cumberland In the Social Security No. 202-20-4701 Commonwealth of Pennsylvania The petition of the undersigned respeclrully represents that: Your petltloner(s), who Is/are 18 years or age or older an the execu' nr In the last will or the above decedent, dated September 22 and codlcil(s) dated named ,19...J!.2.... (state relevant clrcumSlan!:es, e.l_ renuncllllon. death of eXKutor, etc.) Decendent was domiciled at death In Cumberland Count~l Pennsylvania, with It is last ramily or principal residence at 623 Alexander Sprin~ Koad , Carlisle , PA 17013 Dickinson Township (1111 meet. number and munclpalily) Decendent, then 64 years or age, died Nov. 13 ,19 94 M Carlisle. Cumberland Countv, PA . Except as follows, decedent did not marry, was not divorced and did not have a child born or adopted after execution of the will orfered ror probate; was nolthe victim or a killing and was never adJudlcaled Incompetent: Dccendent at death owned property with estimated values as follows: (If domiciled In Pa.) Ail personal property $ unestimated (If not domiciled In Pa.) Personal property In Pennsylvania $ (If not domiciled In Pa.) Personal property In County $ Value or real eSlate In Pennsylvania $ situated as follows: WHEREFORE, petltloner(s) respectrully presented herewith and the 'grant or leller' theron. requesl(s) Ihe probate of the last will and codlcll(s) testamentary (testamenlary; admlnlstrallon c.t...: admlnlslratlon d.b.n.e.....) I s~ !i -g'O i Vi Ja e F. Burke Senior Vice President I TrllRt Officer. Fnrmers Trust Company One West lIiel1 St.. Carlisle. PA 17013 717-?40-4~04 OATH OF PERSONAL REPRESENTATIVE COMMONWEALTH OF PENNSYLVANIA } ss COUNTY OF CUMBERLANlJ Sworn to or affirmed an;! berore me this "'~ ?/)( .( .... I '" The pelltloner(s) above. nom cd swear(s) or affirm(s) that the statements In the foregoing petition are true and correCl 10 Ihe best or Ihe knowledge and beller or petltloner(s) and that as personal represen. tatlve(s) or the above decedent petltloner(s) will well and truly In 1st r the estate according 10 law. subscribed t ~ , day or Jane . Burke, Senior Vice Pres en Trust 19~ Fa Co Cnrlisle PA 1 0 ReRlsler .e Officer . , IL ) 'I -::/iJ9 - 7' .8. ..1"....1.\ IlWHII'I\ltl\"JIoI This j" 1O n:rIH)' th.1t till' infuflll,llinn hCIl' gi\'t~1I is (lJllt'ttly tlll'll'd hom ,Ill lIri~in.d. n'nifk.ltl' of dl,.IlI,1 ,(llIly filed with l.rn:al Registrar, The origin.11 (crIif irilU' will he lorw.lnltd lo1l1l' SliIH' Vit.d Ht:l..-tlhh Oflul.lor pl'rl1l,IIICl11 fill 11,1.:> WARNING: ilia Illegal to duplicate this copy by photostat or photograph. 21-94-998 me ilS No, ~.~~S?~&.~~ 1.01..:01 nc~iMlur ~ Fcc (or Ihis (.crtificilIC, $2.()(1 2665777 NOV, I 5 1994 - ---.--..--.-.----.-- --.-.---- 1>.lIl' M'otIU,,"1111 COMMONWEALTH 0' peNNSYLVANIA' DIPARTMINT 0' Hl!ALTH . VITAL RICORDI CERTIFICATE OF DEATH (Coroner) .., "'" ... TRUAAN ... L IIEISIlMAN ...,,,_. U '1lUIoOM1lI , 202-20-4701 0oll DlN........O"'~ ., Nov. 13,1994 , -'i- Dee. 6, ::::"'0 - -- Dickinson White van a c... - .... Cumberland ........' n...a~-=::: IoI01ICA....-...,.......wvem Orris "..dO__....'" ,,-...-...... ana M. Grove nloklnson ... .. k ___......-.--_........_ __N_"'~_..c..-...._...,__.._..... ......- 1,......__..,....... -.....- -..- o - ~ovembQ~ 13. 1994 ",1(1 ..0 "O....~_-.... ... ....-.,....--,.._.-" I Corona IIrm ... .... 01 0080 . . _""'-,PnCJlllftJ COW'lI'IIOOtQf tAUM .......... _0 ..0 - - - .. IIQ o o - -- .. CJ ..0 c.-......--' Coroner - .all'T.,.,...~,..,-'.....,_.,__.....................__.......,~-,. ............."..-....____.....-'111__..................,...,...................................... CJ ~\ irl..\ ,el o NoV. 1 4 n. ~''''J'lII..~Michae} L. Norrie,Coroner ~ II, Ag~h~~t~~~~rD;l;:. 17055 .. ,...... , I 'r c c ~ANClCl,".......PtfY'IICWt~_""",,"'''''~III__oI-'' "........"'..,............_--"tl..._.-.....,....,__.....I""'"......._..~......................... ~IU.-..NC~ n.......... ....____"""""'*'.11I..,.....-....-...._......""..... ,.................. --s...... _..MMM........................................... ... ............ ......,............. .................... ". M ',' . . , . . . LAST WILL AND TESTAMENT I, TRUMAN L. HEISHMAN, of the Township of Dickinson, county of cumberland, and Commonwealth of Pennsylvania, being of sound and disposing mind, memory and understanding, do make, publish and declare this as and for my Last Will and Testament, hereby revoking and making void all former wills and codicils by me at any time heretofore made. FIRST. I order and direct that all my just debts and funeral expenses be paid by my Executor, hereinafter named, as soon as conveniently may be done after my decease. SECOND. My wife, DONA M. HEISHMAN, and I have accumulated various items of tangible personal property which we acquired prior to our marriage. It is my intention that my said wife, DONA M. HEISHMAN, shall have the right to une and possess all such items for and during her natural lifetime in order that she may not be interrupted in her customary use thereof; however, upon her death or her abandonment of such use, I order and ~ direct that the items which I brought into the marriage shall be distributed unto our son, RANDY L, HEISHMAN, absolutely, and those originating from my said wife shall be distributed in equal shares unto her daughters, namely, LINDA J. SHARAR and TERRY L. TIDD, absolutely. THIRD. I give, devise and bequeath all the rest, residue and remainder of my Estate, real, personal and mixed, whatsoever and wheresoever situated, unto FARMERS TRUST COMPANY of Carlisle, pennsylvania (or its successor by reason of merger, consolidation or other corporate reorganization) as my testamentary Trustee, IN TRUST, NEVERTHELESS, to hold, manage, LAW OrPlCC8 8NELDAKEn 6 EL.ICKER LAW O"'ICU eNILBAKI" 6 ELlCKIR \ . .' . . . , invest and reinvest for the fOllowing uses and purposes: A. If my wife, DONA M. HEISHMAN, survives me, I order and direct that the net income from said trust be paid over to my said wife not less than quarter- annually, absolutely, for and during her natural lifetime. In addition, I authorize and empower my said Trustee to use, consume, expend and apply from time to time during the natural lifetime of my said wife such amounts of the principal or corpus of said trust as may be necessary and proper for the comfortable support, care and maintenance of my said wife in accordance with our standard of living prior to my death. B. If my said wife, DONA M. HEISHMAN, does not survive me, or in the event that she should die during the existence of said trust, I order and direct that the net balance of the assets <}) ~ constituting my Estate or the net balance of said trust, as the case may be, shall be divided into the following amounts and proportions to be held in separate trusts for the persons indicated: (1) One-half thereof in trust for my son, namely, RANDY L. HEISHMAN, (2) One-sixth thereof in trust for my step- daughter, namely, LINDA J. SHARAR, (3) One-sixth thereof in trust for my step- daughter, namely, TERRY L. TIDD, and (4) One-sixth thereof in trust for my son, namely, MICHAEL L. HEISHMAN, on the following terms: to accumulate and reinvest -2- . . . \. . the income in each trust and payout and distribute the then balance of each such trust to the 'u ", beneficiary at the following times: (a) One-third of said amount upon the death of my wife, DONA M. HEISHMAN, or within six months after my death if my said t i ~ wife should predecease me; (b) One-half of the remaining balance on the third anniversary of the first distribution as provided in (a) above; and (c) The entire net balance of said trust on the sixth anniversary of the first distribution as provided in (a) above. If any of said named beneficiaries should predecease me or die during the existence of said trust, without leaving lawful issue to survive such beneficiary, the above provisions for such deceased beneficiary shall lapse and abate, and the proportions for the remaining named beneficiaries shall be increased equally by dividing the deceased beneficiary's share equally per capita. If any of said named beneficiaries should } !l, L \ 1) LAW 0".1;.. 8NEL.DAKEn a ELICKER predecease me or die during the existence of such trust and leave lawful issue to survive me, I order and direct that such deceased beneficiary's interest hereunder shall be divided per stirpes by representation and not per capita and held in a separate trust for each such beneficiary until the beneficiary attains the age of twenty-three (23) years, at which time one-third of the then balance shall be distributed to the beneficiary absolutely, -3- I,' . " . . . . and thereafter the distribution of said trust shall be made the same as above (one-half of the balance on the third anniversary of the first distribution, and the entire net balance on the sixth anniversary of the first diBtribution). LASTLY. I nominate, constitute and appoint FARMERS TRUST COMPANY of Carlisle, Pennsylvania (or its successor by reason of merger, consolidation or other corporate reorganization), to be the Executor of this, my Last will and Testament, to serve without bond or other security as a condition of qualification hereunder. IN WITNESS WHEREOF, I, TRUMAN L. HEISHMAN, have hereunto set my hand and seal to this, my Last Will and Testament which consists of four (4) typewritten pages to each of which I have affixed my signature this ::a:J. day of"f~ One Thousand Nine Hundred Eighty-nine (1989). ~ 'L :I~_ ~ tliu A.D. , (SEAL) The preceding instrument, consisting of this and three (3) other typewritten pages, each identified by the signature of the Testator, was on the date thereof signed, sealed, published and declared by TRUMAN L, HEISHMAN, the Testator therein named, as and for his Last will and Testament, in the presence of us, who, at his request, in his presence, and in the presence of each other, have subscribed our names LAW O'PICr.. eNILDAKIR . ELICKER ~a"..T )?4, .::J~,--t.p -4- , ' " . . . " '. . . COUNTY OF CUMBERLAND ) . . ) SS. COMMONWEALTH OF PENNSYLVANIA we, TRUMAN L. HEISHMAN, RICHARD C. SNELBAKER and JANET M. FORRY, the Testator and the witnesses, respectively, whose names are signed to the attached or foregoing instrument, being first duly sworn, do hereby declare to the undersigned authority that the Testator signed and executed the instrument as his Last Will and Testament and that he had signed willingly, and that he executed it as his free and voluntary act for the purposes therein expressed, and that each of the witnesses, in the presence and hearing of the Testator, signed the will as a witness and that to the best of his or her knowledge the Testator was at that time eighteen years of age or older, of sound mind and under no constraint or undue influence. W tness (hA.u..r )1:.1'. r~~ / Witness------V subscribed, sworn to and acknowledged before me by TRUMAN L. HEISHMAN, the Testator, and subscribed and sworn to before me by RICHARD C. SNELBAKER and JANET M. FORRY, witnesses, this ~~ Ad day of ~~ ' 1989. 9~~a~it~~ IIITAl/Al SlAl. PATl/C/A J, TlDISOH, IIITARY PUIUC IIl:CIWl/CS1\1R4 1lIllO, ClIl8ERI.AHO co Il't COIIISSIOll uPlRn DEC, 31, 1m &,AWO,r1CU INEL.IIAKIA . ELICKIR ..:r ~'1 ,,', J ,~," ;"V" ',. '-.;";; ".'/;!1 .:~ ~" ,'i.'~ :{.~..~, "-,,";1' -.-.,;-i <; .- .~, . ..:I :k ~ I "; . ~ ',1 . , ., , " ,,: ',',C' , ' :( ".~'c:~, . :,'..- .'.~:'r1 tJ ,.; .l.~ ., " " - ~ ~ ' * ,- , ~ . ',., ~ 'r ? " " COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND L J UI .~ Jane F. Burke, Senior Vice p~~!l~~nt & Trust Officer, Financial Trust Services ~ompany sworn according to law, d.pol.. and uy. thaI Ell. i s executor of Ih. E,t.l. of Truman L, Heishman 1.1. of _.Dis;.ki!l~l?IL ,!,QwJ:'!s.hi.P_.m. __....___ ___, Cumberl.nd County, 1'." d.ells.d .nd Ih.t the within II.n In..nlory m.d. by Financial Trust Services c~any ,th. s.ld executor of the .nllre ..I.t. of uld d.c.d.nt, con.llllng of .11 tho p...on.1 pro"drly .nd rill .st.I., .xc.pt re.1 ..t.l. outsld. the Commonwllllh of P.nnlylv.nl., .nd Ih.1 the flgur.s Oppollt. oach II.m of the Inv.ntory repreunllt's f.lr v.lu. .. of the d.l. of d.c.d.nl'. d..lh, b.lng duly Sworn .nd ,ub,crlb.d b.fore m., iJL 19 C) l" Executor.. Aclmlnht,.to, Jan F. Burke, Sr. V.P. & Trust Officer Financial Trust Services Company 1 West High Street Carlisle, PA 17013 Acid,... Dot. of Ollih ~ 11 Month 1994 Doy Vea, INSTRUCTIONS I, An Inv.nlory mUlt b. fII.d within three monlh. .fter .ppolnlm.nt of p...on.1 repr...nl.llv., 2, A suppl.m.nt Inv.nlory must b. fII.d within thirty d.YI of dllcovery of .ddltlon.1 ......, 3, Addlllon.lsh.... m.y b. .tt.eh.d II to p.rson.lty or re.lly 4, S.. Artlcl. IV, Flducl.rl.s Act of 1949, 0 +> +> 0 '" ~ III .... .... .... l:: .<: .... III UI .,; .... ~ w .a l:: . 3: :J ~ CD ~ g UI 0 . . en "" .... Eo< u . .... en 0 III u ....... ~ w C ... 0 Ill: tI: l:: .. .. I< I i!: "" -' u. 0 .; "" E 0 ... ~ 0 , UI 0'0 en u. -' ..:l l:: "" :s: I< w < ~ ~ 0 Z Ill: .... i: < III N 0 l:: ...: c: III C III U ~ C VI z e .... tl 0 ffi z < ::l 0 ... "" I< .... l:: Eo< c 0 .. - -;: UI 0 u +> '" .... .... I< u E . 0 III . .:J ~ u: 0 :t 0 II> Inventory 01 the real and personal estate 01 C.- Truman L. Heishman deceased Allen Distribution, Partnership 14,85% interest ,804,275 H5H Management Ine" Partnership 1/3 interest GET Ine" Buy/Sell Agreement American Express Travelers Check Capital Blue Cross, benefits Penn Treaty Life Insurance Company, premium refund Long Term Care HSH Management Ine" wages GET Inc" wages 1967 Chevrolet 1994 Ford Ranger 137,229 500,000 .' , , 100 48 272 57 8,998 96 720 17 " ',<. 5;800 00 C".J', "'2"99500 ,v;- '-~ l. '. ~,. If'(; " 1 ".... ,. 113 Interest, 212-6 N, Heron Drive, Ocean City, MD Total on f: ;-. Id 4. ~<'i , 1", ;.f.j C'" I I'J : Li ~ .,...... :.1 "..1 :,l.. , " ~ 0\ IN REI ESTATE OF TRUMAN L. HEISHMAN, DECEASED. I IN THE COURT OF COMMON PLEAS I CUMBERLAND COUNTY, PENNSYLVANIA I ORPHANS' COURT DIVISION . . NO. 21-94-998 CITATION WE CCMMAND, you that 1ayl.ng asl.de all busl.ness and excuses whatsoever, you be and appear l.n your proper person before the Honorable Judges of the Common Pleas Court, Orphans' Court Divl.sl.on at a sessl.,on of the sald Court there to be held, for the county' of Cumberland to show cause why, lf any they have, why thls Court should not extend the ped,od of tl. me l. n whlch petl.tl.oner may fUe an e1ectlon agalnst the WU1 of Decedent untU sl.xty (60) days after Petltl.oner has been provlded an accurate l.nventory of Decedent's estate, the value of all assets compdsl.ng the estate, and such other l..nformatlon wlth respect to the value of the assets compd,slng the estate of Truman L. Helshman as Petltl.oner may reasonably request in order to verlfy those values. wltness my hand and offl.cl.,a1 seal of office at CarU,sle, pennsylvanla this 5th day of May, 1995. 't?OILlt1 (I,. >fL.;. C'l,. P.1l<}.n..~ I I Mary . Lewls Clerk of orphans' Court Dl..vl.,slon Cumberland County Car11s1e,pa. ~._'-_. -.. .~-~,-",,-"...-- ......~- . ."'.; . " , ..... " . , I \ $ , oJ '. ";.1 .. ~., ., \ ... f'" . ~- . t<.- .'''.;'' , . , ...",,>:f. . . , " I ., " i ! ~ ',.;1 :'. .'" I~. .. , ~. > , '. If' ~'. ~4 . .r ,. ) 'I t ,. '."",f ....\' ,. ! ~,; '0- .1 , " ',. ,~ , . .j I f .-: , \' ., '"" \ \, t ~, . , .( ~.---~ w~'" c... - _. :-f':;'" - .._ 1 IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-94-998 ORDER II rJ.i.. " AND NOW, this l- day of r--I"'^;[ . 1995, it is hereby ordered that a Citation be issued to Fanners Trust Company, Randy L. Heishman, Linda J. Cheskey (Sharar), Terry L. Tidd, and Michael Heishman to show cause, ifany they have, why this Court should not extend the period of time in which Petitioner may file an election against the Will of Decedent until sixty (60) days after Petitioner has been provided an accurate inventory of Decedent's estate, the value of all assets comprising the estate, and such other information with respect to the value of the assets comprising the estate of Truman L. Heishman as Petitioner may reasonably request in order to verifY those values. By the Court: ~do-,I f~.r)'-/ J. ~ '.'_'1_ I} '_; , ';'1 " ',. -0 :7. (j'B., gQ) a: a: ll"I ~ r1 Cl. <;f I ~ M .) ':J ~ ":3 o ;:.:E .!!!;:I uu 0$ r~, i::-. ',... ::~~ ~~ '-' ~ 30945 I 7~-_____," . _,~_.~ > "", '; ,-,:-.:'.~~i>'.:_l-<':,;;'-':' . __'''d_' .. "1,..,,,:' '.X'-', IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-94.998 ORDER AND NOW, Ihis _ day of , 1995, it Is hereby ordered and decreed that the period of time in which Petitioner, Dona M. Heishman, may file an election against the Will of Truman L. Heishman shall be extended until sixty (60) days after such time as an accurate inventory ofal! the assets of Truman L. Heishman, together with the true and correct values thereof, has been provided to Petitioner, and Petitioner has been provided such other infonnation with respect to the values of the assets comprising the Estate of Truman L. Heishman as Petitioner may reasonably request in order to verifY those values. By the Court: ], IN RE: ESTATE OF TRUMAN L. HEISHMAN. Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21.94.998 PET~ION TO EXTEND TIME FOR FILING AN ELECTION GAINST THE WILL OF TRUMAN L HEISHMAN TO THE HONORABLE JUDGES OF SAID COURT: AND NOW comes Petitioner, Dona M. Heishman, by her attorneys, Mette, Evans & Woodside, and respectfully represents that: I. Petitioner is the widow of Truman L. Heishman ("Decedent") who died November 13, 1994, a resident of Cumberland County, Pennsylvania. 2. Decedent left a Will dated September 22, 1989, which was admitted to probate by the Register of Wills of Cumberland County on November 22, 1994. A copy ofthe Will is attached hereto as Exhibit" A". 3, Letters Testamentary were granted to Farmers Trust Company, as executor, on November 25, 1994. 4. Petitioner was married to Decedent by Nelson P. AId, at Hagerstown, Maryland, on July 15,1963. 5. By Item SECOND of Decedent's Will, Decedent bequeathed to Petitioner all of his tangible property. 6. By Item THIRD of Decedent's Will, Decedent established a Trust, with Farmers Trust Company of Carlisle, Pennsylvania, as Trustee, with the residue of his estate. 7. Decedent's Will provides in Item THIRD (A) as follows, with respect to the trust: " .~, .~.' .---~..., ",.._,~~~~.-.......--~-...,..- \. .' . . A. Ifmy wife, DONA M.IIEISHMAN, survives me, I order and direct that the net income from said trust be paid over to my said wife not less than quarter-annually, absolutely, for and during her natural lifetime. In addition, I authorize and empower my said Trustee to use, consume, expend and apply from time to time during the natural lifetime of my said wife such amounts of the principal or corpus of said trust as may be necessary and propel for the comfortable support, care and maintenance of my said wife, in accordance with OUI standard of living prior to my death. 8. Decedent's Will provides in Item THIRD (B) as follows with respect to the trust: B. If my wife, DONA M. HEISHMAN, does not survive me, or in the event that she should die during the existence of said trust, I order and direct that the net balance of the assets constituting my Estate or the net balance of said trust, as the case may be, shall be divided into the following amounts and proportions to be held in separate trusts for the persons indicated: (1) One-half thereof in trust for my son, namely, RANDY L. HEISHMAN; (2) One-sixth thereofin trust for my step-daughter, namely, LINDA J. SHARAR; (3) One-sixth thereof in trust for my step-daughter, namely, TERRY L. TIDD; and (4) One-sixth thereofin trust for my son, namely, MICHAEL L. HEISHMAN; on the following terms: to accumulate and reinvest the income in each trust and payout and distribute the then balance of each such trust to the beneficiary at the following times: (a) One-third of said amount upon the death of my wife, DONA M. HEISHMAN, or within six months after my death ifmy said wife should predecease me; (b) One-half of the remaining balance on the third anniversary of the first distribution as provided in (a) above; and (c) The entire net balance of said trust on the sixth anniversary of the first distribution as provided in (a) above. If any of said named beneficiaries should predecease me or die during the existence of said trust, without leaving lawful issue to survive such beneficiary, -2- ~-'C-----.-_"~___"" ...,....~'~.__.._-'--:--"-_._. .. the above provisions for such deceased beneficiary shall lapse and abale, and the proportions for the remaining named beneficiaries shall be increased equally by dividing the deceased beneficiary's share equally per capita, lfany of said name beneficiaries should predecease me or die during the existence of such trust and leave lawful issue to survive me, I order and direct that such deceased beneficiary's interest hereunder shall be divided per stirpes by representation and not per capila and held in a separate trust for each such beneficiary until the beneficiary attains the age of twenty-three (23) years, at which time one-third of the then balance shall be distributed to the beneficiary absolutely and thereafter the distribution of said trust shall be made the same as above (one-half of the balance on the third anniversary of the first distribution, and the entire net balance on the sixth anniversary of the first distribution). 9. The names, addresses and interests of the other parties in interest in this matter are as follows: ~ Address Interest Farmers Trust Company One West High Street Executorffrustee of Trust Carlisle, PA 17013 established under Item THIRD of Decedent's Will Randy L. Heishman 802 North College Street Residuary Beneficiary Carlisle, PA 17013 Linda J. Cheskey (Sharar) 256 McAllister Church Rd. Residuary Beneficiary Carlisle, PA 17013 Terry L. Tidd 244 McAllister Church Rd. Residuary Beneficiary Carlisle, PA 17013 Michael L. Heishman 90 I Dunbar Road Residuary Beneficiary Carlisle, PA 17013 10. 20 Pa. C.S.A. ~ 2210(b) provides that an election by n surviving spouse to take her elective share shall be made before the expiration of six (6) months after the Decedent's death or before the expiration of six (6) months after the date of probate, whichever is later. Further, ~ 221 O(b) provides that the Court may extend the time for election for such period and - 3 - "'~~~-:-\, ,.,....,-.--...,...-'--..-~ ~ ' upon such terms and conditions as the Court shall deem proper under the circumstances on application of the surviving spouse filed with the Clerk within the foregoing time limit. II. Petitioner has been unable to obtain accurate information about the nature, extent and value of Decedent's property. Petitioner is unable to determine whether an election against the Will of Decedent would be beneficial without specific information regarding Decedent's assets and the value of Decedent's assets. 12. Decedent was a limited partner in Allen Distribution, a Pennsylvania limited partnership. Petitioner avers and therefore believes that Farmers Trust has retained an appraiser to appraise this interest. However, Petitioner has no information about the value of Decedent's interest in this limited partnership. Petitioner, through counsel, has requested copies of financial statements and/or till( returns for this limited partnership for years 1990 through 1994, but no information has been provided to Petitioner or her attorney. 13. Decedent was a one-third owner ofHSH Management, Inc., the general partner of Allen Distribution. Petitioner avers and therefore believes that Farmers Trust has retained an appraiser to appraise this interest. However, Petitioner has no information about the value of Decedent's interest in this corporation, Petitioner, through counsel, has requested copies of financial statements and/or till( returns for this corporation for years 1990 through 1994, but no information has been provided to Petitioner or her attorney. 14. Decedent owned a one-third interest in a condominium located on North Heron Drive, Ocean City, Maryland. This condominium is currently listed for sale and Petitioner is unable to determine the value of this property based on information which has been provided to her. IS. Petitioner is unable to make an informed decision with respect to making an election against the Will of Decedent within the time allowed by statute, WHEREFORE, Petitioner respectfully requests the issuance ofa citation directing those parties interested in the administration of Decedent's estate to show cause, if any they have, why this Court should not extend the period of time in which Petitioner may file an election against the Will of Decedent until sixty (60) days after Petitioner has been provided an accurate -4- JTf'~'~ ,~.; , . ~ _'. _ ~.......- "'~ -. I,. '_ i"'-',;~.=,._. " . inventory of Decedent's estate, the value of all assets comprising the estate, and such additional infonnation as Petitioner may reasonably request in order to verify those values. Respectfully sub milled, Elyse E. METT , VANS & WOO 3401 North Front Street Harrisburg, PA 17110-0950 (717) 232-5000 1.0. # 41274 Attorneys for Petitioner Date: ()r l ;;g I' .' ~ . '- '. . :' '. .1995 ; , if) ~-.: '.'. i~ ~;: ~): t .' ';;01; "). Jr.!. ., p: i;-' .::.~ ~ '. VERIFICATION J '.~, ~, '" '?r,":"J (, DONA M. HEISHMAN, the Petitioner in the foregoing maUer, states that the ractsln the foregoing Petition are tlUe to the best of her knowledge, information and belief. This statement is made subject to the penalties of 18 Pa. C.S.A. ~ 4904. relating to unsworn falsification to authorities. . ~ Date: 1"/u'l. .:Jt .1995 ~A ).J). #, ,;'h_/Ut ) Dona M. Heishman Exhibit A '.,.'. ,. ..' -~ ' ';,__ "T'- '~"W~~UIAl'''~'''' lOll -.ao... <i' , ' " , ' .' .' .. '. ~":< ,: :.. i - .- . ", :,. " : \ '~~':cc,~:':~i~ :'..' ," . ..' ;,;r .:{ .' .' . '../:,;." '. ",:.,;,:~>:, . ..<,..' ""\"':,i" ....;',>'" .' '>" >~<"...'.:;,':Y, ',.. ,."';,' .... ""',~"".::.;;.;,,;~,/.>~:!;:,? .... ;', :)" "': <:~ ';';'~'>;,';X<; '., ,':: '</~.\:':'; c' :::' '.'., : '. .'; '.' ";:':';'~':;:1';'j,: ,.'.'..,'<"":..':' ".,';;~" i':_ n" .', ." .' ':.':: .. '.,..' <:: ';'.~j~;("i':';:~'" ..' '. ,,' :} , /,(' .' 'i": ; '...':t '..:; .'., "Y':. .'.' ,,:::' '.' ." .... .:' " ," ;':'5::: '" .... .,: . " '.' '';'J.; ,. ':":;.: . ,. ,.,..... ...., :"'.' '" ! . ,'" ':".. . ..:' !~: ,.'; ',':,,'C:","'f'.'," ',..' ',""', ;', :,;' ,,".: ,""; '.... .'-, ',,' -.,;:;:. .' '. '~:,.:' ,,:':C.i..'d:<'''':'':':::''i ::'(:,',.':~;YC' "'" ,:j./'.:.:, , .,' :"J""'" ::..,;:' ':/',:':,,'.,;. '. "L:.""'l; c.., " 'I,; ,', .... ",::':.' 'y,! '.': ':' .:':.::; ',.' '. ,;;~.' ;,~: :.:';:<1 ..".,. .':tt,:>...' ,~, " c>." 0:1: ~0~"Y':: "0 tt+\ <:;;i1~" 'f";:""',;,: ; ....<., ::'):;X:~~;i' R~:l ~\t:;,,\;' .':' ' ;;,:.' ,,- ,:. '.: . ., 'e",' ~~c<;; .....,' ::'. "'c' 'if.' , " .',' c, < ''';'', c. "e, "... ' . .... ,c".';"~;':':'.',",~'.".<>, "" .... .~"'.",""':' , ,', ;L ., " .- '-:-,'. ;,;. ';-",.. .. , ., . . LAST WILL AND TESTAMENT I, TRUMAN L, HEISHMAN, of the Town.htp of Dlckln.on, County of Cumberland, and Commonwealth of Penn.ylvanla, being of .ound and dl.po.lng mind, memory and under.tandlng, do make, publl.h and declare thl. a. and for my La.t Wtll and Te.tam.nt, hereby r.voklng and making votd all former will. and codicil. by me at any timo heretofore made. FIRST. I ord.r and direct that all my ju.t debt. and funeral expen.e. be paid by my Executor, hereinafter named, a. .oon a. conveniently may be done after my decea.e, ~, SECOND, My wife, DONA M. HEISHMAN, and I have accumulated variou. Item. of tangible per.onal prop.ety which w. acquired prior to our marriage, It I. my Intention that my said wlf., DONA M, HEISHMAN, shall have the right to use and pos.... all such Item. for and during her natueal lifetime In order that .he may not be Interrupted In her customary use thereofl however, ~ @ ~ upon her death or her abandonment of such use, I order and direct that the Item. which I brought Into the marriage shall be distributed unto our Don, RANOY L. HEISHMAN, absolutely, and those originating from my said wife ohall b. dlstrlbut.d In equal share. Unto her daughtero, namely, LINDA J, SHARAR and TERRY L, TIDD, aboolutely, THIRD. I give, devloe and bequeath all the rest, residue and remainder of my Estate, roal, personal and mixed, whatsoever and wheresoever oltuated, unto FARMERS TRUST COMPANY of L...O"OCI. .NeLO.ICC" . 1L,ICICC" Carlisle, Pennsylvania (or its successor by reason of merger, consolidation or other corporate reorganization) as my testamentary Trustee, IN TRUST, NEVERTHELESS, to hold, manage, . I Invest and reinvest for the following uses and purposesl A, If my wife, DONA H, HEISHHAN, survIves me, I order and direct that the net Income from satd trust be paid over to my said wife not less than quarter- annually, absolutely, for and during her natural llfetime, In addition, I authorize and empower my said Trustee to use, consume, expend and apply from time to ttme during the natural lifetime of my said wife such amounts of the principal or corpus of sold trust os may be necessary and proper for the comfortable support, core and matntenance of my said wife in accordance with our standard of living prior to my death, 8, If my said wife, DONA H. HEISHHAN, does not survive me, or In the event that she should die during the existence of said trust, larder and direct that the net balance of the assets constituting my Estate or the net balance of sold trust, os the case may be, shall be divided into the following amounts and proportions to be held in separate trusts for the persons tndlcated: 'l-6 ~ (1) One-half thereof In trust for my 80n, namely, RANDY L, II EISIlHAlI I (21 One-sixth thereof In trust for my step- dau9hter, namely, LIIIDA J, SHARAR I (J I One-sixth the reof in trust for my step- daughter, namely, TERRY L. TIDDI and HI One-sixth thereof In trust for rny 80n, namely, MICHAEL L. IlEISIlHAN I ""..".... INn.IAKI'" <<...,cel" on the followlnq terms: to accumulate and reinvest -2- -q: r ~ , ! the tncome In each trust and payout and distribute the then balance of each such trust to the beneficiary at the following tlmesl (a) One-third of said amount upon the death of my wife, DONA H, HEISHHAN, or within alx months after my death If my said wtfe should predecease me, (bl One-half of the rematnlng balance on the third anniversary of the first dtatrlbutlon as prOVided In (a) above, and (c) The entire net balance of said trust on the sixth anniversary of the first distribution as provided In (a) above, If any of said named beneficiaries should predecease me or die during the existence of said trust, without leaving lawful Issue to survive such beneflclaey, the above provisions for such deceased beneficiary shall lapse and abate, and the proportions for the remaining named beneficiaries shall be Increased equally by dividing the deceased beneficiary's share equally per capita, If any of sold named beneficiaries should predecease me or die during the extstence of such trust and leave lawful issue to survive me, I order and direct that such decoased beneficiary's interest L.A. ."ICI. .NI..."CI" . ILICItI" hereunder shall be divided per stirpes by representation and not per capita and held In a separate trust for each such beneficiary until the beneficiary attains the age of twenty-three (23) years, at whtch time one-third of the then balance shall be distributed to the beneficiary absolutely, -3- .. , )'i~ '\Jj ." / / . and thereafter the distribution of said trust shall be made the same as abovs (one-half of the balance on ths thtrd anniversary of the first distribution, and the entire net balance on the sixth anniversary of " the first distribution), LASTLY, I nominate, constitute and appoint FARMERS TRUST COMPANY of Carlisle, Pennsylvania (or its succe..or by r..son of merger, consoltdatlon or other corporate reorganization), to be the Executor of this, my Last Will and Testament, to serve without bond or other securtty ae a condition of qualification he reunder. IN WITNESS WHEREOF, I, TRUMAN L, HEISHMAN, have hereunto set my hand and sed to thle, my LOIt Will and Testament which consists of four 141 typewritten pages to each of which I have affixed my signature this S~ed.- day of ...lyli:../;...... One Thousand Nine Hundred Eighty-nine (1989), ill"" ' /1 ~~ ~ 1I~"A II..... ^ .0., ( SEALI -. ,...~,....-~..- ,.... '" The preceding Instrument, consisting of this and three other typewritten pages, each tdentlfled by the signature of Testator, was on the date thereof signed, sealed, published declsred by TnUMAlI L. HEISHMAlI, the Teotator therein named, as and for his Last Will and Testament, In tho presence of us, at his requost, In his preaence, and in the presence of each other, have subscribed our names a~8se8 hereto. -t~f2J~ ..... ."'lCe. SHUDA"I" . II,'C"ClIII I J'd"t~" )'1 J :J 1:.J-\...J"-lf -4 - , , . COMMONWEALTH OF PENNSYLVANIA 55. COUNTY OF CUMBERLAND We, TRUMAN L. HEISHMAN, RICHARD C, SNELBAKER and JANET M, " FORRY, the TestAtor and the witnesses, respectively, whose names are signed to the attached or foregoing Instrument, being first duly sworn, do hereby declare to the undersigned authority that the Testator signed and e.ecuted the Instrument as his Last Will and Testament and that he had signed willingly, and that he executed It as his free and voluntary act for the purposes therein ..pressed, and that each of the witnesses, In the presence and hearing of the Testator, signed the Will as a witness and that to the best of his or her knowledge the Testator was at that time eighteen years of age or older, of sound mind and under no constraint or undue Influence. ~ . w tnes:r /' .~ . .0, ~./ Wi tness -. ~ ,.._.........,.._.:~.- Subscribed, aworn to and acknowledged before me by TRUMAN L, /lEISHMAN, the Testator, and aubacr Ibed and aworn to before me by RIC/lARD C. SNELBAKER and JANET M. FORRY, witnesses, this Jl~ MJt day of ..J..jl.:te......to..vJ , i989. 9tdu;~J 0 din.......nJ Notar~ Public aoUJIAlUAl, 'UI",. J. 11Ot1Ole. .or"" 'UILIC 'IDWIICUlIIC 101O. CLI"oI[IUMQ CO. n Q)ffISSlQII U'II[S Otc. ,)1. 1990 U_O..IC" 'NIU...lCa" . tLICJ{t" ,.'. ,..... ~I -Cf4.Qllr c ! '. 1 , . CERTIFICATE OF SERVICE I certifY that I am this day serving a Citation upon the person and in the manner indicated below, which service satisfies the requirements ofthe Pennsylvania Rules of Civil Procedure, by serving a copy by an adult individual by personal delivery or in person, as follows: Jane Burke Farmers Trust One West High Street Carlisle, PA 17013 i1.~, 4 Date:' S'/~'fJ/ .1995 o In ....j~ :~I(~ /~ ~ o~ i,~ j?: ._, Ll ~o r- ' ...).., ;,.,..-- ~". I" ~ '}' l\: :;;: 'i..ytJ't"-_ ;s:: 0',:\,1 &!~ . l5l ~ c. o ',' .~:! ",~ 'fi' , n ~; 11 00 30945 I '~::;t-,:,~/, ~"., --~ . " \' CERTIFICATE OF SERVICE I certifY that I am this day scrving a Citation upon thc pClsons and in the manner Int:lcated below, which service satisfies the requirements of the Pennsylvania Rules ofCivll Procedure, by serving a copy by an adult individual by personal delivery or In person, as follows: Michael L. Heishman 90 I Dunbar Road Carlisle, PA 17013 Terry L. Tidd 244 McAllister Church Road Carlisle, PA 17013 Randy L. Heishman 802 North Collcgc Street Carlisle, PA 17013 Linda J, Cheskey 256 McAllister Church Road Carlisle, P A 17013 ~)-f~~- 'XfQ~t,rl(14l) Dona Heishman Date: $- /.:3 .1995 C> t::'!C '6 ~a 'I) 10. l1':';'t; - ,) ,I,~ :?; a... (1 U "::-1 r- -u .~:, - "? .. l' f\' >- ',,, 1~,'1 ~ .:, U Ci ._~.J al~ ~ : E a: c3a 30945 I -i;l;,-~;w~~'flt~}.lrL,:"~',;.;,,,\4'.C..~,:~.....,,,~~:~~""A>-w~~'1f;'l.,>t~''''..t ~,,:~. , ,< .' - , IN REI ESTATE OF TRUMAN L. HEISHMAN, DECEASED. I IN THE COURT OF COMMON PLEAS I CUMBERLAND COUNTY, PENNSYLVANIA I ORPHANS' COUR~ DIVISION I NO. 21-94-998 CITATION WE COMMAND, you ,that laying aside all busj,ness and excuses whatsoever, you be and appear In your. proper. per.son before the Honor.ab1e Judges of the Common pleas Cour.t, or.phans' Court Division at a session of the saj.d Court there to be held, for. the County. of Cumber.1and to show caUBe why, j.f any they have, why this Court should not extend the ped.od of time in whj,ch petj.tioner may file an election against the Will of Decedent until slxty (601 days after petitioner has been pr.ovided an accurate :I,nventor.y of Decedent's estate, the value of all assets nompr.ising the estate, and such other. information with respect to the value of the assets compr:l.sing the estate of Truman L. He:l.shman as Petj.t:loner may r.easonably request in order to ved.fy those values. Witness my hand. and offic:l.a1 seal of office at CarH.sle, pennsylvania this 5th day of May, 1995. '-frpfl't:. C!.., ';/l,.. ~. Mary .Lewis Clerk of Orphans' Cumber.land County CarHsle,pa. pIA ~~CJr"~ Court Division IN REI t ESTATE OF TRUMAN L. HEISHMAN, I Deceased I t I I IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 21-94-998 ORPHANS' COURT DIVISION AND NOW, this ORDER OF COURT I "f-{-f--, V1 , day of NOVEMBER, 1995, based upon the motion of Allen Distribution to Quash Subpoena and for Protective Order, the Court directs that the subpoena directing the records counsel to appear on Wednesday, November 8, 1995 at the office of Elyse E. Rogers, Esquire, is CANCELLED. The Court directs that Argument on reasone stated be eet for Wednesday, January 17, 1996, at 9130 a.m. in Courtroom # 1. Counsel for Allen Distribution shall file their brief with opposing counsel and the Court on or before Monday, January 8, 1996. The brief filed by Dona Heishman shall be filed on or before Friday, January 15, 1996. Counsel shall notify opposing counsel. By the Court, "1'1 Richard C. Snelbaker, Esquire Elyse E. Rogers, Esquire Isld ~ ' ~ ~ . -" {..:. Ul 4'..:._:'~~'-'-~-~"'~._~"".'""""'-"~-~-'- -----.,-...- ~t{':c~,l: ., , - - .., - ,.. ---.. " ~ . . IN REI I IN THE COURT OF COMMON PLEAS OF I CUMBERLAND COUNTY, PENNSYLVANIA I I NO. 21-94-998 I I ORPHANS' COURT DIVISION ESTATE OF TRUMAN L. HEISHMAN, DECEASED AND NOW, this ORDER iF COURT to ~ - day of NOVEMBER, 1995 based upon the motion of HSH Management, Inc. to Quash Subpoena and for Protective Order, the Court directs that the subpoena directing the records counsel to appear on Wednesday, November a, 1995 at the office of Elyee E. Rogers, Esquire, be CANCELLED. The Court directs that Argument on reasons stated be set for Wednesday, January 17, 1996, at 9:30 a.m. in Courtroom * 1. Counsel for HSH Management, Inc. shall file their brief with opposing counsel and the Court on or before Monday, January a, 1996. The brief filed by Dona Heishman shall be filed on or before Friday, January 15, 1996. Counsel shall notify opposing counsel. By the Court, 0<'" t:; >.,-'; iij :1} , P.J. Richard C. Snelbaker, Esquire Elyse E. Rogers, Esquire Isld COJ ~n _~,,~:;,~~lt::~'''"'~''~~~'_''''~'~Y'''''''''''_''_'''-;__''''-'''~--'_U'''--~".- -" .'\ IN REI ESTATE OF TRUMAN L. HEISHMAN, Deceased IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-94-998 ORDER AND NOW, this day of November, 1995, upon consideration of the Motion of HSH Management, Inc. to Quash Subpoena and for Protective Order, the "records deposition" involving HSH Management, Inc. in the above referenced matter is cancelled. - By the court, J. LAW O,.,.ICI:. SNELDAKER lie BRENNEMAN ~~;;!,:~-~~.'~:'~~',,: ~;n;~i!',,;~~:,:,g/ ; "':"'-"~{~:\,#,~i~;:~ ' Hi""\"; 't-..",-.;-....-..,.,;.'...~....".>"'.. ", .~J.'''U-''.'''''' ' . ,\ ti~~!,~~t[;~~::~{(ii",;:i' ;.~:-:t~~~~T(~~;~{\ ":- . IN REI ESTATE OF TRUMAN L. HEISHMAN, Deceased I IN THE COURT OF COMMON PLEAS OF I CUMBERLAND COUNTY, PENNSYLVANIA t ORPHANS' COURT DIVISION NO. 21-94-998 ORDER AND NOW, this day of November, 1995, upon consideration of the Motion of HSH Management, Inc. to Quash Subpoena and for protective order, the Subpoena issued by this Court to HSH Management, Inc. on or about october 25, 1995 is hereby quashed. By the Court, J. LAW orncr:a SNILI!AICI!R III BRENNEMAN IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased . . . . . . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-94-998 ORDER AND NOW, this day of November, 1995, upon consideration of the Motion of HSH Management, Inc. to Quash subpoena and for Protective order, a protective order is entered prohibiting the discovery sought from HSH Management, Inc. By the court, J. ~ \ u.w o,.'-Icn SNELBAKER 110 BRENNEMAN IN REI ESTATE OF TRUMAN L. HEISHMAN, Deoeased IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-94-998 ORDER AND NOW, this day of November, 1995, upon oonsideration of the Motion of HSH Management, Ino. to Quash subpoena and for Proteotive Order, the discovery sought from HSH Management, Inc. in the above captioned matter is hereby stayed pending resolution of the issues raised in said Motion. By the court, J. LAW O"ICU SNELDAICER a BRENNEMAN IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-94-998 MOTION OF HSH MANAGEMENT, INC. TO OUASH SUBPOENA AND FOR PROTECTIVE ORDER AND NOW, comes the Movant, HSH Management, Inc., by its attorneys, SNELBAKER & BRENNEMAN, P.c., and moves this Court to quash subpoena and for Protective Order based upon the following averments: BACKGROUND 1. Movant herein, HSH Management, Inc., is a Pennsylvania corporation with its principal place of business located at Route 641, P. 0, Box 62, Plainfield, Cumberland County, Pennsylvania 17081. LAW on'lca:. SNELDAKER a BRENNEMAN 2. Movant is not a party to this matter. 3. On or about October 26, 1995, Movant received the following items via mail: a. Letter of october 25, 1995, from Cayle D. Swindler, Legal Assistant to Elyse E. Rogers, Esquire, of the law firm of Mette, Evans and Woodside, a copy of which is attached hereto marked Exhibit "A"; b. Document entitled "Notice of Records Deposition" dated october 25, 1995 from Mette, Evans & Woodside signed by Elyse E. Rogers, Esquire, a copy of which is attached hereto marked Exhibit "B". Said Notice purports to require the custodian of Records for HSH Management, Inc, to appear -..,..,., _._..,.,.. ...,_.'..,~..~___...........w,_..._...-:.............-_._-_._'-'-~--' ~ ; .~. ~.\'..;, +',.. ~".."':, on November 8, 1995 at 10:00 A.M. at Mette, Evans & Woodside to submit records to examination. c, Subpoena commanding the Records custodian of HSH Management, Inc" to appear ", . , before our Judges at Carlisle, at our county Court of Common Pleas, Orphans' Court Division , . on the 8th day of November 1995 at 10:00 A,M. . , and bring with you all of the documentation listed on the attached addendum." A copy of the Subpoena and the addendum are attached hereto marked Exhibit "C". 4. The letter, Notice and Subpoena identified as Exhibits "A", "B" and "c" respectively, appear to be issued on behalf of Dona Heishman, who purports to be a beneficiary under the Last Will and Testament of Truman L. Heishman, MOTION TO OUASH SUBPOENA 5, The records being sought are not within the scope of discovery as there is no pending action before this Court. (See: w\w O"ICe:. 5NELDAKER 8< BRENNEMAN Pa.R.C.P. 4003.1(a)) 6. The Subpoena attached hereto as Exhibit "c" should be quashed because there is no proceeding scheduled before this Court at the time and place set forth in the Subpoena. The information provided in the Subpoena conflicts with the information in the Notice of Deposition. 7. The Subpoena should be quashed for failure to serve it in accordance with applicable Rules of civil Procedure in that it was mailed without enclosing payment for witness fees and mileage expense as required by Pa.R.C,P. 234.2(c). -2- LAW o",cc. SNELDAKER a BRENNEMAN . j/ MOTION FOR A PROTECTIVE ORDER 8. The records being sought are not within the scope of discovery as there is no pending action before this Court, (See: jl , Pa.R.C.P. 4003.1(a)) 9. The records sought contain confidential commercial information, the release of which would be dstrimental to Movant. 10. A protective order is required to protect Movant from unreasonable annoyance, embarrassment, oppression, burden or expense which would result if the confidential commercial information is required to be submitted. WHEREFORE, Movant, HSH Management, Inc., respectfully requests your Honorable Court to: (a) order the "records deposition" be cancelled; (b) quash the Subpoena; (c) enter a protective order prohibiting the discovery sought or, in the alternative, to enter a protective order limiting the discovery sought in a designated way; and (d) enter an order staying all discovery pending resolution of the issues raised herein, Respectfully sUbmitted, p.e. By rd C. Snelbaker 44 West Main street Mechanicsburg, PA 17055-0318 Attorneys For Movant, HSH Management, Inc. Date: November (;. , 1995 -3- 1- ...- -"'~"'-$'~~"-'''''<--' " if:f;/, ',~ ':~ HOWW C. Mln' JANIS ." IVANS aOllA r NOOU. Cn"A.w. 'WAUY PlnaJWSUA u.oYD ... "RoW" Cl.AtC ^ nONI JANU ^ UUH DANW. L WlUVAN snVlN 0 SNTDO. aWlTOPtUA c. CONNu" n YSlI. aOClU AHOAI" H tJOWUt.IO MJtHAU. D kllD ~IIllTTIll. IllVANS a WOODHIDIll A rROP'MIIIOHAL (.'ORrORATION ATToRNBYS AT LAW 0"01 HORTIl "RONT HTRKICT 1'.0. BOX nODO IIAlUUSDURO. PA 17110.0130 "UI"tO lOlla r l WOOb.slOf. TWPHONI (1IIJ 232.&000 'A' 11171 illl.llue IkS NO ilJ.IVI,OO!t aotlU ,. ttAYNU III ,...ULA J ute"r CAfl.Y J HUM DAVID ^ nrz.ilMONl CUT,. UNIYINTANO MICJWLD ""A lAklN N COHWl1.l Y kOl1'N J IATZMA.. JAYSON a. WOUCM.-c ANDU" J OSTkOW'W lUZAIlT" ... CALCAGNO lMa. Y L HOffMAN iotA "tllW ^ COUNt... October 25, 1995 Records Custodian HSH Management, Inc. Route 641 P,O, Box 62 Plainfield, PA 17081 RE: Estate of Truman L, Heishman, Deceased No, 21-95-998 (Cumberland County, PA) TO WHOM IT MAY CONCERN: Our firm represents Dona Heishman, a beneficiary under the Last Will and Testament of Truman L. Heishman. According to our information, there are records in your possession concerning Ms. Heishman's interest in the estate. Access to these records is very important. Therefore, I have enclosed a Notice of Records Deposition with attached Subpoena for the purpose of obtaining this information. You will note that the Deposition will be held at Mette, Evans & Woodside rather than the Cumberland County Courthouse as stated in the subpoena. YOU CAN COMPLY WITH THE OBLIGATIONS OF THE NOTICE OF DEPOSITION AND SUBPOENA BY MAILING A COMPLETE AND LEGIBLE SINGLE-SIDED COpy OF ALL RECORDS LISTED ON THE ADDENDUM TO THE SUBPOENA TO OUR OFFICE TO THE DIRECT ATTENTION OF MS. CAYLE D. SWINDLER, BEFORE WEDNESDAY, NOVEMBER 8, 1995. THIS WOULD OBVIATE THE NECESSITY OF YOUR PERSONAL APPEARANCE OR THAT OF A DELEGATE AT THE DEPOSITION. EXHIBIT "A" ,- '~""'-'" --,.-...'..'..- , , Af~' i " i Records Custodian HSH Management, Inc, Oct.ober 25, 1995 Page 2 , I i/ ' ;, I i' .. -"'i Plesse note that in order to be complete, the attached Verification must be properly signed and notarized and returned to us. ICyou have any quesLions regarding your obllgaUons in complying with the NoLice, please Ceel free to contact me at your earliest convenience, 01 I I' I Very truly yours, (\ (, '. JI/\ Cai~ J,;/. ~.l),l-m~(YL Cayle D, Swindler, Legal Assistant to Elyse E, Rogers, Esquire Icds Enclosure ."11' 1 EXHIBIT "A" I I. AFFIDA VIr " Personally appeared before me a Notary Public In and for said Commonwealth and County, the Custodian of Records for HSH Management, Inc" who being duly sworn according to law, deposes and says that the following facts are true and correct based upon his best knowledge, Informallon and belief: . (a) That the undersigned Is a business, profession, occupallon, calling or operation of Instltullon; (b) That the foregoing documents are true and correct copies of the documents in my possession: (c) That based upon my knowledge of the practices of fecord keeping of the foregoing business, the foregoing documents, and the record of any act, condition or event contained therein; (1) would have been made in the regular course of said business; (2) the Informallon with respect to said act, condition or event would have been transmitted by a person having knowledge thereof; and (3) said act, event, or condition would have been entered at the direction of or by a person having personal knowledge thereof. .' . 'c. Custodian of Record for HSH Management, Inc. Sworn to and subscribed before me this day of ,1995 Notary Public My commission expires: EXHI8I'l' "A" IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION . : NO, 21-B4-99B NOTICE OF RECORDS DEPOSITION PLEASE TAKE NOTICE that pursuant to the Pennsylvania Rulas of Civil Plocedure, Dona Heishman, a beneficiary under the Last Will and Testament of Truman L. Heishman, will take the records deposition of the Custodian of Records for HSH Management, Inc" Route 641, P.O. Box 62, Plainfield, PA 17061, for the purposes of discovery, before a pelson authorized to render an oath on all mailers not privileged, which are relevant and material to the Issues and subject mailer Involved In the above-captioned maller, and that the named Individual is required to appear on November B, 1995 at 10:00 a.m. at Melle, Evans & Woodside, 3401 North Front Street, Harrisburg, Pennsylvania and submit records to examination. NO ACTUAL TESTIMONY WILL BE TAKEN AT THE TIME AND DATE STATED HEREIN, Documents required to bs produced are as follows: 1. Financial statements, including year-end balance sheets, Income statements. statements of cash flows and any other statements prepared for In-house use or use by the accountants of HSH Management, Inc. for the years 1990- 1994; 2. All federal tax returns filed on behalf of HSH Management, Inc. for the years 1990-1994; 3. Signed and dated copy of the HSH Management, Inc. Partnership Agleement; 4. Signed and dated copy of the Management Agreement betwsen HSH Management, Inc, and Allen Distribution; EXHIBIT "B" "..'..-.. -..-...,..--.... 5. DATE: "",_.,"c.'e --:'--:;'~.~'l~~~----il1i:.~t_'l~~~ ~"ll'L,.,,>,1 I~ i "', Copies of eny canceled checks, W-2's or any other Indications of payments or compensation mede to any member of the Heishman family or the Shellhamer family. "Family" shall Include Gary C. Heishman and Karolyn H, Sheilhamer, and their respective spouses, children, brothers, sisters, parents and cousins; ! /. . . 6. Copies of any agreements or contracts between HSH Management, Inc. and members of the Heishman family or Shellhamer family (as defined In 5 above). I ,I ! You are Invited to attend and examine the records as you deem fit. METTE. EVANS & WOODSIDE By: Elyse E. ogers, Esqulr Sup.C .0.#41274 3401 North Front Straet P,O, Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Dona Heishman Oc~~ CJ-j ;97) , EXHIBIT liB" CERTIFICATE OF SERVICE I hereby certify that I am this day serving a copy of the foregoing document upon the person(s) and In the manner indicated below, which service sallsfies the requlrements.of the Pennsylvania Rulas of Civil Procedure, by deposlllng a copy of same In the United States Mall, Harrisburg, Pennsylvania, Certified Mall, Return Receipt Requested, postage prepaid, as follows: HSH Management, Inc. Route 641 P.O. Box 62 Plainfield, PA 17081 Ivo Otto, III, Esquire Martson, Deardorff, Williams & Olto 10 Eest High Street Carlisle, PA 17013 METTE, EVANS & WOODSIDE By: Q(lh=:\~' ~~~ Cayl D. Swindler, Paralegal to Elyse E. Rogers, Esquire Sup. Cl. 1.0, #41274 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Dona Heishman DATE: I()I;,}S'I~ EXHIBIT "B" .1;" .. "~ " .' SUBPOENA IN TilE COURT OF COMMON PLEAS Cumberland County, SS: No, 21-84-998 ORPIIANS' COURT DIVISION IN REI ESTATE OF TRIJ}IAN I.. IIEISIIMAN, DECEASED 1ro: Records Custodian HSII Management, Inc, Route 641 p, 0, Box 62 Plainfield PA 17081 GREETING: We command you and each of you, that, setting aside all manner of business and excuses, you be and appear in your proper person before our Judges at Carlisle, at our County Court of Common Pleas, Orphans' Court Division, there to be held in the County of Cumberland, on the 8th day of November 19~ at ~:OO A,M. [prevailing time] of that day, to testify all and singular those things which you shall know in a certain information for Dona lIeishman, __ a beneficiary under the last Will and Testament of Truman L. Heishman, and bring with you all of thc documentation listed on the attached addcndum, Failure to appear may result in the initiation of contempt of court proceedings against you and/or issuance of a bench warrant to secure your presence. WI1rNESS the Honorable Harold E. Sheely, President Judge, at Carlisle, the 25th day of Octobcr A.D. ONE 1rHOUSAND NINE HUNDRED and NINETY-FIVE -2n~R'J{~O~-WRPH'M?t&~- EXIIIBIT "C" L IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION , : NO. 21-84-998 ADDENDUM TO SUBPOENA Documents required to be produced are as followli: 1, Financial statements, Including year-end balance sheets, Income statements, statements of cash flows and any other statements prepared for In-house use or use by the accountants of HSH Management, Inc. for the years 1990- 1994; 2. All federal tax returns filed on behalf of HSH Management, Inc. for the years 1990-1994; 3. Signed and dated copy of the HSH Management, Inc. Partnership Agreement; 4, Signed and dated copy of the Management Agreement between HSH Management, Inc. and Allen Dlstrlbullon; 5, Copies of any canceled checks, W-2's or any other Indlcallons of payments or compensallon made to any member of the Heishman family or the Shellhamer family. "Family" shall Include Gary C. Heishman and Karolyn H, Shellhamer, and their respective spouses, children, brothers, sisters, parents and cousins; 6. Copies of any agreements or contracts between HSH Management, Inc. and members of the Heishman family or Shellhamer family (as defined in 5 above). 47684 I EXHIBIT "e" I I I , I ~ . r~-'-w'r:-"--' " ',i ~", \ ,.., ' VERIFICATION I, Gary c. Heishman, state that I am the President of HSH Management, Inc., the Movant herein, that I am authorized to sign this verificaticn, and that the facts set forth in the foregoing Motion are true based upon my personal knowledge or information and belief. I understand that any statements are made subject to 18 Pa. C.S. Section 4904 providing for criminal penalties for unsworn falsification to authorities. A He shman Management, Inc. Date: November o , 1995 LAW O"ICK. SNELUAKEA III BRENNEMAN 1: ~ ',....,,.,......,';"7' ""-:~'~,',!,1~:,:-~,1,,~-";:--""'~ '\~~~,;~.~{;;~~~~/~f_~~,';"'\< _ -,-.- ~,1y"S~','-<.- ""IW.l,~:"" ::,..;',.1 " LAW O"ICU SNILDAKER 8< BRENNEMAN CERTIFICATE OF SERVICE I hereby certify that I am this date serving a true and correct copy of the within Motion of HSH Management, Ino. to Quash Subpoena and for Protective Order upon the following persons by sending the same by first-01ass mail postage paid addressed as follows: Elyse E. Rogers, Esquire Mette, Evans & Woodside 3401 North Front Street Harrisburg, PA 17110 Ivo otto, III, Esquire Martson, Deardorff, Williams & otto 10 East High Street carlisle, PA 17013 chard C. Snelbaker SNELBAKER & BRENNEMAN, P.C. Attorneys for Movant HSH Management, Inc. Dated: November ~ , 1995 t' " I l II. _;'~~.~~;" .::;I;>.l ;' IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-94-998 IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased BRIEF IN SUPPORT OF MOTION OF ALLEN DISTRIBUTION TO OUASH SUBPOENA AND FOR PROTECTIVE ORDER I. PROCEDURAL AND FACTUAL BACKGROUND. This Brief is filed pursuant to Order of Court dated November 6, 1995 in the above captioned matter. Truman L. Heishman ("Decedent") died on November 13, 1994, A Will dated September 22, 1989 was admitted to probate by the Register of wills of Cumberland County on or about November 25, 1994 and letters testamentary were granted to the executor, Farmers Trust company, that same date. LAW O"ICE8 SNELDAKER It BRENNEMAN According to the docket in this matter, on or about May 5, 1995, Decedent's widow, Dona M, Heishman, filed a Petition To Extend Time For Filing An Election Against The will of Truman L, Heishman ("Petition"). As a result of the filing of the Petition, the following Order was entered by this Court: AND NOW, this 4th day of May, 1995, it is hereby ordered that a citation be issued to Farmers Trust Company, Randy L. Heishman, Linda J. cheskey (Sharar), Terry L, Tidd, and Michael Heishman to show cause, if any they have, why this Court should not extend the period of time in which Petitioner may file an election against the will of Decedent until sixty (60) days after Petitioner has been provided an accurate inventory of Decedent's estate, the value of all assets comprising the estate, and such other information with respect to the value of the assets comprising the estate of Truman L. Heishman as Petitioner may reasonably request in order to verify those values. As of the preparation of this Brief, the Docket in this matter shows that no responses were filed to the citation and that the citation has not been made absolute. Allen Distribution ("Movant") was never served with a copy of the Petition or the resulting citation. Movant was not made aware of the Petition or citation by any of the parties. Movant only became aware of the Petition and citation on or about November 1, 1995 when its counsel found same upon inspection of the docket in this matter. Movant is a Pennsylvania limited partnership with ita principal place of business located at 670 Allen Road, Carlisle, Pennsylvania. Movant is not a party to this matter and is seeking to quash a subpoena and to obtain a protective order. On or about October 26, 1995, Movant received the following items via mail: a. Letter of October 25, 1995 from cayle D. Swindler, Legal Assietant to Elyse E. Rogers, Esquire a copy of which is attached to Movant's Motion as Exhibit nA"i b. Document entitled "Notice of Records LAW o",cn 6NELDAKER 8< BRENNEMAN Deposition" dated October 25, 1995 from Mette, Evans & Woodside signed by Elyse E, Rogers, Esquire, a copy of which is attached to Movant's Motion as Exhibit "B", -2- said Notice purports to require the Custodian of Records for Allen Distribution to appear on November 8, 1995 at 10:00 A.M, at the offices of Mette, Evans & Woodside to submit records to examination; and c. Subpoena commanding the Records Custodian of Allen Distribution to appear " . . before our Judges at Carlisle, at our County Court of Common Pleas, Orphans' Court Division . , . on the 8th day of November, 1995 at 10:00 A.M. . . and bring with you all of the documentation listed on the attached addendum." A copy of the Subpoena and the addendum are attached to Movant's Motion as Exhibit "c", he above referenced letter, Notice and Subpoena appear to be ssued on behalf of Dona Heishman. LAW o,,,,cu SNELDAtcER III BRENNEMAN -3- II. QUESTIONS PRESENTED. A. Whether the records being sought are outside the scope of discovery pursuant to Pa.R.C.P. 4003.1(a) because there is no pending action before this Court? (Suggested Answer: Yes) B. Whether a widow considering an election against a will should be permitted to go on a discovery "fishing expedition" prior to being provided with an inventory and appraisal by the exeoutor? (Suggested Answer: No) C. Whether a protective order should be granted to bar release of the confidential information being sought? (Suggested Answer: Yes) LAW OP'le!_ SNELDAKEA 81 BRENNEMAN -4- LAW O"ICE8 6NELDAKCR a BRENNEMAN '" '~' " III, ARGUMENT. , / , , A. THE RECORDS SOUGHT ARE OUTSIDE THE SCOPE OF DISCOVERY AS THERE IS NO PENDING ACTION IN THIS MATTER. Pa,R.C.P, 4003.1 describes the scope of allowable discovery "involved in the pending action," In the case mm 1udice, there is no pending action. The only question raised by Respondent's (Dona Heishman's) Petition was whether she should bs given an extension of time in which to file an election against the Will f Decedent. Except for issuance of the citation, no action has ccurred and no orders of court have been docketed. There is no ction pending before this Court. The only "relief" accomplished by Respondent's petition was issuance of a citation for certain individuals and the executor o show cause why the Court should not extend the time period for ona Heishman to file an election against the will of Decedent. here is no trial pending nor are any hearings scheduled or nticipated. None of the discovery being Bought is relevant to he only issue before the Court which is whether or not an xtension of time should be granted for a possible election gainst the will. B. A SPOUSE CONSIDERING AN ELECTION AGAINST A WILL SHOULD NOT BE PERMITTED TO GO ON A DISCOVERY "FISHING EXPEDITION" PRIOR TO THE EXECUTOR'S INVENTORY. It is perfectly reasonable for Respondent to be provided -5- LAW a"leu SNELDAKER 1II BRENNEMAN with an inventory of Decedent's assets and their value by the executor, For years, the courte of this Commonwealth have recognized the duty of an executor to provide information to a Decedent's spouse for purposes of election against a will. Me1izet's Anneal, 17 Pa, 449 (1851). However, the duty of an executor to provide information does not extend to persons not parties to the proceedings. In Respondent's Petition, she avers that the executor, Farmers Trust Company has retained an appraiser to value Decedent's interest in HSH Management, Inc, and Allen Distribution. She also avers that she requested copies of financial statements and other documents for the years 1990 through 1994 for those entities, but that no information has been provided. If Respondent has an objection to a lack of cooperation from the executor, then her remedy is to seek to compel the executor to provide same, not to seek the same information directly from third parties when there are no pending issues before the Orphans' Court. An executor has a statutory duty to file a verified inventory within a certain time frame, 20 Pa. C.S. S 3301. An inventory is the established and proper method for informing the Court and the interested parties as to the extent of the Decedent's estate. Such an inventory must include a fair valuation of each item in the inventory, 20 Pa. C.S. S 3302. these statutory provisions ensure that interested parties are supplied with necessary information as to the extent and value of -6- , ! ,I ('1 a decedent's estate. Granting Respondent's discovery request at this time would set a dangerous precedent that would open the floodgates for any potential beneficiary to use the Orphans' Court discovery mechanisms to attempt to gather information relating to the identity and value of a decedent's assets. Such discovery is unnecessary and duplicative of the efforts of executors who are charged with a fiduciary duty to collect and provide such information to the Court and to beneficiaries. The orderly progression of probate proceedings would be greatly disturbed by such discovery "fishing expeditions" if discovery were permitted where there is no pending action before the Court. After an inventory and appraisal is filed, a beneficiary has the right to object to same and to obtain necessary information to litigate his or her objections. However, it is wrong to permit discovery prematurely where there is no pending action such as objections to an executor's inventory or account. C. A PROTECTIVE ORDER SHOULD BE GRANTED TO BAR RELEASE OF THE CONFIDENTIAL INFORMATION BEING SOUGHT The records sought by Respondent are contain confidential commercial information which must not be disclosed. The LAW O"ICES SNELDAKER 8< BRENNEMAN dissemination of the requested information would be detrimental to Movant in that proprietary information regarding its internal operations would be exposed to review. Movant is involved in a competitive business environment where disclosure of such financial data could have an adverse effect on its ability to -7- ~, . . LAW O"ICK_ SNELDAKER 80 BRENNEMAN compete. pursuant to Pa.R.C.P. 4012(a), Movant respectfully requests this Honorable Court to exercise its discretion by issuing a protective order to deny access to the confidential records being sought. Movant's request for a protective order should be considered in light of the fact that Respondent will be provided with an inventory and valuation by the executor as discussed in the previous section of this Brief. IV. CONCLUSION For all of the reasons set forth hereinabove, Movant's Motion to Quash subpoena and For Protective Order should be granted. Respectfully submitted, SNELBAKER & BRENNEMAN, P.C. ('11~~ By: ""(1 .'MA/ Richa tl C. Snelbaker, Esquire Philip H. Spare, Esquire 44 w. Main street Mechanicsburg, PA 17055 (717) 697-8528 Date: January 8, 1996 -8- 11','-1 , . CERTIFICATE OF SERVICE I, PHILIP H. SPARE, ESQUIRE, hereby certify that I have, n the below date, caused a true and correct copy of the foregoing Brief to be served upon the person and in the manner indicated belowt FIRST CLASS MAIL. POSTAGE PREPAID, ADDRESSED AS FOLLOWS: Elyse E. Rogers, Esquire Mette, Evans & Woodside 3401 North Front street Harrisburg, PA 17110 ~~~~ Esquire SNELBAKER & BRENNEMAN, P. C. 44 West Main Street P. O. Box 318 Mechanicsburg, PA 17055 (717) 697-8528 Attorneys for Movant, Allen Distribution ate: January /0, 1996 LAW O"ICr:. SNItLDAI(ER III BRENNEMAN '~ "",-,~-,,,,,,~''''''''--... "....... I ... "' . " .;,..... .. '..' , " ':'" . ".t1 : ...,~', " ' "".Jr.. , , ...\. t ~, I . .t;ji ,rfo "''1 :'. .'" t,. " -'. ..,,' w ., > I ; '" . r .~ .1 .,. ' . ",f ..~ .. ... . . ':1 " " .,.' .-\ , ,j I r' " , ., ... I, " r . .' , -..,- '..... .~... ..-- .... ~_..- "--' . "-'" ....... ..-:- _A I r.. - . \ 1'-"'''-''-' ...,-- , .----, -::::;,00 . :1 ' : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-94-998 BRIEF I~,~l!:!'_C?.!t.:!' OF MOTION OF ALLEN DISTRIBUTION TQ gYM!:! !2~OENA AND FOR PROTECTIVE ORDER IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased I. PROCEDURAL AND FACTUAL BACKGROUND This Brief Is filed pursuant to an Order of CourL doted November 6, 1995, In Lhe above-capLloned maLter. Truman L. Heishman ("DecedenL") died on November 13, 1994. At the Lime of Decedent's death, he was a shareholder and/or limited portner In three closely held entities, all of which are under the control and direction of Decedent's brother, Gary C. Heishman ("Heishman"). The entlLles are as follows: 1. GET. Inc. - GET, Inc. Is a closely held Pennsylvania business corporation which was wholly owned by Decedent, Heishman, and Decedent's brother-in-law, Edward B. Shellehamer ("Shellehamer"). Decedent owned a one-third interest In this corporation, which interest was subject to a buy-sell al;Tooment between Decedent, Heishman and Shellehamer, The GET, Inc. buy-sell agreement provided that Decedent was to receive $500,000 In exchange for his Interest in GET, Inc. 2, HSH Manal!ement. Inc. . HSH Management, Inc, Is a closely held Pennsylvania business corporation owned In equal shares by Decedent, Heishman and Shellehamer. There is no buy-sell agreement In existence for HSH Management, Inc. After Decedent's death, Heishman and Shellehamer, through their counsel, Richard Snelbaker, suggested that the estute convey Decedent's Interest In HSH Management, Inc. to them for no consideration. The executor of Decedent's estate declined so to do. The appraisal obtained by the executor of Decedent's estate valued Decedent's interest In HSH Management, Inc. at $137,229. 3. Allen Distribution. Allen Distribution Is a Pennsylvania limited partnership, the general partner of which Is HSH Management, Inc. Decedent owned a 14.85% limited partnership Interest. {~j1i?:~ft!${iFj~~;~~~:'~.':'-:~'~~:'.E~' .'- '"~1:~3: Decedent's Will, dated September 22, 1989, was admitted to probato by the Register of Wllls of Cumberland County on or about November 25, 1994. Letters Testamentary were granted to Farmers Trust Company as Executor, Decedent's widow, Dona M. Heishman, ("Widow") hns been unnblo to locate a signed copy of Articles of Limited Partnership for Allen Distribution. Unsigned Articles which she has located provide that a limited partner mny withdraw from Allen Distribution, but only oller eight (8) years from the dato of the limited partnership agreement. Widow does not know the dnte or the limited partnership agreement. The appraisal obtained by the executor of Decedent's estate values Decedent's Int.crest In Allen Distribution at $1,804,275. Decedent's Wlll provides, In pertinent part, as follows: a. Widow is to have the use of various items oftangible personal property which Decedent ncquired prior to his marriage to Widow. On Widow's death, these items are to pass to Randy L. Heishmnn, the child of Decedent and Widow. b. Widow Is to receive the following benefits with respect to the residue of Decedent's estnt.c: i. Net income, not less than quarter-annually, for and during the balance of her lifetime. ii. Such amounts of the principal or corpus. .. as may bs necessary and proper for the comfort.able support, caro and maintenance of [Widow) in accordance with our standard of living prior to my death. 111. On the death of Widow, the assets pass in unequal shares to Decedent's children and step-children. Decedent and Widow were married on July 15, 1963. On May 2, 1995, Widow filed a Petition to Extend Time for Filing an Election Against the Will of Truman L. Heishman. Notice of the filing of the Petition to Extend Time was given to those persons interested in Decedent's estat.c, namely Farmers Trust Company, executor of Decedent's estate, Linda J. Cheskey and Terry L, Tidd, Decedent's - 2- '. -. ;'.-'';u::!li+,: >:'~. T. _ " ~ ..''"- .'''.t''r- step.daughters, and Michael L. Heishman and Randy L. Heishman, Decedent's sons. In this Petition, Decedent's Widow alleged, ill/er alia, in the following paragraphs: 11. Petitioner has been unable te obtain accurate information about the nature, extent and value of Decedent's property. Petitioner is unable te determine whether nn election against the Wil1 of Decedent would be beneficial without specific Information regarding Decedent's assets and the value of Decedent's assets. 12. Decedent was a limited partner in Allen Distribution, a Pennsylvania limited partnership, Petitioner avers and therefore believes that Farmers Trust has retained an appraiser to appraise this interest. However, Petitioner has no information about the value of Decedent's interest in this limited partnership. Petitioner, through counsel, has requested copies of financial statements and/or tax returns for this limited partnership for years 1990 through 1994, but no information has been provided to Petitioner or her a\lorney, 13. Decedent was a one-third owner ofHSH Mansgement, Inc., the general partner of Allen Distribution, Petitioner avers and therefore believes that Farmers Trust has retained an apprsiser to appraise this interest. However, Petitioner has no information about the value of Decedent's interest in this corporation, Petitioner, through counsel, has requested copies of financial statements and/or tax returns for this corporation for years 1990 through 1994, but no information has been provided to Petitioner or her a\lomey. On or about May 5, 1995, the Clerk of the Orphans' Court issued a citation pursuant te Decedent's Widow's Petition, which was served on all interested parties. No person interested in Decedent's estate objected te the extension of time. This Honorable Court has apparently never entered an Order granting or denying Decedent's Widow's request for an extension. Subsequent to the filing of Widow's Petition, Fanners Trust Company, as executor of Decedent's estate, did provide Decedent's Widow with appraisals for Allen Distribution and HSH Management, Inc. prepared by Boles, Grove and Metzger, P. C. However, the executor of Decedent's estate has declined to provide any other informstion regarding the value of these assets, and has advised Widow's attorney that they have declined to do so specifically at the request of Richard Snelbaker, attorney for HSH Management, Inc., Allen Distribution, Gary C, Heishman and Edward Shellehamer. - 3. It should be noted thnt Richard Snelbaker and his wife are also limited partners in Allen Distribution, On or about October 25, 1995, Decedent's Widow requested the following information with rcspect to Allen Distribution via a subpoena: 1, Financial statements, including year-end balance sheets, income statements, statements of cash flows and any other statcments prepared for in-house use or use by the accountants of Allen Distribution for the years 1990-1994; 2. All federal tax returns filed on behalf of Allen Distribution for the years 1990-1994; 3. Signed and dated copy of the Allen Distribution Partnership Agreement; 4. Signed and dated copy of the Managemcnt Agreement between HSH Mnnagement, Inc. and Allen Distribution; 5. Copies of any canceled checks, W.2's or any other indications of payments or compensation made to any member of the Heishman family or the Shellehamer family, "Family" shall include Gary C. Heishman and Karolyn H, Shellehamer, and their respective spouses, children, brothers, sisters, parents and cousins; 6. Copies of any agreements or contracta between Allen Distribution and members of the Heishman family or Shellehamer family (as defined in 5 above). Decedent's Widow requested this information in order to evaluate more fully and completely the appraisal which the executor of Decedent's estate obtained, and to aid her in her determination as to whether an election against Decedent's Will is in her best interest. On November 6, 1995, this Court entered an Order, upon the motion of Allen Distribution to quash subpoena and for protectivc order. II. QUESTIONS PRESENTED A. Whether an "action" is pending in the Orphans' Court when a decedent's will has been probated, letters testamentary have been granted, and the decedent's widow has filed a petition for an extension of time to make an election against the decedent's will? - 4- (Suggested Answer: Yes) B. Whether the surviving spouse of a decedent is eatitled to reasonable Infonnation with respect to the nature and extent of decedent's assets, pnrticularly when those assets consist of closely held business Interests for which there Is no trading market? (Suggested Answer: Yes) C, Whether Information with respect to closely held business interests held by a decedent's estate are .confidential" and should be denied to the surviving spouse of the decedent, handicapping her ability to evaluate whether an election against decedent's wlll is in her best Interest? (Suggested Answer: No) III. ARGUMENT A. Whether an "action" is pending in the Orphans' Court when a decedent's will has been probated, Letters Testamentary have been granted, and the decedent's widow has filed a petition for an extension of time to make an election against the decedent's wll1? Counsel for Allen Distribution contends, among other things, that there is no "pending action" before this Honorable Court. Pa.R.C.P. 4003.1 provides, in part, as follows: A party may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter of the pending action. ., absent a pending action, discovery cannot be had. Decedent's Will was probated with the Register of Wills of Cumberland County, Pennsylvania. The Docket Entry for Decedent's estate specifical1y refers to the Orphans' Court Division of the Common Pleas ofCumberlllnd County, Pennsylvania--it is No. 21- 94-998. In addition, 20 Pa. C.S.A. fi 711(1) specifical1y provides that the jurisdiction of the Court of Common Pleas over the administrntion and distribution of real and personal property of Decedent's estate and the control of the Decedent's burial is in the Orphans' Court Division. The probate of Decedent's Will alone creates an action in the Court of Common Pleas, Orphans' Court Division. .5- In nddltlon, Decedent's Widow filed n petition for nn extension of time to elect whether to tnke ngnlnst Decedent's Will. Pa.R.C.P. 1007 provides genernlly thnt nctlons mny be commenced by filing with the Prothonotnry n prneclpe for n writ of summons, n complaint, or nn ngreement for an amicable action. Actions generally ore not commenced by petition. The exceptions ore where authorized by statute, or os auxilinry to or for facilitation of jurisdiction already hod, or to correct the court's own records. III re Correctioll of O/Ticial Records with Civil Action, 44 Po. Cmwlth. 511,503, 404 A.2d 741, 742 (1979), In the present case, Widow's petition for an extension of time to elect against Decedent's Will was filed pursunnt to 20 Pa. C.B.A. ~ 761, which specifically provides: All applications to the Orphans' Court Division shall be by petition in the form prescribed by general rules and . . , . A petition is the first step in a proceeding in the Orphans' Court Division of the Court of Common Plens. Canglofl's Estate, 42 Pa. D&C 666, 672 (1941). The petition in Orphnns' Court procedure Is roughly equivnlent to n complaint In courts of general jurisdiction. Id. nt 671. In addition, It is the Orphans' Court Division which is specifically vested with jurisdiction to determine all matters concerning the spouse's election, Including the Intereats and liabilities of the speuse . , . . with respect to all property. . . subject to the election. 20 Pa. C.S.A. ~ 2211(0). An argument that there is no "pending action" before this Court simply has no merit. Decedent's Will has been probated, jurisdiction has been vested In this Court, and Decedent's Widow has filed a petition with this Honorable Court in connection with Decedent's estate. An action Is most certainly pending. B, Whether the surviving spouse of a decedent Is entitled to reasonable Information with respect to the nature and extent of decedent's assets, particularly when those assets consist of closely held business Interests for which there Is no trading market? A surviving spouse is entitled to a full opportunity to know the decedent's financial situation before the spouse determines whether to elect under a will. Daub's Estate, 305 Pa. 446, 453, 157 A.908, 910 (1931). - 6 - ., ',~ ' - ~ '~I.'~;'J' Chapter 22 of the Pennsylvania Probate, Estates and Fiduciaries Code sets forth the rights of the surviving spouso to an elective share of his or her deceased spouse's eslate. Pennsylvnnia law has zenlously guarded the rights of spouses, pnrticularly to ensure fair treatment of a surviving spouse in the event of the other spouse's death. In Daub's Estate, supra, the court ruled against a surviving spouse who foiled to make an election within the statutory period permitted by law. However, the court slated, "A widow is entitled to full information regarding her husband's estate before (making) her election." [d. Decedent's interest in Allen Distribution is obviously part of his estate. Although the executor of Decedent's estate has obtained an appraisal, this appraisal csnnot be evaluated without more complete finnncial information regarding Allen Distribution. Widow's rights to information becomes particularly compelling when the asset subject to the elective share is a closely held business interest. Should Decedent's Widow elect against his will, she would become a limited partner in Allen Distribution. As such, she would hove full right to all of the information which she has requested via her subpoena. See e.g, 15 Pa. C.S.A. ~ 8525 (limited partners have the right to obtain from general partners true and full information regarding the state of the business and financial condition of the limited partnership, copies of federal, state and local income tax returns, and other information regarding the affairs of the limited partnership as is just and reasonable.); 15 Pa. C.S.A. G 8335 (any partner shall have the right to a formal account as to the partnership affairs. . . ). Allen Distribution argues that it is the executor, not other interested parties, who hOB a duty to provide infonnation in pending actions. This flies in the face of Pa. R.C.P. 4003 which provides, "A party may obtain discovery regarding any matter. . . which is relevant to the subject matter involved in the pending action." There is no limilation on obtaining discovery only from parties to the pending nction. To limit a surviving spouse's nccess only to information available threugh the personal representative of the Decedent's estate would set an extremely dangerous precedent. With respect to assets for which there is no ready market and for which there is no easily verified value, full information should be provided. An executor seeking to establish the fair market value of a decedent's assets, such as a closely held business Interest, will tend to err on the conservative side. Reasonable persons can differ widely with respect to the value of closely held business interests. Without access to full financial information, Decedent's Widow is unable to evaluate the appraisal. She is also .7. i i . unable to detennine whether she wishes to become 0 limited portner of AlIcn Distribution. A surviving spouse's right of clection is not limited to assets solely In the possession or control of tho personol representotive of the decedent's estate. The right to elect can extend to property not within the jurisdiction, or even concern, of the personal representative of the decedent's estate. Sce 20 Pa. C.S.A. ~ 2203(a) which includes, inter alia, as classes of preperty against which a surviving s(lOuse has 0 right to elect, property which the decedent conveyed during his lifetime to others. To argue that a decedent's spouse has right to obtain infonnation regarding the decedent's assets only from the personal represcntatlve of the decedent's estate is analogous to arguing that discovery in civil matters can only be obtained from the opposing parties, and not from third pnrties. This is clearly not the law in Pennsylvania. C, Whether Information with respect to closely held business Interests held by a decedent's estate arc "confidential" and should be denied to the surviving spouse of the decedent, handicapping her ability to evaluate whether an election against decedent's willis In her best Interest? Allen Distribution alleges that the records sought contain "confidential commercial infonnation which must not be disclosed." Without providing any specifics, Allen Distribution broadly claims that the requested information is "proprietary". An examination of the particulars requested in the subpoena show that any shareholder of any corporation, and any partner ef any partnership, would have the right to the same type of information. To claim a privilege in discovery means that privilege must be recognized under existing rules of evidence. In re: Greco Appeal, 20 Pa. D&C 3.d 661, 662 (1984). The court will not create a privilege in discovery. Firschein v. Lafayette College, 7 Pa. D&C 3.d 243, 247 (1978). The burden of demonstrating the privilege is on the person claiming the privilege. Chrysler v. Zigray, 7 Pa. D & C 4th, 408, 410 (1990). Protective orders should rarely be used. Id. In In re: Greco, business owners objected to the discovery of certain documents in a tax assessment and sought a protective order. The county had requested production of all books, records, income tax returns, checks and receipts for the business operated on the property. The court stated that the enly documents which could be privileged were the tax returns. Id. at 662. However, the court ecknowledged that under Pennsylvania law, federal income tax returns are not privileged. Id. citing Kine v. Foreman, 205 Pa. Super. 305, 209 A.2d 1 (1965). The court held that the documents were not privileged and were relevant in arriving at a value for asscssment purposes. Id. - 8 - ~~.'" ~ '~~~~,"M;.:<u;t...-4~..,_"~" Allen Distribution has not clnimed any privilege recognized by Pennsylvania law, such as the attorney-client privilege, the doctor-patient privilege, or governmentnl immunity, Allen Distribution only refers generally to some confidential commercial information. Just as the documents sought in In re: Greco were relevant and necessary for determining a value for assessment purposes, the documents sought by Decedent's Widow are nccessary to evaluate and determine the value of Deccdent's Intorest In Allen Distribution. In Chrysler. supra, the court denied that defendant's motion for a protective order for documents which contained "trade sccrets." 70 D&C 4th at 415. In addition to holding that the documents were not confidential or privileged, the court held that the production of these documents would not cause any unreasonable annoyance, embarrassment, oppression or expense. Id. at 411. The court so ruled because In Its motion for a protectivo order, the defendants did not set forth specific and concreto factual allegations that tonded to show either the confidentiality of the documents or how the defendants would be harmed. Id. "Litigants must reconcile themselves to the fact that under the rules, every inquiry carries with it some degree of annoyance. , . ." Id. In the current case, Allen Distribution has only quoted the language set forth in Pa. R.C.P. 4011, which limits the scope of discovery. Allen Distribution has failed to support its allegations with any specific Information. IV. CONCLUSION For all of the reasons set forth in this Brief, the motion of Allen Distribution to quash the subpoena and for protective order should be denied. Respectfully submitted, METI'~I.EVANS & WOODSIDE ., (,,,~ ( ( ~ ..Y (" " ( ( \..",- \ Elyse E.\J.Wgers, Esquire', ", 3401 North Front Street .--, Harrisburg, PA 17110-0950 (717) 232-5000 J.D. # 41274 Attorneys for Donn M. Heishman Dato: ~/.JW.CJ /[, ,1996 , _ ':_: :,1,.--...,..... ~ __. --- - . CERTIFICATE OF SERVICE I certify that I am this day serving a true and correct copy of tho foregoing Brief upon the person and In the manner Indicated below: VIA FACSIMILE AND FIRST CLASS MAIL, POSTAGE PREPAID, ADDRESSED AS FOLLOWS: Richard C, Snelbaker, Esquire Phl1lp H, Spare, Esquire Snelbaker & Brenneman, P,C. 44 West Main Street Mechanlcsburg, PA 17055 , DatAl: \ -;;;: "CJ 10 ,1996 64380 I I I ! IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased : IN TIlE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-94-998 I I i , i i: . f l , ~ ~j ~, ~~ I" , ~! .. r~ (~ ~~ (': I..;l 1'1 .Ii '1 I (:~ .~ ~ Wi ~.~ ,~ t' ,~ ") .L [:I t<~, r~ L). !': ,,'i I ~" ,. " !. BRIE~ If: SUPPORT OF MOTION OF HSH MANAGEMENT. INC. T UASH SUBPOENA AND FOR PROTECTIVE ORDER I. PROCEDURAL AND FACTUAL BACKGROUND This Brief Is filed pursuant to an Order of Court dat.cd November 6, 1995, In the abovll-CapUoned matter. Truman L. Heishman ("Decedent") died on November 13, 1994. At the time of Decedent's death, he was a shareholder and/or limited partner in three closely held entities, all of which are under the control and direction of Decedent's brother, Gary C, Heishman ("Heishman"). The entities are as follows: 1. GET. Inc. . GET, Inc, is a closely held Pennsylvania business corporation which was wholly owned by Decedent, Heishman, and Decedent's brother-In-law, Edward B. Shellehamer ("Shellehamer"), Decedent owned a one-third interest in this corporation, which interest was subject to a buy-sell agreement between Decedent, Heishman and Shellehamer. The GET, Inc, buy-sell agreement provided that Decedent was to receive $500,000 In cxehange for his interest in GET, Inc. 2, HSH Mannl!ement. Inc. - HSH Management, Inc. is a closely held Pennsylvania business corpomtion owned in equal shares by Decedent, Heishman and Shellshamer. There is no buy-sell agreement in existence for HSH Management, Inc. After Decedent's death, Heishman and Shellehamer, through their counsel, Richard Snelbnker, suggest.cd that the est.nte convey Decedent's interest in HSH Management, Inc. to them for no consideration. The executor of Decedent's estate declined so to do. The appraisal obtained by the executor of Decedent's estate valued Decedent's interest in HSH Management, Inc. at $137,229. 3, Allen Distribution. Allen Distribution is n Pennsylvania limited partnership, the general pnrtner of which is IISH Management, Inc. Decedent owned a 14.85% limited partnership Interest. ;' . ~,'jil ,\ ~~ . ~'l Y:~ ~.. - . "t ., i;ji .."C.'{;' r ,/;:i , .--.'... J . . , ., ,J I .~.... fl 'I \ . H' " ..io , ' , I I I ':hi of\' , f , ..:1 ~" I ~.. . ;)> " ., . '.. r, ; .. 'I" f .., .... .' . . ... ", , , ,- .;' ,.~ ., , ,j t' '. f< \ ., t . " I ~' . .-.~ .'-...- I --- ",--- ...' -~. -~ c.. _ 17\ ~~_. 1 I . - , .'.1' ..---' \. Decedent's widow, Dona M. Heishman, ("Widow") hns been unable to locato a signed copy of Articles of Limited Partnership for A1lon Distribution. Unsigned Articles which she has located provide that a limited partner may withdraw from Allen Distribution, but only aft.er eight (8) years from the dato of the limited partnership agreement. Widow does not know the date of the limited pnrtnershlp agreement. The appraisal obtained by the executor of Decedent's estato values Decedent's Interest In Allen Distribution at $1,804,275. Decedent's WlIl, dated September 22, 1989, was admitted to probato by the Register of Wills of Cumberland County on or about November 25, 1994. Letters Testamentary were granted to Fanners Trust Company as Executor, Decedent's WlIl provides, in pertinent part, as follows: a. Widow Is to have the use ofvarlousltcms of tangible personal property which Decedent acquired prior to his marriage to Widow. On Widow's death, these Items nre to pass to Randy L. Heishman, the child of Decedent and Widow. b, Widow is to receive the following benefits with respect to the residue of Decedent's estate: I, Net income, not less than quarter-annually, for and during the balance of her lifetime. ii, Such amounts of the principal or corpus, .. as may be necessary and proper for the comfortable sup pert, care and maintenance of [Widow] in accordance with our standard of living prior to my death. lI\, On the death of Widow, the assets passin unequal shares to Decedent's children nnd step-children. Decedent and Widow were married on July 15, 1963. On May 2, 1995, Widow filed a Petition to Extend Time for Filing an Election Against the WlIl of Truman L. Heishman. Notice of ths filing of the Petition to Extend Time was given to those persons interested in Decedent's estate, namely Farmers Trust Company, executor of Decedent's estate, Linda J. Cheskey and Terry L. Tidd, Decedent's - 2 . ,~ " step-daughters, and Michael L. Heishman and Randy L. Heishman, Decedent's sons. In this Petition, Decedent's Widow alleged, In/er (///a, in the following paragraphs: 11. Petitioner hl\B boen unnble to obtain accurate infonnatlon about the nature, extent and value of Decedent's property. Petitioner Is unable to detennlne whsther an election against the Wll1 of Decedent would be beneficial without specific Information regarding Decedent's assets and the value of Decedent's assets. 12. Decedent was a limited partner in Allea Distributioa, a Pennsylvania limited partnership. Petitioner avels and therefore believes that Fanners Trust has retained an sppraiser to appraise this interest. However, Petitioner has no infonnation about the value of Decedent's interest in this limited partnership. Petitioner, through counsel, has requested copies of financial statements and/or tax returns for this limited partnership for years 1990 through 1994, but no infonnation has been provided to Petitioner or her attorney. 13. Decedent was a one-third owner ofHSH Management, Inc., the general partner of Allen Distribution. Petitioner avers and therefore believes that Fanners Trust has retained an appraiser to appraise this interest. However, Petitioner hss no infonnation about the value of Decedent's interest in this corporation. Petitioner, through counsel, has requested copies of financial statements and/or tax returns for this corporation for years 1990 through 1994, but no infonnation has been provided to Petitioner or her attorney. On or about May 5, 1995, the Clerk of the Orphans' Courllssued a citation pursuant to Decedent's Widow's Petition, which was served on all interested parties, No person interested in Decedent's estate objected to the extension of time, This Honomble Court has apparently never entered an Order granting or denying Decedsnt's Widow's request for an extension. Subsequent to the filing of Widow's Petition, Fanners Trust Company, as executor of Decedent's estate, did provide Decedent's Widow with appraisals for Allen Distribution and HSH Management, Inc. prepared by Boles, Grove and Metzger, P. C. However, the executor of Decedent's estate has declined to provide any other Infonnation regarding the value of these assets, and hns advised Widow's attorney that they have declined to do so spocifieal1y at the request of Richard Snelbaker, attorney for HSH Management, Inc., Allen Distribution, Gary C. Heishman and Edward Shellehnmer. - 3 - It should be no led that Richard Snelbnker and his wife are also limited partners In Allsn Distribution. On or about October 25, 1995, Decedent's Widow requested the following Infonnation with respect to HSH Manugement, Inc. vis u subpoena: 1. Financial statements, Including yeur-end bulance sheets, Income statements, statements of cash flows and uny other statements prepared for In-house use or use by the accountants ofHSH Management, Inc. for the years 1990-1994; 2, All federal tax returns filed on behalf of HSH Management, Inc. for the years 1990-1994; 3. Signed and dated copy of the HSH Management, Inc. Partnership Agreement; 4. Signed and dated copy of the Manugement Agreement between HSH Management, Inc. and Allen Distribution; 5. Copies of any cnnceled checks, W-2's or any other Indications of payments or compensation made to any member of the Heishman family or the Shellehamer family. "Family" shall Include Gary C. Heishman and Karolyn H. Shellehamer, and their respective spouses, children, brothers, sisters, parents and cousins; 6, Copies of any agreements or contracts between HSH Management, Inc. and members of the Heishman family or Shellehamer family (as defined In 5 above). Decedent's Widow requested this Infonnation in order to evaluate more fully and completely the appraisal which the executor of Decedent's estate obtained, and to aid her in her detennination as to whether an election against Decedent's Willis in her best interest. On November 6, 1995, this Court enlered an Order, upon the motion ofHSH Management, Inc, to quash subpoena and for prolective order. II. QUESTIONS PRESENTED A. Whether an "action" is pending in the Orphans' Court when a decedent's will has been probated, letters testamentary have been granted, and the decedent's widow has filed a petition for an extension of time to make an election against the decedent's will? - 4 - (Suggested Answer: Yos) B, Whether the surviving spouse of a decedent Is entitled to reasonable Infonnation with respect to the nature and extent of decedent's assets, partlculnrly when those assets consist of closely held business interests for which there is no trading market? (Suggested Answer: Yes) C. Whether information with respect to closely held business Interests held by a decedent's estate are "confidential" and should be denied to the surviving spouse of the decedent, handicapping her ability to evaluate whether an election against decedent's will Is In her best interest? (Suggested Answer: No) III. ARGUMENT A. Whether an "action" Is pending in the Orphans' Court when a decedent's will has been probated, Letters Testamentary have been granted, and the decedent's widow has filed a petition for an extension of time to make an election against the decedent's will? Counsel for HSH Management, Inc. contends, among other things, that there is no "pending action" before thlE Honorable Court. Pa.R.C.P. 4003.1 provides, In part, 88 follows: A party may obtain discovery regarding any matter, not privileged, which Is relevant to the subject matter of the pending action. .. sbsent a pending action, discovery cannot be had. Decedent's WI1l was probated with the Register of Wills of Cumberland County, Pennsylvania. The Docket Entry for Decedent's estate specifically refers to the Orphans' Court Division of the Common Pleas of Cumberland County, Pennsylvania--It is No. 21- 94-998. In addition, 20 Pa. C.S.A. ~ 711(1) specifically provides that the jurisdiction of the Court of Common Pleas over the administration and distribution of real and personal property of Decedent's estate and the control of the Decedent's burial is in the Orphans' Court Division. The probate of Decedent's Will alone creates nn action in the Court of Common Pleas, Orphans' Court Division. - 5 - In addition, Decedent's Widow filed a petition for an extension of time t.o elect whether t.o take against Decedent's Will. Pa.R.C.P. 1007 provides generally that actions may be commenced by filing with the Prothonotary a praecipe for a writ of summons, a complaint, or an agreement for an amicable action, Actions generally are not commenced by petition. The exceptions are where authorized by statute, or as auxiliary t.o or for facilitation of jurisdiction already had, or to correct the court's own records. In re Correction o[Official Records with Civil Action, 44 Pa, Cmwlth. 511, 513, 404 A.2d 741, 742 (1979). In the present case, Widow's petition for an extension of time to elect against Decedent's Wlll was filed pursuant to 20 Pa. C.SA ~ 761, which specifically provides: All applications to the Orphans' Court Division shall be by petition in the form prescribed by general rules and. . . . A petition is the first step in a proceeding in the Orphans' Court Division of the Court of Common Pleas. Cangloffs Estate, 42 Pa, D&C 666, 672 (1941). The petition in Orphans' Court procedure is roughly equivalent t.o a complaint in courts of general jurisdiction, Id. at 671, In addition, it is the Orphans' Court Division which is specifically vested with jurisdiction to determine all matters concerning the spouse's election, including the interests and liabilities of the speuse . . . . with respect to all property. . . subject to the election. 20 Pa. C,S.A. ~ 2211(a). An argument that there is no "pending action" before this Court simply has no merit. Decedent's Will has been probated, jurisdiction has been vested in this Court, and Decedent's Widow has filed a petition with this Honorable Court in connection with Decedent's estste. An action is most certainly pending. B. Whether the surviving spouse of a decedent ill entitled to reasonable information with respect to the nature and extent of decedent's assets, particularly when those assets consist of closely held business interests for which there is no trading market? A surviving spouse is entitled to a full opportunity to know the decedent's [mancial situation before the spouse determines whether t.o elect under a will. Daub's Estate, 305 Pa. 446, 453, 157 A. 908, 910 (1931). - 6 - , .;_,:,,~,;,'';:--~J~A:. \. -P0'lj,:';.;,\'" =~,-cc.".,-'---"''' .., ,._.'" --'~ '. Chapter 22 of the Pennsylvania Probate, Estates and Fiduciaries Code sets forth the rights of the surviving spouse to an elective share of his or her decensed spouse's estate, Pennsylvania law has zealously gunrded the rights of spouses, particularly to ensure fair treatment of a surviving spouse in the event of the other spouse's death. In Daub's Estate, supra, the court ruled against a surviving spouse who failed to make an election within the statutory period permitted by law. However, the court stated, "A widow is entitled to full information regarding her husband's estate before [making) her election." [d. Decedent's Interest in HSH Management, Inc. is obviously part of his estate. Although the executor of Decedent's estate has obtained an sppraisal, this appraisal cannot be evaluated without more complete financial information regarding HSH Management, Inc. Widow's rights to information becomes particularly compelling when the asset subject to the elective share is a closely held business interest. Should Decedent's Widow elect against his will, she would become a minority shareholder in HSH Manngemenl. As such, she would have full right to all of the information which she has requested via her subpoena. See e.g. 15 Pa. C.S.A. ~ 1508(b) (every shareholder shall, upon written verified demand stating the purpose thereof, have the right to examine, in person or by agent or attorney, during the ususl hours for business for any proper purpose, the share register, books and records of account, . .. A proper purpose shall mean a purpese reasonably related to the interest of the person as a shareholder). HSH Management, Inc. argues that it Is the executor, not other interested parties, who has a duty to provide information in pending actions. This flies in the face ofPa. RC.P. 4003 which provides, "A party may obtain discovery regarding any matter. . . which is relevant to the subject matler involved In the pending action." There is no limitation on obtaining discovery only from parties to the pending action. To limit a surviving spouse's access only to information available through the personal representative of the Decedent's estate would set an extremely dangerous precedent. With respect to assets for which there is no ready market and for which there is no easily verified value, full information should be provided. An executor seeking to establish the fair market value of a decedent's assets, such as a closely held business inlerest, will tend to err on the conservative side. Ressonable persons can ditTer widely with respect to the value of closely held business interests. Without access to full financial information, Decedent's Widow is unable to evaluate the appraisal. She is SISD - 7 - -,-"._"..-."..""*~~""~,,,:*~------ unnble to determine whether she wishes to become n shnreholder of RSR Mnnngement, Inc. A surviving spouse's right of election is not limited to nssets solely in tho possession or control of the personnl representntlve of the decedent's estate. The right to elect cnn oxtend to proJlCrty not within tho jurisdiction, or oven concorn, of the personal ropresentatlve of the decedent's os tate. See 20 Pa. C.S.A. ~ 2203(n) which Includes, inter alia, as classes of proJlCrty against which a surviving SJlOUso has a right to elect, property which tho decedent conveyed during his lifetime to others. To argue that a decedent's sJlOuse has right to obtain information regarding the decedent's assets only from the JlCrsonal representative of the decedent's estate is analogous to arguing thnt discovery In civil matters can only be obtained from the opJlOsing parties, and not from third parties. This is clearly not the law in Pennsylvsnia. C, Whether Information with respect to closely held buslneBB interests held by a decedent's estate are "confidential" and should be denied to the surviving spouse of the decedent, handicapping her ablllty to evaluate whether an election against decedent's will is in her best interest? HSH Management, Inc. alleges that the records sought contain "confidential commercial information which must not be disclosed." Without providing any sJlCclfics, HSH Management, Inc. broadly claims that the requested information is "proprietary". An examination of the particulars requested in the subpoena show that any shareholder of any corporation, and any partner of any partnership, would have the right to the same type of information. To claim a privilege in discovery means that privilege must be recognized under existing rules of evidence. In re: Greco Appeal, 20 Pa. D&C 3.d 661, 662 (1984). The court will not create a privilege in discovery. Firschein v. Lafayette College, 7 Pa. D&C 3.d 243, 247 (1978). The burden of demonstrating the privilege is on the person claiming the privilege. Chrysler 11. Zigray, 7 Po. D & C 4th, 408, 410 (1990). Protective orders should rarely be used. Id. In In re: Greco, business owners objected to the discovery of certnin documents in a tax assessment and sought a protective order. The county hnd requested production of all books, records, income tax returns, checks and receipts for the business operated on the property. The court stated that the only documents which could be privileged were the tax returns. Id. at 662. However, the court acknowledged that under Pennsylvania law, federal income tax returns are not privileged. Id. citing Kine 11. Foreman, 205 Po. SUJlCr. 305,209 A.2d 1 (1965). The court held that the documents were not privileged and were relevant in arriving at a value for assessment purposes. Id. .8. r l<<~~~,' ..._.._--~. .".:.."."._.."".._~."...................,_.....,.~".,... HSH Management, Inc. has not claimed nny privilege recognized by Pennsylvania law, such as the attorney-client privilege, the doctor-paUent privilege, or governmental immunity. HSH Management only refers generally to some confidenUal commercial infonnaUon. Just as the documenls soughlin Itl re: Greco were relevant and necessary for determining a value for assessment purposes, the documents sought by Decedent's Widow arc necessary to evaluate and determine the value of Decedent's interest in HSH Management. In Chrysler, supra, the court denied that defendant's moUon for a protective order for documenls which contained "trade secrels." 70 D&C 4th at 415. In addition to holding that the documents were not confidential or privileged, the court held that the production of these documenls would not cause any unreasonable annoyance, embarrassment, oppression or expense. Id. nt 411. The court so ruled because in ils moUon for a protective order, the defendanls did not set forth specific and concrete factual allegations that tended to show either the confidentiality of the documents or how the defendants would be hanned. Id. "Litiganls must reconcile themselves to the fact that under the rules, every inquiry carries with it some degree of annoyance, . . ." Id, In the current case, HSH Management has only quoted the language set forth in Pa. R.C.P, 4011, which limils the scope of discovery. HSH Management has falled to support its allegations with any specific information. IV. CONCLUSION For all of the reasons set forth in this Brief, the moUon of HSH Management, Inc. to quash the subpoena and for protective order should be denied. Respectfully submitted, METrE, EVANS & WOODSIDE ) -' Elyse E. gers, Esquire ~ 3401 Nort Front Street Harrisburg, PA 17110-0950 (717) 232-5000 J.D. # 41274 Attorneys for Dona M. Heishman Date: ..;T;;;tLU1/1(j, //r-j ,1996 ;~ " "I> .~~.4i-!i','l<"'i-~c,;:;"'._. 'f~..;",':t}", , . CERTIFICATE OF SERVICE I certify that I am this day serving a true and correct copy of the foregoing Brief upon the person and in tho manner indicated below: VIA FACSIMILE AND FIRST CLASS MAIL, POSTAGE PREPAID, ADDRESSED AS FOLLOWS: Richard C, Snelbaker, Esquire Phlllp H, Spare, Esquire Snelbaker & Brenneman, P,C. 44 West Main Street Mechanicsburg, PA 17055 .--? () -7 / Elyse E, C :0 /J ? ("'0 gers, Esquire, Date:~l'~d /0 ,1996 " t~,1 " ,.,- " -l ~;' . 644891 .. ~ '- ~ IN REI I ESTATE OF TRUMAN L. HEISHMAN, I DECEASED I I I I IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 21-94-998 ORPHANS' COURT DIVISION IN REI MOTIONS TO OUASH BEFORE SHEELY. P.J. ORDER AND NOW, this2~1 day of January, 1996, the motions of HSH Management, Inc. and Allen Distribution to quash subpoenas issued to them in the above captioned action are GRANTED. It is further ordered and directed that the executor shall file an inventory as soon as possible. Dona Heishman shall then have 60 days from the date of that filing in which to make an election or file objections to the inventory. By the Court, .!iw:fJ!::'J. Philip H. Spare, Esquire For Movants, HSH Management, Inc. and Allen Distribution Elyse Rogers, Esquire For Dona M. Heishman Isld n::> .,") 1- II' . t. -. ,u,. " :(., i:'''!:''' 'I:). I U ; i-:t~iTr?J:'~-:.-"-"" ~_~.,v,,_~ y....;n'.,.~. ,,,,,,,,_,,,.","'~"'~~""~_'~_""__~____~'__M_"' '~ , IN REI ESTATE OF TRUMAN L. HEISHMAN, DECEASED . . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 21-94-998 I I ORPHANS' COURT DIVISION IN REI MOTIONS TO OUASH BEFORE SHEELY. P.J. MEMORANDUM OPINION AND ORDER OF COURT Before the court are motions of Allen Distribution (Allen) and HSH Management, Inc. (HSH) to quash subpoenas in the above- captioned matter. The pertinent facts can be summarized as follows. The decedent, Truman L. Heishman, died on November 13, 1994. His will, admitted to probate on November 25, 1994, named the Farmer's Trust Company as executor. Thereafter, decedent's widow, Dona M. Heishman, filed a petition seeking an extension of time for filing an election against the will. This court then issued a Citation requiring certain parties to show cause why such an extension should not be granted. The extension was to last until sixty (60) days after the executor provided Dona Heishman with an accurate inventory of the estate and valuation of the assets therein. The docket indicates that no responses were filed to the Citation, nor was the Citation made absolute. In late October, 1995, Dona Heishman issued subpoenas under the above caption to HSH and Allen, two businesses in which the decedent was involved. The subpoenas required Hsn and Allen to appear, through their records custodians, and open certain ~,""--"-=."'-'<".",,,,,,""" -- ---,-' .. '11--------- .:.' """'''Y'" --- ...,--',.,"--- ~ - ? \ - . ..... j, NO. 21-94-998 ORPHANS' COURT DIVISION . '- records for inspection. HSH and Allen each filed a motion to quash the subpoena on November 6, 1995. On that same date, this court issued an order cancelling the scheduled records depositions and ordering the parties to this dispute to appear for argument on the motions to quash on January 17, 1996. Subsequently, each side filed briefs and argument was held on January 17. , , ;: c ~. \ ~, , ~ ~~ I"' ~: " (, ;, DISCUSSION . " In a nutshell, Dona Heishman contends that she cannot make an intelligent decision about election without the information about the decedent's business interests requested in the subpoenas. HSH and Allen respond that since they are not parties to any action before this court, they are not bound to submit themselves to discovery. They further contend that Dona Heishman is engaged in a "fishing expedition" that is pointless and ~, :;. ~, ." .f. .;; ~\. t ,. I: > ~ "'~ \.;- ~" :i. unnecessary. r- We agree that the attempted discovery is premature. The proper procedure to be followed in this type of action is found not in the discovery rules, but in the Probate, Estates and Fiduciaries Code. 20 Pa.C.S.A. 5101 et sea. The executor herein, Farmer's Trust, has a statutory duty to file an inventory within a certain time. 20 Pa.C.S.A. S 3301. When that inventory is filed, Dona Heishman will have information about the estate, including a fair valuation of each asset therein. 20 Pa.C.S.A. S 3302. If, at that time, she believes that the inventory or ." 'i,', , s ? '.~ ~~; ~~ ".j ri.,. '.' 'j' !~~': '14 ." "'.{ !', ~ ~~ 2 NO. 21-94-998 ORPHANS' COURT DIVISION valuations are not sufficient to allow her to make a decision about election, she may file objections to the inventory in order to obtain the desired information. 20 Pa.C.S.A. S 3305. In the absence of a specific case on point, we find no reason to deviate from the above described procedure. ORDER AND NOW, this~~ay of January, 1996, the motions of HSH Management, Inc. and Allen Distribution to quash subpoenas issued to them in the above captioned action are GRANTED. It is further ordered and directed that the executor shall file an inventory as Boon as possible. Dona Heishman shall then have 60 days from the date of that filing in which to make an election or file objections to the inventory. By the Court, /s/ Harold E. Sheelv Harold E. Sheely, P.J. Fhilip H. Spare, Esquire For Movants, HSH Management, Inc. and Allen Distribution Elyse Rogers, Esquire For Dona M. Heishman uld 3 ';',,\~;: ii ';..-.i,.,......, -,"" ._"-',...~-.,.,"',.'"., .'~.~4!;."''''''><''!,..._'~.~~'_c,.~...._' . , .. .~-"--""-"-- '-........... .~ . . . ......; J . .' '\ \ .1 ! . '. ~ ~:<<' ,. , ..\ ", ~, '~ . f' . ,I : f"-..' H."- \ , I . , '1 l~,. .rr'-.:t ~', .. f 't · .. ~ ' I r. ~ '1" ,. ~ "", ~ ,",0\. ;) , .... , .1 ..L ~, .' .: ~ . " . ,..;. .;. . .l I ~' '. ". f';' \' ., 1 ... .' , ..___A -~ ~ - .~ l:-~" ',.'"" ',"""-"'*' '"",'---_.., ~--,.- --. r;- ","" ..All ". ,...,.'....~ '. IN RE: ESTATE OF TRUMAN L. : IN THE COURT OF COMMON PLEAS OF HEISHMAN, Deceased : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-94-998 OBJECTIONS TO INVENTORY .) AND, NOW, thisc>>IJday of March, 1996, Dona M, Heishman, the surviving spouse of Truman L. Heishman, and the current beneficiary of the trust established under the Will of Truman L. Heishman, deceased, objects to the inventory of the real and personal estate of Truman L, Heishman, deceased, filed by Financial Trust Services Company as Executor (the "Executor"). These objections are filed under Section 3305 of the Pennsylvania Probate, Estates and Fiduciaries Code, as follows: 1. Dona M. Heishman ("Widow") objects to the value Bet forth for decedent's interest in Allen Distribution, a limited partnership. 2. Widow objects to the value set forth for decedent's interest in HSH Management, Inc., a corporation. 3. Widow has been unable to obtain accurate infonnation about the value of decedent's interests in Allen Distribution and HSH Management, Inc. 4. Section 3302 of the Pennsylvania Probate, Estates and Fiduciaries Code imposes upon the personal representative of a decedent's estate the duty of determining and stating in an inventory of decedent's estate the fair market value of each item of the inventory. 5. Widow believes, and therefore avers, that the values assigned by the Executor to decedent's interests in Allen Distribution and HSH Management, Inc. are based upon appraisals prepared with information provided by persons in control of Allen Distribution and HSH Management, Inc., whose interests in these businesses are adverse to hers. 6. Widow believes, and therefore avers, that the infonnation upon which the appraisals are based may be faulty or incomplete, and the Executor has failed , ,~,' !"'.,,;,,-+ "~'''~~.;':'?'. ,_"_",.~"'", .-,t, .' to provide information regarding Allen Distribution and HSH Management, Inc, to Widow, despite repeated requests. 7, Widow's rights and interests under tho will of decedont will be soveroly prejudiced if the Executer of decodent's estate relios upon and accepts appraisals for Allen Distribution and HSH Managemont, Inc. which are defective and if the Executor fails te provide information necessary for Widow to exercise her rights with respect to decedent's estate, WHEREFORE, Widow files these objections to the inventory of Financial Trust Services Company, as Executor of the Estate of Truman L, Heishman, deceased. Respectfully submitted, METrE, EVANS & WOODSIDE &~2 I~ Elyse E, gers, Esquire 3401 N h Front Street Harrisburg, PA 17110-0950 (717) 232-5000 J.D, # 41274 Date: /1 (/lur/L ~ ( Attorneys for Dona M. Heishman ,1996 .0 , r", (. r- \"J ,.:" ,.. -; ," -' '-' __ _ _ .... .... _:'~R_' ~ , " . . . VERIFICATION DONA M. HEISHMAN, the Petitioner in the foregoing matter, states that the facts in the foregoing Petition are true to the best of her knowledge, information and bslief, This statement is made subject to the penalties of 18 Pa, C,S,A, fi 4904, relating to unsworn falsification to authorities, Date: -g-~.Q ,1996 J)~11 j)J. -d~.lm"H) Dona M, Heishman 60887 I - - - , ' " IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA ORPHANS' COURT DIVISION IN THE ESTATE OF TRUMAN L, HEISHMAN, LATE OF DICKINSON TOWNSHIP Schedule of Proposed Distribution Balance for distribution as per First and Final Account filed September 6, 1996 S2.300.780.30 GET, Inc" Buy/Sell Agreement Allen Distribution, Partnership 14,85% Interest HSH Management, Inc., Partnership 1/3 Interest Principal Cash Income Cash 139,761.05 1,804,275,00 137,229,00 83,211.10 136.304.15 Distribution Financial Trust Services Company, Successor to Farmers Trust Company Trustee under Wi1I Truman L, Heishman S2.300.780.30 Statement of the Reasons for the PJ'Qposed Distribution The above distribution is proposed in accordance with the terms of the Last Will and Testament of Truman L. Heishman, late of Dickinson Township, Cumberland County, Pennsylvania, " I I i , I, I I I , J ' F, Burke, Senior Vice President an Trust Officer - ,-..-- -,...__..__.------_.~.., --.~~ .~_..~ ,,\ . ,,,, ...~,:~!~::;'.: '. ,\: ,.', ,.-,' ~ ,-" " '.R .,.______.-a .'~--- -""-'-"-""'","" o ../'.. .,. '~-':~"lip - _' ,~~,.,:,;.~,~', - : - ,._t,.~.L (.. ". - "', ~"'~'A~'O'i'~ ',"~~:;':L' IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA ORPHANS COURT DIVISION IN THB ESTATE OF TRUMAN L, HEISHMAN, LA TB OF DICKINSON TOWNSHIP (Continued) COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND: lane F, Burke, Senior Vice President and Trust Officer, being duly sworn according to law, deposes and says that she Is Trust Officer of Financial Trust Services Company, the Accountant in the Estate above named, and that the facts set forth in the Statement of the Reasons for the Proposed Distribution arc true and correct, F, Burke, Senior Vice President Trust Officer Sworn ~ subscribed to before me this ~ day of September, 1996, So~1f&* My Commlsslon _ ec.. 25~ ~ no Enn1f~ Notary Publ corCf,'! ('I;;~IJ 01 RRC .'.'\i" <I 'vl/I\ls e~II" ' '96 SEP -6 1\8 :34 I ,-,,'''''''', Court Clol't\'; .. ."'. pA cumbi:il,,;;;J (.v., I , .. ~ . - .' . .. . ~"'~-"'''''",,-....-_.:..,.,.,.., - ".,.., ~ "_'~'c_,,____.,_.....~_,,~ '_',~ .' ,. <2. w'" COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA ORPHANS' COURT DIVISION No, 2194-0998 Estate of TRUMAN L, HEISHMAN, Deceased Late of Dickinson Township FIRST AND FINAL ACCOUNT OF FINANCIAL TRUST SERVICES COMPANY, SUCCESSOR TO FARMERS TRUST COMPANY, EXECUTOR Date of Death: November 13, 1994 Letters Granted: November 25. 1994 First Complete Advertisement of Grant of Letters: December 22. 1994 Account Stated to September 6, 1996 SUMMARY AND INDEX PRINCIPAL Receipts Net Loss on Conversions flIW 2 3 3-5 5 Less Disbursements Less Distributions to Beneficiaries Principal Balance Remaining 2 INCOME Receipts Less Disbursements 6 6 6-7 2 Less Distributions to Beneficiaries Income Balance Remaining Combined Balance Remaining $2,519.120.47 6.927.77 $2.512.192,70 320.921.55 $2.191.271,15 26.795.00 $2.164.476,15 $ 368,619,49 13.230.34 $ 355,389,15 219.085.00 136.304.15 52.300.780.30 1 Composition of Net Balances Principal GET Ine" Buy/Sell Agreement Allen Distribution, Partnership 14,85% Interest HSH Management Ine" Partnership 1/3 Interest Cash $ 139,761.05 1,804,275,00 137,229,00 83.211.10 Income Cash Princloal Receipts InventOlY Filed Per COpy of Inventory Filed SubSCQuent RecelDls 7-27-95 PA Dept, of Revenue, 1994 Income Tax Refund Adlustments to Account Values Adjust 1/3 Interest Heron Drive, Ocean City, MD property by 1/3 Balance Mortgage Chase Bank of Maryland Total Principal Receipts $2.164.476.15 $ 136.304.15 2,555,772,04 53,00 f 36.704.57) $2.519.120.47 Principal Conversions Into Cash ODin Ll2.U 1-24-96 1/3 Interest Heron Drive, Ocean City, MD Property Proceeds $33,701.00 Inventoried at 40.628.77 TOTAL 0.00 $6.927.77 $6,927.77 $6.927.77 Net Loss on Conversions Principal Disbursements 11-23.94 Register of Wills, Letters Testamentary 235,00 ll-JO.94 Cumberland Law Journal, advertising Letters Testamentary 40,00 12-5-94 Farmers Trust Company, balance due Master Card J\ccount5417-7516-5028-7802 307,88 Unlled of PA, service 31,59 12.13.94 Hoy's Greenhouse, balance due 121.90 Dona Heishman, reimburse for VISA balance and postage stamps 99,72 MInistry of Plainfield Lutheran Church, donation for services 200,00 12-19-94 Hoy's Greenhouse, balance due 95,40 PP&L, service 152,72 12-21-94 Register of Wills, Short Certificate 3,00 Dona Heishman, reimburse for payment to Cumberland Valley Memorial Gardens 550,00 12-22-94 Farmers Trust Company, balance due Master Card J\ccount5417-7516-5028-7802 292,35 Unlled of PA, service 27,06 Farmers Trust Company, balance due VISA Account 4121-2616-5019-2309 663,80 Amoco Oil Company, balance due 38,80 1-10-95 The Sentinel, advertising Letters Testamentary 62,12 1-17-95 Ewing Brothers Funeral Home, partial funeral bill 3,930,00 3 -. --.......,.-..................... ...~--,. ..---.- - ------:--:- . ~-.. ,. _~ ~ __...~,,_..._.,,~...,I.,.s_.~._.~ , ~, 111,' '. ~l~' ,. . l~it~J-ot '. ,". :,,' ~1"f '?' ,....~ i,n:. . , b .,-, ,~..., p >.' . ."", < ~ , '.~~',"p {.q".'lt.~~ " '-, ...' ...... ," "~'_' " t"" . b "..-, , ' .f-.t,:,<- ~~. '-.;;;iI! ';1\ c .--\.l ,1, ("".~"l~\ ',~ ( . ~ - -' ~, . _J'of~',;'!',~.,..;'r..'...,I:".:. ,.. ,', '."~" - ' Principal Disbursements ConI. 1-18-95 MCI, service 17,38 PP&L, service 159.98 1-24-95 Cellular One, balance due 43.77 United of PA, service 29,86 2-3-95 Commonwealth of PA, registration renewal 39,00 2-6-95 Touches Landscaping, balance due 810,00 3-23-95 Donald ], Van Bosklrk, D,C" balance due 60,00 3-30-95 Ewing Brothers Funeral Home, balance funeral bill 5,000,00 4-7-95 GET Leasing, Interest on Note 1-1-94 through 12-31-94 5,000,00 4-18-95 Phllllps and Uoyd Appraisals, real estate appraisal Maryland property 250,00 4-2S-95 Register of W11ls, Short Certificates 6,00 4-27-95 Notary fees 6,00 4-28-95 Dona Heishman, reimburse for automobile transfer costs 8,00 6-7-95 Martson, Deardorff, Williams & Olio, professional services 4,062,00 6-12-95 Heishman, Heishman & Shellehamer, reimburse 1/3 condo costs 11-14-94 through 3-31-95 2,594,34 8-10-95 Register of W11ls, Certified Copy of Will 2,00 8-14-95 Register of W11ls, filing P A Inheritance Tax Return 15,00 Register of Wills, PA Inheritance Tax 67,603,63 GET, Inc" payment in full Demand Note 100,000.00 8-23-95 Boles, Grove & Metzger, P,C" Certified Public Accountants, Valuation of Allen Distribution and HSH Management 6,600,00 8-24-95 Dona M, Heishman, reimburse for Card of Thanlcs placed in The Sentinel, November, 1994 24,64 8-29-95 Dona M, Heishman, reimburse for one-half joint loan balances 14,132,50 Dona M. Heishman, Family Exemption 2,000,00 10-19-95 Heishman, Heishman & Shellehamer, reimburse 1/3 condo costs April through September 2,849,96 10-23-95 Martson, Deardorff, W1lliams & Olio, professional services 1,726,00 11-9-95 Cumberland Valley Memorial Gardens, memorial 1,650.00 12-15-95 Martson, Deardorff, Williams & Olto, professional services 1,185,00 2-2-96 Register of Wills, filing Inventory 10,00 Martson, Deardorff, Williams & OliO, professional services 975,00 3-11-96 Martson, Deardorff, Williams & Olio, professional services 417,00 4 ~...-:--- ". Principal Disbursements Cont. 5-14-96 Boles, Grove & Metzger, P.C., professional services Reserved: HSH Management, Inc. Balance due Note Martson, Deardorff, Williams & Otto Financial Trust Services Company Closing and Filing Costs Total Principal Disbursements Principal Distributions to Beneficiaries Distributed In Kind to Dona M. Heishman, 1967 Chevrolet, as appraised Distributed In Kind to Dona M. Heishman, 1994 Ford Ranger, as appraised Total PrIncipal Distributions to Beneficiaries Princlnal Capital Chanees GET. Inc.. Buy/Sen Al!reement Inventoried at 4-4-95 Principal Payment 8-13-95 5-21-96 Principal Payment Principal Payment Principal Payments 5-9-95 through 8-19-96 One-Third Interest Heron Drive. Ocean City. MD Condo Inventoried at Adjusted by 1/3 Mortgage Balance due Chase Bank of Maryland 1-24-96 Sold 5 540.60 50,000.00 10,000.00 35,752.55 500.00 $320.921.55 $ 5,800.00 20.995.00 $ 26.795.00 Account Value $500,000.00 145.000.00 $355,000.00 100.000.00 255,000.00 100.000.00 155,000.00 15.238.95 $139.761.05 $ 77,333.34 ( 36.704.57\ $ 40,628.77 40.628.77 $ 0.00 .!~ '''{:~&j;-'):;i;)i-;:.G-:~>,~~~;j{.';,~':;-,:::'-:~:Ji,,~~~;~>>t,.;_0:'~:-:~~""""~~~ ',.:-~,:' .- f - ,. Income Receipts GET, Inc., Interest 5-15-95 to 8-19-96 Allen Distribution, Partnership, Income 3-28-95 to 7-30-96 HSH Management, Inc., Partnership income 10-25-95 to 7-12-96 Interest, Temp Fund 4-4-95 to 8-2-96 Interest, Fed Fund 1-4-95 to 8-2-96 $ 33,927.50 250,965.00 64,382.15 12,217.31 7.127.53 Total Income Receipts $368.619.49 Income Disbursements 4-25-96 6-4-96 GET, Inc., Interest on Note 1-1-95 through 8-13-95 HSH Management Co., Inc., Interest on Note for 1994 and 1995 Financial Trust Services Company, income commission $ 4,034.00 Total Income Disbursements 6,000.00 3.196.34 $13.230.34 Income Distributions to Beneficiaries 9-14-95 Internal Revenue Service, Quarterly Estimate for Dona M. Heishman 6,250.00 PA Dept. of Revenue, Quarterly Estimate for Dona M. Heishman 1,250.00 12-21-95 Internal Revenue Service, Quarterly Estimate for Dona M. Heishman 6,250.00 PA Dept. of Revenue, Quarterly Estimate for Dona M. Heishman 1,250.00 3-19-96 Internal Revenue Service, Third and Final Installment of Additional 1993 taxes 1,286.00 4-9-96 Internal Revenue Service, tax due Form 1040 Dona M. Heishman 78,867.00 PA Dept. of Revenue, tax due Form PA40 Dona M. Heishman 3,782.00 4-15-96 Internal Revenue Service, Quarterly Estimate for Dona M. Heishman 28,570.00 PA Dept. of Revenue, Quarterly Estimate for Dona M. Heishman 2,200.00 6 Income Distributions to Beneficiaries ConI. 6-14-96 Internal Revenue Service, Quarterly Estimate for Dona M. Heishman PA Dept. of Revenue, Quarterly Estimate for Dona M. Heishman Dona M. Heishman 6-5-95 to 8-9-96 2,200.00 58.610.00 $219.085.00 28,570.00 Total Income Distributions to Beneficiaries Financial Trust Services Company, Successor to Farmers Trust Company Executor Truman L. Heishman Jan F. Burke, Senior Vice President and Trust Officer COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND: Jane F. Burke, Senior Vice President and Trust Officer, being duly sworn according to law, deposes and says that she Is Trust Officer of Financial Trust Services Company, the Accountant In the Estate above named, and that the facts set forth In the Statement of the Reasons for the Proposed Distribution are true and correct. F. Burke, Senior Vice President rust Officer Swol'!I.Rtd subscribed to before me this ~ i1ay of September, 1996. Not8IlaI Seal So~~~PubIlo My CommlaslOO E;p,'i.. 0I:l. 25~ Mtiiioer, enn soctal on Ebm711~~ Notary Publi --..-_.- 7 ~ - .- .. -- .' -. \". Recurc-' , . RC":' :.' '.j'." : 'f) of ~,,-"hln '96 SEP-6 'UI~ In ""J '0 ''''4 '''JOIDllouoq 'JOllplllD" 010110 041 UIIIOIOIUI UII WIU!'" Cle; :'1 . luolunoDDO 1141 0' UNlOU~ uOllod '84'0 AlO^O 01 puu I. 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"" a a s- a Oel) :s ~U8 ... r" .... ~ o '" :;; 'a .. .... t:l C) .; a g .S ... ~ ~ .. .. <Z . _ ~._i '___ .--'- ...,....- -......., , , " -"".; . r .. " " >. ':~.: ) i -.. . o,J. " '{It. '. .r., .1 .'1'.. '.\ , ..f.",. . -'" '. .. ":t ,. .;. , .." , .;' . I .! . 'to. -- " ','.' Po \ , ~. t ,... \' ,. .f .,.' -~ t.. - ;' '/ I -. _._,....w.~ ..-.- .-..~-.~~~ '.....--- ""Il- I ----. r-.... /-' -;~/--)f.; D .... . -.- 1 " l '.. IN RE: ESTATE OF TRUMAN L, HEISHMAN, Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-94.998 PRAECIPE TO WITHDRAW OBJECTIONS TO INVENTORY TO THE PROTHONOTARY OF SAID COURT: AND NOW comes Dona M. Heishman, the surviving spouse of Truman L. Heishman, by her attomeys, Mette, Evans & Woodside, and respectfully requests that the Objections to the Inventory of the real and personal estate of Truman L. Heishman, filed on March 27, 1996, be WITHDRAWN. Respectfully submitted, Elyse E. Ro rs. Esquire METTE, :.\NS & WOODSIDE 340 I North Front Street Harrisburg, PA 17110-0950 (717) 232-5000 J.D. #41274 Attorneys for Petitioner Date: ~6-, r, /57 V I ~ H'i,'< . .., . . CERTIFICATE OF SERVICE ; I certifY that I am this day serving this Praecipe upon the persons and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by serving a copy upon the following persons, by United States mall, first class, postage prepaid, as follows: Linda J. Cheskey 256 McAllister Church Road Carlisle, PA 17013 Terry L. Tidd 244 McAllister Church Road Carlisle, PA 17013 Michael L. Heishman 90 I Dunbar Road Carlisle, PA 17013 Randy L. Heishman 802 North College Street Carlisle, PA 17013 l.D.1I41274 Attorneys for l'elhloner Date: , ~~ , '.X ~'I f I, CERTIFICATE OF SERVICE \ I , I I 1, I certifY that I am this day serving this Praecipe upon the person and in the manner indicated below, which service satisfies thc requirements of the Pennsylvania Rules of Civil Procedure, by serving a copy upon the following person, by United States mail, first class, postage prepaid, as follows: . I ~/ ~ r" Jane Burke Fanners Trust One West High Street Carlisle, PA 17013 \ ~;~ , Elyse E. R gers, Esquire METT, ANS & WOODSIDE 3401 North Front Street Harrisburg, PA 17110-0950 (717) 232-5000 I.D. #41274 " Attomeys for Petitioner Date: Ou, b ~ 199~ ; ~ 79766 1 roo '0 ,1 '" ," ',' .- 0.-":'1'-' , . , , - . ' '" , ,..', , '- ',' , . ., .' ,', .;' 'y,:, :, " ',', '-, " , ',">< :.'" 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'-', :'.;' -- ':':.,' :'., , ...-; "\" '," .-', ,',,'1':' ,. )\::<:,;,1 --:;:;, " ,". i:i: :;y! .' .';,: .' ...., , . .. ' .:.:. ,.'. ,', , " ;,::" 1\'>><:'" ' :;; .. " ;', ..' -.:" ,- -- " .,~- ld " ,:'d ,.... " ;' " ", - , ,..c. h'-' -, \ - ,."; FILED OCT 8 - 1996 JANE 0, MARFI%O REGISTER OF WILLS !: I , I . '. . . . . . . _.~.- ..--~'-'_.- . ~"... , . . " , ~-. . f' I oJ' .. ' .'" ~. . ;) I ., ..' ; " . .... . r , ,1 'I' ' ~.. \ . . d" .. . . " " ..;. .';' ! , ,I r' " \ .. ..,' " t .f I .' ,."...v.~.,....-.,....,....,. ..~...-'-~... -~._-'-_. / --~ r~' __ ,t. , '. ,...... "#" .--. -. ~..,.. h__& --..... (-' ~::-, I ' 'I ,..,.--- -, ~=1u~l\:"~i'l'if~~~y~t;t:ji~oJ!.~, IN RE: ESTATE OF TRUMAN L. HEISHMAN, Deceased : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY. PENNSYLVANIA : ORPHANS' COURT DIVISION : NO, 21-94-998 PRAECIPE TO WITHDRAW PETITION TO EXTEND TIME FOR FILING AN ELECTION AGAINST THE WILL OF TRUMAN L. HEISHMAN TO THE PROTHONOTARY OF SAlD COURT: AND NOW comes Petitioner, Dona M. Heishman, by her attorneys, Mette, Evans & Woodside. and respectfully requests that the Petition to Extend Time for Filing an Election Against the Will of Truman L. Heishman, filed on May 4, 1995, be WITHDRAWN. Respectfully submitted, \ Elyse METTE, VANS & WOODSIDE 340 I North Front Street Harrisburg, PA 17110-0950 (717) 232-5000 l.D. #41274 Attomeys for Petitioner Date: O~~.,).~ /99(P CERTIFICATE OF SERVICE I certifY that 1 am this day serving this Praecipe upon the persons and In the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by serving a copy upon the following persons, by United States mall, first class, postage prepaid, as followR: Linda J. Cheskey 256 McAllister Church Road Carlisle, PA 17013 Terry L. Tidd 244 McAllister Church Road Carlisle, PA 17013 Michael L. Heishman 901 Dunbar Road Carlisle, PA 17013 Randy L. Heishman 802 North College Street Carlisle, PA 17013 Elyse E. R gers, Esquire METTE, ANS & WOODSIDE 340 I North Front Street Harrisburg, P A 17110-0950 (717) 232-5000 I,D. 1#41274 Attorneys for Petitioner Date: ObfaV-. -:J.) Ir;'l& - '.~....,~~.. ". i'.~,,:.,,". , . CERTIFICATE OF SERVICE I certify that 1 am this day serving this Praecipe upon the person and in the manner Indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by serving a copy upon the following persons, by United States mall, first class, postage prepaid, as follows: Jane Burke Farmers Trust One West High Street Carlisle, PA 17013 ~ Elyse E. R gers, Esquire METTE, EVANS & WOODSIDE 340 I North Front Street Harrisburg, P A 17110-0950 (717) 232-S000 I.D. # 41274 Attorneys for Petitioner Date: ~~? 1~9f.::, J I:,' . I, " , .... , ',' .',' "j'," \, I ' ,. , , " I,"~ '" ., , ,,~: i~ : . ..,.1. "'f~i',~ :. ,,;> :,' '-';":L '. I: C': ;", " :'C". '"iI ,: ";, ' ': :'~:;'" /i )J~ ,~;:,;,\,;y <'),:., .:':":- }J', -,,:},;: : "':-':'!(:,;(;;.:t:,)",;;:,;,~,-;::/;; ,.',,' " '. ',<:,',:~/'Ht~:",,"::: ' ',-.,',,, <'". ,. . :. .'J ~:; .f"i' ";": ;." C' [: i: :~, " ':': ,;; ": ii"~) -, ';:~ "_";:" ::{:, ' ;' ":~,, ".>.~i/ ',,, it;:_ \:' '" , ,. ~' :'~ '::'~, ii, -, :': ::',,", - :,,-,:}; is' ''', ::i", \,:,," : ,}:,:. t'.~\, .,' ' ~:">'~::)"'" ,'", -. ,'~,"-', c '''''.. - .. :,2, '!~1:;;,~ ' . X ' -' y,: ' "':"'. ' " :, "~:" -.'" ., _, ,', :c v'! "" ' ,:' .;';, ~~;,J> :\:/:;;;;, ~;~ .' 'i;;~:"~;:'<<i,;~~:): ,,' ..,., > ,'" '..<.:'~',~:;::;:,i ,;".,";' .,:. ~ " ' , . " ," ",,"' "" '-' ':'~, ,', ," ;}~- -1" ; :' 'P' ,; ';'" " :~ :r\!~ li;,_," ", " ':, .:. ',' _ , ';,l",' : _ "', "- "': ,., '",' , , j'l!(,:'1li: ~': i!' ,( ." :' '_, "''' ~ ' " "'" '. 'JIr:'-'l!1 <', ,.~ ,c" : c . I.. .. 'i H . ....~. : . . C '~'. '. . f'\ .' , .. .... ',I :';11. .. "".. , .1 . ", ;". FILeo ocr 8 .. 1996 JANE 0, MAAF/ZO REGISTER OF WILLs . . .. ~~~v. ~""~.'_.......,_...-.__..,~ ~."'" i ~ ,,', ~ " ,~::;::~;~:,:::,,~::~.!~ Financiall1st Ilb'i~=- Company S~IVICCS I 00 ~ r.- ,p G-, :0 ~n rr. "-~ ~ ~ STATUS REPORT UNDER RULE 6,12 Name of Deoedent: Truman L, Heishman i.:'> "'" I C'I Date of Death: November 13, 1994 " .,., t.." -~ v; s.~ Will ~Q ~:~ Ul .". ~. OJ Pursuant to Rule 6,12 of the Supreme Court orphans' Court Rules, I report the following with respect to completion of the administration of the above-captioned Estate: No. : 2194-0998 1, State whether administration of the estate is oomplete: Yes X No_____ 2, If the answer is No, state when the personal representative reasonably believes that the administration will be completed: 3, If the answer to No, 1 is Yes, state the follOWing: a. Did the personal representative file a final Account with the Court? Yes X No_ b, The separate Orphans' Court No. (if any) for the personal representative's account is: N/A c. Did the personal representative state an account informally to the parties of interest? Yes No_-X- d, Copies of receipts, releases, joinders and approvals of formal or informal accounts may be filed with the Clerk of the Orphans' Court and may be attached to this report. November 5, 1996 ---~~ .~ Ja F, Burke, Senior Vice Pr ident/Trust Officer Financial Trust Services Company Successor to Farmers Trust Co. One West High Street Carlisle, PA 17013 Telephone: 717-243-3212 Personal Representative Fannen TN" . Olvblnn or Flnanel.1 TN,I Cornpany I We'llIIgh Slreel, 1'.0.110' 220 . Carll,le,I'A 171113 (717) 243.3212 First NUlinnul Bunk und Trusl Cu. 13 We,l M.ln Slreel. 1'.0. IIn. 391 . Wayne,hom. I'A 17268 (717) 762.8161 Charnbcnburg Tnnl 14 Nonh Main Slrcel, 1'.0. Bo. C . Cbarnbcnhurg,l'A 17201 (717) 263.9201 Flnuncllll Trusl Corp 310 Allen Road.I',Q,lIo. 220 . Carllsle,l'A 17013 (717) 243.8003 "'l c', . . ~~~l~i~.".~~ioJt~"'f"~'~"'~;"~:~ ,.-,' .-.- I , '-1- - ~ _;__..o!--_~,_, F,-'-""r,1I!i".... T,.~,",~ _.~.'t~-':l~ ~. ;,' (j) , . BUY AND SELL AGREEMENT REI GET, INC. STOCK THIS AGIlliEHENT, made and entered into this 2 day of , 1989, by and between GARY C. IIEISIIMAN, TRUHAN January L. IIEISIIMAN, EDWARD B. SIIELLEIIAHER, ond GET, INC,. a Pennsylvania corporation, all of Weat Pennsboro Townahlp, Cumberland County, Pennsylvanls, WITNESSETIII WHEREAS, Gary C. lIeishman, Truman L. Heishman and Edward B. Shellehamer, hereinafter referred to aa "OIlNERS", own all the outstanding capital IItock of GET. INC., hereinafter referred to as "CORPORATION", each owning four sharea thereof; and WHEREAS, it is the desire of the Owners that close control be maintained of the IItock of the Corporation; that an agreement be made to permit the continuance of the close control and ownership of the atock of the Corporation in the event of the withdrawal or death of a stockholder; that upon the death of sny of them, the Corporation or the surviving Owners or any of them shall acquire the sharu of stock of the deceaaed Owner; and that the eatate of such deceased Owner ahall receive a fair price therefor. NOW, TIIEREFORE, in conslderatlon of the covenant a herein contained, the parties hereto mutually agree aa follows I I. That each of the Owners agreea that he will not sell, assign, transfer, convey, pledge; hypotheca~, or otherwise dispoae of any of hia shares . . . of the atock of the Corporation at any time during hls lifetime without first obtaining the approval of the other Owners and the Corporation. If any Owner , should decide to sell Ills sharea of stock in the Corporation during hls lifetlme, - I - . .. --- --""-'---~._-- ..' '-~. ,..:....;~ ._..._.,..___~.".,:7";' . . " upon receipt of a bona fide offer from 0 third party, he hereb)' agreell to give the Corporation and then the other Owners, in that order, an opportunity to purchase any such shares which he IDlIY desire to sell. Each party hereto covenants and agrees that if the Corporation is willing to equal said bond fide offer, he will sell the aaid shorea to the Corporation and not to said third party. The offer to sell to the Corporation for said bond fide offer shall be held open by Owner desiring to sell for a period of thirty (30) days after written notice stating his intention to sell, tho amount of the bono fide offer and the name of the third party has been given to the Corporation and the other Owners. If at the end of thirty (30) days after such written notice the Corporation fails to meet said bona fide offer, tile shares then shall be offered to the other Owners under the same terms and conditions. Such offer shall be to said other Owners equally and each of said other Owners sholl have the right to purchase an equal number of shsres in question to be determined by dividing the number of shares in question by the number of said other Owners; provided, however, should the number of shares not be divisible equally as aforesaid, the Corporation shall purchase such odd share or shares, if the said other Owners meet said bona fide offer. Should one or more of said other Owners not desire to meet said bona fide offer, the remaining Owners, if any, shall hove the right to purchaoe an equal number of the shares as provided illllllediately above. If all of the other Owners shall foil to meet the bona fide offer received from the third party within thirty (30) days sfter offered to them, - , . . such shares may be sold to said third party provided that such third party shall first become a party to and become bound by this Agreement. This eection of this Agreement is in accord with the provisions of the By-La~s of - 2 ; \ ;; . , . oC the Corporation, and if it conflicts in any way with said By-Laws, this Agreement shall take precedence. 2. That each Owner hereby binds his estate and the Executor or Administrator thereof to sell to the Corporation and then to the other Owners, or partly to both, at the election of the surviving Owners, all of the shores of stock in the Corporation owned by him at the time of his death, at the price and upon the terms and conditions established by this Agreement. 3. That the Corporation convenants and agrees that at the death of any Owner, or at the death of any person who may hereafter become an' Owner, in compliance with the terms and conditions of Paragraph I hereof, it will, if the surviving Owners so direct, purchase from the estate of such deceased Owner, all of the decedent's shares of stock in the Corporation at the price and upon the terms and conditiona herein set forth. In the event the surviving Owners elect to become the purchaser of such shares individually, or any part thereof, then the Corporation covenants and agrees that it will fully guarantee payment of the purchase price of such shares to the estate of the deceaaed Owner in accordance with the terms and conditions of this Agreement. In order to preserve its capacity to comply with this obligation under the Businesa Corporation Low of the Commonwealth of Pennsylvania, the Corporation covenant a and agrees with the Owners, and the Owners, individually agree, that the Corporation will not transfer any funds from its capital stock paid-in surplus account, or from ~ earned surplus account to.its csmitsl stock account, or pay dividends from or otherwise deplete any of its capital accounts, so long as the Corporation has any liability either an principal or guarantor under this Agreement. - 3 - . . Shares of the Corporation so purchased, either by the surviving Owners or by the Corporation, may be resold to any person at the discretion of the surviving Owners, subject to the terms and conditions eatablished by this Agreement. 4, Th3t Gary C. lIeishman, Truman L, lIeishDlSn and Edward B. Shellehamer, each covenant and agree with the other that, at the death of any of them, or at the death of any peraon, who hereafter may become an Owner, in compliance with the terms and conditions of Paragraph I hereof, the aurviving Ownera will either purchase from the estate of the deceased Owner, or cause the Corporation to purchaae from the estate of the deceased Owner, all of the share a of IItock of the deceased Owner in the Corporation, at the price and upon the terms and conditions herein set forth. 5. That the purchaae price for the shares of a deceased Owner ahall be Five lIumlred Thousand ($500,000.00) Dollara, payable ao follolJs: Either in full or the sum of One lIundred Forty-five Thousand ($145,000,00) Dollara shall be paid to the Estate of a deceased Owner not later than ninety (90) days following the death of said Owner, and the balance of the purchase price of Three Hundred Fifty-five Thousand ($355,000,00) Dollars shall be amortized over a twelve (12) year period with interest thereon at the rate of ten (10%) per annum payable in monthly installments of Four Thousand Two Hundred Forty-two and 53/100 ($4,242.53) Dollars. The first such 'payment shall be made on the first day of.J:he sixth month following the .death of the Owner and on the first dsy of each month thereafter, said payments being first credited to the payment of interest and then the principal balsnce due until fully paid. ',~ - 4 - . . .' ~: ~f " ,.." ,1 f 'J, , '~ ! . 6. That in the event of the simultaneous deaths of the Owners, or their deaths under such circumstances as to render it difficult or impossible to determine who predeceased whom, or the death of all Owners within the same business year, the aesets of the Corporation shall be liquidated as soon as mey be conveniently done by Richard Snelbaker, Esquire and the firm of Waggoner, Frutiger snd Daub, Certified Public Accountants, acting together. In the event that the estate of a deceased Owner shall have received partial payment for shares of such Owner, such Owner's estate shall have its share in liquidation of the Corporation reduced by an equal amount. 7. That by tha execution of this Agreement, the parties hereto intend to legally bind themselves, their heirs, personal representatives, estates, successors and assigns, The Corporation enters in this Agreement with the approval of all of its stockholders and directors. B. Any chsnges or additions to thill Agreement must be ,made ,in writing and executed by the parties hereto. 9. That this Agreement shall be governed by and construed in accordance with Pennsylvania 'law. IN WITNESS ~IEREOF, this Agreement has been duly executed on the day and year firat above written. .JJ'ESSI '7/ ~ /(~#/rI. ;(/~ / ./- ~"'A+I/~JJLmu/ L) (SEAL) Edward B. Shellehamer ATTEST: !l.J... ;t.~ GET, (SEAL) Secretory By Guy - 5 - : ~ . rI l- ~ II --~ $ 'ill,OOO Dec, ...21lo 1900 Plalnfiold, Ponnoylvanla DEI-lAND NOTE FOR V^LUE ItEC~lVEll, the undernignod, Truman l!. Heishman("Oll1illorOO), Cor h1.neelf, h1s porsonnl roprosonl:atlvoo, hoiro, ~uccouoro and ossll1no, l.rOln1sos 1:0 poy uron DEIIANI) to tho ordor of IISlI ~IAN^G1!llEN'r, lNG" Ita suc- cessors Bn,1 nuiglls ("Obllgoo00), al: nouto GI,l, P.O. Ball G2, Plllinfield, t'ennoylvnn1n, 1700l, or III: such I.laco no tho holdor horooC inDY dos1&noto CrOln tLlno to U,no, tho principnl SUIO of Fiftv Thouollnd -0- lIulldred -0- Dollnro (~50, 000 ), lllwful monoy of tho Uni tod Stot:os oC ^mericn I tOGother with 1111:0rost IIccruod thoroon, Intoroot shnll occruo all tho unp01d bnlanco at the ral:o of oix and 09/100 I,ercont (G.09\) per IInnUln, I,nynblo se,ni-nllllually, cOlnlllellcinll slx Inontho frOln tho dol:o horoor. Poymonts shail be npp,lied Cirst to occruod Intorost ond tho bnlnnco to I.rlnclpol, OblIgor hereby wnlves nnd relennos nIL errors, dafocts nnd iml,erCoc- tlOIlS 111 nllY l'rocoed1I1g" 1l1sl:1tllted by the holder horoor, liS woll ns oil bOlloUts thnt might oor-rue to ObllgoLo by vlrtuo of any prooallt or Cutura lows, ollelnl'tlllg nllY I'L'oporty, roai or I,orsollal, or OilY pnrt of tho procoods nrlnlllg Croln tho snlo of nllY ouch proporty, Crom nttaclllnellt, lovy or sola ullller. executlon, or 1"'ovl.d1I1g Cor nllY stny of exocutioll, exel"l'tlon Croln oivil pr.ocoos, or. extellslo11 oC timo ror payment, "'.'~"">""'''''''~~''c'_.~",",__...,-__...-.",,_. \"""".......,.,..,."__~"'!'~'.,-"'~T_"'~....-._...,..,.....,,. .. ~"'.-.',.... '';'''"l:...:' . --"":"'" . - ;.' ~ . ~ ~- " . DISCLOSURES FOR CONFESSION OF JUDGMENT 1 AIt SIGNING. TillS lJL DAY OF DEe., 1988, A CONFESSION OF JUDGHENT NOTE, IIIIICII IIILL OBLIGATE ME TO PAY IISII MANAGEMENT, INC. TilE STATED ... PRINCIPAL SUM', TOGETIIER AT TIlE INTEREST RATE DESCRIBED 'l1IEREIN ON TIlE OUTSTANDING BAlANCE COliMENCING ON TIlE DATE IIEREOF UNTIL TilE PRINCIPAL IS PAID IN FULL. INITIALS: !!il. 7/, A REPRESENTATIVE OF IISI1 MANACEMENT, INC, EXPLAINED TO ME TIIAT TilE NOTE CONTAINS IIORDING TIIAT IIILL PERMIT IT OR ITS ASSICNS TO ENTER JUDGMENT AGAINST ME AT TilE COURTIIOUSE FOR TIlE ENTIRE AtIOUNT OF SAID NOTE IIITIIOUT TIlE RIGIIT FOR ME TO IIAVE PREJUDGtlENT NOTICE AND IlEARING, IlITIIOUT TilE RIOIIT TO IIAVE TilE BURDEN OF PROOF ON IISII tlANAGEMENT, INC" AND IIITIIOUT MY RIGIIT TO AVOID TilE EXPENSE OF OPENING OR STRIKING ^ CONFESSED JUDGMENT 0 AND TllAT TIlE JUDGMENT HAY BE COLLECTED AND ENFORCED BY ANY LEGAL MEANS, INITIALS: ?i..ti-r . .. .. I t - 3 - ,,#" __.........."._~.\'iR...,.,...--~.~ , ;,..~--"._-........~"'''.~-''~'-~~'''''~''''--..., .... , \<,:,.,-,-,'-"'- \, , I ..c.;.;- ,'~ ~ -. ,,~1;'_. _,_n_"__'_<<h_. ~ . ....,""',- '~'<_:',"~~.~ _~ :':':S~-:":-""l,;.'" :i'j< _- ",.~_~ --~ '. : Obligor agrees that his liebility shall not be affected in eny mennor by sny indulgence, extension of time, renewal. waivar or modification granted or consented to by holdet.-__., 1I01der shall not be deemed, by any act of omiStiion or commlssion, to have waived any of its rights or remedies h~rau~d~;'~~i~s;' ~uch'waivar is in writing and signed by holder, and then only to the ax tent specifically set forth in said writing. ^ waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event, Obligor authorizes any attorney at law to appear in any court of record, state or federel, in the United States of America, to confess judg- ment against Obligor in fevor of Obligee for the stated initial principel amount hereof, together with interest, costs of suit and attorneys' collec. tion fee of five percent (5\). . This warrant of attorney may be exerclsed from time to time and no one exercise of said warrant shall exhaust the same. This instrument shall be governed by end construed according to the laws of the Commonweelth of Ponnsylvenie. IN WITNESS WIIEREOF, end intending to be legelly bound hereby, Obligor has executed and sealed this Note the day end year first above written. .. WITNESS: )t: -Is .YJ1. ~ . ... OBLICOR: /J K---- if. ?Jh:JL~-, (SEAL) ~ - 2 . - '. , ___...._:.....~_.;.;;....-..;...;., .",~. .,.::....';~".',.:"..~~N.;-",~.._,-,_., .- --"":'" . . '. IN SIGNING TIIE.!Jp:r.~. I~t.!Q!OWI!lGL"{ ",]ND~RST~,DINGL"{ AND VOLUNTARILY WAIVING K'l RIGIIT TO RESIST TltE ENTRY OF JUDGMENT AGAINST ME AT TilE COURT- 1I0USE AND 1 AM. CONSENTING TO TilE CONFESSION OF JUDGMENT, AND 1 UNDERSTAND TIIAT IISII HANAGttlENT, INO, OR ITS ASSIGNS MAY ENTER JUDGMENT IMMEDIATELY ... AFtER TNE SIONING OF TNE NOTE, INITIALS: - !It. {I. 1 IIERESY OERTIFY AND VERIFY TlIAT M'I INCOME IS IN EXOESS OF TEN TlIOU- SAND DOLLARS ($10,000.00) PER ANNUM' AND TlIAT TNE OSLIGATION EVIDENGED IIERESY ARISES oUT OF A SUSINESS TRANSACTION, I OER'IlFY TtlAT 1 RECEIVED A COP'! OF TillS NOTE AND DISCLOSURE AT TilE TIME OF SIGNING, WITNESS: ~..I~ Y!1;)JA'_- . ~~ ;f ~;~j~ (SEAL) .. _ 4 - --~ #~b PROMISSORY JUDGMENT NOTE $100,000.00 April 1, 1989 The undersigned maker, TRUMAN L. HEISHMAN ("Maker"), does hereby promise to pay to the order of GET, INC., ("Obligee"), on demand, the sum of One Hundred Thousand and NO'lOO ($100,000.00) Dollars, without defalcation, value received, with interest from the date hereof at the rate of ten per centum (10%) per annum (said interest to be paid not less frequently. than annually on the anniversary date or at such earlier time as demanded by Obligee). And, further, upon Maker's failure to pay any amount due after demand therefor, said Maker does hereby authorize and empower any attorney of any court of record of pennsylvania or elsewhere, to appear for him and to enter judgment hereon against him for the above sum, with or without declaration, with coats of suit, release of errors, without stay of execution, and with ten per centum (10%) added for collection fees. And the said Maker hereby waives the right of inquisition on any real estate that may be levied upon to collect this Note and does hereby voluntarily condemn the same and authorizes the prothonotary or other clerk of court to enter upon any writ of execution said voluntary condemnation. And Maker further agrees that any property, real or personal, levied upon may be sold upon said writ of execution and hereby waives and releases all relief from any and all appraisement, stay or exemption laws of any state now in force or hereafter enacted, And, further, Maker does hereby create in favor of Obligee a purchase money security interest in the two (2) units [equivalent to 9.9% partnership interest] of the limited partnership known as Allen Distribution being sold this date by Obligee to Maker, which security interest shall be a lien on said units/interest and all distributions thereunder until all amounts due on this note are paid in full, and which security interest shall be perfected by noting the same on the books and records of Allen Distribution and upon the general partner of said limited partnership acknowledging the existence of said security interest and agreeing to prohibit any further transfer of said units/interest as long as any portion of the obligation of this note remains unpaid. .. IN WITNESS WHEREOF, the Maker has caused these presents to be duly executed and sealed as of the day and year first above written, intending thereby to legally bind himself, his heirs, personal representatives and assigns. , 0;- '1 ;!I,ut110,A J 9~ Truman L, He shman (SEAL) "........u_ ;:..'.P'"L''' FARMERS m TRUST _ AULlust 10, 1995 DavJd Muelvor Trust Deptartment Farmers Trust Co. P. O. nox 220 CarlIsle, PA 17013 Re: Estate of Trumnn L Heishman Dute oJf Death: No"~mber 13, 1994 Dear Mr. Maclvor: In answer to your requO!st concernlnll accounts owned, either separately or jointly, by the above referenced decedent and the balance in each account as of the date of death, we have checked our records and are subml t tine the followlnll Informat Ion In duplicate. We succest that you rile one of these letters attached to the P,,-,nnsytvanla InventOr)' forms (RCC) to substantiate the balance you report, Note that we have shown the correct reclstration for each account. Also, Interest accrued to the date of death, If any, Is listed as a separate flcure. Checklnll account number 1034936 was orlclnally opened on 4/26/S9, The account was Joint between Truman L, Heishman or Dona M, Heishman, The balance as of 11/13/94 was $14,100.01 plus accrued Interest of $5,68 for a total of $14,105,69. The account was earnlnll 2.10% Interest at the time of hIs death, Sincerely, Sh~~~ Shawnee E. Smith Customer Service Main Office One West High Street P.O. Box 220 Carlisle, Pennsylvania 17013 (717)243-3212 RECEIPT FOR PAYMENT ..mama_aaaaaaaaaaaa Cumberland County - Register Of Wills HanOVer and High Streee Car11s e, PA 17013 Receipt Dote Receipt T1me Receipt No. 3{~r~~~u 1007501 HEISHMAN TRUMAN L File Number Remarks 1994-00998 METTE HOWELL C ------------------------ Distribution Of Receipt ------------------------ Transaction Descr1ption Payment Amount Payee Name MISC PETITION (<!)(~;J \':c\ \ eN S \0 4.00 CUMBERLAND COUNTY GENERAL FUN '~I.l~G""\O(~ ) Check' 047380 Total Received......... $4.00 $4.00 20. If line 10 I, greater than Une 18, enter the difference on line 20. Thllll the OVERPAYMENT IJID 21. "line 18 I. greater Ihan line 19, enter the difference on llni21. Thllllthe TAX DUe. A. Enter thelnlerelt on the balance due on line 21 A, B. Enter thetota' of line 21 and 21A on Ilnl 210. Thll II the BALANCE DUE. Mak. Check Pavable 10: Regllter of WillI, Auent ;' , ,c . DE SURE TO ANSWER ALL QUESTIONS ON REVERSE SIDE AND ,TO RECHECK IIATH' . " Under penaltlel ot ptrjury, I declarlthatl have e..mlned Ihil reI urn, Including accompanying Ichedulll and 11alemenll, and to the bell ot mv knowledge and beUet, It II true, cOffeet and complete. I declare that all reale.tete hll been reported at true market value. DeclaraUon ot prap.rer other lhan ptrlonal repr...nt.livell b..ed on alllnformaUon of which preparer has tnv knowledae, SIGNATURE OF PERSON RESP SISLE FOR FlUNG RETURN ADDRESS DavldW. Maclvor, CFP , ~ ~~ ~ Mt- SIGNATURE OF PREPARER OTHER THAN REPRESENTATIVE ~ORESS I!! li~B w~O :Ca:-' U..., ~ I... III Z Ww a:O a:Z 00 Uo.. ... Z W C W U w C I '/.-,;J.yq.. 9 INHERITANCE TAX RETURN RESIDENT DECEDENT ,_ _ _c"WJi1~itii~d~~?slfE~~o"€~~I~) .' DEC[O[Nr. N......E lLASl. flRll. "'NO U'DUlt IHIIlA!) Halshman, Truman L &OClAlB'C~~;~~~~~701---l"";1ii;1~~fm- .1' uA;~f;~;~' ----- IURVMND ~:~:'~~~~ll~~~~[l ---- --- ioC2~~-~C~:I:~~:~[n-- (!Qj<;. 1"011 (JARS Of UtAlIl Nun IP13'1V1 cure.. IInu: II" A Rl10UnAL r.~_:~"Y CfJE!!rrlf!E~L~~:P_[J. filE NUIIOER 21-94-0996 COtol~AlmOF rtNNSYLVAN.... ttrAAlIroI[NlOF r1rvtNLC OCPt,llOOOl UARAlSBUnQ.PA "'''.0<<11 -o.'!OUH.tJtQPt....__=J!1~11:_-=.. ()f ClU[NT'. COU,'lCl[ ADORCS. 623 Aloxandor Spring Road Carlislo, PA 17013 C.~" 21-94-0998 AMOUNI nl:c[JV[o IIU INSTRUCTIONSI NUMUU\ 2,25~,454,gQ. IXl o IXl D 2, Suppllmenl.1 Return CJ 3. Rem.lndlr Return (for dall' prior to 12-'2-82) D 4a. Future Interest Comproml.. 00 5. Federtl E.tate Ta. (tor datil of death after 12-12-82) Rlturn Rlqulred O. Deeldlnt died T..tell D 7. DlCedlnt Malnttlnld t LMng Trult _-11_ 8. Totel number at Sare Depo.1t Antchco ofWlI Ah.cheo oftrull 00'" ALL CORRESPONDENCE AND CONFIDENTIAL TAX INFORIIATION 8HOULD DE DIRECTED TO: COUPlETE MAlUNOAOOOElS Farmom Trust Company Trust Dopartmont P.O. Box 220 QfIl1l~Il,EA.JJ.!!J 3 Nono Nono 1, Orlgln.1 Return 4. Umh.d e.tate HAME David W. Maclvor CFP TEUPHONE N\JUOER 717-243-3212 Z o ~ E o.. < U w a: 1. R.al elt.te ( Schedul. A) (t) 2. StOckl Ind Bond. (8chldul. B) (2) 3. Closely H.ld Stoclf./Ptrtner.hlp Interllt (Schedull C) (3) 4. Mortgagel and Notll Receivable (Schedule D) (4) 5. Cash, Oank Depollt. & Mlleellaneoul Perianal Property (5) ISchedule E) O. Jointly Owned Prop.rtv (Schedule F) 7, Tranaterl (Schedule 0) (Schedule L) 8. Totti Groll A..etl (Iotallln.. 1-7) U. Fune,.1 E.".n.... Admlnl.tratlve COlt.. Mllcellaneou. (Q) expenle. (Schedule H) '0. D.bt. Mortgage Uablllllll, Uen. (Schedule Q 11. Tolal Deduction. (Iotalllnel V & 10) 12. Net Value of Elt.te (line II mlnu.llne 11) 13. Charitable and Governmental Bequtltl (Schedule J) 14. Net Value Subject to Talt (line t2 mlnulline 13) 2,253,454.20 Nono 1,941,504.00 500,000,00 36,934.70 77,333,34 Ie) 90,687.22 211,630.62 111) (12) (13) I'") 2,253,454,20 X 0.03 - 0.00 x .00 - 0.00 X .15 - (10) ~~ (e) (7) 2,555,772.04 (10) 302,317.64 2,253,454.20 Z o g .. :E o t.l ~ 15, Spousal Tran.fer (for datil tfter e-30-D4) s.. Inltructlons for Applicable Percent on Ravene (15) Side. (Include valulI tram Schedule K or Schedule M,) 10. Amount of line 14 taublea II" rate (Include yatu.. tram Schedule K or Schedule M) 17, Amount of lin. '4 taxable at 15" r.t. (IncludtvtlUII from Schedule K or Bchedule M) t~. Prlnclpaltt. due (Add lax from line 15, 10 and from lIne '7) 1V. Creditl Spoultl Poverty Credit Prior Paymentl Discount 0.00 + 0.00 + 0.00 11V) (20) 0.00 (Ie) 67,603.63 0,00 tl7) 0,00 Inler.lt 0.00 Check hore If you are requotltnn n relund of your overpayment . 67,603,63 . 0.00 67,603.63 (21) 12'A) (216) D.le :r;h-:~ S- Date Act #48 of 1994 provides for the reduction of the tax ratos Imposed on the net value of transfers to or for the use of the spouse. The rates prescribed by the statute will be: 3% (.03) will be applicable for the estates of decedent's dying on or after 7/1/94 and before 1/1/96 2% (,02) will be applicable for the estates of decedent's dying on or after 1/1/96 and before 1/1/97 1% (.01) will be applicable for the estates of decedent's dying on or after 1/1197 and before 111/98 Spousal transfers ocourrlng on or after 1/1/98 will be exempt from Inheritance tax. PLEASE ANSWER THE FOLLOWING QUESTIONS BY PLACING A CHECK MARK (X) IN THE IN THE APPROPRITATE BLOCKS, YES NO 1, Old decedent make a transfer and: a. retaIn the use or Income of the property transferred...................................................................... X b, retain the right to designate who shall use the property transferred or lis Income,..,..,................ X c. retain a reversionary Interest or ...................................................................................................... X d, receive the promise for life of either payments, beneflls or care? ......,....................,......,.............. X 2," death occurred on or before December 12,1982, did decedent within two years preceding death transfer property without receiving adequate consideratIon? " death occurred alter December 12, 1982, did decedent transfer property within one year of death without receiving adequate consideration ? ............,..................................,........................... X 3. Old decedent own an 'In trust for' bank account at his or her death? ..................................,....,..... X IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHEDULE G AND FILE IT AS PART OF THIS RETURN. . -- - po< .-',., . 'j.,~.""_"""",,,~,_.," ,_. .._._."...~____..;;..... '~,-:.......~:._; ~':;.'J:.".~_.-.,.,", ;_.,:<"..'~..-_~\."i~~' .w ~~=:.::.- EBTA11! OF SCHEDULE C CLOSELY HELD STOCK PABJ:N1:Illllil~ND-EBQfBJ1:LQ8SI:lJE.. Pl,," P.t!nl..Jn.lyP' Truman L Helslvnan FILE NUllOEn 21-94-0996 '11!1l NUllOE DEeCRlFTION VALUE AT DA11! OF DEATH 1. Allen Distribution, Pertnershlp 14.65% Interesl 2. HSH Manogemant Ino, Partnership 1131nleresl 1,604,275.00 137,229.00 Tatal ,liD .nter an Un.:t rlCI lIutadon (tf more .paclll n..d,d.lna'" addltlonal'heets of ..m. Ilzl) 1 941 504.00 t< 'I , ,r" , 0- M L1', , I :=.'T.&j'tM~"HNlnVtoJM ,"MUCC1Al,.",... ..callCWT ESTATE OF Truman L Heishman SCHEDULE D MORTGAGES AND NOTES , III FILE NUMBER 21-94-0996 All fa I olnll -ownld wtth the RI ht of Survlvor.hl mUlt b. dlaclol.d an 8ah.dull F. OEBCRlPTION nA~~~~~TH 1, Gellno" Buy/Sell Agreemenl 500,000.00 Tolal al.o ant.r an IIn, 4 rlCI ulaUon (tt mora apaa. II n..dld. Inll" addltlona. aha'l af ..m. alze) 500 000,00 .UlnlOPPI..'I'lV...... ...NfNClI T....lW1UIW . .....WT .ClIDlWT ~ SCHEDULE E CASH, BANK DEPOSITS AND MISCELLANEOUS ~RSQNALeBO.eERIY PIWI Print ar Tval FILE NUMBER 21-94-0990 ESTATE OF Truman L Heishman (AU DrOPlrtY olnU -ownld with lhl RI hI 0' 8ufYlvarahl mU.l bl dllc'o..d on Bahdul. F. ITEM OESCAlPTION UMBER VAL EAT D OF OEATH 1, AmertcBn Express Trevelers Check 2. Capital Blue Cross, benefits 3. Penn Trsaty Ufe Insurence Compsny, prsmlum re'und Long Term Care 4, HSH Management Ino, wagea 5. GET Ino, wages 6. 1967 Chevrolet 7, 1994 Ford Ranger 100.00 46.00 272.57 0,990.96 720.17 5,000.00 20,995.00 Total alia .nt" on IIn.. reea Itutatlan (tf marl .paolll n.eded, Inllft addltlonallheltl of .am. .11t) 36 934.70 'i~<~):O,,' - :' ~;'~:..>.~ ,',_;r.."'''''' -1" , ~:;. . ~ ff f(~J -AIBJIl.IUlL>lIl1. ESTATE OF Trul1!!!..n L Heishman L SCHEDULE F ~ JOINTLY-OWNED PROPERTY .~ S%~~------=. '""""_._~. FILE NUMUER 21::!14 - 0998 - ~Al.,"or"""'''.uM . "'''''Net tAlI"""" Joint 'en.nl(l): IlMilE ^llpnl1UL- _ lll1LAIlOJilUilP TO DECl1J).IlllL Sister & Brother-in-Law A. Edwsrd & Karolyn Shellehamer 2088 Newville Road Plalnlleid, PA 17081 B. Gary & Vonnie Heishman 10 Cedar Court Cartlaia, PA 17013 Brother & Sister-in-law C. i l JoInllv- own.d DrooenV: N~U'.reR 'F\;R'n DATE TOTAL VALUE DECD'S DOLlAR VALUE OF JOINT MADE DESCRIPTION OF PROPERTY OF ASSET "INT. DECEDENTSINTEREaT TENANT .JOINT 1. A&B 1987 212-6 N. Heron Dr, Ocean City, MD 232,000.00 33% 77,333.34 _. . Totalllllo ant.r on Iln. e ,ec_ellul.llon' - 77 333.34 " 4~ ~.' , ~ i (" mo,a .pac.l. n"d.d,ln..rt addJtlonal.h..t. of ,.m. ,In) .......... l'UHOI'I"C"'nvAIM IHNwcc TM N1\lI'H . .....'" .~m:N1' SCHEDULE H J FUNERAL EXPENSES AJl~bN~E~ll~Ja'8~&Sr!lN~D I!JIIILTYIILJlrJ!llnL- FILE NUMBER ;,. i .; EBTATE OF ITEM NUMBER A. 1. Truman L Halshman 21-94-0998 AMOUNT DESCRiPTION Funeral Expenses: Ewing Brothers Funeral Home Dona Heishman. reimbursement Cumberlend Valley Memorial Gardens 8,930.00 550.00 B. AdmlnlstraUve Costs : Farmers Trust Company (estimated) 35,752.55 1. PIt.onal R.prl..ntatJvl Commllllon. Social Security Number of P.rlonal nlprluntAUvl: VI'" ComrnJlllon. paid _ 2. Attorn.y FI.. Martson, Deardorff, Williams & Otto (estlmatad) 35,752.55 3. Famlly E..mpUon Claimant Donna Helshma Rllallonlhlp Wife Addr... 0' Claimant at deeld.nt'. death Strlet Add.... 623 Alexander Spring Rd Cfty Carilsle, Slall PA 2,000.00 4. Probata F... Register of Wills, Latters Testamentary 235.00 C. 1. 2. 3. 4. 5. 6. 7. Miscellaneous Expenses: Cumberiand Law Joumal, advertising Lettere Testamentary The Sentinel, advertising Latters Tastamentary Raglster of Wills, Short Certificate Notary Fees Phillips & Uoyd Appraisals, balance due Ocean City MD property MIscellaneous Filing & ClosIng Costs Boles, Grove & Metzger PC, CPA Valuation Allen & HSH 40.00 62.12 9.00 6.00 250.00 500.00 6,600.00 Total alia Inter on IInl 0 reea ltulaUon (If more apaa. la nlldld. Inllrt additional ahet. of ..m. ,'n) 90 687.22 .;t: ';""....""... ;....';.4~,"_-;"........~~...<W~. ~AUHDfI"ftNIl'\VNM . "''''NIOITM''''''''' .....'" _WWWT SCHEDULE I DEBTA OF DECEDENT MORTGAGE LIABILITIES AND LIENS t"'leUl!.tl1n1 or I YOe FILE NUMOEn 21-94-0996 ESTATE OF !--' . i t f .. " f I ~ I , j I Truman L Heishman ERftlPTfON MOUNT NUMBEn 1. Farmers Trust Compsny, crudll card bills 2, United of PA, telephone service 3. Hoy'e Gruenhouoe, balance due 4. Dona Heishman, rulmburse lor VISA bills & postage stamps 5. Ministry 01 Plainfield Lutharun Church 6. PA Power & Ught Company, balance duo 7, Amoco 011 Company, balanca due 6. MCI, balanOD due 9. Cellular Ona, balance due 10. Commonwealth of PA, auto ruglstratlon 11, Touches landscaping, balance due 12. Donald J. Vanbosklrk MD, balanOD due 13. GET Laaslng,lnterest on Ncte payable 14. Heishman, Heishman & Shollohamer, 1/3 rulmbursement condo costs 15. HSH Management Ino. Nota 6,69% 16. GET Ino. Note 10% 17. Farmers Trust Company Home Equity Loon, 1/2 outstanding balance 16. Farmers Trust Company Ncte, 1/2 outstanding balance 19. Chasa Bank of MD, 1/3 outstanding mortgsga balance Ocaan City property 20. Dona Heishman. rulmburse automobile transfar costs 1,264.03 66.51 217.30 99.72 200.00 312.70 36,60 17.36 43.77 39.00 610.00 60.00 5,000,00 2,594.34 50,000.00 100,000,00 9,632.50 4,500.00 36,704.57 6.00 Total "'0 ent. on Wn'1D riel. ttulallon Ctf more .p.oe 'I ne.d.d,ln.ert .dditlon.1 Ih..ta o' Mme .Ize) 211 630,62 _.,<.",,- \ ,",~. e,;,"'\"7.';:'_"-.~~,._,^";,:;"""""",."" ", r:=~::='- l EITATE OF SCHEDULE J BENEFICIARIES I FILE NUMBER 21-94-0996 Truman L Heishman ITEM NUMBER NAME AND ADOREBB OF BENEFICIARY RELATIONSHIP AMOUNT OR sHAI1E OF EBTATE A. r.ublt Pequot.: 1. Fsrmers Trust Company Trustee Under Will Truman L Heishman FBO Donna M. Heishman Wile 100% Il1!M NUMSER NAME AND ADDRESS OF BENEFICIARY AMOUNT OR SHAI1E OF ESTATE P. Charttabl. and Gov,rnmlntal Plqul.t.: 1. TOTAL CHAI1ITABlI! AND GOVERNMENTAL BEOUESTS AI.. ..... on Un. ,. Roc kuloU.n (" mort apaa"1 n..dad. Inl.rt additlanal ah..tl a. ..m. tin) 0.00 ......IMJ...lnll w SCHEDULE C-' CLOSELY HELD CORPORATE STOCK INFORMATION REPORT COMMONWEAlTH 0' 'ENN'YlYANIA INHUlTANCE TAX a(TUIN aUIDEN' DECEDEN' Plea.. Ty . or Print FILE NUMBER 21 94-0998 ESTATE OF Truman I" lIeishman The followinn information must be submitted with this schedule' A. Ol1ollod doscrlpllon ,howlno Iho mothod 01 computation utllllOd In tho voluollon 01 Iho docodont'. .Iock. 8. Compl.t. copl.s of tinondal ,tat.m.nll or compl.l. copl.. a. the fed.ral Tax R.turns (f.d.ral form 1120) for the y.or of d.ath and A pr.c.ding y.ars. C. Slal.m.nl of dlvld.nd. paid .och YlOr. lilt .hoil d.clar.d and unpaid. D. U.t nom.. of oHlclra, salorle., bonu... and any oth.r b.n.fil. rec.lved from Corporation. E. 11 the Company owned rlOl..lot., submit a list .howlng the campI... add",,/.. Dnd e"lmated Fair Mar..t Valu./.. 11 Real E.tal. Appral.ah hay. b..n ,ecured, plea.. allach copl... f. List prlndpal ,tockholde,. 01 dol. of d.ath, numb., of .har.. h.ld, and relationship to deced.nt. G. Any other Information ,.Iallve 10 Ihe valuallon 01 the dlCed.nt', Inl,,"I. l. Nomo of Corporarlon IISH Management r Inc, SlrootAddro" Route 641, P.O. Box 62 Clly Plainfield Sloto PA Fodoroll. O. Numbor 25-1570649 (Somo A. Fodoral Form 1120) Typo 01 Bu.lno" business management PA Slat. of Inc. Oato 01 Inc. March 30r 1988 3 17081 Total Number of Sho"hald.n lip Cado 2. Busln." R.partlng V.or 10 3. A. Pradud TOTAL' SHARES OUTSTANDING PAR VALUE , SHARES OWNED BV DECEDENT STOCK TYPE Common 100 000 $ .10 33 333 Preferred 5. Provldo all rlohll and ro.t~dlon' portalnlnll to oach cia" of ,tock. Wa. docodonl omployod by tho Carporallon' 0 Vo. liiI No 11 y", Po.lllan Annual Salary $ TIm. D.voted 10 bu.ln." Woo Iho Corporallon Indobled 10 Iho docoden" 0 yo, rn No If y", provld. omaunt of Indebl.dn... S Wo. ,here Iif, Insurance poyabl. ta the carparollon upon d.olh of d.ced.nl' 0 Ve. C&J No If ye., Ca.h Surrender Valuel $ N.t Procllch Payabl'l S Ownor 01 Policy Old the deced.nl ..II or transfer .'ack of thlt compan)' within on. y.ar f!.Iar to d.ath If the dol. of d.alh was on or after 12/13/82 or wllhln two yoan II the dolo of dooth wa. prior 10 12113/82' 0 Ve. l2!I No If Y"l 0 Trans'er DSale , of Shar.. Tran".,.. or Purthallr 6. 7. B. Condd.,allon S Attach a saparal. .hlll for additional tranale,. and/or sol... 9. Old th. corporation have an Intor..' In other carporallan. or portnenhlps' lEI Ve. 0 No If y", r.port th. nec.llary Informal Ion an a ..parol. she.t, Including Sch.dul. "C.l" or "C.2" for .om Inl.IIst. Dot. 10. Was Ihere a wrltt.n sharehold,,'. ao".m.nlln effOel at the '1m. of Ih. decedent', d.a,hf DYes [&J No If y", provld. a copy of the ao".mlnl. 11. Wollho docodonl'IIloc\lSold' 0 Vo. rn No If y", pravid, a copy of Ih, ao".m.nt of ,01., elc. 12. Wo"he corporation dinolv.d or IIquidotod oft., ,hI d.c.d,nt'. d.ath' 0 V.. IKJ No If y", provld. a bllokdown of Iiquldotlon dislrlbutlons, .tc. Attach a "parole .hllt. .. ",..--' , -.~ ,- ---"":""" , , - \ 'I~ U06Uf I,qll SCHEDULEC.U PARTNERSHIP INTEREST REPORT Plea.e Tyee or Prlnl FILE NUMBER 21 94-0998 ~j~ COMMONW(AlHt 0' 'fNN~YlVANI'" INHUIfANC( TAX IUUIN IUIDENT DECEDENT ESTATE OF A. D.tall.d d..crlptlan .hawlng th. m.thad 01 camp uta lion ullllzed In th. valualion of th. d.c.d.nt'. Inl.r..t. B. Campi. I. copl.. of flnanclal.tal.m.nl. or campl.l. copi.. of th. F.d.ral Tax R.turn'IFarm 10651 lor th. y.ar 01 d.ath and 4 pr.c.dlng y.ars, Including abalone. .h..t lor Ih. y.or of d.ath. C. If th. Company own.d R.al E.lal., furnl.h a 11.1 .howlng th. compl.l. addr.../.. and ..tlmat.d Fair Mark.t Valu./.. II R.al E.tat. Appral.al. hay. b..n ..cur.d, pl.a.. allach copl... D. Any ath.r Informalion r.lotlv. 10 th. valuation of th. d.c.d.nt'. Inl.r..t. 1. Nom. of Parln.rshlp Allen Distribution F.d.rall. D. Numb.r 25- 1 576445 IA. p.r Form 1065) Dol. Bu.ln... Comm.nc.d Nov, 7 , 1 988 Addr... 670 Allen Road Bulin... Activity Warehousi nq 2. D.c.d.nt was 0 OG.n.raII&lUmlt.d portn.r. If d.c.d.nl was 0 IImlt.d partn.r. provid.lnltlallnv..tm.nt S 100 , 000 ,.00 Carlisle, PA 17013 3. PARTNER'S NAMES 'llo O. tNCOME 'llo 0. OWNERSHIP SALARY BALANCE O. CAPITAL ACCOUNT A. B. C, o. 4. E.tlmat.d Valu. of d.c.dent'. Int.r..f: S 1,804,275,00 Oy.. liD No 5. Was th. partn.rshlp Ind.bt.d to Ih. d.c.d.nt' If y... pravld. amount of Ind.bledn... S 6. Wa. Ih.r. 1If. In.uranc. poyabl. 10 th. partn.rshlp upon lh. d.alh olth. d.c.d.nt' Dy.. UlNa If y.., Ca.h Surr.nd.r Valu.: S N.t proc..d. payabl.: S Own.r of Policy, 7. Was th.r. a wrlll.n partnership ogr..m.ntln .fl.ct olth. tlm. ollh. d.c.d.nl'. d.alh' [ly.. DNa If y.,. allach copy 01 agr..m.nl. B. Old Ih. partn.rshlp hay. an Int.r.'lln any oth.r partn.rshlp. or corpora lion.' Dy.. []Na If yes, reporllhe necessary information on a separate shoot, Including Schedule "C-1" or "C.2" for oach Interesl. 9. Old th. d.c.d.nl'.Int.r..tIn the partn.rshlp chang. In th. y.or b.lar. d.alh If th. dol. of d.ath wa. an or alt.r 12/13/82 or If d.ath occurr.d prior to 12/13/82 In lh. 10.1 two y.ars' Oy.. I1iINo If y.., .xplaln: 10. Wa. th. d.c.d.nt r.lal.d 10 any of tho oth.r partn.rs' I1iIY.. ONu Ify....xplaln: Gary C. Heishman, brother: Karolyn II. Shellehamer, sister; Edward 8, Shellehamer brotheE:i-in-laW 11. Wa. Ih. partn.rshlp dl..olv.d or IIquldot.d afl.r d.c.J.nl'. d.alh' y.. IKINa If y.., r.porl alllh. r.lot.d Informal lon, Including copl.. 01 th. Sol.. Agr..m.nt ond/or S.III.m.nt Sh..t. 12. Wa.lh. d.c.d.nl'. portn.rshlp Inl.r..t.old' Oy.. [!lNo If yes, provide 0 copy of the agraemnt of sala, etc. v ~. /L/.,J.<!'j-/ LJ/(il L REV-1547 EX AFP (12-95* CD""OHWUlTH OF PEfoIdVlVAHIA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL 'AkES DEPT. lID611 HARRISBURG, PA 17121.06Dl NOTICE OF INHERITANCE TAX APPRAISEHENT. ALLOWANCE OR DISALLOWANCE OF DEDUCTIONS AND ASSESSHENT DF TAM ACN 101 DATE 02-19-96 FILE NO. 11-13-94 COUNTY CUMBERLAND NOTE. TO INSURE PROPER CREDIT TO YOUR ACCOUNT. SUBHIT THE UPPER PORTION OF TNIS FDRH WI TN YOUR TAM PAYMENT TO THE REGISTER OF WILLS. HAKE CHECK PAYABLE TO "REGISTER OF WILLS. AGENT" REMIT PAYMENT TO: DAVID W MACLVOR FARMERS TR CO TR DEPT PO BOX 220 CARLISLE PA 17013 REGISTER OF WILLS CUMBERLAND CO COURT HOUSE CARLISLE, PA 17013 A.ount R..ttted CUT ALONG THIS LINE ~ RETAIN LOWER PORTION FOR YOUR RECORDS .... iiE"y:is47-Eif-AFP-ii'2-:9i;"r-ijiiYicEuOF-"iriHEifiTANCE-YA'itAPPRA-isEHEij'r;-iii.i.-O'WAiici-jili-m--u----m-- DISALLOWANCE OF DEDUCTIONS AND ASSESSMENT OF TAX ESTATE OF HEISHMAN TRUHAN L FILE NO. 21 94-0998 ACN 101 DATE 02-19-96 TAM RETURN WAS. <<X I ACCEPTED AS FILED RESERVATION CONCERNING FUTURE INTEREST - SEE REVERSE APPRAISED VALUE OF RETURN BASED ON: ORIGINAL RETURN 1, R..l E.t.t. <<Schedule AI III 2. Stock. and Bond. ISchedul. BI <<21 5. Clo..1~ Held Stock/Partnerahlp Int.r..t (Schedule C) (3) 4. Kort~./Nat.. Raceivabl. (Schedule D) (It) S. taah/lllnk Oepodta'Hhc. p.,..on.l Property (Schedul. E) II) 6, Jointly OlIn... Property <<Schedul. F I (61 7. Trenafa,.. (Schedul. QJ (7) a. Tot.l A...t. I CHANClEO .00 .00 1.941.504.00 500,000.00 36,934.70 77,333.34 .00 (BI 2,555,772.04 APPROVED DEDUCTIONS AND EXEMPTIONS: 90,687.22 9. Funeral Expen.../Ao.. COli./HI10. Expen... (Schedul. H) (9) 10. Ilabh/Horto.oa LlabUIU../Ll.... (Schedule II UOI 211 .630.62 11. Tot.l Deduction. (Ill 12. Net Value of Tax Raturn (12) 15. Charitabla/Govarnaental a.que.t. ($chadula 4) C1S) l~. Hat V.lue of E.t.t. Subj.ot to T.. Il~1 NOTEI If.n .......Bnt w.. i.Bu.d pr.viou.ly, lin.. 14, 15 Bnd/or 16, 17 ond 18 will refl.ct figur.. th.t includ. the total of ~ r.~urn. a..B..ed to dBte. ASSESSMENT OF TAXI 15. Aaount of Line l~.t Spouoal r.t. US) 2,253.454.20 16. A.ount of Lin. 14 t.xable at Llna.l/Cl... A rat. (16) .00 17. AItount of Line 14 taxab1. at Collataral/Cla.. I rat. 117) .00 18. Principal Tax Due ~n?~17 At. 2.253.454.20 .00 2.253.454,20 M .03. M.06. M ,15. I1BI 67,603,63 .00 .00 67,603.63 TAX CREDITS: PAYHENT DATE 08-11-95 RECEIPT NUHBER AA048103 OISCOUIIT (+1 INTEREST (-I ,00 AHOUNT PAID 67,603.63 TOTAL TAX CREDIT BALANCE OF TAX DUE INTEREST TOTAL DUE 67.603.63 .00 .00 ,00 . IF PAID AFTER DATE INDICATED, SEE REVERSE FOR CALCULATION OF ADDITIONAL INTEREST. << IF TOTAL DUE IS LESS THAN .1. NO PAYHENT IS REQUIRED. IF TOTAL DUE IS REFLECTED AS A "CREDIT" ICRI, YOU HAY BE DUE A REFUND. SEE REVERSE SIDE OF TNIS FORH FOR INSTRUCTIONS. I "~ ~ .-, i.)(-; REIERYATIDH, E.t.t.. of decedent. dying on Dr before Dec.-blr II, I'll .. If InV future Int.r..t In the I...t. I. trtn.f.rred In po.....lon or snJo,..nt to CI... . (col..t.r.l) bentf.o..rl.. of thl dtctdent .ft.r the ..,Ir.tlon of IftY ..t.t. for Ilf. Dr for v..r., the c~lth hereby ..,r...lv r...rve. thl right to ."r.l.. tnd ...... trtn.f.r tnherltsnc. ,.... .t the I~ful el.., I (coll_t.r.l) r.t. on InY such futu~ Int.r..t. PlIlPOII! 01' NOTICE I ro fulflU thl r...lr.-nh of hotlon IIU of the lriMritsnc. and E,t.t. r. Act, Aot II of 1"1. 11 '.1. IIotlon IUt. PAYNDfl'1 Deteon the top portion of thl. NoUn end __it ..Ith your pIIJWMt to the A....t.r of Wnh printed on tM rev.n. ,Ide. ..Htk. chtck Dr ItDnIV orellr p.v-bl. tal REGISTER OF MILLS, AOEHT AU P'YMnt, rH.lved thlll flnt be .".111d to tnY Inter..t Witch .." be due with .,y n..I"r .".Ued to the .... RfruHD (ClU I A r.fund of . t.. crldlt, Wilch .... not requ..ted on thl ,.. A.turn, MY be r..,..tld by cDllPI.tlnt ., "Applle.tlan for A.fund of ,,"",vlv.,l. Inhlrltenc. end E.t... 'I." (REY-1SIS). Appllcltlon. Ir. .v.lltbll It the Dffle. of thl AII..t.r of Will., InY af thl IS A.v,"", DI.trlct Dfflc.., or by c.lll"I the speal.1 I~-hour .,.werlnt ..rvlc. nutblr. for for.. order Inti In PennlYlvsnl. 1-'OO-S4I-IOSO, out.lde Penn.vlvlnl, end ..Ithln loc.1 Harrlsbur. .r.. (717) 7.7.1094, fDDt (111) 71'-1151 CHe.rlng IIP.lred Only). DIJECllDNI, ArrJ pert)' In Intlr..t not ..thfled ..Ith thl! IIPPr.l.......t, .Uowsnc. or dl..llowenc. of dIWOtlon., or ........nt of t.. (Including dl.count or Int.r.,t) .. thoMn on thl, Notlc. lU.t object ..I thin ,I.ty ('0) dlY. of rec.lpt of thlt Notlc. bYI .-Nrltt., prot..t to thl PA o.,.rtttnt of A.venut, ao.rd of ~.I" Dlpt. 1'1011, Harrllbur., 'A 1711'-1011, OR .-.IHtlon to hlv. thl ..tter d.t.nlntd .t Mldlt of 1M ICCount of thl perlonll rtpr..en"Uv" Olll ueppul to thl Orphtn.. Court. AOMIH IlTAATlVE CORRECTIClaI DIICOlMTI 'HtUlI error. dllClov.rld on thlt .........,t ahoUld be addnued In Mr1 tint tOI PA o.,.rtHtlt of A........, lur..u of Individual T..... ATTHI ,o.t A..........t A.vlew unit. Dlpt. 110601. Harrl.burg,'A 11111-0'01 Phone C711) 117-'505, ... P'" S of the bookl.t "In.truetlon. far Inhtrlt~. 1.. Rlturn for a A..ldent u.c.dInt" (REV-1101) for en 'MPlanttlon af ~lnl.tr.tIVllv correetlbla .rror.. If MY t.. due It ,.Id ..Ithln thrH CS) c.I""r Hnth. .fter the d..tdtnt'. duth. . fI.." ,lre."t IU) dltoaunt o' the t.M p.ld I. .IIDMld. INTEREST. Int.r..t It chIrgld btalnnlnl with flrll du af dellnquenov. or nine C,) ...,th. .. one (I) dey froe thl det. of dNth. to the ct.t. of p.pent. T.... Mhlch btceM delinquent before JMUlry 1. 191' beer Int.,..t .t the r.t. of .iM (6:C) pere."t per ennue calcul.ted .t . dtlh' rat. of .D0I1M. All t.... Mhlch beG_ cMllnquent an .-MIl .ft.r J8nUlry I. I'll ..III be.r Int.r..t .t . r.t. which .111 v.ry fr.. elltndtr y..r to c.ltndlr VHr with thet r.t. snnounoed by thl PA Dtp.rt.-nt af A.venut, The tppllcebl. lnt.r..t r.t.. for 1'12 through 1996 Ir.1 !!!! Int.r..t A.t. D.lly Int.r..t ,..tor ~ Inttr..t R.t. o.llv Int.r..t Fectar 1't! Uk .aaaMI 1'17 OX .lOat47 I9IS 16k .aaant 190-1"1 Ilk .aaDSGI I'" Ilk .oonn I"' OX .DDD2.., I'll ISX .0DDS56 .995-1"" 7X ,OIGI" ".. lOX .0001'4 ."5-1996 OX .000247 .-Int.r..t I' c.lculated I' fol1011I1 IHTEREBT . IALAHCE OF TAX UNPAID X NUKlER OF DAYI DELINQUENT X DAILY IHTEREBT FACTOR --Anv Hotlc. I..utd .ft.r thl t.. ~.... delinquent will r.flect en Int.r..t cllcul.tlon to flftllft (IS) day. beyond tM ct.t. of thl ..........t. If ,Ipent It udI Ifter thl! Int.rllt cCMllJlUt.Uon ct.t. shawl on the Notlc.. addltlantl Int.r..t .u.t be c.loul.tld, .,. .... -.-..,..........'., , ~ , ~---~._"-_._.----_..-_._-.-------_._-----~--------~.--._----~--- "', ," -,.-.,,' --~,:\,':, ':->,'. .--',.,.'., ....,.,-/,'-" ...... :--"~';'<<."-'-':-'" .',' . - "--- ..... " d"~AA 048103, ,C~~MOND~:~~~T~~R~:~:YLVANIA ,'. :'~i.;~i; ~"I J," ,. OFfiCiAL RICEIPT,. iiiNNSYLVANIA INHERITANCE AND ESTATE TAlC ,,", ACN eJ ASSESSMENT I!' II CONTROL IiiI NUMBER ,o. __.'.'.', ..,.".,: . ,.:....- ". ,,",-' , ". ,'..l RECEIVED FROM. AMOUNT FARMERS TRUST CO -TRUST PEPT. DAVID W MACI-VOR POBOX eeo CARLISLE PA 17013 101 _67,603.63 1010 Hili :-'OIo,Hllt ESTATE INfORMATION. ~ fll NUMBER U el-l'194-0'1'1e II NAME Of DECEDENT (lAST) II DATE Of PAYMENT m POSTMAR COUNTY SSN 202-20-4701 (FlRSTI (Mil DATE Of DEATH REMARKS m TOTAL AMOUNT PAID .1>7,1>09.63 SK SEAL FARMERS TRUST COOP AN V cIa PAVIa W MAC I. OR,CFP CHECKt 61-seeObb4S'1 RECEIVED BY , IIONAlURE ' REGISTER OF WILLS MARV C. LEWIS REGISTER OF WILLS a_:Ci;::.-:--:::---:-----...-,---7--~-.~---..~-...-"-~-~ -- ---- - -- --- - - -.- ---.....-::l~:-..:-:. ~~;. ._ ',- 'f ,. '" . f '.. "'! .r,; , t' I ", ~. . t .. . .' , " -'t' j'.---'" ,.--" v~ .~.:::-----;";..,.~ I ~ _ 1 ,..-,:- . " ~EV'483 EX AFP 112'95~ CDHHONWUlfll or PENNSYLVANIA DEPAArNEN' Of REVENUE BUREAU Of INDIVIDUAL tAMEI DEPr. r1D60, tlARAUIURD, Pi Unl.0601 /1/ - Jl/ 9- 9 0- ACN 201 NOTICE OF DETERMINATION AND ASSESSMENT OF PENNSYLVANIA ESTATE TAX BASED ON FEDERAL ESTATE TAX RETURN DATE 04-29-96 HEISHMAN TRUMAN l FILE NO.21 94-0998 DEATH 11-\3-94 COUNTY CUMBERLAND NOTE. TO INSURE PROPER CREDIT TO YOUR ACCOUNT. SUBHIT THE UPPER PORTION OF THIS FORH WITH YOUR TAX PAYHENT TO THE REGISTER OF WILLS. HAXE CHECK PAYABLE TO "REGISTER OF WILLS. AGENT", REMIT PAYMENT TOI DAVID W MACLVOR FARMERS TR CO TR DEPT PO BOX 220 CARLISLE PA 17013 REGISTER OF WILLS CUMBERLAND CO COURT HOUSE CARLISLE. PA 17013 A..ount R...Ut.d CUT ALOND THIS LINE ~ RETAIN LOWER PORTION FOR YOUR FILES .... Rifv:4Si--ix-oAFP--iiz:-9Si-.---.-.-Niificif'OF--UErifRHiiiAfiiiN-Aiiu-AS-SESS-HENT-----------------------'.---- OF PENNSYLVANIA ESTATE TAX BASED ON FEDERAL ESTATE TAX RETURN .. ESTATE OF HEISHMAN TRUMAN l FILE NO,2l 94-0998 ACN 201 DATE 04-29-96 ESTATE TAX DETERMINATION 1. Cr.dit For Stat. D..th Taxe. a. V.rified .00 2, P.nn.ylvania Inh.ritanc. Tax A......d (Excluding Di.count and/or Intar..t) 67,603.63 3, Inh.ritanc. Tax A.a...ad by Oth.r State. or Territori.. of tha United Stat.. (Excluding Di.count and/or Int.ra.t) .00 5, Penn.ylvania E.tat. Tax Due 67,603.63 .00 4. Total Inheritanc. Tax Aa.....d TAX CREDITS I PAYMENT DATE RECEIPT NUMBER DISCOUNT (+) INTEREST (-) AMOUNT PAID TOTAL TAX CREDIT .00 BALANCE OF TAX DUE .00 INTEREST .00 TOTAL DUE .00 "IF PAID AFTER THIS DATE. SEE REVERSE SIDE IIF TGTAL DUE IS LESS THAN 'I, NO PAYHENT IS REQUIRED FOR CALCULATION OF ADDITIONAL INTEREST. IF TOTAL DUE IS REFLECTED AS A "CREOn" ICRI. YOU HAY BE DUE A REFUND. SEE REvERSE SIGE OF THIS FORH FOR INSTRUCTIONS. I _ _ ,..-",...., .._, ,'......,...~. ... .._~,.""~. 4.....:.,""',.,-'....;;..,...,~ ;. """~:" ~~~.~ Det.ch the top portion of r.v.r.. .ld.. n ".k. check or .on.v ordu p.Vlbl. tOI REGISTER OF HILLS, AGENT, All p.w-.nt. rec.lv.d .hell be appll.d flr.t to any Int.r..t which .IV b. due with any ra..lnd.r appllad to the t... , , i " 'J I' 'l' , l~ :' I '6 ~" Q~ 3 ;;" 1"1" ' 2: ,.:> !:l ;,. r, . ~ ~ ;S ~ ,'i tt 'i:' ~ ~, ( .~. . fJ /-\ a To fulfill thl requlr...nt. of S.otlon 21'S (b) of the Inh.rlt~ce .nd E,t.te ra. Aot, Aof 2~Df I"tr' (72 P.I, S.otlon 21"J, ~ S 'ist of Mill. prlntad on the PIJIIPOIltOl' HOrteE. PAYJt[HTI thl. Hot Ice and .ubllt with vour p.v-ent to the R.gI.tar :0:::0 (~8 . ,.-, <, a m~ 0(:' .:. =;i ;;g iii S. REFUND (CAJ. A r.fund of . tl. cr.dlt .'V be r.que.tld bV coapl.tln, an "Appllc.tlon for R.fund of P.nn.vlvanla Inherltancl and [.t.tl 'ax" CREY-ISIS). ApplIcation. .r. aVlllabl. .t the Dfflc. of the R.gI.t.r of Will., ~Y of thl 2S A.venu. DI.trlct Offlc.' or fro. th. D.part..nt'. 2'.hour an.w.rln, ..rvlcl ~'r. for for.. orderlntl In Penn.vlvanl. 1-100.562-2050, out.ld. PaAn,Vlvanla and wIthin 10c.1 Harrl.bur, ar.. C717. 717-109', TOO' (717) 772-2252 (H..rln, I~alr.d Onlv), OIJECTIOHSa Anv p.rtv In Int.r..t not .atl.fl.d with the ........nt of t.x e. .hown on thl. notlc. .'V obJ.ct within .Ixtv (60) d.V' of recllpt of thl. Hotlc. bYI --wrltt.n prot..t to the PA D.part..nt of Rlv,nu., Bo.rd of App...., D.pt. Ulan, HarrhbUrg, PA 17UI.Ull, OR --.I.oUn, to h.va the ..tt.r d.t.r.lned .t audit of tha p.r.on.1 r.prllantltlv., OR ..appl.1 to thl Orphan.' Court, ADtUH" IITAATlVE CORRECTIONS I Flctuel .rror. dl.cov.r.d on thl. ........nt .hould b. .ddr....d In writing tal PA D.p.rt..nt of Aev.~, lur..u of IndivIdual Ta..., ATTHI Po.t A.......nt R.vllw unit, aapt. 210'01. Harrl.bUrg, PA 17121-0601, Phone (717) 717~6505. S.a p.g. } of the bookl.t ~In.tructlon. for Inh.rltanc. r.x Raturn for. Ra.ld.nt D.cedent" IREV.ISOI) for en 'MPI.natlon of ~Inl.tratlv.ly corr.ct.bl. .rror.. INTERESTI For d.ta. of de.th on or aft.r ID-}-91, P.nn.vlvanl. E.tat. Tax b...d on the F.der.1 [.t.t. T.x raturn baco... d.llnqu.nt at the .xplr.tlon of nln. C09. .onth. fro. the d.t. of d..th. For dat.. of d..th prior to 10-3-91, P.nn.vlvanl. E.t.t. Tax ba..d on tha F.dar.1 E.t.ta 'a. rat urn beco... d.llnquent .t the awplratlon of .Ight..n Ill. aonth. frol the data of d..th. T..a. which bac... d.llnqu.nt before Janulrv I, 19a2 b.ar lnt.r..t at th. r.ta of II. (6~) parclnt p.r ~ calculat.d .t e d.llv r.t. of .0001'4. All t.... which b.c..a d.llnquent on or .ft.r Janu.rv I, 1912 will b.ar lnt.ra.t .t . rat. WhIch wIll vary fro. CII.nd.r ~.ar to calandar v..r with th.t rat. ennounc.d bv thl PA a'Plrtlent of A.venua. Th. .ppllcable Int.ra.t rat.. for 1912 through 1996 .r'l " ~ Int.r..t R.t. D.I1~ Intar..t r.ctor .....r Int.r..t Rat. o.lty Int.r..t F.ctor 1'12 ZOX .0005U 1917 'X .000247 " 1915 ..X .OOOUI 1981-1991 II' " .000101 lj 191_ IIX .000101 I'" .. .000247 1'15 IS' .00055' 1995-19" 7X .00Dl9Z 1'16 I.. .000274 1995-1996 .. .0002U --Intar..t I. calculatad .. follow" INTEREST . SALANCE OF TAX UNPAID X NUNBER OF DAYS DELINQUENT X DAILY INTEREST FACTOR ."Anv Not Ie. l..uld aft.r the t.. b.co.a. delinquent will rafl.ot an Intar..t calcul.tlon to flft..n (IS) dev. bavond the deta of the ........nt. If paveant I. .ad. .ft.r the Intar..t cOlputatlon data .hown on the Hotlc., addltlon.l Intar..t MIlt b. calcul.t.d. NOTICE OF DETERMINATION AND ASSESSMENT OF PENNSYLVANIA ESTATE TAX BASED ON FEDERAL CLOSING LETTER DATE 05-06-96 REV-736 EX AFP 112-9*1 CO""OHWUlllt Of PENNSYLVANIA h[PARlHE:Nt Of' REV[trM: BUREAU Of INDIVIDUAL TAKEI DEPT. IIUOI HARRIIIURG, PA IJu."a.oI 11-.(F/9.- 9 ACN 202 C, DATI! NOTE. HEISHMAN TRUMAN L FILE NO, 21 94-099B OF DEATH 11-13-94 COUNTY CUMBERLAND TO INSURE PROPER CREDIT TO YOUR ACCOUNT, SUBHIT THE UPPER PORTION OF THIS FORH WITH YDUR TAX PAYHENT TO THE REGISTER OF WILLS. HAKE CHECK PAYABLE TO "REGISTER OF WILLS, AGENT", REMIT PAYMENT TOI DAVID W MACLVDR FARMERS TR CO TR DEPT PO BOX 220 CARLISLE PA 17013 REGISTER OF WILLS CUMBERLAND CD COURT CARLISLE, PA 17013 I HOUSE AMount R..ltt.d CUT ALONG THIS LINE ~ RETAIN LOWER PORTION FOR YOUR FILES ..... R-EiV:73,"-ii--AFP--Ciz:-9sj-----.-.-Niifici!-oF--oiri!RHiN-Afio-H-Aiio-AS-SESS-HiNif--------------------.------- OF PENNSYLVANIA ESTATE TAX BASED ON FEDERAL CLOSING LETTER .. ESTATE OF HEISHMAN TRUMAN L FILE NO,21 94- 0998 ACN 202 ESTATE TAX DETERMINATION DATE 05-06-96 1, Cr.dit FGr St.t. D..th Tax.. aa Varifiad ,00 2. Pann.ylvania Inharitanca Tax A.....ad (Excluding Di.caunt and/ar Intar..t) 67,603.63 3. Inh.ritanca Tax A.....ad by Oth.r Stata. ar Tarritari.. af tha Unitad State. (Excluding Di.caunt and/ar Intera.t) .00 5. Pann.ylvania E.tota Tax Dua 67,603,63 .00 4. Tatal Inharitanca Tax A.....ad 6, Amaunt af Penn.ylv.nia E.tata T.x Praviau.ly A.....ad Ba..d an F.d.ral E.tata Tax Raturn .00 7. Additianal P.nn.ylvanio E.tata Tax Dua ,00 TAX CREDITS I PAVMENT DATE RECEIPT NUMBER DISCOUNT 1+) INTEREST 1-) AMOUNT PAID · f.~RP~lrc6Ll~~o~Hb~ Rftb~T~SnA~EYn~~~E~fDE I IF TOTAL DUE IS LESS THAN n, NO PAYHENT IS REQUIRED. IF TDTAL DUE IS REFLECTED AS A "CREOn" YOU HAY BE DUE A REFUND. SEE REVERSE SIDE OF THIS FORH FDR INSTRUCTIONS,) TOTAL TAX CREDIT BALANCE OF TAX DUE INTEREST TOTAL DUE (eR), . I.. --,..-....... 9~ ~ :ciS' 3:;-... ,11l8 cr', r, ') ~ q'o - ' F II, (1'1 , r -, u c: ., I \to ,.I O't (J\ ). ". Po "tJ ~b 5:.(0 u N lI>o ~!i ~ - \N PIIlPOU lW NOTICE I To ,ulflll tn. r.qulr..ent. of Slotion 'I~S lb) of thl Inherltancl ~ E.t.t, ,.. Act, Act 22 of 1991. (72 P.I. IHUDn 2145). PAYMrHT I Detach thl top portion 0' 'hl, Notlcl .nd lubl.t with wour plv..n' to the R..l,"" 0' wtll, prlntad on the t.ver.. ...... .- KMlI check ar 110MV' order p.yabla '01 REGISTER OF MJLLS_ AatHT. All pava-nt. recalvad ,hill bl applIed flr.t to any Int.r..t which ..y bl dUe wlth ~y r...lnd.,. applied to the tlX. REFUND (CAli A r.'WMI 0' . tllC credit "V b, reque.t.d by co.pllUng ~ "Appl1utlon fa.. R,fund 0' P.r"1Iyl"."I, Inherlt~. end E,t.t. Tlx" (REV-1S.S). Appllcltlona It. IVIII.bl. It thl a"lcI 0' thl AI.I,t.r Df wtlll, any of the IS R.v~ DI.trlct O'flc.. or 'r~ the DIP,rt..n". !4-hour an.werlng ..tvICI ~.r. 'or 'or.. orderlnat In P~.vlv~l. 1-.II-)6z-rI51, out.ld. P.nn.ylv~l. end within 10c.1 H.rrl.burg .r.. (717) 7.7-.19~. TDDI (717) 772-ZZ52 CH..rlng 1~.lr.d Only). OBJECTIONS I Anv p.rtv In Int.r..t not .,tl.,I.d with t~ .....'..nt 0' ta. a. .hown on thl, not Ie. ..v obJ.ct within .I.tv (61) d.v. 0' r.calpt of thl. Notle. bVI "wrltt~ prate.t to thli PA Dapert.ant 0' R.ver'IUII. laird 0' 'pp..I.. Dept. ZlUU. Hlrrlsburg, PA 17UI-I02I, OR "lllctlna to haVI thl .athr d.tar.lnad .t .udlt 0' the p."onal r.pr...ntatlv.. OR .-~.I to t~ Orphln" Court AD.UN- IITAAflYE CORRECTIONS I Factual .rrar. dl.cov.red on thl, ......~t .hould b. .ddr..,.d In writing tal PA D.p.rtsent a' R.v,nue, Bureau of Individual'..... ATTNI Po,t A"...sant R.vl.w unit. D.pt. Z11611. Harrl.burg, Pi 17IZ'~1601, Phona (717) 7.'-6515. S.. p.g. J of the booklat "In,tructlon, for Inh.rltanc. TI. Raturn 'or. Ra,ld.nt Dacadlnt" CREV-ISIl) for ~ ..pIIM.tlon of edlllnhtr.tlv.h correct.bl. .rrorl. INTEREST I Addltlon.l pann,vlvanl. E.t.t. T.. ..'....d .. a r..ult of . chana' on the F.d.ral E.tat. ,.. clo.lng latt.r ~o... delinquent at the ..plratlon of one (I) aonth froa thli d.t. thl final notlc. of tha lner.... In Fadaral E.t,t. Ta. I. racalv.d. T.... which bee... d.llnquent b.for. J~'rv 1. I'.Z b..r Int.r..t at t~ rat. of .1. C6~) pareent par ~ c.lcul.ted It . d.llv r.t. of .IODI6~. All t.... which bacs.. d.llnqu.nt on or .ft.r Janusrv I. I"Z will b..r Int.re.t .t . r.t. which will v.rv fro. c.land., v..r to c.llnd.r v..r with th.t r.t. ~.d bv thl PA DIp.rt....t of Alvanua. T~ appllcabl. Int.r..t r.t.. for I'.Z through I'" .r'l ~ 'nt.r..' D.t. n.ll" In'.r..' ...",tnr bar Int.r..' D.t. n.ll" tnt.r..' ..."tllr 1911 lOX . ODes" 19.' 'X .DIII~l 1911 "X .ODOU' 1'.'-1"1 IIX .DIDSOI I'I~ IIX .DDOSDI 1.92 'X .DDllto7 1915 UX .DOIS5' 1995-I"~ 7X .DIDI'! 191' lOX .IOOZ11t 19n~I'" OX .DIDZ" "Int.,..t I. cllcul.tld .. follow'l INTEREST . BALANCE OF TAX UNPAID X NUNBER OF DAYS DELINQUENT X DAILY INTEREST FACTOR "Anv NotlCI Inuad .ft., thl t.. baco... d.llnquent wUI refllct 1M Int.,..t ulcul.tlon to flft.an US) d.v, beyond the d.ta of thl ....n....t. If p.pent Is Md. .ft., thl Int.nlt CHPUt.tlon d.t. ahOWn on the Hotle.. eddltlonal Int.r..t ~,t b. calcul.t.d. / ;/ /1/ ,,)t/r; (j NOTICE OF DETERMINATION AND ASSESSMENT OF PENNSVLVANIA ESTATE TAX BASED ON FEDERAL CLOSING LETTER ACN 202 ~ REV-736 EX AFP (12.95* COHHOHWUltll OF PlHHIYlVAHIA DEPAR'HlNl OF REVENUE; BUREAU OF INDIVIDUAL TAMEI Df:PJ. ltUla "ARR.IBURG, PA 17111-0601 ' DATE 05-06-96 o HEISHMAN TRUMAN L FILE NO. 21 94-0998 OF DEATH 11-13-94 COUNTY CUMBERLAND NOTE. TO INSURE PROPER CREDIT TO YOUR ACCOUNT, SUBHIT THE UPPER PORTION OF THIS FORH WITH YOUR TAX PAYHENT TO THE REOISTER OF WILLS. HAKE CHECK PAYABLE TO "REOISTER OF WILLS, AOENT". REMIT PAYMENT TOI DAVID W MACLVOR FARMERS TR CO TR DEPT PO BOX 220 CARLISLE PA 17013 REGISTER OF WILLS CUMBERLAND CO COURT CARLISLE, PA 17013 I HOUSE Allount R..Ut.d CUT ALONG THIS LINE ~ RETAIN LOWER PORTION FOR YOUR FILES .... RifV:736--Ei--AFP--(iz:;95j---......No-ficE--oF--nETifRHIiiATIo-N-ANin-As-iEss.HENT...-------------------------- OF PENNSYLVANIA ESTATE TAX BASED ON FEDERAL CLOSING LETTER .. ESTATE OF HEISHMAN TRUMAN L FILE NO;21 94-0998 ACN 202 DATE 05-06-96 ESTATE TAX DETERMINATION 1. Credit For Stete De8th T8xee 8e Verified . .00 2, Pennsylv8ni8 Inherit8nce T8x Assessed (Excluding Discount 8nd/or Interest) 67,603.63 3, Inherit8nce T8x Assessed by Other St8tes or Territories of the United St8tes (Excluding Discount 8nd/or Interest) .00 4. Tot81 Inheritsnce T8x Assessed 67,603.63 5. Pennsylv8ni8 Est8te T8x Due .00 6. Amount of Pennsylv8ni8 Est8t8 T8x Previously Assessed B8s.d on F.der81 Est8te T8x Return .00 7, Additionsl Pennsylv8ni8 Est8te Tax Due .00 TAX CREDITS I PAVMENT DATE RECEIPT NUMBER DISCOUNT (+l INTEREST (-) AMOUNT PAID TOTAL TAX CREDIT BALANCE OF TAX DUE INTEREST TOTAL DUE · ~~RP@lec6rl~~0~Ho~ RftbiT~DRA~EYR~~~E~fDE I IF TOTAL DUE IS LESS THAN n, HO PAYHENT IS REQUIRED. IF TDTAL DUE IS REFLECTED AS A "CREOn" YOU HAY BE DUE A REFUND. SEE REVERSE SIDE OF THIS FDRH FOR INSTRUCTIONS.' ICRJ, .,"",''''_,''''.''".,i.....''~,.,''.''''_,_, ! go ~ :c:rJ 3!R. $8 rr',' {!!': ~ _.~ 1/, 0 r.;, ~o III ~ r 4' c;.\ C' , I ~;:. C''J , 0\ b' ,.. "'. ~':"_l '" ..~r C', ; f1 :::::(U N U;o ~~ ~ -. W PUIll'01EOF NOnCE I To fulfill the r.qulr...ntl of S.ctlon 21~S eb) of the Inh.rltenc. end E.tat. T.M Act, Act 22 of 1"1. e72 P.S. Sactlon ZI~S). PAYtlEM'. Det.ch the top portIon of thla Hotlce and 1~lt with your pay.ent to the A.gllt.r of Will. prlnt.d on the r.vllr.. Ilde. -- "aka check or aon.y ordar payable tal REGISTER OF MILLS, AGENT. AU payeants r.c.lv.d .heU b. .ppllad flnt to any Int.r..t which .ay be due ..Ith any "...Ind.r applied to the tn. REFUND tCRh A rafund 0' . taM cr.dlt .ay b. r.qua.t.d bv coapl.tlng an "Application 'or R.fund of Penn.ylvenla Inharlt.nc. .nd Ed.ta TaM" IREY-UIS). Appllc.tlon. are .v.l1abla .t the Office of the Ragllta.. of NUll, .ny of the ZS R.v.~ DI.t..lct Dfflca. or frc. thl D.p.rt..nt', Z4-hour .n....rlng .arvlc. nuab.r. fa.. fora. ordarlngl In Pennsvlvanl. 14I1DD.S6Z-ZDSD, out.ld. P'Mlvlvanl. and within local Uarrhburg ar.. (717) 7117-1109", TDOI (717) 77Z-!ZSI IHaarlng lapalr.d Only). DlJECTlONSI Anv party In Int.r..t not ..tllfl.d with the ........nt 0' taM .. .ho..n on thll noUc. .ay obJ.ct within ,IMty 16D) dey. of r.c.lpt of thl. Hotlc. bYI ..wrlttan prot..t to the PA D.part..nt of Rav.nua, Ic.rd of App...., O.pt. zalDZI, H.rrhburg, PA 171ZII"lOU, OR ualaetlng to h.va the .ethr datar.lnad at .udlt of the p.r.on.l tlP.....nt.Uv., OR -".pp..l to tha Orphans' Ccurt ADttIN. ISTRATlVE CORRECTIONS I F.ctu.l .rror. dheov.red on thh ........nt .hould b. .ddr....d In wrlUng tal PA Dapart.ant of Ravanu., lur.1tJ of Indlvldu.l TaMil, A"NI POlt A.......nt Ravla.. Unit, D.pt. zaD6DI, Uarrhburg, p,t, l7UI.DUI, Phona Clll1 117.65D5. S.. paga S of the bookl.t "Inltructlonl for Inh.rltanc. TaM R.turn for a R..ldant D.c.d.nt" (REV-1SOI) for an .MPlan.tlon of adalnlstratlv.lv carractabla arror.. INTEREST I Addltlon.l P.nnlylv.nla t.tata T.IC .......d a. a r..ull of . changa on the Fadaral E.tata TIM clollng l.tt.r baeo.a. dallnquant at tha .lCplratlon of ona (1) .onth fro' tha data the final not Ie. of the Incr.... In Fad.r.l Eltata T.IC I. r.calv.d. T'M" which bee... d.llnquent bafar. Januarv 1, 1'8Z ba.r Int.ra.t at tha r.t. of .IIC 16~) pare.nt p.r annua c.lculat.d at . dallv rat. of .DDD16'. All talCal which baea.a d.llnquant on or aft.r January 1, 1'12 will b.ar Intar..t at a r.ta which will vary fro. calandar va.r to cal.ndar yaar with that rata announcad b~ the PA Oapart..nt of R.vanu.. T~a appllcabl. Int.ra.t rat'l for 1'82 through 1996 aral 'tul: 'nt.,...t Rill. ",,'Iv 'nl.....t "'flr-tn" lIAr 'nl.....1 Rill. n..llv Int.....1 r"r!lnl" 1911 .n .DDD51t1l 1917 OX .oaOllt? 1915 lOX .00DItSI 19111.1991 lU .DDn01 1914 II' .00nDI 199Z OX .oaDZ.., 1915 IS' .00D.156 1995.1991t l' .DDOI9Z 1916 lex .oaOl71t 1995.1996 OX .DDOZ41 "-Int.r..t h calculatad .. follow'l INTEREST . BALANCE OF TAX UNPAID X HUNBER OF DAYS DELINQUENT X DAILY IHTEREST FACTOR ".Any Notlca I..uad aft.r the t.M baeo.e. dallnquant ..Ill r.flaet an Intara.t calculation to flftaan CISI day. b.yond thl d.ta of thtl .......ant. If pay.ant Is aada .ftar the Intar..t coaput.tlon dala .hown on thtl HoUca, additional Intar..t lIIUlt ba calculat.d. I I , nOl.I~S, GROVE ANI) MlrI"LGER, P.C. C~RTIFIE() ('UIILIC ACCOUNTANTS WIIJJAM O. OOU!S OAltY O. OROVn ORlAN J. M=DR DIU!NT W, UMRlCK RONALD P. OVUUlOCII DUANO Il. 1I0RMAN 3601 NORTII FRONT STREET 1'.0. 1I0X 5810 IIARIUSDUIW, ('ENNSYI.VANIA l711ll TELm'II0NE (717) 238.(}446 FAX (717) 238.3%0 MDMIIUllS AMI!IUCAN IN!)ITIUm 01' Cml11f'1l!D I'UOLIC ^CCOUl\'ri\Nrs l'I'.l\'NSVLVANIA INSlTIUffi 01' CI!RTIf'lI!D rUIILlC ^CCOU/<ITAm'S Estate of Truman Heishman Allen Distribution c/o Mr, Ivo V, Otto, Esquire Marston, Deardorf, Williams & Otto P.C, 10 East High Street Carlisle, PA 17013 We have been requested to estimate the value of Allen Distribution, a limited partnership, as of December 31, 1994 using information available at that time. This report has been prepared specifically for estate tax purposes and should not be used for other purposes such as purchase or sale transactions, We have prepared this estimate of'value on the presumption that value Is equivalent to "fair market value" and that "fair market value" is that price at which a willing buyer will buy and a willing seller will sell an Item of property, in an arms-length transaction with neither one being under any compulsion to buy or sell, and with both having reasonable knowledge of all relevant facts, The Company being valued is not a publicly-traded security with an established market; therefore, fair market value cannot be readily ascertained by reference to any such market, Actual fair market value can be determined only by bona fide negotiations between knowledgeable buyers and sellers, Therefore, we do not represent that our estimate of the common stock value will be the amount ultimately so determined In actual bargaining or litigation, We reviewed the fundamental valuation factors applicable to this particular study, The factors considered include: . the nature of the business and the history of the enterprise . historical earnings . the value of the underlying tangible assets . the existence of goodwill or other Intangible assets . the earnings capacity of the Partnership . sales of other partnership Interests . the size of the interest to be valued . the economic outlook In general, and the anticipated Impact of economic changes on the industry I " I Offices III lIarriJbll1g alld Lell'lJ/owll, !!;,i""; i I j Also examined were Allen Distrlbutlon/s compiled financial statements and U.S. Partnership Returns of Income, form 1065 for the periods unded December 31, 1990 through December 31, 1994. The balance of thi s report and attached schedul es will analyze the va 1 ua ti on findings as determined by our se1ecllon of appropriate valuation techniques, The final paragraphs Include our summary of findings and opinion of the fair market value as of December 31, 1994, Statement of Procedural Policies All financial statements, operating results, and the data pertaining to the income and expenses of Allen Distribution (also referred to in this report as the "Company") have been taken from the Company's compiled financial statements and U,S, Partnership Returns, All related facts, comments and statistical Information set forth In the report have been obtained from sources believed to be knowledgeable, re1 iab1e and accurate, All claims to property have been assumed valid and no Investigation of legal fee title to real or personal property has been conducted, Liens and encumbrances which may be against the propel'ty have been given no consideration except as may be specifically set forth In this report, Our conclusions arc based on the assumption that there shall be a continuation of the present management policies over whatever period I s reasonable and necessary to maintain the character and integrity of the Company. The analyses, conclusions, and opinions concerning the preparation of this business val uat i on report have been prepared by Robert E. Rodgers I", CPA, ChFC, CFP under the guidance and supervision of William B, Boles, CPA, ASA, CFP, No opinion has been rendered concerning the existence or possible impact on value of potentially hazardous construction materials, toxic waste or the ability of the Company to meet Environmental Protection Agency Standards, No responsibility is assumed for the subject Company to meet environmental approvals, Detection of hazardous substances is beyond the appra i ser' s scope and requi res consultation with an expert in this field. We hereby certify that, to the best of our knowledge and belief, the statements of fact contained in this report are true and correct, and this report has been prepared In conformity with the Uniform Standards of Professional Aooralsal Practice of the Appraisal Foundation and the Princloles of Aopralsa1 Practlce...2nJt Code of Ethics of the American Socie~y of Appraisers. The American Society of Appraisers has a mandatory recertification program for all of its Senior Members, We are In compliance with that program, The appraisers herein. by reason of the report, are not required to give testimony in Court, with reference to the business herein appraised, unless arrangements have previously been made, 2 ,--...........--,...- "'-'~".-.' '.~;." " . -'. .--,--' " 1 The fair market value determined In this report Is only valid for the date sped fi cd, The fee paid for the formulations and reporting of the conclusions set forth herein is not contingent upon the values or other opinions presented In this report, No shareholder, employee or agent of Doles, Grove and Metzger, P.C, has any direct or indirect interest In the Company. This report and any or all of the Information contained herein may not be disseminated or disclosed in any manner, either directly or indirectly, to any party whatsoever without the prior wrl tten consent of Dol es, Grove and Metzger, P,C. Introduction . Obiectlve The purpose of this report Is to present a detailed narrative explanation of the methods, procedures and calculations used to arrive at an opinion of the fair market value of Allen Distribution, Its principal business activity Is warehous i ng, for the express purpose of estate tax val uat I on. . Definition of Fair Market Value Fair market value Is,deflned as the amount at which a property would change hands between a willing buyer and a willing seller, each having a reasonable knowledge of all the pertinent facts, neither being under compulsion to buy or sell, Our appraisal of the Company as of December 31, 1994, is In accordance with the above definition, This appraisal was also performed in a manner consistent with the guidelines set forth In Revenue Ruling 59-60, (1959-IC,D,237), . Economic Outlook THE NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and OutlooK The following analysis of the national economy for the fourth quarter of 1994 is based upon a review of current economic statistics, articles in the financial press and economic reviews found in current business periodicals, The purpose of the review is to provide a representative, "consensus" view of the current condition of the national economy and its outlook, Real gross domestic product, the output of goods and services produced by labor and property located in the United S'tates, increased at an annualized rate of 4,5%, or about $5B billion, in the fourth quarter of 1994, according to estimates released by the Bureau of Economic Analysis, In the third quarter, revised real GDP increased 4,0%, or about $51 billion. 3 -.- ,-~ -< -. ~ .._.:-.~ -:C~'~ci,,,,,, NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) Despite rising Interest rates, corporate capital investment and consumer spending for durable goods and housing continued at a strong pace. For the year, GDP expanded 4,0%, an increase over the 3.1% growth rate of 1993, That Is the best performance in a decade. Many analysts anticipate slower growth In the first half of 1995 as the Federal Reserve's six Interest rate hikes, aimed at containing Inflation, have their full cumulative impact, Explosive 1993 fourth quarter growth was the primary factor leading to the Fed's corrective measures during 1994. The goal aimed at engineering what analysts refer to as a soft landing for the economy In which growth Is slowed to a more sustainable level free of excessive inflationary pressures, The I ndex of 1 eadl ng i nd Icators of the economy (the government I s primary forecasting gauge) registered a slight gain of 0,1% in December 1994, somewhat less than anticipated by economists. The Index Is a composite of II Indicators of economic performance that attempt to measure economic activity up to 9 months in advance, The December gain followed a strong Increase in November of 0.3% and a recently rare decrease of 0.1% in October, The index has increased 14 out of the last 17 months and generally indicates continued growth through the first half of 1995. It is generally believed that the economy will grow between 2~% - 3% In 1995. Expectations are high as the first Republican controlled congress in forty years attacks several key areas in the economic arena including: middle class tax reductions, capital gains tax relief, and deficit reduction initiatives. Consumer prices rose 0,2% in December 1994, bringing the annual Inflation rate for 1994 to a modest 2,7%, the same rate experi enced in 1993. The modes t inflation rate resulted primarily from the lowest core-rate of inflation (2.6%), which excludes food and ener9Y costs, since 1965, Analysts expect inflation to drift higher in 1995 reflecting continued heavy capacity utilization, higher priced raw materials and low unemployment conditions, Proposed legislation to increase the minimum wage, conditions could increase inflation beyond the approximately 3,5%. According to surveys by the University of Michigan and by the Conference Board, 'consumers continue to be optimistic, both in their assessment of prevailing conditions and in their expectations for the Immediate months ahead." December's consumer confidence index measured 103.4, revised from the initial estimate of 102.2, marking the third consecutive month above the 100 level, The confidence level is up from a mid-year drop-off and is expected to remain at near four-year highs for the first half of 1995. The increase in consumer optimism is principally a result of strong economic growth, risin9 personal Income and lower unemployment. combl ned with preva il Ing 1995 estimated rate of 4 I f NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) Retail sales for the month of December were below analysts' expectations, with seasonally adjusted sales slipping 0.1% (meaning that sales Increased less than anticipated), which is an early sign that the economy may be cooling off, 11any analysts commented that aggressive price discounting designed to encourage consumers may have resulted in the holiday drop In sales. The year-end results somewhat overshadowed otherwise Impress i ve results for 1994 as a whol e, wh i ch represented a 7.6% increase over 1993, the bi9gest gain since 1984, Credit del inquency was down for the year despite grOWing consumer Installment credit use and higher percentages of credit purchasing to personal Income, Consumer saving also increased as interest rates began to encourage saving both In absolute terms and as a percentage of Income. Many analysts question the extent to which this consumer leveraging can support continued spending, The year ended December 31, 1994 was not a good one for equities, with most major indices posting losses. Both large and small capitalization stocks felt the crunch with the Dow Jones Industrial Average up only 2.1% compared to 1993' s 13.7% increase, while the NASDAQ Composite declined 3.2%. The broad-based Wilshire 5000 Index fell 2.5% and the S&P 500 index retreated 1.5% for the year. Increased merger activity was a key factor in the limited group of stocks shOWing gains for the year, Some analysts predict that stabilized Interest rates, sustainable growth, capital investment and recovering foreign economies will support the markets in 1995. Bond investors suffered through one of the worst years ever in 1994, Economic strength is often viewed negatively by traders in the bond market who are very sensitive to inflationary pressures that erode the value of fixed rate investments, Constantly rl sing interest rates overshadowed currently low inflation reports, resulting in significant losses for the year. The virtual collapse of the bond markets was compounded by heavy use of sophisticated derivative securities whose values plunged in the wake of rapid interest rate increases. Institutional Investment pools, historically managed to minimize exposure to market volatility, were hit particularly hard as evidenced by the Orange County, Cali forn i a default on interest payments, A new scruti ny will likely pervade institutional investments going forward, The Federal Reserve hiked short-term interest rates six times in 1994 with the federal funds rate (the Interest rate that commercial banks charge each other) Increased 1,75% to finish December at 4,75%, Alan Greenspan, Chairman of the Federal Reserve, stands fast on an anti-inflationary platform that supports monetary tightening as long as the economy maintains growth exceeding 3,0%, The mid-November move, increasing the Fed Funds rate by 0.75%, was the most aggressive boost since 1980 and sparked great controversy that the economy could be pushed into recession once the full impact of preVious hikes is felt. Analysts commented that the only beneficial aspect to the move Is that it should keep the Fed on the sidelines through the middle of the first quarter of 1995, allOWing markets to settle in and assess the situation, 5 NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) Despite the rising rale cllmatc lhat prevailed lhroughout 1994, growth in employment and income has allowed for continued strength in housing and consumer spending. Fears are building that strong fourth quarter growth and low unemployment will result in further Fed action by mid-February. Tim thirty year fixed ratc mortgage has increased about ?,O% for thc year and now tops 9,0%. Yield on thc 30-year treasury bond also climbed past the 8,0% levcl in thc fourth quarter, the highest since 1991, Investors and consumcrs are expected to see interest rates stabilize in 1995 as the cconomy slows but it is unclear as to what cumulativc levcl of inflation, unemployment, and growth will signal the Fed that the economy has achieved the elusive soft landing, Ilome-building is often a measure of how well the overall economy is doing because new home construction st imul ates so many rel ated industries, Despite ri sing mortgage rates, housing starts increased 12.9% to 1,45 mill ion in 1994, the highest level in six years, Unseasonably warm weather in the fourth quarter boosted construction activity while building permit applications, a major indicator of future activity, increased by 0,6% in December to an annualized level of 1.4 million units. llousin9 starts have increased for the third consecutive year following five years of decline. Every region of the country shared the 1994 increase, and housing is expected to show continued improvement in those areas of the country in wh i ch economic recovery was late arriving, principally the West and Northeast. However, by December, the new home inventory (those available for sale) represented a 6,7 month supply at the current rate of sales, the highest level since late 1991, Sales of new homes also rose in 1994, reflecting a 0,6% increase to the highest level in six years, November and December reports dampened the year's performance as sales fell due to rising mortgage rates. Overall, many analysts are predicting that demand for new homes will remain strong in 1995 but not at the levels experienced in 1994, Unemployment fell to a four-year low of 5,4% in December, from a revised 5.6% in November. Job creation in December, however, was revised downward to 210,00 from earlier estimates of 256,000. Despite the lowest monthly job creation since January when only 101,000 new jobs were generated, 1994 was the best year for employment since 1988, Approximately 3,5 million new jobs were created during 1994, an average of 290,000 per month, The labor Department changed the way that it conducts its household survey in 1994 to give a more accurate picture of joblessness, According to the Bureau of labor Statistics, the old counting method, used for over 40 years, was replaced by a new method that is more reliable in calculating part-time work, part-year work, and home-based work, Unemployment has not increased since the methodological influenced January 1994 increase of 0,3%, The last time unemployment rose prior to the survey change was January of 1992. 6 NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) I~any analysts predict unemployment to edge upward In early 1995, reflecting economic growth moderation from Increased interest rates. Continued growth is likely to prevent the rate from exceeding the 6,0% level. The predictions seem to be supported by the fact that average work weeks remained at post World War II highs of 42,1 hours and overtime hours were still rising at year-end, According to the Bureau of labor Statistics, about 75% of the jobs created In 1994 were in profess i ona 1 and manageri al occupat ions, Strong growth in the service sector is expected to continue into 1995, Observers should note that the service sector does not include low wage jobs such as in fast food, which fall under the retail trade sector, Recent surveys indicate that over half of the work force is us i ng computers on the job and demand for skill cd 1 abor will rema i n strong as technology-driven businesses continue to grow. The economy carried over and surpassed 1993' s vitality registering the strongest growth in ten years, Activity in many interest rate sensitive areas remained strong despite repeated moves by the Federal Reserve to slow economic growth and prevent inflation, Many analysts predict that Inflation has been successfully contained and that growth will moderate going Into the new year, Financial markets remain unstable but optimism is building that 1995 could return the market to strong form as corporate profits and stable yields inspire increased activity, Previous discontent concerning the fiscal pattern and reform agenda of the Clinton Administration has subsided due to the resounding Victory for the Republlcan Party during mid-term elections In November. New economic polley considerations Include increased deficit reduction, middle class tax reform and capital gains tax elimination, Improved income and capital investment are projected to propel the economy at a healthy and sustainable pace close to 3.0% growth in GDP. The leading Economic Indicators support strong but moderating economic performance for the first half of 1995. I Review of Tax Returns Allen Distribution uses a December 31 year ending, The Company is structured as limited partnership and reports its activities as a partnership for federal income tax purposes, The Summary of balance sheets and statements of income are from the Company's compiled financial statements for the years ended December 31, 1990 through 1994, We compared the company financial ratios to the comparative historical data as reported by the Robert Morris Annual Statement Studies, 1994 edition, Services _ Warehousing and Storage - General, ~Tc# 4225. The Company is primarily Involved in the warehousing and storage of general goods, 7 ,. .,.".-,-,~"""............... ~. .c.'...'; .cl... ~-l Robert Morr is Assoc I a tes Annua 1 Stilim!tllLS_llifu,$. Robert Morris Associates (IlHA) recommends that statement Studies data be regarded only as general guidelines and not as absolute industry norms. It should be noted that the information collected by R11A is not selected by any random or statistically reliable method. As such, the information utilized from the RHA Studies was considered only as a general guideline. Balance Sheet Exh i bi t I, I s a summary of balance sheets for the years ended December 31, 1990 through Oecember 31, 1994, The Company's Balance Sheet appears healthy. The current ratio Is a measure of a company's ability to pay Its short-term debt from short-term assets. It measures the number of times that current assets exceed current liabilities, The current ratio for 1994 Is 27.6 to 1,0 This Is substantially better than the Industry average of ,9 to 1, The industry debt to worth ratio is 2.7, while the Company displays a debt to worth ratio of ,74 which Is sl9nificantly less than the industry standard, The lower ratio can be due to either a hi9her net worth or a lower amount of debt, either way, the Company has a stronger ratio than the Industry statistic, We also examined the asset turnover ratio. The industry statistic shows a turnover rate of 1,1. Allen's asset turnover rate Is ,49 which shows a slower utilization of assets than is evident in the Industry, The majority of the Company's long-term debt consists of mortgages payable, and are 71.7 percent of total assets, This Is significantly higher than that for the industry, and caution should be exercised, because the Company depends on a relatively few contracts for a significant portion of its revenue. While the Company has a substantial amount of long-term debt, it al so has a substantial amount of real estate on the books that Is recorded at net book value, The fair market value of the real estate is estimated to be $21,775,852, The historical cost method of recording transactions substantially understates the assets in this Company, If adjustments were made to the balance sheet for the fair market value of the real estate, the Company would portray an even st,'onger balance sheet, The balance sheet details a healthy Company, but also a Company that could take a turn for the worse In a relatively short period of time, Income Statements Exhibit 2, presents Income statements for the Company for the years ending December 31, 1990 through December 3f, 1994, Gross revenues have grown at an average annual compound growth rate of 33,35 percent, Income has grown at an average annual compound growth rate of 41,45 percent, Total expenses have Increased at an average annual compound growth rate of 31.62, 8 The Company's gross revenues and income has Increased dramal1cally over the years indicating a fast growing Company that has not yet reached maturity, The Company's net income, as portrayed by the financial statements requires some modification when evaluating the Company, As shown in Exhibit 4, normalized net Income reached a high of S2,075,III in 1994 and a low of S421,852 in 1990, It appears that the Company Is increasin9 gl'oss revenues and profits on a consistent basis. · Computation of Normalized Ad.1usted Cash Flow Earnings are considered the primary factol' in a number of valual10n techniques; therefore, the clements that comprise earnings were reviewed for material factors that could distort income, Partners' compensation Is the 1 ine item that most frequently requires adjust.ment on the income statements of a small partnership, because actual compensal1on tends to be based on what the company can afford, or how the owners want to be compensated, rather than on the value of the economic services rendered by the general partner. The general purpose of the compensation adjustment is to substitute for the actual compensation tendered the cost of hiring an outside management team to operate the business, In other words, what can the business really earn in net income as compared to the historical bottom line, In this situation, compensation fOl' management services is handled via a management fee, This fee is 4,5 percent of gross revenues collected. When compared with the industry's officers' compensation, which is paid for management services, the management fee is less than the amount paid by other companies, Therefore, we have adjusted income to reflect a normalized management fee, We derived the amount of partners' compensation from the Robert Morris Associates Annual Statement Survey as detailed above, As shown in Exhibit 4, we normalized partners' compensation by applying a percentage to sales based upon the Robert Morri s Associ ates, 1994 ^nnua 1 Statement Survey for warehousing and storage companies, We deducted from income the officers' compensation as a percentage of sales for each year, because the Company is not paying out as much as other companies in the industry. We also removed gain on the sale of auto and miscellaneous income, because this income is not material in amount, is infrequent in nature and docs not represent operating income for the Company. For purposes of calCUlating a value under the methods we utilized, we have added back 1/2 of the depreciation expense to more fUlly reflect the true earning capacity of the Company, The adjustments and their computation are detailed in Exhibit 4, 9 Goodwill Goodwill can generally be defined as the Intangible aspects of a business, It Includes such items as reputation, if that reputation Is transferable, customer base, transferable negotiated conlracts that offer favorable terms, etc. Goodwill is considered to be Inseparable from the business, It cannot be sold without the accompanying sale of the business, To determine whether or not goodwill was present in Allen Distribution, we have taken Into consideration the following factors: 1, The economic outlook for the industry, 2, The opportunity for ,'epeat business, 3, Any elements that would yield a competitive advantage. 4, The competitive environment of the industry. 5, The effect repulation would have on the presence of goodwill, As shown in Schedule 4, goodwill is calculated as excess income, Excess income is the difference between a "normal" return on equity and the adjusted net income before Income taxes that the Company generales, The percentages utilized for average industry taxable income as a percentage of shareholders' equity are from the 1994 Robert Morris Associates Annual Statement Survey for SIC' 4225, The Company has excess Income in all years, The Company's weighted average excess income is $871,793 for the four year period. We did not include the 1990 year, because the trend in earnings has significantly improved, We have capitalized this excess income using a capitalization rale of 25 percent, Excess earnings are considered to contain more risk than ordinary operating income, Therefore, we have capitalized excess earnings at a rate higher than the capitalization rate we computed in Exhibit 3. We utilized a rate of 25 percent to account for the additional risk of these earnings. As can be seen in Schedule 4, the Company exhibits goodwill calculated to be worth $3,487,172, This calculation is performed after adjustments and normalization of income, and is based on average stockholders' equity, Valuation Methods The methods considered and employl'1. in reaching our conclusions include the following: 1. Capitalized earnings method 2, Excess earnings method .. 10 We decided to utilize valuation methods th.lt stress hlstol'lcal rather than projected data, because of the difficulty in making future projections with enough reliability to get a meaningful result; this Is especially true for a small closely-held entity, Valuation approaches using historical data have found general acceptance in the discipline of business valuation, and we believe that the historical data used in this valuation report is representative of current conditions, Comput~tlon of Cap-itallzation Rate Under the Build-Up Method Unlike some aspects of valuing a business, small changes In capitalization rates can make a substantial difference In the fair market value arrived at by an appraiser, Therefore, to insure that the capitalization rate derived was appropriate for the subject company, we computed a capitalization rate under the build-up method, The build-up approach Is based on the premise that a company's capitalization rate is composed of a number of identifiable risk or return factors that, when added together, result in the total return that a prudent Investor would demand from the purchase of the Company If the standard of value Is fair market value, the correct capitalization rate is the rate available on other comparable Investments, adjusted for differences In risk and other factors, In the build-up method, we have started with the rate, as of the appraisal date, available on long-term bonds, The rate utilized Is reported by the Federal Reserve Bank of St. Louis. This rate is then normalized by SUbtracting the horizon premium of bonds over bills, as detailed in Ibbotson's Stocks, Bonds. Bills and Inflation 1994 Yearbook, This yearbook Is a statistical compendium of market results from 1926, This normalizes the short-term yield, In other words, It prevents the use of a yield that may be abnormal when compared to long-term historical results. Due to practical problems encountered in the use of a short-term rate as the risk free rate, we utilize a "normalized" risk free treasury yield, The normalized risk free treasury yield Is developed by subtracting from the long-term bond yield the average expected amount by which long-term bond yields exceed short- term bill yields, This excess Is called the "horizon premium", The equity risk premium, the difference In premium between stocks and bonds, Is then added to the normalized risk free treasury yield to develop an average market return, This Is the extra return earned by an average equity Investor In excess of the return on long-term treasury securit i es, In other words, it attempts to measure the rate of return that an average investor would consider adequate for an Investment in a Standard & Poor's 500 Company, 11 _.-A_",_~+.. .,;;,...;J.";>, Thc avcragc markct rcturn Is thcn adjustcd to takc into considcration thc additional risk inhcrcnt In a small closcly-hcld company, Thcrc Is obviously marc risk assoclatcd with a closcly'hcld company than with a major publ icly tradcd S&P 500 company. Thcrcforc thc callital ization ratc must bc adjustcd to takc Into considcration this additional risk. Wc havc utlllzcd Ibbotson's "small stock risk prcmium" of 5.3 pcrccnt, Ibbotson calculatcs this pcrccntagc by calculating thc wcightcd avcragc rcturn carncd by thc smallcst 20 pcrccnt of all companlcs listcd on thc /lYSE, AMEX and OTC companlcs of similar slzc, This ratc is thcn adjustcd for othcr risk factors inhcrcnt In thc company bclng valued, Wc havc adjustcd thc ratc an additional 3.0 pcrccnt to account for lack of diversification in thc Company's opcratlons. A highcr risk asscssmcnt docs not appcar ncccssary, bccausc thc typc of opcrating asscts hcld by thc Company arc, In gcneral, apprcclatlng asscts. In othcr words, most companics hold opcrating asscts that losc valuc ovcr timc and which will at somc tlmc In thc futurc nccd to bc rcplaccd, Rcal cstatc is gcncrally an apprcclating assct, in that a wcll maintaincd propcrty In a good location will, ovcr timc, gcncrally apprcciatc in valuc cvcn whllc uscd in thc opcratlons of a business, An cxamplc would bc, thc Public Storagc 1 Imitcd partncrshlps which wcrc dcvclopcd to providc incomc to scrvlcc thc outstanding mortgagc whilc thc undcrlylng rcal cstatc apprcclatcd In valuc, Thc units werc dcsigncd for casy futurc dcmolltion so as not to Impcdc a potential purchascr. Thc discount ratc for nct cash flow Is convcrted to a discount ratc applicablc to nct carn i ngs by add i ng an i ncremcnt spec i fi c to nct carn i ngs. Wc havc utilizcd 3,0 pcrccnt, Onc mcthod of dcvcloping a company's nct carnings discount ratc or incrcment spccific to carnings is to dcvclop a convcrsion ratc bascd on a rangc of typical diffcrcnccs between dividcnd ylclds (diVidends/stock pricc) and earnings ylclds (carnings/stock prlcc) of public companics. Whilc thcre havc bcen no dcfinltlvc studlcs at this point, many cxpcricnccd practltloncrs fccl that this dlffcrcncc most typically rangcs from 3 to 6 pcrcent. This Company's excellent carnings history and modcratc risk structurc would dictatc a lower yield than avcragc to attract invcstmcnt capital. Thcrcforc, wc utilizcd 3,0 perccnt as our incrcmcnt to carnings. In ordcr to convcl't thc discount rate for nct carnings to a capitalization ratc for nct carn I ngs I thc cxpccted 1 ong- term avcragc compound growth ratc is subtractcd from thc discount ratc for nct carnings. Wc cstlmatcd thc long-tcrm growth ratc to bc approximatcly 10.0 pcrccnt, Gross rcvcnuc has becn Incrcasing rapidly at approxlmatcly 33,35 pcrccnt per ycar, Wc do not bcllcvc that this lcvcl of growth Is sustainablc for thc long-tcrm, Wc havc cstlmatcd 10.0 pcrccnt to bc a bcttcr indicator of futurc growth. This calculation rcndcrs thc nct carnlngs capital ization ratc applfcablc to thc ncxt ycar. To apply thc capitalization ratc to thc Company's reccnt historical bcncfit stream it should be divided by I plus the pl'ojected growth rate. As detallcd in Exhibit 3, thc capitalization rate derivcd undcr this mcthod is 13,66 perccnt. 12 . tiP.ltallzed Earnlngi-tl~ The capitalized earnings method Is a generally accepted method used to value small buslnessos, As shown In Schedule 2, an estimated market value has been determined by the capitalized earnings method, This computation Is based on the Company's earnings history over the most rocent four years, Since earnings are considered the most Important factor with this technlquo, the clements that comprise earnings have been reviewed for material items which may distort Income, In Exhibit 4 we have adjusted income for Items which distorted income. As shown In Exhibit 3, a portion of tho computation Is based upon a capitalization rate of 13,66 percent. This rate is determined under the build-up method. A capitalization rate computed under the build-up method asks the question of what rate of return would a normal market participant require to assume the stated risk/reward relationship, In any scenario there are competing Investments that can be utilized, The build-up approach compares the investment being offered to other opportunities available, In other words, It is a measure of the opportunity cost of selecting one investment over another, Ordinarily, distributions paid In recent years are considered in valuation procedures; however, U,S, Internal Revenue Ruling 59-60 indicates: Section 4,02(e) "Where an actual or effective controlling interest In a corporation Is to be valued, the dividend factor is not a material element, since the payment of such dividends Is discretionary with the controlling stockholders." "",dividends are a less reliable criteria of fair market value than other applicable factors.,," Dividends are essentially equivalent to distributions from a limited partnership and are paid at the discretion of the general partner. Accordingly, it has been determined that the other factors considered are a more reliable criteria of the Company's value, The value of Allen Distribution as indicated by the capitalized earnings method shown in Schedule 2 is $10,069,451, . Excess Earninos Method The excess earnings method was developed by the U,S, Treasury Department in 1920 in Appeals and Review Memorandum 34 (ARM 34), This method is also referred to as the Formula method, This is a commonly used method of valUing businesses. 13 ...._...,.""..."'..._......."'--=or.."'~-+ '-.4: .:. This mothod computes the company's equity value based on the "appraised" value of tangible assets, plus an additional amount for Intangible assets, A company's tanglblo assets should provide a current return to the owner. Since there arc risks associated with owning tho Company's assets, the rate of return on those assets should be equivalent to the risk assumed. lhe rate utilized should be the prevailing I'ato of return required to attract capital to that Industl'y or an appropriate rate above the risk free rate, Any returns prodoced by the company In excess of the rate on tangible assets arc considered to arise from Intangible assets, In Schedule 3, an estimated value has been determined In general accordanco with the formula or excess earnings method, This method Is a two-stago valuation technique in which net tangible assets are valued using an updated version of ARM 34 and U,S, Internal Revenue Ruling 68.609, In applying this method, a normalized level of earnings and net tangible assets value need to be determined. For the Company, the normalized Income ranges from S729,066 In 1994 to SI78,033 In 1991 (Schedule 4), An appropriate rate of return on shareholders' equity or net tangible assets must be developed to utilize this method, In our judgement, the Company's excellent record of growth has been accomplished by superior management abil flies, While the excellent growth rocord Is expected to continue, the ability of the Company to consistently outperform the market is statistically questionable, Therefore, we have utilized a 25 percent rate to capitalize excess earnings, As shown in Schedule 4, the goodwill of Allen Distribution has been calculated to be S3,487,I72, The value of the net tangible assets, less the book value of the real estate, is combined with, the fair market value of the real estate and the Intangible assets to produce a total value of the subject corporation. The total Company value derived under this method Is shown In Schedule 3 as SI5,877,232, Relative Imoortance of Each Method When comparing the results of these methods, It was necessary to determine which method should be considered the most Important In determining the estimated value of the business, The capitalized earnings method values the total Company, including tangible assets and goodwill, in a lump sum, --Instead of determining one capitalization rate for tangible assets and another for intangible assets, a single blended rate is established for all assets, The capitalized earnings method Is a fundamentally sound approach which recognizes the Importance of earnings and views value as would an outside investor, This involves determining the rate of return an Investor would require to assume the risk of putting money Into a particular business, 14 '...:'"~...._....","" ., .,...... . :'..':". As shown In Schedule 2, the capitalized earnings method values the Company by applying a capitalization rate to the normalized net income of the Company. The principal limitation of this method Is that It ignores asset values, This Is especially Important when the company examined contains a substantial amount of real estate used in operations. In our opinion, this method does not properly portray the economic substance of the Company, because It cannot take Into consideration the appreciation In value of the underlying assets of the Company; therefore, we assigned no weight to this method, The formula method or excess earnings method which Includes a goodwill factor as well as the adjusted net asset value of the Company is a commonly used method In business valuations, This method gives consideration to the return available on all the assets of a Company, We adjusted fixed assets to reflect the fair market value of the operating assets, This method, In our opinion, best estimates the Indicated value of the Company, As detailed In Schedule I, we applied 100 percent of the weight available to the excess earnings method. Marketabllltv Discount The concept of marketability involves the liquidity of an Interest, In other words, marketability Is how quickly and assuredly an Investment can be converted to cash at the owner's discretion. Generally, an Investment has greater value If It Is readily marketable than If It Is not, because Investors prefer liquidity over the lack of It, An Interest In a closely held business Is not as liquid as compared to a majority of alternative Investments. The dual Issues of liquidity and marketability have been addressed In the proposed adequate consideration regulations of the Department of Labor (DOL). These regulations state that In the conduct of an Independent appraisal, one may apply a lower than average marketability discount In cases where there Is a put option and sufficient liquidity to make repurchases. The regulations use the words "diminish" and "reducing" and avoid the word "eliminate". This seems to Indicate an official prohibition by the DOL against using a zero percent discount to reflect limited marketability, A discount for lack of marketability should usually be applied to any ownership Interest that cannot be easily sold In a timely manner, A number of studies during the past 25 years have tried to measure the average levels of discounts for lack of marketability, These studies fall Into one of two categories, depending on the type of market transaction data on which they are based: I. Restricted ("letter") stock studies, 2. Studies of transactions In closely held stocks prior to Initial public offerings (IPO' s). . l I 15 : .'.':. ~":::-~;-7'N~d~!.i Lcttcr stocks arc idcntical to frccly tradcd stocks of public companlcs except that thcy are rcstrlctcd from trading on thc opcn market for a spcclfied period of tlmc, It would appear, that marketability Is the only dlffercnce bctwccn a lcttcr stock and Its frccly tradcd countcrpart. lhc studlcs havc conccntratcd on finding dlffcrcnccs In thc price at which letter stock transactions take placc comparcd with opcn markct transactions in the samc stock on the s~mc datc. It should be notcd, that similar rcsults havc bccn obtalncd by diffcrcnt rcsearchcrs ovcr a significant number of ycars, In calculating thc amount of discount for lack of marketability wc rcvlewcd thc Institutional Invcstor Study Rcport of the Securities and Exchangc Commission published In 1971, thc Gclman Study publlshcd In 1972, thc Trout Study publishcd in 1972, the Moroncy Study publlshcd In 1973, thc Mathcr Study publlshcd In 1976, thc Standard Rcscarch Consultants Study publ I shcd In J 983, thc Will amct tc Managemcnt Assoclatcs Study completcd In 1984 and thc Sllbcr Study publlshcd in 1991 all of which found lack of markctablllty discounts with avcrage or mcdlan discounts ranging from 30 to 45 pcrccnt, It Is rcallzed that rcstrlctcd stocks arc only rcstrlctcd from public trading for a specified amount of tlmc. Aftcr that, thc stocks arc cllgible to tradc in a public markct that is alrcady cstabllshcd. It appcars logical thcn, to cxpcct that the discount for lack of markctablllty for closcly held stocks or llmltcd partnership intcrcsts, for which no public markct has bccn Idcntiflcd, would bc grcatcr than thc discounts for lack of markctabllity for rcstrlctcd stocks that in the foreseeablc futurc would bc frccly cxchangcd in an opcn public markct, Two companlcs, Robcrt W, 8alrd & Co. and Wlllamcttc Managcmcnts Associatcs, undcrtook two indcpendcnt scrles of studics dcslgncd to answer the qucstlon implied abovc, These studics wcre based on transactions in closely hcld stocks compared to subscquent transactions in the samc stocks as IPO's. The Baird Study cxamincd 173 qualifying transactions from 1980 through 1993, The results indicate a mcan and median discount for lack of marketability of 47 percent and 46 pcrcent respcctlvely. The Willamette Study cxamined 516 transactions for a time pcrlod ranging from 1975 through 1992, Thc median discount indicated from thc 12 Willamcttc Studics ranged from a low of 41.7 pcrcent in 1985 to a high of 62.9 pcrcent In 1979, As far back as 1977 in Rcvenue Ruling 77-287, thc Internal Rcvcnue Service (IRS) recognizcd the validity of the restricted stock studlcs In providing useful data for the determination of discounts applied for lack of marketabll ity. The Baird and Willamette studies did not exist thcn, however It appears that both the IRS and the courts have becn reccptive to these data in assisting an appraiser in quantifying discounts for lack of ma~ketability, We also reviewed various court cases In determining OUI' discount for lack of marketability, It appears that dlscounls for lack of marketability determined by the Courts have increased In recent years compared to ead ier years. 1I11s is most likely due to the aval1abl111y of emlllrlcal data on which lo base their analysis, Cases in point, where evidence dlscllssed abovo was presented, and where the discount for lack of marketabl111y delermlned by the court was clearly disltnguished from any othel' discount, Include the Estate of Nark Gallo v, Commissioner, 50 T.C,M, 470 (1985), 36 percent; Estate of Marlha U, Watts, 87-2 U,S,T.C paragraph 13726 (lllh Cir., 1987), 51 T.C,M 60 (1985), 35 percent; and the Estate of Joyce V. Itall v, Unlled Stales (89 T.C, 19), 3(j percent. We also reviewed the Eslale of Charles Bennell, \1993/ TC /1emo 1993-34, In valUing a 100 percent slock Interest in a corporat on wlich owned and operated shopping center real estate and also owned a separate parcel of land which was subject to an 83-year ground lease on which the lessee had constl'ucted a shopping mall, the Tax Court, after valuing the underlying corporate assets, applied a 15 percent discount for lack of marketability of the stock, The Tax Court noted that the real estate was not liquid and inferred that a discount would probably be necessary to induce a buyer to purchase the corporalton wilh ils exisltng mix of assets, The Partnership Agreement also contains additional restrictions on resale of the units including certain prohibitions against the transfer of any Units without the express written consent of the General Partner, There can be no assurance that the General Partner will, in any instance, approve the transfer of Units. Addilionally, certain circumstances involVing a limited Partner will trigger fi rst refusal rights under the Partnershi p Agreement, permil t i ng the Genera I Partner to designate a purchaser of ils choice to purchase the particular limited Partner's Units, As provided by the original Confidential Disclosure Nemorandum, dated March 30, 1988, there exists no current market for the Units, nor is it expected that one will develop in the future, Accordingly, each Limited Partner should be prepared to hold his investment indefinitely and should not anticipate any liquidity from his investment in the Partnership. Pursuant to the terms of the Partnership Agreement, a Limited Partner may be permitted to withdraw his interest in the Partnership after the expiralton of 8 years from the date of said Agreement. While this right of withdrawal permits a Limited Partner to withdraw his Limited Partnership interest on a future date, there 15 no assurance that the Partnership will remain in existence on such date, or that such Limited Partner's interest will have any value on such date, Moreover, pursuant to the terms of the Partnershi p Agreement, the Partnershi pis requi red to prov ide payment of the Withdrawing limited Partner's Interest over a period five (5) years from the date of withdrawal, in five (5) equal annual installments, together wilh accrued interest. There is no assurance that the Partnership will be able to meet its obligat ions for payments of pri nc i pal--and interests under such repurchase scheme at the time at such obligations mature. After conSidering the studies and court cases as cited above, we have applied a 15,0 percent discount for lack of liquidity and marketability, 17 ..,.c--<..--.~-. '""'f:~ -~.-.--- r - --. ..-'-- , - ---~ 1 \ I1InQl:H.LlntllQs,Uli~Q.\!n1 The minority Interest discount Is the concept which recognizes the Inherent relationship between a limited partner and the general partner. This relallonshlp Is a function of the control that a general partnel' can exercise over the direction and management of the company. A limited partnership Interest is worth less than a general partnership Interest, because a limited partner cannot compel payment of distributions, employment by the partnership or structure perquisites to Its benefit, ^ limited partner is essentially at the mercy of the general partner. We applied a discount for a minority Interest In this case, because by definition a limited has no control over the dally operations of the partnership, and Is In fact precluded from control, The limited availability of Information regarding sales of closely held entities has limited the research publlshcd on discounts for minority interests, Howevcr, a study completed by W,T. Grimm & Company on control premiums in publicly traded stock transactions, published by HerQcrstat Review, implies that a discount for a minority interest in excess of 25 percent can be utilized, However, a study completcd by H, Calvin Coolidge published in Estate PlannlnQ, Spring 1975, p,141 indicates that discounts for minority Interests in which shareholders are unrelated can be as high as 70 percent, but that in sales where the shareholders were related and fricndly I'clations existed the discount was generally below 20 percent, In developing minority interest discounts, appraisers frequcntly look at the current historical relationship bctween the quoted market values versus the stated net assets values for shares of publicly traded closed-end investment companies and real estate investment trusts (REIT's), or other public companies wi th comparabl e asset structures, Net asset va I ue refers to managements estimates of the fair market values of the underlying assets, less any liabilities, Usually, shares in closed-end mutual funds and REIT's trade at a discount to net asset value. The discounts take Into account the market's collective assessment of built-in capital gains, capitalized operating expenses and management fees, This is normally the starting point for impullng an appropriate minority Interest discount, We utilized closed-end mutual funds In our analysis, because the net asset value of REIT arc based solely on estimates of value and can be computed under various methods, Closed-end mutual fund's net asset values arc computed at the close of each day based upon actual transactions, Thcrefore, we believe that this Information Is more objective and better estimates the actual discount available from net asset value, The final estimation of the discount utilizes the appraisers evaluation of the consequences of the lack of control for the limited partner relative to the current condition and outlook for the assets in the partnership, Such control issues may include the size of the vote needed to liquidate the partnership or amend the partnership agreement, whether or not the agrecment requires the general partner to distribute excess cash, and how much discretion the general partners have in making ncw Investments. Ii I! 18 l--~--'."-'-'-~ " ." " :"~~'$.~~tt~~7;~'>.~$~~-kJ5~,~~~"t'~4~~A~'~~~~;j~WL~~1r~,~~-h,~~~~~~.~'i(';~"';'; ~""'.;.}w~i:i;; After considering the studies cited above and the relationship of the Company being valued to the particulars of these studies, we have assigned a 10,0 percent discount for minority Interest, Summarv Based upon the information obtained, the procedures followed and the assumptions made as set forth above, a reasonable estimate of the market value of Allen Distribution, before applicable discounts as of December 31, 1994 Is $15,877,232. The total Indicated value after discounts for lack of marketability and minority Interest for Allen Distribution, as of December 31, 1994 Is $12,146,082, The value of a I percent limited partnership Interest, rounded to the hundred Is $121,500, However, because the validity of the assumptions made could be ultimately determined only as a result of litigation, If a controversy were involved, and because actual fair market value can only be determined by bona fide bargaining between well Informed buyers and sellers, we do not represent that the amount set forth above will be the amount ultimately so determined. BOLES, GROVE AND METZGER P,C. August 4, 1995 U/~~ Ie I ' 19 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31, 1994 SUMMARY Indicated Weighted Method Schedule value Weight value Capllalized earnings 2 $10,069.451 0% $0 Excess earnings method 3 15.877,232 100 15,877.232 Total indicated value before discounts 100% 15,877.232 Lack of marketability discount 15.0% (2,381,585) Minority interest discount 10.0% (1.349,565) Total Indicated value after applicable discounts Value of 1 percent limited partnership Interest, rounded to the nearest hundred '. Schedule 1 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31, 1994 CAPITALIZED EARNING METHOD METHOD COMPUTATION OF INDICATED VALUE I. ," 1994 1993 1992 1991 1990 Nonnalized net Income (Exhibit 4) $2,075,111 $947,979 $957,115 $696,260 $421,852 WeIght 4 3 2 1 0 WeIghted average adjusted cash flow _$8,300.444 52,843,937 $1.914.230 L $696,260 ~Q. Sum of weighted average adjusted cash flow $13,754,871 Sum of weights 10 Weighted average adjusted net Income 1,375,487 Capitalization rate (ExhIbit 3) 13.66% Indicated value $10,069,451 " , Schedulo 2 tC; ..,,'-, ,(;i;"c;'!;:'- ", 1'('. I .."......~.-.-,.,..,,~.,_.,' -'-' ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31. 1994 EXCESS EARNINGS METHOD COMPUTATION OF INDICATED VALUE I' ""',,".,... ',.<-. Partners' equity (Exhibit 1) $4,018,667 Less book value of buildings 13,404,479 ; Partners' equity less book value of real estale (9,365,792) , Goodwill (Schedule 4) 3,487,172 i Fair market value of warehouses. See Exhibit 5 21,775,852 , " Indicated value $15,677.232 , , -.... -. '. Schedule 3 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31, 1994 EXCESS EARNINGS METHOD COMPUTATION OF GOODWILL I'''' .............,.., ~. , ,'.; .... , ." -~ .... '-'. . 1994 1993 1992 1991 1990 Net normalized Income (exhibit 4) $2,075,111 S947,979 $957,115 $696,260 $421,852 Average partners' equity (Schedule 5) 3,438,992 2,635,619 2,101,095 1,561,689 1,175,886 Industry average taxable Income as a percentage of partners' equity' 21.2% 15.8% 16.5% 11.4% 20.7% Normalized Income 729,066 416,428 346,681 178,033 243,408 Excess Income 1,346,045 531,551 610,434 518,227 178,444 Weight 4 3 2 1 0 Weighted excess Income $5,384,180 $1,594,653 $1,220,868 $518,227 $0 t Sum of weighted excess Income $8,717.928 Sum of weights 10 Weighted average excess Income $871,793 Goodwill range: Minimum 30.0% 2,905,977 InlUal 25.0% 3,487,172 Maximum 20.0% 4,358,965 Indicated goodwill $3.487.172 ~ Schedule 4 ,_, .......,_,.,_, .;........~~_..-....,'~.".".~._..,...._.. _n' . ......,....,.._.,_:,.:....,."",,',.__i~n'....;..-'Y~-,....""'...., ",.<" ,. ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31, 1994 EXCESS EARNINGS METHOD COMPUTATION OF AVERAGE PARTNERS' EQUITY 1"',....,", ........ ,.."..~..".... ..,.". ~ " . ,-..-, -, ~.~- - :..',' 1994 1993 1992 1991 1990 Partners' equity (exhibit 1) ,$4,018,687 $2,859,296 ~2.411,941 $1,790.248 $1,333,129 Average partners' equity: II 11 '" * l J ~ t , ~ r. ~. ,", t :~ ,> $( 4,018,687 + 2,859,2961 2 $3.438,992 , $( 2,859,296 + 2,411,9411 2 $( 2,411,941 + 1,790,2481 2 $( 1,790,246 + 1,333,1291 2 $( 1,333,129 + 1,018,6421 2 ,$2,635,619 , $2,101,095 $1,561,689 $1,175,886 - , . Schedule 6 ,,,:..__.r,.~...,....~.,;.,;;;..~.,. ESTATE OF TRUMAN HEISHMAN AllEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31,1994 BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31,1994,1993,1992,1991 AND 1990 ASSETS 1994 1993 1992 1991 1990 Cash $1,440,356 $834,809 $643,756 $357,417 $495,312 Accounts receivable 607,298 309,373 313,984 160,584 210,057 Employee advances 2,961 Prepaid expenses 136,009 111,798 172,591 63,729 28,202 Total current assets 2,183,663 1,258,941 1,130,331 581,730 733,571 BUildings and other depreciable assets net of accumulated depreciation 12,363,432 10,683,014 7,988,476 6,126,332 5,775,568 land 2,365,521 2,365,521 1,729,686 1,729,686 953,538 Net cost of property and equIp men 14,728,953 13,048,535 9,718,162 7,856,018 6,729,106 Other assets 104,772 72,447 86,137 100,812 72,755 Total assets $17,017.388 $14.379,923 $10,934,630 $8,538.560 $7,535,432 LIABILITIES AND PARTNERS' EQUITY Current portion of long- term liabilities $428,034 $655,833 $343,683 $339,197 $300,900 Accounts payable 170,577 62,904 46,798 51,337 27,940 Other current liabilities 191,380 128,010 104,677 76,551 57,719 Total current liabilities 789,991 846,747 495,158 467,085 386,559 Accounts payable 1,735,653 200,000 458,467 Note payable 82,500 232,500 232,500 232,500 232,500 Mort9ages payable 10,306,250 10,723,871 7,861,661 5,606,100 5,601,717 Notes payable - equipment 490,452 128,473 178,113 155,933 50,948 Capital lease obligation 21.889-- 44,869 98,940 167,424 231,479 Total 12,636,744 11,329,713 8,371,214 6,620,424 6,116,644 ". less: current portion 428,034 655,833 343,683 339,197 300,900 Tolallong-term lIabllllles 12,208,710 10,673,880 8,027,531 6,281,227 5,815,744 Partners' equity 4,018,687 2,859,296 2,411,941 1,790,248 1,333,129 Totalllabllltles and partners' equity $17,017.388 $14.379.923 j1Q,934.630 $8,538,560 $7,535,432 Exhibit 1 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31,1994 STATEMENTS OF INCOME FOR THE YEARS ENDING DECEMBER 31,1994,1993,1992,1991 AND 1990 1994 1993 1992 1991 1990 Revenue $8,366,576 $5,224,428 $4,513,562 $2,680,955 $1,984,172 OperatJng expenses Storage 2,645,129 2,194,354 1,885,208 1,181,864 1,024,828 Handling 1,998,624 1,265,056 1,057,528 533,646 341,987 Transportation 1,019,364 412,154 207,329 92,363 58,748 General and administrative 861,586 545,852 463,472 293,822 225,493 Totel operating expenses 6,522,703 4,417,416 3,613,537 2,101 ,695 1 ,651 ,056 Operating Income 1,843,873 807,012 900,025 579,260 333,116 Other Income Interest 28,341 14,255 12,030 34,747 20,939 Gain on sale of auto 1,782 Miscellaneous 4,382 4,466 Total other Income 32,723 20,503 12,030 34,747 20,939 Total 1,876,596 827,515 912,055 614,007 354,055 Other expense Interest. land. 12 acres 16,236 25,575 25,575 25,575 25,528 Net Income $1,860,360 $801,940 $886.480 $588.432 $328,527 -- Exhibit 2 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31,1994 COMPUTATION OF CAPITALIZATION RATE .". . Appraisal date long.term bond yield. . 7,93% Horizon prernlum - bonds over bills - .. (1.40) 6.53 7.20 Normalized risk free treasury yield Equity risk premium, stocks over bonds - .. Benchmark premium for size Adjustments for other risk factors Discount rate for net cash flow 5,30 3.00 Average market retum 13.73 22.03 Increment specific to net eamlngs Discount rate for net eamlngs Less sustainable average compound growth rate or "GOO Net eamlngs capltalizallon rate for next year Divided by "G" plus one Net eamlngs capltalizallon rate for current year 3.00 25.03 (10.00) 15,03 110,00 13,66 % · Source. U,S. Financial Data, The Federal Reserve Bank of SI. Louis, Long-Term Treasury Securities as of December 30,1994. .. Source - Stocks, Bonds, Bills and Innallon, Ibbotson Associates 1994 Yearbook, Market results for 1926 . 1993. Exhibit 3 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31, 1994 COMPUTATION OF NORMALIZED NET INCOME I. 1994 1993 1992 1991 1990 Revenues (Exhibit 2) $8,366,576 $5,224,428 $4,513,562 $2,680,955 $1,984,172 Officers' compensation as a parcentage of sales. 5.5% 6.3% 7.6% 6.4% 7.5% Nonnallzed officers' compensation 460,162 329,139 343,031 171,581 148,813 Management fee 376,735 234,844 203,264 120,662 89,789 Difference $83,427 $94.295 $139,767 $50,919 $59,024 Net Income (Exhibit 2) $1,860,360 $801,940 $886,480 $588,432 $328,527 1/2 Depreciation 302,560 246,582 210,402 158,747 152,349 Gain on sale of auto (ExhIbit 2) (1,782) Miscellaneous (Exhibit 2) (4,382) (4,466) Adjustmantto nonnallze management fee (See above) (83,427) (94,29~ (139,767) (50,919) (59,024l Nat nonnallzed net Income $2,075,111 $947,979 $957,115 $696,260 $421,852 - .' . Source - Robert Morris Associates, 1994, Services, Warehousing & Storage - General Dala sorted by sales, SIC # 4225. Exhlbll4 '.'.1. -I '-.-';"-'.C'''.i;."..,> v_.<-,!~,;'.}ri~i~-~'~+;;(~~:~"'y'y~i~:iV.IE~:'{~Wi~f~~ -..'~ ESTATE Of TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31,1994 COMPUTATION OF FAIR MARKET VALUE OF WAREHOUSE PROPERTIES Location of property 1705 Shearer Drive, Carlisle, PA Includes buildings #10 . 670 Allen Road, Carlisle, PA Includes buildings # 1, 3 and 4 .. Legal description Plan book 63, Page 74 Fair market value $3,963,000 Plan book 55, Page 58 12,750,000 1994 1993 Cost Cost Cost of Building #10 expansion Cost of building Warehouse #11 Improvements: ,~4,192,883 ,$2,657,230 1,535,653 3,095,532 Warehouse 1 Warehouse 3 Warehouse 4 $2,481,355 1,716,613 2,174,744 $2,351,231 1,444,877 2,144,937 Total $6,372,712 ,$5,941,045 431,667 $21,775,862 Estimated fair market value of warehouse properlles . Source - Larry E, Foote, C.R.E,A., DlvesIned Appraisal Services, Value as of September 17, 1992. - .. Source - Larry E. Foote, C.R.E.A., Dlveslfied Appraisal Services, Value as of November 9, 1990, - Exhibit 5 ESTATE OF TRUMAN HEISHMAN ALLEN DISTRIBUTION (A LIMITED PARTNERSHIP) VALUATION OF BUSINESS DECEMBER 31, 1994 COMPUTATION OF MINORITY INTEREST DISCOUNT PremIum -discount Closed-end Investment Stock percenlage . company exchange Symbol 1994 1995 ASA L TO. NYSE ASA -10.0% 17.0% ADAMS EXPRESS NYSE ADX -10.0% -12.0% GABELLI EQUITY NYSE GAB 6.0% -2.0% GEN'L AMER. INVEST. NYSE GAM -11.0% -16.0% H&Q HEALTHCARE NYSE HQH -7.0% -17,0% LIBERTY ALL-STAR NYSE USA 2.0% -2.0% MORGAN GREN SC NYSE MGC -17.0% -16.0% PETROLEUM & RES NYSE PEO -4.0% -5.0% ROYCE VALUE TRUST NYSE Rvr -6.0% -10.0% SALOMAN BROS. FD. NYSE SBF -14.0% -16.0% TRI-CONTINENTAL NYSE TY -14.0% -17.0% Tolal -67.0% -96.0% Number of closed-end Investment companies 11 11 Average dIscount from net asset vlllue - -7.9% -6.9% ~ . Source - Value LIne Investment Survey, June 9,1995 and September 9, 1994. ExhIbit 6 nOI.ES, GRom AND METZGER, ().C. CERTIFIED PUBLIC ACCOUNTANTS W1UlAM II. 1I01.1'_~ OARY O.OROVI! DIlIAN J. Mm-zol!R D1l1lN1' W. I!MIUCK RONALD r. IlVl!l.IIOCII OUM'n I!. III!RMAN 3601 NORTH I'llONT STREET 1',0. BOX 5810 HARRISBURG,PENNSYLVANIA 1711ll TEI.EPIIONE (717) 238.(J.l46 FAX (717) 238.3960 MHMllr:JlS AMI!IUCAN INSlllllru ai' CI!I\111~I!D I'UIII.IC ACCOU"'''ANI'S l'I!NNSYI.VANIAINS1TIUll! 01' Cr.J\lll~IJD I'UIII.IC ACCOU"'''ANrs Estate of Truman Heishman HSH Management, Inc, c/o Mr. Ivo V, Otto, Esquire Marston, Deardorf, Williams & Otto P,C, 10 East High Street Carlisle, PA 17013 We have been requested to estimate the value of HSH Management, Inc, common stock as of December 31, 1994 using information available at that time. This report has been prepared specifically for estate tax purposes and should not be used for other purposes such as purchase or sale transactions, We have prepared this estimate of value on the presumption that value is equivalent to "fair market value" and that "fair market value" is that price at which a willing buyer will buy and a Willing seller will sell an item of property, in an, arms-l ength transaction with nei ther one bei ng under any compulsion to buy or sell, and with both having reasonable knowledge of all rel evant facts, The Company being valued is not a publicly-traded security with an established market; therefore, fair market value cannot be readily ascertained by reference to any such market, Actual fair market value can be determined only by bona fide negotiations between knowledgeable buyers and sellers, Therefore, we do not represent that our estimate of the common stock val ue will be the amount ultimately so determined in actual bargaining or litigation, We reviewed the fundamental valuation factors applicable to this particular study, The factors considered include: I the nature of the business and the history of the enterprise · historical earnings · the value of the underlying tangible assets · the existence of goodWill or other intangible assets · the earnings capacity of the Corporation · sales of other stock interests · the size of the interest to be valued · the economic outlook in general, and the anticipated impact of economic changes on the industry Offices ill Hani,bllrg alld Lewis/awlI. I", ~.,.~,..........".--."",......,..._..".._~ Also examined were IlSIl Management, Inc/s, U.S. Income Tax Returns for an S Corporation, Form 1I20S for the periods ended ()ecember 31, 1990 through December 31, 1994. The balance of this report and attached schedules will analyze the valuatfon ffndlngs as determined by our selection of appropriate valuation techniques, The ffnal paragraphs Include our summary of findings and opinion of the fair market value as of December 31, 1994, Statement of Procedural Policies All financial statements, operating results, and the data pertaining to the Income and expenses of HSH Management, Inc. (also referred to in this report as the "Company") have been taken from the Company / s U, S, Income Tax Return for an S Corporation, Form 1120S, All related facts, comments and statistical information set forth in the report have been obtained from sources believed to be knowledgeable, reliable and accurate. All claims to property have been assumed valid and no Investigation of legal fee title to real or personal property has been conducted, liens and encumbrances which may be against the property have been given no consideration except as may be specifically set forth In this report. Our concluslons'are based on the assumption that there shall be a continuation of the present management pol icies over whatever period Is reasonable and necessary to maintain the character and Integrity of the Company, The analyses, conclusions, and opinions concerning the preparation of this business valuation report have been prepared by Robert E. Rodgers III, CPA, ChFC, CFP under the guidance and supervision of William B. Boles, CPA, ASA, CFP, No opinion has been rendered concerning the existence or possible Impact on value of potentially hazardous construction materials, toxic waste or the ability of the Company to meet Envi ronmenta 1 Protect Ion Agency Standards, No responsi bil I ty is assumed for the subject Company to meet environmental approvals, Detection of hazardous substances is beyond the appraiser's scope and requires consultation with an expert in this field, We hereby certify that, to the best of our knowledge and belfef, the statements of fact contained in this report are true and correct, and this report has been prepared in conformity with the Uniform Standards of Professional Aooraisal Practice of the Appraisal Foundation and the Princioles of Aooraisal Practice and Code of Ethics of the American Socie!y of Appraisers. The American Society of Appraisers has a mandatory recertification program for all of its Senior Members. We arc in compliance with that program. 2 ':,___i-<_ -.--'-!r"-,>'. The appraisers herein, by reason of the report, are not required to give testimony in Court, with reference to the business herein appraised, unless arrangements have previously been made, The fair market value determined in this report Is only valid for the date specified, The fee paid for the formulations and reporting of the conclusions set forth herein is not contingent upon the values or other opinions presented in this report, No shareholder, employee or agent of Boles, Grove and Metzger, P,C, has any direct or indirect interest in the Company, This report and any or all of the information contained herein may not be disseminated or disclosed in any manner, either directly or indirectly, to any party whatsoever without the prior written consent of Boles, Grove and Metzger, P.C, Introduction . Obiective The purpose of this report is to present a detailed narrative explanation of the methods, procedures and calculations used to arrive at an opinion of the fair market value of HSH Management, Inc. common stock for the express purpose of estate tax valuation, · Definition of Fair Market Value Fair market value is defined as the amount at which a property would change hands between a willing buyer and a willing seller, each haVing a reasonable knOWledge of all the pertinent facts, neither being under compulsion to buy or sell, Our appraisal of the Company as of December 31, 1994, is in accordance with the above definition, This appraisal was also performed In a manner consistent with the gUidelines set forth in Revenue Ruling 59-60, (1959-1C.B.237), · Economic Outlook THE NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook The follOWing analysis of the national economy for the fourth quarter of 1994 is based upon a review of current economic statistics, articles in the financial press and economic reviews found in current business periodicals. The purpose of the review is to prOVide a representative, "consensus" view of the current condition of the national economy anti'its outlook, Real gross domestic product, the output of goods and services produced by labor and property located in the United States, increased at an annualized rate of 4,5%, or about $5B billion, in the fourth quarter of 1994, according to estimates released by the Bureau of Economic Analysis. In the third quarter, revised real GDP Increased 4,0%, or about $51 billion, 3 . ~,_.~...:; I I I I I r . , i Despite rising Interest rates, corporate call1lal investment and consumer spending for durable goods and housing continued at a strong pace, For the year, GDP expanded 4,0%, an Increase over the 3.1% growth rate of 1993. lhat Is the best performance in a decade, Many analysts anticipate slower growth in the first half of 1995 as the Federal Reserve's six Interest rate hikes, aimed at containing inflation, have their full cumulative impact. Explosive 1993 fourth quarter growth was the primary factor leading to the Fed's corrective measures during 1994, The goal aimed at engineering what analysts refer to as a soft landing for the economy in which growth is slowed to a more sustainable level free of excessive inflationary pressures, The index of leading indicators of the economy (the government's primary forecasting gauge) registered a slight gain of 0.1% in December 1994, somewhat less than anticipated by economists. The index is a composite of II indicators of economic performance that attempt to measure economic activity up to 9 months in advance. The December gain followed a strong increase in November of 0.3% and a recently rare decrease of 0.1% in October. The index has increased 14 out of the last 17 months and generally indicates continued growth through the first half of 1995, It is generally believed that the economy will grow between 2~% - 3% in 1995. Expectations are high as the first Republican controlled congress in forty years attacks several key areas in the economic arena including: middle class tax reductions, capital gains tax relief, and deficit reduction Initiatives. Consumer prices rose 0,2% in December 1994, bringing the annual inflation rate for 1994 to a modest 2.7%, the same rate experienced in 1993. The modest inflation rate resulted primarily from the lowest core-rate of inflation (2,6%), which excludes food and energy costs, since 1965, Analysts expect inflation to drift higher in 1995 reflecting continued heavy capacity utilization, higher priced raw materials and low unemployment conditions, Proposed legislation to increase the minimum wage, combined with prevailing conditions could increase inflation beyond the 1995 estimated rate of approximately 3,5%. According to surveys by the University of 11ichigan and by the Conference Board, .consumers continue to be optimistic, both in their assessment of prevailing conditions and in their expectations for the immediate months ahead,. December's consumer confidence index measured 103.4, revised from the initial estimate of 102,2, marking the third consecutive month above the 100 level, The confidence level is up from a mid-year drop-off and is expected to remain at near four-year highs for the first half of 1995, The increase in consumer optimism is principally a result of strong economic growth, rising personal income and lower unemployment, Retail sales for the month of December were below analysts' expectations, with seasonally adjusted sales slipping 0,1% (meaning that sales increased less than anticipated), which is an early sign that the economy may be cooling off. Many analysts commented that aggressive price discounting designed to encourage consumers may have resulted in the holiday drop in ~a1es. The year-end results somewhat overshadowed otherwise impressive results for 1994 as a whole, which represented a 7,6% increase over 1993, the biggest gain since 1984. Credit del inquency was down for the year despite growing consumer installment credit use and higher percentages of credit purchasing to personal income. 4 NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) Consumer saving also increased as Interest rates began to encourage saving both In absolute terms and as a percentage of income, Many analysts question the extent to which this consumer leveraging can support continued spending, The year ended December 31, 1994 was not a good one for equi ties, with mos t major Indices posting losses, Both large and small capitalization stocks felt the crunch with the Dow Jones Industrial Average up only 2.1% compared to 1993' s 13,7% Increase, while the NASDAQ Composite declined 3,2%, The broad-based Wilshire 5000 Index fell 2.5% and the S&P 500 index retreated 1.5% for the year, Increased merger activity was a key factor in the I imlted group of stocks shoWing gains for the year, Some analysts predict that stabilized interest rates, sustainable growth, capital Investment and recovering foreign economies will support the markets In 1995, Bond Investors suffered through one of the worst years ever In 1994, Economic strength Is often viewed negatively by traders In the bond market who are very sensitive to Inflationary pressures that erode the value of fixed rate investments, Constantly rising Interest rates overshadowed currently low inflation reports, resulting In significant losses for the year. The virtual collapse of the bond markets was compounded by heavy use of sophisticated derivative securities whose values plunged in the wake of rapid Interest rate increases, Institutional Investment pools, historically managed to minimize exposure to market volatility, were hit particularly hard as evidenced by the Orange County, California default on interest payments, A new scrutiny will likely pervade Institutional Investments going forward. The Federal Reserve hiked short-term interest rates six times In 1994 with the federal funds rate (the Interest rate that commercial banks charge each other) increased 1,75% to finish December at 4.75%. Alan Greenspan, Chairman of the Federal Reserve, stands fast on an anti-Inflationary platform that supports monetary tightening as long as the econcmy maintains growth exceeding 3.0%. The mid-November move, Increasing the Fed Funds rate by 0.75%, was the most aggressive boost since 1980 and sparked great controversy that the economy could be pushed into recession once the full impact of previous hikes Is felt, Analysts commented that the only beneficial aspect to the move Is that it should keep the Fed on the sidelines through the middle of the first quarter of 1995, allowing markets to settle In and assess the situation. Despite the rl sing rate climate that preva Il ed throughout 1994, growth in employment and income has allowed for continued strength in housing and consumer spending, Fears are building that strong fourth quarter growth and low unemployment will result in further Fed action by mid-February, The thirty year fixed rate mortgage has Increased about 2,0% for the year and now tops 9,0%, Yield on the 30-year treasury bond also climbed past the 8,0% level In the fourth quarter, the highest since 1991. Investors and consumers are expected to see interest rates stabilize in 1995 as the economy slows but It Is unclear as to what cumulative level of inflation, unemployment, and growth will signal the Fed that the economy has achieved the elusive soft landing. 5 .- .-....-...- NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) Home-building is often a measure of how well the overall economy Is doing because new home construct ion stimulates so many related industries, Despite ri sing mortgage rates, housing starts increased 12,9% to 1.45 million in 1994, the highest level in six years. Unseasonably warm weather in the fourth quarter boosted construction activity while building permit appl ications, a major indicator of future activity, increased by 0,6% in December to an annual ized level of 1.4 million units, Housing starts have increased for the third consecutive year following five years of decline, Every region of the country shared the 1994 increase, and housing is expected to show continued improvement in those areas of the country in which economic recovery was late arriving, principally the West and Northeast. However, by December, the new home inventory (those available for sale) represented a 6,7 month supply at the current rate of sales, the highest level since late 1991, Sales of new homes also rose in 1994, reflecting a 0.6% increase to the highest level in six years, November and December reports dampened the year's performance as sales fell due to rising mortgage rates, Overall, many analysts are predicting that demand for new homes will remain strong in 1995 but not at the levels experienced in 1994. Unemployment fell to a four-year low of 5,4% in December, from a revised 5.6% in November. Job creation in December, however, was revised downward to 210,00 from earlier estimates of 256,000, Despite the lowest monthly job creation since January'when only 101,000 new jobs were generated, 1994 was the best year for employment since 1988, Approximately 3.5 million new jobs were created during 1994, an average of 290,000 per month. The Labor Department changed the way that it conducts its household survey in 1994 to give a more accurate picture of joblessness, According to the Bureau of Labor Statistics, the old counting method, used for over 40 years, was replaced by a new method that is more reliable in calculating part-time work, part-year work, and home-based work, Unemployment has not increased since the methodological influenced January 1994 increase of 0.3%, The last time unemployment rose prior to the survey change was January of 1992. Many analysts predict unemployment to edge upward in early 1995, reflecting economic growth moderation from increased interest rates, Continued growth is likely to prevent the rate from exceeding the 6,0% level. The predictions seem to be supported by the fact that average work weeks remained at post World War II highs of 42.1 hours and overtime hours were still rising at year-end. According to the Bureau of Labor Statistics, about 75% of the jobs created in 1994 were in professional and managerial occupations. Strong growth in the service sector is expected to continue into 1995, Observers should note that the service sector does not include low wage jobs such as in fast food, which fall under the retail trade sector, Recent surveys indicate that over half of the work force is USing computers on the job and demand for skilled labor will remain strong as technology-driven businesses continue to grow, 6 THE NATIONAL ECONOMIC REVIEW Fourth Quarter 1994 and Outlook (Continued) The economy carried over and surpassed 1993' s vitality registering the strongest growth In ten years. Activity in many interest rate scnsltlve arcas remained strong despite repeated moves by the Federal Reserve to slow economic growth and prevent inflation, Many analysts predict that Inflation has been succeSSfully contained and that growth will moderate going Into the new year. Financial markets remain unstable but optimism Is hullding that 1995 could return the mal'ket to strong form as corporate profits and stable yields Inspire Increased activity, Previous discontent concerning the fiscal pattern and reform agenda of the Clinton Administration has subsided due to the resounding Victory for the Republican Party during mid-term elections In November. New economic policy considerations Include Increased deficit reduction, middle class tax reform and capital gains tax elimination, Improved income and capital investment are projected to propel the economy at a healthy and sustainable pace close to 3.0% growth In GDP, The Leading Economic Indicators support strong but moderating economic performance for the first half of 1995. . Review of Tax Returns HSH Management, Inc, uses a December 31 year ending, The Company is an S Corporation for federal Income tax purposes. The Summary of balance sheets and statements of Income are from the Company's U,S. Corporation Income Tax Returns, Form 1120S for the years ended December 31, 1990 through.1994. We compared the company financial ratios to the comparative historical data as reported by the Robert Morris Annual Statement Studies, 1994 edition, Services - Management Services, SIC# 8741, The Company Is currently operating under a management contract with Allen Distribution which was Initiated In 1988 and presently has been renewed to August 31, 1998, The Company manages warehousing facilities solely for Allen Olstrlbution, a limited partnership. Robert Morris Associates Annual Statement Studies Robert Morris Associates (RMA) recommends that Statement Studies data be regarded only as general guidelines and not as absolute Industry norms. It should be noted that the Information collected by RHA Is not selected by any random or statistically reliable method. As such, the Information utilized from the RHA Studies was considered only as a gen!ral guideline, Balance Sheet Exhibit I, Is a summary of balance sheets for the years ended December 31, 1990 through December 31, 1994. The Company's Balance Sheet appears healthy, The current ratio is a measure of a company's ability to pay its short-term debt from short-term assets, It measures the number of times that current assets exceed current liabilities, 7 The current ratio for 1994 Is 2.98 to 1.0 This is better than the industry ratio of 1.2 to 1.0. The industry debt to worth ratio is 2.1 for similar firms. The Company displays a debt to worth ratio of .05 to I which is significantly less than the industry standard of 1.2 to 1.0. The lower ratio can be due to either a higher net worth or a lower amount of debt, either way, the Company has a stronger ratio than the industry statistic, We also examined the asset turnover ratio. The industry statistic shows a turnover rate of 2,2, The Company's asset turnover rate is 1.65 which shows a slightly slower turn over of assets, The Company has no 10n9-term debt. The Company, presents an apparently healthy balance sheet. Income Statements Exhibit 2, presents income statements for the Company for the years ending December 31, 1990 through December 31, 1994. nevenue has grown at an average annual compound growth rate of 34,2 percent, Income has grown at an average annual compound growth rate of 34,6 percent. Total expenses have increased at an average annual compound growth rate of 34.1 percent, The Company's gross revenues and income has increased dramatically over the five year period under analysis. The Company's net income, as portrayed by the income tax returns requires m?dification when evaluating the Company. As shown in Exhibit 4, normalized adjusted cash flow reached a high of $264,605 in 1994 and a low of $60,474 in 1990. It appears that the Company is increasing gross revenues and profits in a consistent manner, . Comoutation of Normalized Adiusted Cash Flow Earnings are considered the primary factor in a number of valuation techniques; ther~fore, the elements that comprise earnings were reviewed for material factors that could distort income, Accordingly, an adjustment was made for officers' compensation for each year included in the study. As shown in Exhibit 4, we normalized officers' compensation by applying a percentage to sal es based upon the Robert f10rri s Associ ates, 1994 Annual Statement Survey for Services - Management Services. We deducted from income the officers' compensation as a percenUge of sales for each year," because the Company has been paying less than the industry for officers' compensation. Officers' compensation is the line item that most frequently requires adjustment on the income statements of a closely held corporation, because actual compeqsation tends to be based on what the company can afford, or how the owners want to be compensated, rather than on the value of the economic services rendered by the controlling shareholders/employees, 8 ,_......--""':...-~.,......"."..."...~.- .,,--...., The general purpose of the compensation adjustment Is to substitute for the actual compensation tendered the cost of hiring an outside management team to operate the business. In other wOI'ds, what can the business I'eally eal'n In net income as compared to the historical bottom line, In this particular Company, officers' compensation was less than the Industry in general is paying, Therefore, we have adjusted income to reflect a normalized offi cers' compensat i on. We derived the amount of offi cers' compensat i on from the Robert Morris Associates Annual Statement Survey as detailed above, For purposes of calculating a value under the methods we have utilized in this report, we have removed income received from Allen distribution, because we add back the fair market value of a I percent interest in Allen Distribution on the individual schedules of the report, The adjustments and their computation are detailed In Exhibit 4. . Goodwi 11 Goodwill can generally be defined as the intangible aspects of a business, It includes such items as reputation, if that reputation is transferable, customer base, transferable negotiated contracts that offer favorable terms, etc, Goodwill is considered to be inseparable from the business, It cannot be sold without the ar.companying sale of the business, To determine whether or not goodwill was present in HSH Management, Inc., we have taken into consideration the,following factors: 1, The economic outlook for the industry, 2, The opportunity for repeat business, 3, Any elements that would yield a competitive advantage, 4, The competitive environment of the industry. 5. The effect reputation would have on the presence of goodwill, As shown in Schedule 4, goodwill is calculated as excess income, Excess income is the difference between a "normal" return on equity and the adjusted net income before income taxes that the Company generates, The percentages utilized for average industry taxable income as a percentage of shareholders' equity are from the 1994 Robert Morris Associates Annual Statement Survey for SIC# 8741. The Company has excess income in all years. The Company's weighted average excess income is S165,075 for the five year period, We have capitalized this excess income using a capitalization rate of 40.0 percent. Excess earnings are considered to contain more risk than ordinary operating income, Therefore, we have capitalized excess earnings at a rate higher than the capitalization rate we computed in Exhibit 3, Due to Allen Distribution being the Company's only client, we have used We utilized a rate of 40.0 percent to account for the additional risk of these earnings. .. 9 As can be seen in Schedule 4, the Company exhibits goodwill calculated to be worth S412,680, This calculation Is performed after adjustments and normalization of income, and Is based on average stockholders' equity, Valuation Methods The methods cons idered and employed in reach I ng our cone I us ions I ncl ude the following: I, Capitalized earnings method 2. Excess earnings method We decided to utilize valuation methods that stress historical rather than projected data, because of the difficulty in making future projections with enough reliability to get a meaningful result; this is especially true for a small closely-held entity. Valuation approaches using historical data have found general acceptance in the discipline of business valuation. and we believe that the historical data used in this valuation report is representative of current conditions, Comoutation of Capitalization Rate Under the Build-Uo Method Unlike some aspects of valuing a business, small changes in capitalization rates can make a substantial difference in the fair market value arrived at by an appra iser, Therefore, to insure that the capita Ii zat i on rate deri ved was appropri ate for the subject company. we computed a capitalization rate under the build-up method, The build-up approach is based on the premise that a company's capitalization rate is composed of a number of identifiable risk or return factors that, when added together, result in the total return that a prudent investor would demand from the purchase of the Company If the standard of value Is fair market value, the correct capitalization rate is the rate 'available on other comparable investments, adjusted for differences in risk and other factors, In the build-up method, we have started with the rate, as of the appraisal date, available on long-term bonds, The rate utilized is reported by the Federal Reserve Bank of St. Louis, This rate is then normalized by subtracting the horizon premium of bonds over bills, as detailed in Ibbotson's 'Stocks, Bonds, Bll1s and Inflation 1994 Yearbook, This yearbook is a statistical compendium of market results from 1926. This normalizes the short-term yield, In other words, it prevents the use of a yield that may be abnormal when compared to long-term historical results, 10 Due to practical problems encountered in thc use of a short-term rate as the l'isk free rate, we utilize a "normalized" risk free treasury yield. 1he normalized risk free treasury yield is developed by sublracting from the long-lerm bond yield the average expecled amounl by which long-term bond yields exceed shorl- term bill yields. lI11s excess is called the "horizon premium". 1he equity risk premium, the difference In premium bctween stocks and bonds, is then added to the normal ized risk frce treasury yicld to develop an average market return. 1his is the extra relurn earned by an average equity investor In excess of the relurn on long -term lreasury securit I es. I n other words, it attempts to measure the rate of return that an average Investor would consider adequate for an Inveslment in a Standard & Poor's 500 Company. The average market return Is then adjusted to lake into consideration the additional risk Inhcrent in a small closely-held company. There is obviously more risk associated with a closcly-held company than with a major publicly traded S&P 500 company. Therefore the capitalization rate must be adjusted to take into considerat ion thl s addl t10nal ri sk, We have utilized Ibbotson's "small stock risk prcmlum" of 5,3 percent, Ibbotson calculates this perccntage by calculating the weighted avcragc return earned by the smallest 20 percent of all companies listed on lhc NYSE, AMEX and OTC companies of similar size, This rate is then adjusled for other risk factors inherent In the company being valued, We have adjusted the rate an additional 20,0 percent to account for lack of diversification in the Company's operations and the Company only managing one client, The discount rate for net cash flow Is converted to a discount rate applicable to net earnings by adding an increment specific to net earnings, We have utilized 3.0 percent, One method of developing a company's net earnings discount rate or increment specific to earnings is to develop a conversion rate based on a range of typical differences between dividend yields (dividends/stock price) and earnlngs,yields (earnings/stock price) of public companies, While there have been no definitive studies at this point, many experienced practitioners feel that this difference most typically ranges from 3 to 6 percent, Despite the Company's excellent earnings history, It is still a development stage Company whose growth is tied solely to thc success or failure of Allen Distribution, and it has no intent of managing for other clients, Therefore, the Company's risk structure would dictate a higher percentage. Accordingly, we utilized 6,0 percent as our increment to earnings. In order to convert the discount rate for net carnings to a capitalization rate for net earnings, the expected long-term average compound growth rate is subtracted from the discount rate fornct earnings, We estimated the long-term growth ratc to be approximately 10,0 percent, Gross revenue has been increasing rapidly each year. We do not believe that this level of growth is sustainable for the long-term, We have estimated 10.0 percent to be a better indicator of future growth, This calculation renders the net earnings capitalization ratc applicable to the ncxt year. To apply the capitalization rate to the Company's recent historical benefit stream it should be divided by I plus the projected growth rate, II H'" _....... ,.,_."...,_,..,..._.,.,t'."""'~ As detailed in Exhibit 3, the capitalization rate derived under this method is 31.85 percent. . Caoitalized EarnlnQs Method The capitalized earnings method is a generally accepted method used to value small businesses, As shown in Schedule 2, an estimated market value has been determined by the capital ized earnings method, This computation is based on the Company's earnings history over the most recent four years, Since earnings are considered the most important factor with this technique, the elements that comprise earnings have been reviewed for material items which may distort income, In Exhibit 4 we have adjusted income for items which distorted income, As shown in Exhibit 3, a portion of the computation is based upon a capital ization rate of 31.85 percent. This rate Is determined under the build-up method, A capitalization rate computed under the build-up method asks the question of what rate of return would a normal market participant require to assume the stated risk/reward relationship. In any scenario there are competing investments that can be utilized. The build-up approach compares the investment being offered to other opportunities available, In other words, It is a measure of the opportunity cost of selecting one investment over another. The value of HSH Management, Inc, as indicated by the capital ized earnings method shown in Schedule 2 is $674,944, Ordinarily, distributions paid in recent years are considered In valuation procedures; however, U.S, Internal Revenue Ruling 59-60 indicates: Section 4,02(e) "Where an actual or effective controll ing interest in a corporation is to be valued, the dividend factor is not a material element, since the payment of such dividends is di scret ionary with the controll i ng stockhol ders, " "".dividends are a less reliable criteria of fair market value than other applicable factors.. ," Accordingly, it has been determined that the other factors considered are a more reliable criteria of the Company's value. . Excess EarninQs Method The excess earnings method was developed by the U,S. Treasury Department in 1920 in Appeals and Review Memorandum 34 (ARM 34). This method is also referred to as the Formula method, This is a commonly used method of valuing businesses, This method computes the company's equity value based on the "appraised" value of tangible assets, plus an additional amount for Intangible assets, A company's tangible assets should provide a current return to the owner, 12 Since there are risks associated wllh ownln!l thll Cllllll'.lny's assllts, the rate of return on those assets should be cquivall!nt tu thu risk assumed, the rate utilized should be the prevailing ratll ur l'eturn requll'l't1 tu attract capllal to that Industry or an appropriate rate above the l'lsk rrell rate. Any returns produced by the company In excess of tho r,lte un tangible assets are considered to arise from intangible assets, In Schedule 3, an estimated value has been determined In general accordance wllh the formula or excess earnings method, lIlIs method Is a two-stage valuation technique In which net tangible assets are valued using an updated version of ARM 34 and U,S, Internal Revenue Ruling 68.609, In applying this method, a normalized lovel of earnings and not tangible assets value need to be determined, For the Company, the normalized Income ranges from SI5,208 to $2,630 depending on the year In question (Schedule 4). An appropriate rate of return on shareholders' equity or net tangible assets must be developed to utilize this method. In our judgement, the Company's excellent record of growth has been accomplished via additional asset purchases and by superior management abilities, While the excellent growth record Is expected to continuo, the ability of the Company to consistently outperform the market Is statistically questionable, Also, future performance depends on the continuing rolatlonshlp with Allen Distribution, therefore, we have utilized a 40,0 percent rato to capitalize excess earnings, As shown In Schedul e 4, the goodwill of 11511 Management, Inc. has been cal cuI ated to be $412,388, The value of the net tangible assets Is combined with, the fair market value of a I percent interest in Allen Distribution and the Intangible assets to produce a total value of the subject corporation, Since, the book value of Allen Distribution is already reflected In sharoholders' eqully, only the difference between the book value and fall' mal'ket value has been added to shareholders' equity, The total Company value derived undor this method is shown in Schedule 3 as $708,878, IllIln.tiY.urnnillol1co of Each Method When comparing the results of thoso methods, It was nocessary to determine which method should be considered tho most Important In determining the estimated value of the business, The capitalized earnings method values the total Company, including tangible assets and goodwill, In a lump sum, Instead of determining one capitalization rate for tangible as sots and another for Intangible assets, a single blended rate Is established for all assets, The capitalized earnings method Is a fundamentally sound approach which recognizes the Importance of earnings and views value as would an outside investor, This Involves determining the rate of return an investor would require to assume the risk of putting money Into a particular business. 13 . """''''',',1''''oU''. .-' -, \,It' . -j"- -_._-' -. .:. As shown in Schedule 2, the capital ized earnings method values the Company by applying a capitalization rate to the normalized net income of the Company. The principal limitation of this method is that it ignores asset values, This is not important when the company examined contains no assets that could be deemed appreciating assets, In our opinion, this method adequately portrays the economic substance of the Company; thel'efore, we assigned a weight of 50.0 percent to this method. The value indicated by this method is confirmed by the excess earnings method, and thus adds weight to the value determined, The formula method or excess earnings method which includes a goodwill factor as well as the adjusted net asset value of the Company is a commonly used method in business valuations. This method gives consideration to both operating and non- operating assets, We adjusted fixed assets to reflect the fair market value of the limited partnership interest in Allen Distribution, This method, in our opinion, equally estimates the indicated value of the Company. Using the value indicated by a market formula method in conjunction with the excess earnings method provides a range of values, As shown on Schedule I, the indicated value ranges from $674,944 to $708,878, We applied 50 percent of the weight available to both methods, because in our opinion, one method confirms the value derived by the other, Marketabilitv Discount The concept of marketabil ity involves the 1 iquidity of an interest, In other words, marketability is how qUickly and assuredly an investment can be converted to cash at the owner's discretion, Generally, an investment has greater value if it is readily marketable than if it is not, because investors prefer liquidity over the lack of it, An interest in a closely held business is not as 1 iquid as compared to a majority of alternative investments, The dual issues of 1 iquidity and marketabil ity have been addressed in the proposed adequate consideration regulations of the Department of Labor (DOL), These regulations state that in the conduct of an independent appraisal, one may apply a lower than average marketability discount in cases where there is a put option and sufficient liquidity to make repurchases. The regulations use the words "diminish" and "reducing" and avoid the word "eliminate", This seems to indicate an official prohibition by the DOL against using a zero percent discount to refl ect limited marketability, A discount for lack of marketability should usually be applied to any ownership interest that cannot be easily sold fii-a timely manner, In consider"ing the level of discount to apply we considered that the Company, at present and in the past, has paid no dividends and that there is little or no prospect of either a public offering or sale of the Company, The Company does not have an ESOP plan or any buy/sell agreements in place, therefore not even a 1 imited market has been developed for the Company's stock. 14 ., ,--- .. ..~._.. '-"'~-"'''':_' I : A number of studies durlnu tho pa~t 25 yoars havn tried to mea~uro tho average levels of discounts for hl:k uf markotahlllly, Ihose studies fall Into one of two categories, dependlny on tho typo of market transaction data on whIch they are based: I. llostl'lclod ("Iotter") stock studies, 2, Studies of transactions In closely held stocks pdul' to initial public offerings (11'0' s) , Leller stocks aro Idonllcal to fl'eely traded stocks of public companies except that thoy aro rostrlcted fro," tl'adlng on the open markot for a specified period of time, It would appear, that markotablllty is the only difference between a lotter stock and Its freely traded counterpart, The studies have concentrated on finding differences In the price at which letter stock transacl10ns take place compared with open market transactions In the same stock on the same date. It should be noted, that similar results have been obtained by different researchers over a significant number of years, In calculating the amount of discount for lack of marketability we reviewed the Institullonal Investor Study Ileport of the Securllles and Exchange Commission published In 1971, the Gelman Study published in 1972, the Trout Study published In 1972, the Moroney Study published In 1973, the Mather Study published in 1976, the ,Standard Ilosearch Consultants Study publl shed In 1983, the Will amelle Management Associates Study completed in 1984 and the Silber Study published In 1991 all of which found lack of marketabll ity discounts with average or median discounts ranging from 30 to 45 percent, It Is realized that restricted stocks are only restricted from public trading for a specified amount of time, After that, the stocks are eligible to trade In a public market that is already establIshed, It appears logical then, to expect that the discount for lack of marketability for closely held stocks, for which no public market has been Identified, would be greater than the discounts ,for lack of marketability for restricted stocks that in the foreseeable future would bo freely exchanged in an open public market, Two companies, 'Ilobert W, BaIrd & Co. and Wll1amelle Managements Associates, undertook two Independent series of studies desIgned to answer the question Implied above, These studies were based on transactions In closely held stocks compared to subsequent transactions in the same stocks as IPO's, The Baird Study examined 173 qualifying transactions from 1980 through 1993, The results Indicate a mean and median discount for lack of marketability of 47 percent and 46 percent respectlvely~. The Wlllamette study examined 516 transactions for a time period ranging from 1975 through 1992, The medIan discount Indicated from the 12 Willamette Studies ranged from a low of 41,7 percent in 1985 to a high of 62.9 percent In 1979, " 15 ~. ! As far back as 1977 in Revenue Ruling 77-287, the Internal Revenue Service (IRS) recognized the validity of the restricted stock studies In providing useful data for the determination of discounts applied for lack of marketability. The Baird and Wl11amette studies did not exist then, however It appears that both the IRS and the courts have been receptive to these data In assisting an appraiser in quantifying discounts for lack of marketability. We also reviewed various court cases In determining our discount for lack of marketability, It appears that discounts for lack of marketability determined by the courts have Increased In recent years compared to earlier years. This Is most likely due to the availability of empirical data on which to base their analysis. Cases in point, where evidence discussed above was presented, and where the discount for lack of marketability determined by the court was clearly distinguished from any other discount, Include the Estate of Mark Gallo v, Commissioner, 50 T,C,M, 470 (1985), 36 percent; Estate of Martha B, Watts, 87-2 U,S,T,C paragraph 13726 (11th Cir., 1987), 51 T,C.M 60 (1985), 35 percent; and the Estate of Joyce V. Hall v, United States (89 T.C, 19),36 percent. District court decisions have recognized higher discounts for lack of marketability and, in our opinion, we believe the U,S. Tax Court will also recognize higher discounts for lack of marketability. After considering the studies and court cases as cited above, we have applied a 30.0 percent discount for lack of liquidity and marketability. Mlnorltv Interest Discount The minority interest discount Is the concept which recognizes the Inherent relationship between a partial Interest being valued and the entity taken as a whole. This relationship is a function of the control that a minority Interest shareholder can exercise over the direction and management of the company, A minority Interest is worth less than a controlling Interest, because a minority interest cannot compel payment of diVidends, election as an officer, employment by the corporation or structure perquisites to its benefit, A minority Interest cannot control or I nfl uence corporate a ffa I rs and is at the mercy of the controlling interest. We applied a discount for a minority Interest In this case, because we are valuing I percent Interests In the Company, and Is therefore not a controlling Interest. The limited availability of Information regarding sales of closely held entities has limited the research published on discounts for minority interests, Ilowever, a study completed by W.T, Grimm & Company on control premiums in publicly traded stock transactions, published by MerQerstat Review, implies that a discount for a minority interest in excess of 25 ~ercent can be utilized, However, a study completed by H, Calvin Coolidge published in Estate P1anninQ, Spring 1975, p.141 indicates that discounts for minority interests in which shareholders are unrelated can be as high as 70 percent, but that in sales where the shareholders were related and friendly relations existed the discount was generally below 20 percent, ' 16 :t~L,.,;_.",O~H_' :""~-_'l":;_.;,;.~,~.t','>t_;'~";r~~:i;.'Jt~........ !, \, , . After considering the studies cited abeve and the relationship of the Company being valued to the particulars of these studies, we have assigned a 15.0 percent discount for minority Interest, Summarv Based upon the information obtained, the procedures followed and the assumptions made as set forth above, a reasonable estimate of the market value of HSH Management. Inc" before applicable discounts as of December 31, 1994 is $691.9115, The total indicated value after discounts for lack of marketability and minority interest for HSH Management, Inc" as of December 31, 1994 is $411.687. However, because the vaUdity of the assumptions made could be ultimately determined only as a result of litigation, if a controversy were involved, and because actual fair market value can only be determined by bona fide bargaining between well informed buyers and sellers, we do not represent that the amount set forth above will be the amount ultimately so determined, BOLES, GROVE AND METZGER P,C. August 4, 1995 U~J ... fe. .I 17 , ~ j,-':;'-'l-"..,!..It_~!.....~:..._. 'I ESTATE OF TRUMAN HEISHMAN HSH MANAGEMENT, INC, (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31, 1994 SUMMARY ! 1 . ~ -I Capitalized earnings EXcass earnings method Total Indicated valua bafora discounts 2 $674,944 3 708,878 Weighted Weight valua 50% $337,472 50 354,439 100% 691,911 (207,573) (72,651) $411,687 c $4,100 Method Indicated Schedule value Lack of marketability discount Minority Interest discount 30.0% 15.0% Total Indicated value aftar applicable discounts Value of 1 percent Interest, roundad to the nearest hundred Schedule 1 '''''---'-1 ESTATE OF TRUMAN HEISHMAN HSI~ MANAGEMENT, INC, (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31,1994 CAPITALIZED EARNING METHOD METHOD COMPUTATION OF INDICATED VALUE Normalized net Income before tax (ExhlbIl4) Weight 1994 1993 1992 1991 1990 $264,605 $156,522 $156,826 $82,009 $60,474 5 4 3 2 1 ,$1.323,025 $626,068 $470.478 $164,018 $60,474 $2,644,083 15 Weighted average adjusted cash now Sum of weighted average adjusted cash now Sum of weIghts Weighted average adjusted net Income 176,272 31.85 553,444 Capllallzatlon rate IndIcated value Plus 1,0 percent of the fair market value of Allen DIstribution, a limited partnership Indicated value 121,500 $674,944 I. , , Schedule 2 1 ESTATE OF TRUMAN HEISHMAN HSH MANAGEMENT, INC. (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31,1994 EXCESS EARNINGS METHOD COMPUTATION OF INDICATED VALUE I r I I i ! I "'~ ,..-, Shareholders' equity (Exhibit 1 ) Plus 1 percent of the fair market value of Allen DlstrlbuUon, $121,500, a limited partnership In which HSJ Management, Inc, owns a 1 percent Interest less $40,188 shown on the Company's Form 1120S Shareholders' equity less net book value of Allen DlstrlbuUon plus fair market value of a 1 percent Interest In Allen Distribution Goodwill (Schedule 4) Indicated value $214,878 81,312 296,190 412,688 $708,878 ..... , Schedule 3 .~ g , ..,. 'f i.i.' ~ ~ 1 ,. ~ i1 Ii (; ~ " " ,. l! ~" f:- ~'\ r" ~I 2' ;-:.,- t> '"t "'., < } k; f: ~~ ;~~ :;;' .. J> i' ~ '( .' "J ~:. r, 1; !~ ESTATE OF TRUMAN HEISHMAN HSH MANAGEMENT, INC. (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31, 1994 EXCESS EARNINGS METHOD COMPUTATION OF GOODWILL I . ' ." ~ 1994 1992 1991 1990 1993 Net normalized Income before tax (ExhlbIl4) 5264.605 5156.522 5156.826 582.009 560.474 Averege shareholders' equity (Schedule 5) 194,487 170.878 164,353 163,988 167,178 Industry average taxable Income as a percentage of shareholders' equity. 7.2% 8.9% 1.6% 5.9% 5.9% Normalized Income 14,003 15.208 2.630 9.675 9,864 Excess Income 250,602 141.314 154.196 72.334 50,610 Weight 5 4 3 2 1 Weighted excess Income $1.253.010 5565.256 $462.588 ~4.66B $50.610 Sum of weIghted excess Income $2,476,132 Sum or weights 15 Weighted average excess Income $165.075 Goodwill range: Minimum 45.0% 366,833 InlUal 40.0% 412,688 Maximum 35.0% 471,643 Indicated goodwill 412688 Source - Robert Monis Associates, 1994. Services, Management Services. Comparal ve Dala, SIC# 8741. Schedule 4 .'". 1,,'., ESTATE OF TRUMAN HEISHMAN HSH MANAGEMENT, INC. (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31,1994 EXCESS EARNINGS METHOD COMPUTATION OF AVERAGE SHAREHOLDERS' EQUITY I_...~.,,,.,,,,,,,,V," ..'.. . 1994 1993 1992 1991 1990 Shareholders' eqully (Exhibit 1) $214.878 $174.095 ~187.660 $161.045 $166.930 Average partners' eqully: $( 214,878 + 174,095/ 2 ~194.487 $( 174,095 + 167,660/ 2 $170.878 $( 167,660 + 161,045/ 2 . ~164.353 $( 161,045 + 166,930/ 2 $163.988 $( 166,930 + 167,426/ 2 $187,178 ~ Schedule 5 ESTATe OF TRUMAN HEISHMAN HSH MANAGEMENT, INC. (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31, 1994 STATEMENTS OF INCOME FOR THE YEARS ENDING DECEMBER 31,1994,1993,1992,1991 AND 1990 1994 1993 1992 1991 1990 Revenue $374,277 $231,037 $198,780 $118,770 $85,888 Other Income 18.421 7,910 9,024 5.815 3,339 Total Income 392,698 238.947 207,804 124,585 89,227 Compensation of officers 83,173 51,342 44,173 26,393 19,106 Taxes and licenses 14,475 10.716 9.354 5,785 2,717 Other deductions 1.628 6.040 1.590 1.046 1,053 Total operating expenses 99.276 68.098 55.117 33.224 22.876 Net Income before tax $293.422 $170.849 5152.687 $91 .361 566.351 Exhibit 2 , '" ,._._....:.,.)'IJ~;-'j'"' ~,'$O......""'...""...........,.""',.~..~'"'",., ESTATE OF TRUMAN HEISHMAN HSH MANAGEMENT, INC. (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31,1994 COMPUTATION OF CAPITALIZATION RATE Appraisal dale long.lerm bond yield - · 7,93 % Horizon premium - bonds over bills. .. (1.40) 6.53 7.20 13.73 5.30 20.00 Normalized risk free treasury yield Equity risk premium, stocks over bonds - .. Average market relurn Benchmark premium for size Adjustmenls for olher risk factors Discount rate for net cash flow 39.03 Increment specific to net eamlngs Discount rate for net eamlngs Less sustainable average compound growth rate or "Goo Net eamlngs cepllallzatlon rate for next year Divided by "G" plus one Net eamlngs capllallzatlon rate for current year 6.00 45.03 (10.00) 35.03 110.00 31.85 % . Source - U.S. Financial Dala, The Federal Reserve Bank of SI. Louis, Long-Term Treasury Securities as of December 30, 1994. .. Source - Stocks, Bonds, Bills and Inflation, Ibbotson Associates 1994 Yearbook, Market resulls for 1926 - 1993. Exhibit 3 I ~ , ESTATE OF TRUMAN HEISHMAN HSH MANAGEMENT, INC. (A SUBCHAPTER S CORPORATION) VALUATION OF BUSINESS DECEMBER 31,1994 COMPUTATION OF NORMALIZED NET INCOME 1994 1993 1992 1991 1990 Revenues (Exhibit 2) $374,277 $231,037 $198,780 $118,770 $85,888 Officers' compensation as a percentage of sales. 25.0% 25.0% 15.6% 25.2% 25.2% Normalized officers' compensation 93,569 57,759 31,010 29,930 21,644 Officers' compensation 83,173 51 .342 44,173 26.393 19,106 Difference ($10.396) ($6,417) $13.163 ($3.537) ($2.538) Net Income before tax (ExhlbIl2) $293,422 $170,849 $152,687 $91,361 $66,351 Income from Allen Dlslributlon (18.421) (7,910) (9,024) (5,815) (3,339) Adjustment to normalize management fee (See above) (10.396) (6,417) 13,163 (3.537) (2,538) Net normalized net Income $264.605 $156.522 $156.826 $82.009 $60.474 , .... '. · Source - Robert Monis Associates, 1994. Services, Menagement Services Comparative Historical Data, SIC # 8741. Exhibit 4 ,- . i .. I .. .... No. APRIL 5, 1995 PIIIILIPS NlO UDYD APPRAISo\IS 505 WILLIAM9 8IREEl' BERLIN, HI) 21842 MS. Jl\NE IlURK! FTalEIlS 'l1lIlST CXtlPJIN'i P.O. BOX 220 CARLISLE, PA 17013 'a DFAR MS 1lUIlKE. PurBUant to your request, 118 haw prepared en appraisal report or the prqoerty Cllptioned in the "SUl11Mry or SIllient Fellturos" ..nich tollows. 'lboo aCXXllJllll1Yirq report is belled m a sita inspectim ot iJrprovemenbl, J.nveetigDtim or the 8Ubject neighborhood Il1"8I1 ot intl""""", llJ'd review or 1ID1..., cost, llJ'd inoano dAte tor silllUIll' prcpertJ..... '!hill appraisal hall '-" 1MdA with pertJ.cullll' att:entim paid to awliCDbls value-intluen:>irq eoonanio oorditiClM llJ'd hall '-" proo8<'.ed in ao:ardAnoe with I1lltionally recognized appreisal guidelines. 'Itle valus concl\18iClM st:Dta:I harein Ilr8 lIB or the ettectiw dAte lIB st:Dta:I in the lxxIy or the appraisal, llJ'd oontJ.rqent upon the certitication erd lim1tinq oorditione ett:eched. Please do not hasiteta to oontect I1llI or errt or my staft it 118 Cll/l be or edditional service to yaI. RospecttUlly, ,:!!:;;g~~tf .. ,. -TO'fAL..................,...--...... I.,..... 'j t " \'~tiM;M~~~'g~~ibENr'F~~WM~~:~',: ,;, <' ;:': ~ \'.:":'~'? -i:t~.',. ~{"'i'~'J;(;'!tY. ;'.... -.., SubJeel Address UlIT 16 1WICllWIY, 212 00Rl1I IIm:H tmVE Legel Oiler/pilon Ia. lJ80 I 2JO City OCFAII = 'a County ~J.I:.K Stsle 1m Zip CDde 21842 Census Tr.el WlllACI'm M.p Reference 116-5J12A S.le PrIce $ N/A I Oete of Sele N/A Borrower I Client CMIIERSI 5llElUlwml , III!:ISHH1I/I Lender /l.9IM'E OF 'rnlJoM L. III!:ISHH1I/I Size (Squ.re Feet) 1677 PrIce per Square Fool $ 1J8.J4 Lacetlon N. HER::tf at. Age 10 EFFI 5 Condition GOal Tol.1 Rooms 7 Bedrooml J Blths J.5 Apprelser IWIY EUDI UDYD l- O.le of Apprelled V.lue APIUIo 5, 1995 f.~~.t ~..,t,lrn'~'~_r~! ~Y~:'~'~'~'~~?'~:~1~!~,~j9i~~hi;!~-;~,:~:.'::: ", ':':!~"-,:fj'}:;\~!),:, ~::'. "TOTAL....,....,.......,............. tflOOl......... APPRAISAL REPORT. INOIVIDUALlXJ CONDOMINIUM 0 PUD UNIT ...... 950JJ1 I' laM~."""'''''''''' "I" .-..- E91'ATE OF 'I1UWl L. 'FARilllS 'I1lllST CD.. CAJU.1l!L&. PA --- rNWAlfnA,........ 1'tUIC........................ I"UIO........................ """" ~ ...... Hr~IOODMrHO 0M0I "'" ,.. .... eMf'" 1ft",.. u....., ,............... ""'" ...., .....~~ aw..... .... ~ ,.........,..... Ir'MIfI "...... ~~....... Ur*..... ....... 0.., ,..,.....0-,...., .....,....... ..,.,. ....:zg..e... """"""__c...........~ ..~ -1Q.'Wtv", ........."",........ [XJN;u..., Uu.v O'.....~. ......-...-""....... ,,... .JiJ.^ T' HI" tfUMW 000.- LJ,..... JJi("v~ 12!h. . 275 ............ 180 NEU "". -1Q."" ........... --2"" 175_ . 500 ,....,...,... 250 ,... NEW..... -.I..... ,......... -1..... 0...-. ..................... ~............., _ 'IHE ARE\. APPFARS 'It) .....,.....c-.t W~J.l:J( Dht............. H/A IlEI91M7\N UoWft....... c..-,.. Utln~ -. -r:!!! -; 2111.12 ...,. IXI.... lu........ "-It ""-- 116-53 l2A SlWI J J;'HDml , IIF:IQH\N' -- 0....- P\MI ,........-"" -.... -- -- - --- NotOI PHUICl?HYA do nol toNkter ,.. Of the ....... OOfnpOtIUon ef IfM MIgtlbOft1ood 10 be ,.,&allle .ppnlNllMtora. o..tM..................... ___......,....... .....................................*-.... ............................. oc::F.AN CITY IS A vmY mPUIAR n~ 00 B ' BEVrnAL ...............I'\oq H/A -H/A...... .... ~- ..tm2XY::I RESIDmrIAL. R-2 ..,... ....... UM' lXJ ......., UM U or. ~ ~- ;.::=. e-.l.- ,......o.n.-,..,.".c:-,It.....""""'" -UD<............ ..................... 00..0....................... _lIlT 1Xl- 0-- ".............,............., ....hQl;XX.IATE '''' ....... TiPICAL .....'--f WATmFR:Nl'-NEIGUncIlJI'YTl/OXlD __ NJFJ:X1ATE/AVf1WJE ..,. ................. KJD............."... ......M.' U...tx.J".. 6 ....... ,.,.,... v..,.. I' ~ ~..... o:::tlIXHINIUi ..... 0.... ~- '" I ...... ......... "'*' ~ 0-..1""'- ...... W..., MI."""," H/A ..,...,................,...... ,...,_...... Otw ...... N/A ~.........-I ......" ""*'- ~..... ........... lH... . ~_ NIl. .....-2. ........ JQ. ........ -50 cwa,.. o-rr....n & .... , . "-",,,,"I ...... .... "-.l:lLA .... ...... ..Hl.A- ........ JY.A... cer............... '''"''''..............1 T"---.l.~-D.""--Il""-Ui< ~....... v........lWII"'Ut: ................ 7 ............ -L ~......... I r-ww.. ..... '"- ....."'.... N &e..- v..... ............ ,......,....,. --. 125 "-.. 2.5~ ,.". OPEN IDr .......-...o..HI..-. .' ~__._.-..-.-. PCOL. LtGJrrm'I'ENns CI'S.. PARKI>>::: lDI'S. CiRm-l nEIlI'S. It ."" _...................... ........o.-t'I__, . ................ UroIIIIf e.... "-.... ~ u..w. Mt J5J:L 10 ___ ,. ~ T)>M OPflf tar ".,.... 0-4 ~.. LWl AvmAGE 0... IUI .... .... ... ,... or... \HT '"rHO --- ,.,.-. """"- ,..,..,..~""...... M.....~II&W........ ~.,..,..,""CenlIIIol ,.....,.....,""~ --"- ,....... nwIM ............,.......Vh. ............ -...- MlAn 1)M..lImT PlMP 1\01I ~ cw E III. .I...... AlII COI'Q , lXJ 0..... D or. _lXJ........ ......... r... kIWMI u. 8 ....................~ ----O~ ............-w....CMoI& ....,ttllw.'" I'\IID..... 0.........0..""""'..... D~.....~ (i]Dlo/rI"""'~""",*,,-, (X]CIOA'WH...... NIl.UT1ClHI.....lIII....I~ OOW.J.I:IK. OOc.. LtiKOO"-J,Nt 0,...."... [i)w.w....w J:T.frIRIC .--.............................."'............-..., -H/A .,.,....,.~..---...,...,.. IJItIlOY'I'rCIIHCY,.,..Wl'l 0""" 00,...... D~ how'" OY"I'~'."""'1 00 ,. c:.c:u.1t(f................~......................,......,....""'.,..,.__.., 'I11E st.JIl:J'lrI' PJt)PfRI"i lIAS rrrn <XP.LITi lI'S. rnm ovmAlL mmITICtl OF 'lirE st.JIl)'}rl' tNlT IS 1"l'Y"n. 00 ES WERE 00=. 'JllE UIlT IIA9 A 2 OEJ:l\S A llALCCIIY ~ OOM' SLIP. iIKNO....... Me '"YOfAL.....................II,..,..... t<<JO.AI.N>IOD. NIIA,......ra.... 6 -...... - , 'oO - .... ....... - , 'oO - - - c__~ ~w_ Dr,..e ...... ,_ T~ to DIM ...... ... .=....,~- ~.:= ............ "'.....w ~ .......... o "- ......... ......,., ..--... t~....~.~-.".....,""-. ,q~.nn _."., -..2..,.J.D4.../f', .~,..rvr-"""'-I ..................."...... 0'" U.... OMClMi U...... 0 OM NR.......__..........c..t'\D....... ...-......... .H Tt...............................,................."....................... ~ II........... ............,.....,......................... __ 0....- 0- 00--- o.IIW' ........... """ .. ......... .. ..... .... ........ ...... 0 ..... OeM .............................. ~ _____......... "'-.........,.....,...........~ 11-'. ...., o.r.I""" """ I.JYA-- 'rf. 00 w.... 0 .... -. ... -,. I ~ HOTII~................... .....,....... ...................... PUDwill. c..I~,........'"" ...IIIINf.............. --'-"" ~c.."" 1,677"'''''' ....~......... ~I ~....V.....Lr ~ ,..,'-"v.........................,~.................... ." ,....,.......v""..~ , .....'.,.. ,.. ,........... .,.... 00 N' ,,,1\.8 0 UAlIHCUI . ~......................""'.,........................,....... ......"'.,..,.., _I ,... ..,.... "..". ...........1 ""...""......, ....,.,.... ..,.................,........"...,. :--~~=..-::...-=:::...-::::.......~~:===-.I:. ...;:;:J..:;:...~~~= _ _. .. ............_................--'- ...............'"*"'1-1...-.. ............. II .........-.-j..... ...-............... ....................-........1.,..-...................-.-.-. . UST ONLY lltOI! my. THAT ..laUIAI ADJUIT\lINT COM'AAMLI HQ. , COWP'.Ul.-" NO.' lNlT 15-222 COlol".uu.au NO.1 lNlT 1715 -- .... ...- INtI......"" - ...... - ...-- ....... o ID "- 500 ID ....- 't"' ,., .lD .H.JJE11O' .... .1lIaXlI '0 ..",. . - '-.-: .... .... :-.-: .... .... - ; .... +l,BOO " .." '''77'' ... "fA "fA "fA H/A. .N'A A\7'nJar::~ tJn.n'mJ m. RAY JrrY"n T" .__ ., '1. 142n .... , i +1,000 k'" . +5,14 "fA J/ 'l"iPlCAL POOL TENIIS lXlURl' ~"'~:Tl' ..1Jl2.j)O """ TYPIC'AL !lID M'PIS FIIlEPU\CE ..DEXJ(-~mnN DIOIH. 264 lAT. POOL TENIIS lXlURl' rooL '1'I!NIIS CXXlRl' ~ TVPICAL FOOL 'l'EIlIIIS 0XlRI' ~'T'm,m 2.!)n m - 2llj,.nn """ 'lYPlCAL SID APPIB FIllEI'UoCE ~o .:DA ~'z...ooo- I k .........I.......~IIiooIl. .....o-lIiooIl........, .. 0.................-.......,................. 0....................,..,...................". tn R-N~Tt""AT. nn F1~T. nmnw:ntA~~. .DJlARIW11'V nF' 'I1IF. 'RtF. TlJrYMF. ~ tYMT,T'7.m Nm 'In 'nIP. TAMe np j:;InoTTM'ntr RFN1'Af. nAT~ , ~w",""", ,.... HI ~...--..,.... "/A ..,..,..,~&.oIIht MIA n...........~...............~.. __~.........w~.........,...lIIIeM4y__.~h4""" ....." DM.MO.....ut""",a'NI/~......I-Cl'n-~..-...... 1'_ [X]...,.,. IlIllMATI MA"KI!T Y.,ALUI A I11N I 0 ICT '11nY AI 011 txnFMnrn l' ".!J!.. ..... --2J.2...oo ,..,.."., \ ""'"'-,..,.,.,,,........., 0.11....... Dlif DlifMot ......~ fM.IoIC......... hO RmLIPS 'Il.OYO APPRAISAlS ...........1011 MO "TDTN.................,.~....... ,~ ~. ~.., }'~. ~.t ,".-, ~ ~~ '\ . ~ ~ ", ~ , ;P.t<--~ .' ADOEIlDlJl 'ro APPIlAISAL REI'ORTI IllIIT 16 /lANC1'UN\Y 212 NORI11 llEIlCII DRIVE OCEAN CITY, HI) 21842 APPRAISAL IIEI'ORT DATl!DI IIOVEMIIm 13, 1994 a.I1!Nl'1 THE ESTATE OF TRltWl L. IlEISlIH1III I'ILB NIIlIIml 950331 DATEI APRIL 5, 1995 '11m FOLLOWIIlO IS ADOITIOIlAL DIFORHA'l'IotI m IlEFEIU1lCE 'ro '11m _ DESaUBm APPRAISAL IIEI'ORTI ' '11m 'IlIRI!E BALES USED IN THE BALES CXtlPARISOlI SElCTIotI OF 'lllIS APPIlAISAL ~RT ARE CXlIlSIDERl!IJ THE BEST AVAII.\IlLE IIIUOI II)ST CIDSELY JlESEMIlLE THE BUIlJECT m TERMS OF LCCATIotI, SIZE, t71'IL1TY AIlD IllIRKEl' APPEAL, TYPICAL IS usm 'nIIlClU3X1l' '11m APPRAISAL IIEI'ORT 'ro DESaUBE All ITDl WHIQI IS lXJolIoDI FOR '11m IWUIE'l'ING ARV.. '11m suanx:T moPmI"l IS A WATmPmllT LCCATIotI m A RESORT a::tlHUIIIT'i 011 '11m DAY SIDE OF lXlASTAL HIGHWAY. 'I1US IS All IIIPORTAm' FAcm:lR m ESTABLISHDlG VAWE. 'I'IlEIIEf'ORE, ML OOlIPAlWlLE BALES ARE AfBJ WATmPmllT LCCATIotIS. ADOITIotIALLY, THE BUIlJECT'S LCCATIotI IS wrnml '11m CXHlUIlI'l'Y OF IlEIlOlI IIARIlOUR ISLE. 'I1US EXC1USIVE SEl'I'INCl IS m A SI!ICLUDED AREA lII'11I A 'lWENT'l 'I11REE AOlE WIlDLIFE BAlIC'roARY. THE lXJ1IIUIlI'1'l/ IS lllIDE UP OF CXlIlIla03lIUIS. ~ NlO SDlGLE FNlILY l:MELLINGS. THE lXJ1IIUIlI'1'l/ IlIIARI!S A SWIMIIDlG POOLI NlO 1lN\"'1'RIl 'l'ENIlIS CXXlRTB . B!X:AUSE OF THE STABILITlI OF THE sua:nrr HEICIIIlOllIIOOIl, IT HAS BEm NECESSARY 'ro EXCEED A otIE KILE RADIUS FOR CXtlPARABLE BALE 13, '11m LOCATIotIS ARE, HOWEVER, SIKILAR m IWlK!:I' APPEAL. 'lllIS IS TYPICAL FOR THE lXJ1IIUIlI'1'l/ AS IT IS APPROXIMATELY 10 MILES m LnlC7I1I NlO LESS 'IllAII A MILE AQlOSS. INU<El'ING TIME IN EXCESS OF SIX IIltmlS IS TYPICAL FOR THE ARV. DUE 'ro THE ovmALL 000NCtlY CXXJPLED WI'11l SCfIEWHA'l' SEASOlIAL BUYING CYCLES. THE PRICE DIFFERENCE, pm SQUARE FOC7I', FOR GROSS LIVIIlQ ARV. IS SLICH'l'LY GREA'l'm 'IllAII $10,00 FOR OOlIPARAIILE BALE 13 DUE'ro '1lIA'l' OOlIPARAIILE'S SIlALLER SIZE. '1'HI!RE IS GENERALLY A HIGHm = 'ro CXlIlS'l'RUC'l' (pm SQUARE FOC7I') 011 A I.OWm VOUJIE. IT IS NCII'ED '1lIA'l' OOlIPARAIILE SALE 12 IS ovm SIX H::tmlS OlD. 'I1US SALE IS 0IlE OF THE II)ST IlEICEN1' SALE WHIOI IS LCCA'l'ED wrnml THE BUIlJECT l'IlClJEC'1'. 'lllIS IS A REFLI!lC'l'IotI OF THE S'l'ABILITlI NlO KAl<EUP OF THE HEIClIIlORIlOOD. BALES mat wrnml THE suanx:T PROJECT ARE BELIE\IEIl 'ro PROVIDE THE BEST nmICATIotI OF THE BUIlJECT'S VlIWE. '1lIEREFORE, 'm:l OF THE OOlIPARAIILE BALES WERE mat THE suanx:T PROJECT . '11lE BUIlJECT mopmI"l IS m A FEMA IDEN1'IFIED nooo ZOlIE. 'I1US COlIDITIotI OOES tm AFPTCr THE IlAIU(!:I' VAWE OF THE mopmI"l WImI nooo mSUlWlCE COVEnAGE IS REQUDUD. '1llIS IS TYPICAL FOR '11m IlARKE'l'IIlG ARV.. '11m BUIlJECT'S APPRAISED VAWE IS GREA'l'ER 'IllAII '11m l'RElXHDlAII'l' HEIClDlORlIOOD VAWE. THE BUIlJECT IS tm CXlIlSIDI!lUD All ovm-IHPIlOVEHI!N'l', NlO '11m l'RElXHDlAII'l' ~ VAWE HAS NO IHPAC'l' 011 THE BUIlJECT'S JoWlKE1'ABILlTY. '~~-A y LLOYD, .,iJ fe7rZ- .. ..,...."--' l\Illlf.llDUol TO AP1'IlAISAL IlEPORT 'Il1E SCOPE OF 'IlaS AP1'IlAISAL REI'ORT lXlllSISTS OFI 1) DEFINIIIG '1l1E VAWATION QUESTION, 2) mSp=ON OF '1lIE IlUIlJ1X:T PIlOPEmY, 3) lXlllSIDmATION OF RELEVANl' fXXltIaoIIC NlO DlMOClRAPIaC DATA, 4) lXlllSIDmATIONS OF PIIYSICM. alAIlACTERI6'l'ICS, ZOIlIIIll, NlO/OR arum RESmICl'IONS, 5) a:H'LE1'E APPLICATION 01' APPIlOPllIATE VALUATIOlI HFlruoos, 6) RfXXlNCILIATION 01' VAWE INDICATORS NlO lXlllCWSION 01' VAWE, AND 7) PI10VIDDlG A WIU'ITm IlEPORT OF APPRAISAL ANALYSIS Nm FINDDlGS, '1lIE APPRAIsm FOR '1las APPRAISAL IlEPORI' CERl'IFY 'IlIAT mlE UNDmllTNlO NlO COtlFORH TO UNIFORH 8I'o\NlWlOS OF PIlOl'ESSIOIlAL PRACl'ICE (USPAP) l\IlllPTED BY '1l1E 8I'ANOARDS BOARD OF '11lE APPRAISAL FOUIlOATION. AUlD, '1lIE APPRAISERS Cl!Ri'I1'Y NlO ABIDE BY '1l1E AP1'IlAISAL GUIDI!:LIIlES NlO RULINGS 01' '1l1E OFFICE 01' '1l1E CXflPm:lu.ER OF CURRIi1lCY APPRAISAL 8l'ANlWUlS, 120m PART 34, DATED AOOU8I' 24, 1990." UNLESS aI1IERWISE 8l'ATED m '1las IlEPORI', '1llE EXIS'l'E]lCE 01' IIAZAROOUS MATERIAL, WIlIOI MAY OR MAY NC7l' BE PRESEm' ON '1l1E PIlOPEmY, WAS NC7l' OIlSERVED BY '1l1E APPRAIsm. '1l1E AP1'IlAIsm lIAS 110 JQIOWLEDGE OF '1lIE EXISTENCE 01' SIlCI MATERIAIS ON OR m '11lE PIlOPEmY. '1lIE APPRAIsm, 1lOWEVI'JI, IS NC7l' QUALIFIm TO DEnlCT SUOI SIlIl8l'ANCES. '11lE PRESENCE 01' SUBSTANCES SIlCI AS ASBESTOS, UREA-FORMAIDEIIYDE FONl mSULATION, IWXlN GTIS, OR anlm I'C7l'ENl'IAILY IIAZAROOUS IlATERIAIS MAY AFFFr:r '11lE VAWE 01' '1l1E PIlOPEmY. '1lIE VAWE ESTII1ATE IS PlUDICATED ON '1lIE ASSI.tlPTION '1lIAT '1l1ERE IS 110 SUQl MATERIAL ON OR m '1l1E PI10PEmY '1lIAT WOUID CAUSE A LOSS m VMlJE. 110 RESPOlISIBILITY IS ASBltlm FOR ANY SUQl CIONOITION, OR FOR J\N'i EllPI!Rl'ISE OR EllGIIlEI!RINll I<NOlIL1!IlGE ~ TO DISCXlVER 'l1IDl. '1l1E CLIEm' IS \lOOm TO RE1'AIN All EXPI!3lT m '11lIS FIElD, II' DESIRm. 110 IIARRAIlTY 01' '1lIE APPRAIsm PI10PEmY IS GIVEN OR IHPLIm. 110 LIABILITY IS ASBltlm FOR MA'lTERS liIIIOl ARE S'l'RUCIURAL OR HElClIANICM. m NATURE. TYPICM. IS usm 'I1lROUlI\OU1' '11lIS APPRAISAL IlEPORI' TO DESCRIBE All J.TDI Wl\IOI IS CCfoIIQI FOR '1lIE HARKEI'ING AREA. ONLY ITDlS lXlllSIDERm PART 01' '1lIE REAL ESTATE IIAVE BEEN mcwom m 'l1IIS VALUATION. 110 PERSOIlAL PI1OPE:l'Y, FIlmlRES OR Im'AllGmLE ITDlS ARE mcwom. AT LEAST TEN (10) DAYS NC7l'ICE WIIL BE JIEQUIREIl m '11lE EVEm' ANY 'I'ES'l'JKlIlY IS NECFSSARY ON BEIlALF OF '11lE AIlOVE IIAHEIl CLIEm' m REFERENCE TO '1las IlEPORT. I CERl'IFY '11IAT, TO '1l1E BEST OF MY JQIOWLEDGE NlO BELIEI', '1l1E REI'OR'I'ED ANALYSES, OPINIONS AND lXlllCWSIONS !IDlE DEVElDpm, NlO 'l1IIS 1lEPORl' lIAS BEEN PREPARED, m ClONlCRKI'l'Y WI'll1 '11lE ~ 01' '1l1E COOE 01' PI1OFESSIOIlAL El1lICS NlO '11lE STANOARDS OF PI1Ol'ESSIOIlAL APPRAISAL PRACl'ICE OF 'Il1E APPRAISAL mS'lTlUl'E. I cmTIPY '11IAT '11lE USE OF 'l1IIS REI'ORT IS IlUIlJ1X:T TO '1l1E IlEQIlIREHENl'S 01' '1l1E APPRAISAL.:~au RELATING TO REVIEN BY ITS DULY AUlllORIZm REPRESEm'ATIVES. ~~Jt4 .. , I i I I. I " ----"----.......:." -- ",. ."'.".' ,.~"",~-".",,- FIIlREA AOOEmUH 'llUS APPIlAISAL lXlNFORMS 'l'O 'll1E llNI~ STANIlAJUlS OF PROF'ESSIOIlAL APPRAISAL PRACTICE (USPAP) AOOPl'ED BY 'll1E APPRAISAL FCXJNlIA'l'IOII. BASED UPON 'l1lB 8m'!' AVAILABLE IImlRHA'l'IOII~ 'l1IIS APPRAISER, AS OF 'll1E DATE OF 'llUS APPIlAISAL 1lEI'OR'1', 'l1lB SlIIlJfJC:l' PROPEXl'i lIAS IlOl' TIWlSFERREIl WI'l1lIII 'l1lB PltSr 'llfELVE matlS. BASED UPON 'l1lB Bm'!' AVAII.\IlLE IImlRHA'l'IOII 'l'O 'l1IIS APPIlAISER, AS OF 'l1lB DATE OF 'l1IIS APPIlAISAL 1lEI'OR'1', 'll1E CXtlPARAllLE ,!!ALES IfAVE IlOl' TIWlSFERREIl WI'll1Ill 'l1lB PltSr 'llfELVE lIlImlS P1UOR 'l'O 'll1EIR PlIESEm' SALE. IF 'l1lB IlUIIJECl' WERE PU.CEIl 011 'll1E OPEN Ml\RKEl', IT SIIOUID SELL WI'I1UN APPROXIMATELY SIX 'l'O 'llfELVE M:lImIS, IF P1UCEIl APPROPRIATELY. 'l1lB SELLER IS IlOl' PAYIOO POIm'S OR CXlIICESSIOIIS 011 'lllE SUIlJEIC'l' PROPERTI'. 'l1lB FINAL VlWIE OF 'lllE SI~ PROPmrY IS IlOl' BASED ON A REIQUESTEIl HIImlUH LOAII l\PPAOVl\L. ONLY ITl!MS CXlIISIDEREIl AS IU!'AL m'!'ATE ARE DlCWDED DI 'l1IIS VAWA'l'IOII. NO PERSONAL PROPERTI', n>mJRES OR Dll'AllGIBLE ITl!MS ARE DlCWDED DI 'l1IE VAWA'l'IOII. ~~~~ .. , I I , i I I. I .. lit SKETCH ADDENDUM I f.E:~:;;:~ ~~i!;;~~!~:~~~::::~ ~~Il~ii!~~~:~o: II~~;::~~ 1I::::TII:~:~~!t~~~E I , ) "I - ,.,..". I : I I' .. , r- -. ..., _. .. _ I I I I t\~<.v. I : r'=-1 I - ~p I.. ~..; :.:..~.... ,# .. , . , P. \ ' .!....~:('..,'. i I'" .; IK' L\u..,,::, ~"'cvn Bed tc>olli ".'\ I i~~ rg'~q'! , L - 'j,: , _...: Jb , ,,,' r '. . (~l" 8.Jh! ; L. .___~ ! . . I ( ~1 ,......".....1,. I,kll , :....,-. I f; ; " , "'f 8a J ft>tu/ I' i I -J. ~s-~ < ' 11 X .7 &....L(.. .t 8'.,. ~, :L 1"",; RO{j(1Uo ty)'''1 f)"~ ~I' (., . . GtA: j ~'7'1 Ip to ." j ~ ffl.TJA Pin ClIHO'CIffI'II II'ItWDrmltnc, :lltW?lllnt, A... H....H..,.n, crooil..... R'9flIt n........ l1IOOt'''''.'' ......111900 uw.""',...... IDIOotIlI'"" = ~ooa"'Q W1\NtIJM'" llU W"_ >> ...... ..c......~ C,..:I""'IWlU""... ..0.... w("'Hln "AOIOH[""Ollll HIgt't._" ,,, _n..", e.._. "Otftlt,.~ovt ....1Iwty III 100 ...,., r L A w A . r \...... ..-, A r ", """ICDI "'~:;:. '""ft' ,\.tIM .-- .,- .- ,.. '- ..., j '.... l"NIII ,- -.- ~ "'''- -- '" 4J ,. ~,- <J 0 1,.- ~,- <J " ,., ~ " .....", ~ C:> l. 21 13 <- c: t:>.... . I,,,,, , ,,, , + $ c ~~ ~ .- ~ . ~ \ E-;; " . " 13 "-'1: +. , . " I- I,'. i , " ,: ~ :':'ZI ~ ~ . t, ~ ''''',\,.=-- ~ ~ , " .....- I---{_ , .. FRONT OF SUBJECT PROPERTY ':~}Ir.Il~~ ~~ri~2!.~i!l~h_~ 1&IUl., T.n u S.T _!;Q,,-,~^ltkl5I.G REAR OF SUBJECT PROPERTY STREET SCENE lInUII" ----- , . , . PHOTOGRAPH ADDENDUM sm;LW;U/\I1I;;~Tk,JIt:J:;J1HIIN , "".. ' ,... ~l!1!l "'''l!!1tlJ T 16 SANCTUAI\1'.I_uLtlQRIIL 1l1;)ION" PIUYJ~,....w;lll!tLIl^,illO,UlLJ.SJ,.&--. "", Q~.t;AN CITY C"'" WQJlg;S.T~ll,u .~"!' tlD . .1!p Cod. 21.ll!',~, illm..CI:H:NT I "STATE Of' THUMAN _1",..JlilSillIII1LX. fAllJ1"ns TllUS'LCClL.....cAI!ill,I.&, .. ~J,"C~U.jATI:JlV II:!.} l- O ADDITIONAL PHOTOS ON REVERSE --- ~.."",~._".~^,..,- - -,",-" ;."" _';~''''''''''-''''~'''F.U~''''''-''''''''''-''' ~.,.","~ " , u~~'o~:'~~~~~~~~!.H8I'2 S,J'J!II11.'l: CQ."d:M!.Jlll-~ " COMPARABLE SALE "1 COMPARABLE SALE "2 COMPARABLE SALE "3 . . lIU'fttlH ;.'-'"." ,-,.~~....1.4Iit' DEFINITION OF MARKET VALUE: ThO...II ............ which. _ ,-........ ..""".... ,....., .. ",,11I'1 UNtil .. r:oncfttlOll. ,"""Il' 10 , 1.1f ...., 1M buyer 'M ...." IIch .~ ptUd.,.lty, '~"blr' ,nd uaumIntJ th, prIc' " not .ffected " PofftdI.I, .IImlAII, tmpllcll '" till 6tPtnlltoft II J\t lDOI\IUftWft.lIon 01 , .." " 01 . IPtClW d." Ind thl pa..1ng 01 Uf. lrom ..." " ~ under col'ldftlont MIff",)': (II burer 'M ...., ." ~.1Iy mollY.ltdj CI) both p."" ." welllnlormed Of ..... .ctvIIld, .nd ..d'! 'Pnt an -.1 ht eoneld.,. hit OWII 1*11n1"..1; m . tI.ton.bI. 11m. II .1ow4Id lot .lfIO'...'. an Ih. opt" ",.",.1: (4) P'P''''' It m.d, In lenn. 01 e.." In U, I. do"" Of In I."". 01 "",!'CI.I .n."Otmtnll COmp.fllbt. th.,.to; .~ (II ~. pnc. lepre..nll W\. no"".' co",ldtf.tton lot the ptOPtrty IOId un.1ttcllld by .piN' Of Cfll"" ""'tIdtlO 01 lilt. 00/'tC...101\l' o,.nltd b)' .n)'On. ..toet.ltd ""'" I\e..... . Ad,.,.~.. to '" comp.,.bltt mu'l bt m.d. lot II*ItI Of CI..... An.netng 01 ..It. cone,"lOn.. No .dlu.tIn.nll II. nee....ry lot h).. COl. wf'Ilch ... norm.1Iy p.1d by ....,. .. . reM of ".dttloft 01 I.... .., . m."" ,",; ..... to... "' ,..diIy' 1d1ll,II.bIt .1rlC. '" ...., p,p "... co.. In WtJ.l!t .11 ..... 1t.",.ctlOl\I, ep.cl.' Of cre...". fIn.nelng .dlU.lm.net c.n b. m.d. to !h. OO!ftCl.,.blt plOp'''' by' CO"'fl.lteon. 10 "'ndno I."", 0".,1d bt . fWd p.", Inttttutlon.1 ~tt th.1 " nol .It..dt Involvtd an fl' pt'OPIfty or tr.nllctiolt. ,.",., '~,",tnl .NIuId 1101 be calcultllld on . Ifttch.nlc.1 doll., 10' do'" co'l 01 !h' lIn.ncV14 01 COM,"lon but '" do"" .""""1 of .n)' '~Imen' .NIuId 'ppf'Ollm.,. fl. .,.."..r. 'limon 10 1M ""'MIno 0' conc,"lon. bl~ on the .ppt.lt.l", ~"'tnL STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: ThO ,........ ..".........11 ....... .. ... ......., '..... tubfec1 to fl. IollOwIng condItIOn.: t. Tht 'J!P.lltt ... nol be tI'POn." 101 ",.ftlt, 01 . 1tg.1 "'IuI. ....1 '''ect 11th" th. property being .ppt.l.td 01 Ih' ~ 10 It Th. apprlltll .UUft\1I "" Ih. Ilfl. " good end ",."'.I.tII. .~. "."10',, will not find" '"1 oplnlOn. .bout th. loll.. Th' proptrly It 'ppI.1t1ld on Ifll bUll 0111 btlng under IIepon.lblt OWII."hlp. t. Th. Ippttlt" "It pt'O\1!td , ",.tch In tf'l. 'Wllt.1 '1901' to .~ .ppt'Ollm.l. dlm.ntlol\l of 1M """ro".rn.net .nd th. .ketch " ~....td oNt to ..,It I ". 'lid" 01 1M ItpOIt ... wteu'''1l''Ig II" propttty .M und.rtttndlng the .pp-.It.t'. d.l.rmlnttlon 01 ... .,u. :.. Th. 'pplt..' hll ...",1nteI Ih' '''Ilttl$t lIood ",ape 11.1 It. pIOYIdtd by II. ~td.,.ll!m.'Vttq M.n.o.m.nt "".ney (01 olM' dill 1OUtC") .nd h.. noled ., fl. 'ppll...1 lepon .lhtI fl. ~ "11 It Ioct,ltd In In Sdenttl*f IptclIl '1ooclI Haunt At.., he.UtI ". ,ppIIlttl " nol . .UNtyOt, h, Of ,ht m.... no OU"."'.... '''''" Of ~. ''OIrd4ng Ihit d.l.rmIn.lIon. 4. The tWI"" will 1'101 "'" 'ttllmon, 0' 'P9I" In COUt1 btc'III' h. 0' .h. m.d. In 'WII.., 01 the property in qul.1Ion, unit.. .pecWc .n,"O,lIIlnll to do 10 hIve e...n m.d. belo"".nd. t. Th, ,ppt..... hi. """lied 11'I. v.tu, 01 '" I.~ In ,.. 00.1 'PP'O.ctl .t ... high..' Ind be.1 ut. .nd the lmpto"lm.nll .1 !hilt oonltllutoty v.\It, Th'I' 'IP.rtl. .,......1101\1 of the I.~ .~ 1mp/'oYtn\lnll mu.l nol be Ultd '" co,*,nc1lon with In)' other .pp,....' .~ ." 1tW.1d 'Itl., If' to "..d. t. ThI .ppt.lttt "" nolld In th. .ppttl..1 ItPOn .n)' .dvM. condltkll\l lweh II, nNdtd ''P.n, d.ptKlellon. the PI...ne. 01 hultdoul w..",. toile lubtIlM... .tc,) ob.ttvtd duMct fl. k\tptCtlon 01 thl tubjeet property Of '''I ", 0' .h. bKlm. I""tt 01 Ibvlg !hi norm.1 ,....tCh IMoofvtd In ptrtonnlno '" .j)9t.It.l Unlet. OlMtwlt. .lIltd in 1M .W....I'epon, the .ppr.lt" hi' no knolllltdgl 01 .ny hldd.n Of un.ppeftnl oondlnDnl 01 th. ptOpIrty 0' ,ctv,,.., ,ttritonmtnlal conditIOn. (InCWlng "'- pI...nc. 01 h.unfou. .1I'e., toile: ""IIC", .k.lth.1 would m.., Ch. PfOtMrty moll 0' Itll ".~.bIt, .M hu .hUmld ,".111\1,. .11 no 'uch condition. .M m.... no gu.r.nIHI or ..r"dll, 'lpI"" or 1mpItd, ,eg.rdIng the co~n 01 1M pmperty. Th. .pprt"" wlI no, b. ",poMblt to, Int tueh eoMIfton. "., do ..ltl 01 101 ,ny .nolnll""o 01 l"lIng th.t mlghl be '1qU1t1d 10 dllco"lt Vft\tlhl' .uch conditIOn. ,Iltl. Dtctu.. ", .ppt,"tt It nol ." ..,m In th. fI.1d 0' tnmMl.nl.1 hu.rdt, th. .ppt.It.1 ,epott mu.1 nol be contldlttd II .n .nwonm.nlll ......m.nl 0' th, pt09''''. f. Tha 'W.It., obl.lnld th. Intorm.tIon, "MI.,,,. .M opinion. Nt ..r. ......td .... "'I .ppt.It.1 leport from toUrCII th.1 h. 01 .h. coMId.,.. to tit "..bII .M bll,,," "'.m to b. IN. .nd c:cnlC'L Th. .ppt,".r do.. not ...um. 'KPOn.bltty rol Ihl .CCUtlc., 01 .uch It.fnI "'a' .tt. ""n"hld b'f' Othll p.""" ., Th. tppl'"'' .... nol di.clo.. th. c:onl.nN 01 rt!. .ppt.It., ,tpOt1 ..tlpl II proYkftd 101 In fl. Unifo'm SI.nd.rd. 01 P,ol...lOna' AMw.It., p"ctic.. ., T"- .ppt.lttt hll blltd h.. 0' hit .ppr.It., ,tpOl't .nd ".".llOn conclu.lon 10' ,n .ppt.It.1 "'"It .~1C1 ~ UIi.,.C1Ory comp.tIeln. '1P11rt, 01 .1I1t.len. on th. ...umpllOn tha' compllliOn 01 "'.1m9to...."'.nll will be p.rto,mtd '" 1 wortlmlnWl. m.MIt, 'fO. Th. .ppt.It., mu'l pro\1j. hit 01 hit prio, Wfilltn con.tnl beklf' Iht Itndtt/tlln' .peclftld In '"~ .ppt.It.1 ,tf)OtI c.n dill,lbult th. .W'.".. ItpOrt (lnCklding conc".lon. .bout '"~ proptrty ...."., tha 'Pelf.It,,.. "'.ntity ,nd pro,...lon.' d..lgn.tlon., .nd ",.,.ne.. Ia '''1 prof.allOn., .ppt....1 org.n1ution. 01 the film wtlh ""Ich Ih. 'ppt""tt " uaoc:l'ltd) to Inron. olhlt th.n th. borro..,; ttl. mona.o.. 0111I 'UCC'ltol't .nd ...Ign.; th. mortg.g. NUfIt; conlul\lnll; prol...lon.' .ppt,tt.1 org.nllllion.; 'ny' .1.1. Of ,<<f.,..., .ppro'" ...tId.1 In.hItiafI: 01 '''1 dlP.tlm,flt, 'gtnCy, Of tn.tNmtnl'M'f' of '" United Sill.. or .nt .1.1. 0' th. Olt~ 0' Colull'lblt: 'ICtp! '\11 ... ItndttlCI.nt m.'f' dltlrtM. th. ptOpIrty d"~IIO" .lCtIOn 01 Ih. ItpOtI oAtt 10 dll. COltcllOn 01 leponlng ..Me'l'l IJI'lIhout h.wIng to obllln '" .ppt....,.. priol ",,"In COM.rtf, ThI .pptl"'''' WftlI.n cont.nl .nd .pproval mu'l .Ito M obl.ked btloll ... .ppt...., cen bI con....rtd by .nron' 10 Ih. p.bIlc IhrouOh .chlftll\nt, publIC ttlatlon., "'WI. ..I.., 01 0"'" mtdl., ".....,..,....11.)I aIJ '__....'-11611." "fOl.l,j,._...............,.lI_,...,II-o.t.L.AlllOO. ......... " APPRAISER'S CERTIFICATION: Ttlt App...., C""~ .. 'g'H' fI,l I. t hi" ,..lIteMd lit .ubftct "'."" ".. ,rw:I "If' ..'-did. mInitflur9l 01 "".. 'KM ..... 01 ptOIHIrtl.. mol' ,lml" end pltalml'l .. N ~ ".rfy 101 dftfldlf.... Irt N ..... OO"'PlNon .n..,." Iftd hi.. m.d. . 001" IdJutlment wNft .PfIIOPriII' ta fI~ fl' ",,"'1 ,..ctIOft ., r.o.. .,"'. ot IIgnlIIc.nt ",11,1101'1, ... 1'vNf'c'''' 'It,.. In . CIOmp'"bI' P'OPfrtt It .upenor to, 0' mor, rl'lOl'.bIt 1\11\ ... ~ P'OPttty. I N" ""d. . "".tvt .~Imtnt to rlduc. N ",Itd ..It, pric. 01 fI' CO"'PIt.b11 Ind. . . IIgNrc.nl lIem 11\ . oo,..,.,.bIe proptItf .. In'""" to, 01 .... l.vorltN fI'" fI' IUtlftC1 ptOpt"". I "It. "'Id, I pollttwt ,djuttmll'll to Incf.... fI' '~Ied ..... pric. .1 fI' cofftCt.flblt. t, I hi" ...." "'to oo"lld'/lIIo" ". 1'&10" ",. h.,. '" ltIlp.tt on ..", In "" d."lopm.nl 01 !hI .."".1. 01 """"1 ..". Il'I fI' aw....1 ,.rt. I h.'" nol lno*"'Vf't 'IPftMIkt I"Y IIrftIHIc'"1 WllomlltlOn lrom fl' 'pp'I'..1 ,tpGIt .nd I b....".. .. th. WII of m, .~.. ".", ,"ttlMfl. ,Nt "'Io",,'!'on In N 'pp'.II.1 rlPO't It..". 'M oonKt, ,. lll.ted '" th, .w...., '1ClO't oNy "'f own ,.rtOf'l'~ unbI..tct, and pIOl'''ial'l'l '''Ilytle. opinion., end eonc".lonl. ..Nett 1'1 ,ubjecl ""'10 ,.. COIllinQtftt .nd .,.,.,.". COI'll'Ii:)fl' .peelAed In "" 1omI. .. .. 1 ha.. no p'"."1 Of pIO.,.c'" Im""l'" '" ~fft Iftal" IMIWtecI 01 "" '1901\,.nd I 1'11.1110 ptl.."1 0' pto.~' ptflO"ll 1m.,." Of .... '"'" ,ttpIC1 .. ,.. pantel,,,,,. In N ..",.cfoft, I did not b.... tlfIM pafll.., Of ..I.tt, "', '"1''''' .ftdoloI It" HIII."I. .f """"1 ..'" In Iftl appl....1 rfPOl' O't N IIct. CO"". IIlIgIon. "', ",.NlIe.p, l.mIl.1 .1..,.. 01 ,,,110".1 OrlgVlol 1"'" Iftl pIOtptCtIY. ""'." Of oeeupl". 01 "I .~ ~ 01 01 N pt."'" own", Of oecup."" ot lhl ptOPIf1I.. In Ih..tclnlfr' 01 ... --, ., 1 1'1..1 no pI"I"1 0' CO""mp1.led "'u, ""1.,1,1 ." '" ~ propeltf, .I'd ."Ilhll "', CUlII"1 0' "'.,'. '~rm."1 flOf "'l' 00fI'lIN'''.....,. 10' ptfiotfftlng thII IPP'.".I .. COIIllngl"l 0" "'" 'Wllted WI"'I 01 1ft. PfOP.rty. I. I.... not requited 10 rtpo,l I ptedll,",*,1d .''''1 Of dlfectlO" ." ",\I. Ift.1 t.YOfI ,,, Clutl 01 "I ~"I Of .,., '''lied p."... '" .moum 01 1M .,.\1. MIm.... Iftl .fttlMltf'lt of I tPKItIc ,"""- 01 fit OCOMIlftCl of I .ubI.,quI"1 '.'''1 ." Ordl' 10 'tc~1 m, ~.1IOft IndoIoI I~llol ptlfotmlfl9 ,.. .pp'....L IlfId nol b... N 'pp'.",1 ''PO'' 0" . ,.,qulllld rNNmum ..",.1Ioft, · It*fI'tc w.~.tIOn. 01 ". need 10 .~ I .peell'tC 1I'lOftg'" 10.", 1. I paftotmld IhII .W....I ." COIlIo""'" wIIh the lJnIIoml Itlnd.rd. 01 Pnlfl..Ioft.1 ........1 pr.ctc. 'lit "'"I .doplld.ftd pIOlN,IIg.11d bv' "I A41Pf....1 IlInd.rd. &o.nt 01 TN AW...I ,ound.1Ion .nd "'1 "'I In p1.ct .. 01 Ihl .fl~ d.11 01 "" .,.,....~ """ IIlI 11Ctpllorl 01 1M dfP''''''1 "",,Ion 01 "'" ltand.rd., IJrtlIth doN not IppIy. I IdllW).I~. thlt In ".....1. 0' . "..o".bIt tlMl 10' lapo"''' ." N 0l>I" "'...." .. . ~... 1ft '" d.1MIoft 01 "'.....t w.'" ."11 N ......1. , d..llopad " COII,"I.", ..... Iftl ",."11Ing ""I "'lid ." "" n.lghboftlOOd .KtIofl 01 thII ''POI\, UfIII" 1 h... 01h.twII. .tltld ." thl raconc_ltIo" Iaction. . I hI.1 pafMfl." InIPKtId '" Iflllf\of 1M '''tr* If'" 01 ,.. IUbtad ptOPIt1y and 1M l"lriof of II ptOPtrNl "lid II CO~II.bIt. 1ft Ih. appn"al 'apoft. I.,.,.." ca..tot !h.1 I hawl Mild .'" ,pp.llnt 01 ho....n .ltttfI. conditio". 1ft thl .ublKt lrI'Ipro.lm"'tI. Ofl!hl ~ ,MI. Of Oft a", .M, ...... ,.. ImmtdIaII wIcWfr 01 !he ~ ".", of wNdll .'" a.". .nd 1'1..1 ",.d. .dju.tmlfltI lor """ .11I1 COfldltioftIIft my ."'"... of 1M rropettr w..... III !he 1""'1 ".11 h.d "'."'tl ~ancl to 1UPPOr1 "'.m. I haw. .Ito COfl'lmlfllad .bout Ih. .fI'ad oltha Id.."a condltIofl. 0" "'. ",.rhl.bIIltt 01 !hI .lAlfect proptt1y, ., I pi",,,.., pttp.rld .1 tonclu,IO". ."It oplfllOf\I .bout !h. ..,I IIltl. lhll ",.,. III lontI 1ft "a IppI'." ,epott. II I "'ad Oft .,flIfIc'''' pIOl".1em11 1I..llflC' Irom .'" 1ndMcIu.1 Of 1nlSht6u... lri ". periofrII.flC' 01". aWllt., or th. P,,,,lflliO" 01 1M .walt" ,tpOrt, I h,.. ".mld .uc" lndIwIdu.I(,) ."It dotelo,ad th. .pICl(tc tall. plfto"",d by'''''' lri !hi ,econcilahl)" .Ktiofl 01 .".. 'W.I..I repo" I cant!v ",.1 .,.,IrldMN,lao n.mld II qu.lIAId 10 pelto",.. "'. I"", I hl.- flOl .uthoriled .n,o'" III m.h . ch'I'IQ' to .n, lI.m '" '" ,aport; "'"101'. II ." "",.u1hortltd C"'flGl .. ",.d, 10 "'. 'PP""" 'aport. I .. la.. 110 ,.apon.lbllity 10. II. SUPERVISORY APPRAISER'S CERTIFICATION: ". '_IV ........ ,.nod ... '......, '....... '"' I'" caflftt. Ind '0"" "'1: I dlflC1ly .uptrWI N ,ppI,." whO pttp.rld thl .P9'....1 ,aport, h... IIoMwed tha .pew."" 'arol\, '0'" with the .ltllm",,, .nd COf\Ck/.lon, 01 "'. 'ppI'''''. '0'" to bI bound b, fl. .pp'....,.. car1iIlc.llon. numb.rld . lhtough 7 .boWl. .M .m 'It WIG IuI II.potl.Ntt 10' '" 'ppI1"" .nd '" .W...., ,tpOfl "00"111 0' '''OP.''", """A'IID, .UNJTJ,~fC'lWoIlY._Z12Jl.JlEmILDIUYf:~ "".....111.11 I' / to- I,.., . / 19'\1..,,1: ,_ 'f :.rhij' I., . ,. .' "-4--'-'~ "..." ..l11oRY ..1UIYIL.__~._, 0... 1>0"" ..lIPRlLJl.-199~ atilt c.ntflc'IOn': "ltal'Uc","" ..B~4 IlIlI:' -ttD 11plf.'IIofl 0.11 01 earllllc.1iOfl Of UC""I: -12/.11 197 IU'."VIIO"Y .""AIU" (onl, If ,equktd)l ~ 89".",rl: ______. Naml: Oal.llQ"ad; Sill. CartAullO"': 0' 11.1. Lie",.. ,: 8111.: 1.q>If.tIOfl Dal. 01 CIflJIIutlon or UCI"U: [1 Old 0 Old No' ....... p....'" ~ .........,..... .11 '_....'-IItM..1I ., .,~,....................,..._,... I..."""""OC. ......... APPRAISAL QUALIFICATIONS OF IllIRY fLLf1l UOYD I'IIILLIrs lI/lD UOYD APPRAIBAL'l 505 WILLIAMS S'mEE:l' OERLIN, HARYLIINIl 21011 TELEPlIOIlEI (410) 641-1739 FAXI (410) 641-45B6 .. LIcmSFSI LIcmsm REAL ESTATE APPRAISER HARYLIINIl REAL ESTATE APPRAISER'S O!tIMISSION - NUHIlER 874, JANtlAAY 1992 LIcmsm REAL ESTATE IlALESPEIlSON .. HARYU\IID REAL ESTATE CXHoIISSION - NUHIlER 317250, JULY 1991 muCATIONI BAatELOR OF SCIEWCE - OUSIIlFSS AlJolINISTIlATION, SALISBURY STATE UNIVERIS'l"i, SALIBBURY, HARYLII/ID, DEX:DIIlER 19B3 REAL ESTATE muCATIONI m IlMl'nI REAL ESTATE SClOOL, OCEAN CrN, IllIRYLIINIlI PRINCIPLES OF REAL ESTATE, JULY 1991, 45 flOURS f'UlID.l\MEm'A1S OF REAL ESTATE APPRAISAL, SEPI'EMIlER 1991, 40 HOURS UNIFO~ STANDARDS OF PROFESSIOIIAL APPRA:ISAL PRACl'ICE, SEPI'EMIlER 1991, 15 IIOURS CAPITALIZATIOn NlO STATISTICS FOR APPRAISERS, ocroOER 1991, 30 IIOURS APPRA:ISAL OF 'I1lE SINGLE FAJoIILY RESIDEWCE lI/lD 1-4 UlIITS, JIO\IDoIBER 1991, 30 IIOURS APPLICATIOll OF CXlIlCEPI'S AIm WRITING 'I1lE IlARRATIVE APPRAISAL REI'ORl', NO'o'alIlER 1991, 30 HOURS CAPITALIZATION NlO STATISTICS FOR APPRA:ISERS, APlUL 1993, 15 flOURS APPRAISAL IIlSTl'lUl'E1 FIIlREAI OVERVIEW NlO PRACl'ICAL APPLICATIONS, HAY 1993, 7 HOURS NEW UNIFO~ RESIDmTIAL APPRA:ISAL 1lEI'ORl' SEMIIlAR, SEPI'EMIlER 1993, 7 flOURS 410 STANDARDS OF PROFESSIOI/AL PRACTICE PARI' A, IlAROI 1994, 16 fDlS 420 STANDARDS OF PROFESSIOI/AL PRACTICE PARI' B, JUlIE 1994, 11 1l0URS 110 APPRA:ISAL PRINCIPLES, HAY 1994, 39 flOURS 120 APPRA:ISAL PROCmURES, ocroOER 1994, 39 IIOURS UlIDERBTlI/lDING LIIlITED APPRAISAlS l\Nll REPOm'ING OPl'IONS-RESIDDn'IAL, NO'o'alIlER 1994, 7 flOURS f11A 'mAIIlIIlG SEMIIlAR, HOV&IDER 1994, 4 flOURS IIATIOI/AL ASSOCIATION OF IIlDEPENDmI' FEE APPRAISERS, mc. 2.0 FIIlAIICIAL AllALYSIS OF IIlcnIE PROPERTIFS, IlAROI 1994, 7 HOURS ASSOCIATIOllS I GREATER OCEAN CITY ASSOCIATION OF REAIJI'ORS OF HARYLIINIl, mc. lXlABTAL ASSOCIATIOll OF REAIJI'ORS OF IlARYU\IID, mc. APPRAISAL IIlSTl'IUI'E (CAHDIDATE FOR SRA) EXPElUDICEI PIIILLIrs NlO LIDYD APPRAIBAL'l JUlIE 1992 - PIlESEm' 505 WILLIAMS S'I'REI':l' BERLIN, HARYU\IID 21011 L. BENDLER APPRAIBAL'l NlO PROPERTY IOf1' DEICEMIlER 1991 - JUlIE 1992 SALIBBURY, 1lARYLII/ID REBIDmTIAL REAL ESTATE APPRAISER FEE APPRAISo\IS FORI CXlIlSUlElI FIRST JoIJRl'GI\Gt: CXlRl'ORJlTIOII SUITE 4. 7904 lXlABTAL flIClIWl\Y OCEAN CITY, 1lARYLII/ID 21042 \, .. FAIRFAX I<<)RI'(WlE CORPORATION V403 CXWlTAL HI12IWAY OCEAN ern', IWlYL\Nll 21842 BAlIK OF DEtAllAI1E WIlJolINC11'QI, Df1AIIARE FIR9l' ctIIHI BAlIK P,O, BOX VOO 1lIUBBOOO, DEUlIIAAIl lV966 IIIIC I<<)RI'(WlE CORPORATION 12505 CXWlTAL HI12IWAY OCEAN ern', IWlYL\Nll 21B42 IDYOlA Fl!DERAL IL\VINGS AND LCITIN 306 CAJlR)lL 8I'IU!I!:I' SALISBURY, HARYL\NIl 21BOl BAlIK OF OCEAII ern' 59'l1l 8IREEl' NlO CXWlTAL IIIGllllAY OCEAN ern', IWlYL\Nll 21842 APPRAIBAIB FOR PRIVATE DlDlVIllUAlB AND ATI'ORNEYS ( ;1 Ii if ~ '& JlEFI!R!NCES . FAIRFAX ~E CORPORATION, HR. DRnI !DYm, LOAN ORIGINATOR, 9403 Cl:lASl'AL HIGllllAY, OCEAN ern', IlARYU\ND 21B42, OFFICE' 410-524-4266, FAX. 410-524-2604. FIR9l' a1HI BAlIK, MS, NANCY BRADFORD, 1IRAII0l omcm, P.O. BOX 900, HILLBBORO, Df1AIIARE 19966, OFFICE. 302-934-2B15, FAX. 302-934-2926. al&SAPEAKB IDRl'<WJE COlISUIJrAlfl'S, PAT _, omcm, 300 SflCOND S'I'REE:I', ~, HI) 20707, OFFICE 301-725-1246, FAXI 301-725-1253. COlIstJolm FIR9l' IfJRIlWlE, MS. Jl\IIIE L. IIEl'ZElBEIIlER, ASSIsrAm' VICE PRJ!'SIDmI', IlRANQIIWWlER, SUITE 4, 7904 <XlASI'AL HIGHWAY, OCEAII CITY, ~ 21B42, OmCE. 410-723-4454, FAX. 410-723-280B. IIIIC ~E CORPORATION, MS, IXlNNA J. ALUmlAOOIl, LOAN ORIGINATOR, 12505 CXlASTAL HI12IWAY, OCEAN ern', Hl\RYLAND 21842, OFFICE. 410-250-5752, lAX. 410-250-1401. to .. I, I .. . , '. Willi... Donald I.h..r., . 0.",,.., I , I " I. AN AUTHOAIlEO -.-..... .--........-...." ........ ......... , ~o/~/amd DEPARTMENT OF LICENSING AND REGULATION HARTLAND REAL ESTATE APPRAISERS CDHHISSION CEATI".ITHAr HART ELLEN LLDTD WIIII.m Al "Of II. Jr. ....,..." .. LICENSE LC NI CIA' tlO ..,..fOI DAti lH.eTMI DAn kAtlOCll' 874 12/31/97 11/17/94 OJ ............UYl.."noouu.n.CON.PlCUOVlLv......n....".."."HICHIU"....19 2 4145 .. '~.,.>;,:.-:"..~...., '_ __ecH, ' , 1 i 1 ~ ~ ; .. -- STATE OF DELAWARE · .. i DhWIft lit ,..,.....111.1 ~""" '4 .. \401 . 0.-. 0..- ,""',<<1' n. ...... ...., "" ,.,.." NrMd tw.-. .. ...... at ........ W II", ~... II: ..,._._.._.......0 ...... , . .OI' .!.....' "'.., Appra'..r-Licen..d R.P. ......,..... . :,'1 . "'- )(3-00000:17 I.... , ., :. 111/31/911 4 ~ ~ 4; :. ~ It- D!Sl\AY ms romoH ~ n.- DOC\Iolt.., . OlAf Ii, i t:p.::-~ :r~ (llI :.. J -'