HomeMy WebLinkAbout06-01-07
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA,
ORPHANS' COURT DIVISION
IN RE:
The May M. Moore Five-Year
Charitable Lead Annuity Trust
No. 21-07-0138
Previously assigned to Judge Oler
First and Final Account
PETITION
TO
REQUIRE ACCOUNT BY INVESTMENT COUNSEL
AND NOW, comes Community Trust Company, Trustee of The May M. ~~ore Five-
Year Charitable Lead Annuity Trust, by its attorney Gates, Halbruner & Hatch, PC,~ files this
Petition to Require Account by Investment Counsel and avers as follows: . r...
I
1. May M. Moore, the Decedent/Donor, established The May M. Moore Fiv.b Year
Charitable Lead Annuity Trust ("the Trust") on November 7th, 2001, through her grand<f~u~
and Attorney-in-Fact, Amanda B. Reed. ~ <
ru....,
2. Community Trust Company was named the Trustee in the Trust Agreement. c
3. May M. Moore died on December 8, 2001.
4. Pursuant to its terms, the Trust terminated on December 8, 2006.
5. Community Trust Company filed a Petition for Adjudication/Statement of
Proposed Distribution on February 9, 2007. A true and correct copy is attached as
Exhibit A.
6. Community Trust Company also filed a First and Final Account for the period
March 30, 2003 (the date Trustee received assets) to December 8,2006, on
February 9,2007. A true and correct copy is attached as Exhibit B.
7. Donor's granddaughters, Amanda Reed and Araminta Finn, filed Objections to
the First and Final Account on April 16, 2007.
8. The Objections raised issues of fees and specific details of transactions with
respect to Community Trust Company, TOEWS, American Skandia Insurance,
and Keeler and Danner Financial Services, LLP.
Page 1 of 3
9. The listing of market value and acquisition (book) value is proper procedure in an
Account.
10. Investment Fiduciary, Keeler and Daniier Financial Services, LLP, is in the best
position to provide the additional details requested by the Objectors.
11. Community Trust Company is the administrative Trustee for the Trust and was
not responsible for the Trust investments. Community Trust Company does not
have details of specific transactions involving investments. The Trust Agreement
assigned this duty to Keeler and Danner Financial Services, LLP.
12. Under Article Sixth, Paragraph (D) of the Trust Agreement (pages 7-8), the Trust
names Dale E. Danner and John R. Keeler of Keeler & Danner Financial Services,
LLP, as Investment Counsel ("Keeler & Danner").
13. Under Article Sixth, Paragraph (A), Donor's Power to Direct Investments, the
Trust provides that during the Donor's lifetime the Trustee shall not exercise any
of the Trustee's power over the investments without receiving written directions
from the Donor. The Trustee has no duty to direct or review investments and
shall not be liable to any beneficiary of this trust to any heir of the Donor for
losses.
14. Article Sixth, Paragraph (E), Trust Protector Directed Investments, provides that
"[ u ]pon the death of the Donor, Amanda B. Reed and Araminta (Flegel) Finn, as
the Trust protectors, may select, in writing delivered to the Trustee, either the
investments or the Investment Counsel for the Trust,.... If Amanda B. Reed and
Araminta (Flegel) Finn assume or otherwise accept such responsibility, then the
Trustee shall be exempt from claims of the remaindermen for the investment
decision made by such Trust Protectors or the Investment Counsel(s)." Please see
page 8 of the Trust Agreement. Emphasis added.
15. Article Sixth, Paragraph (F), Nonliabilitv of Trustee for Directed Investments,
provides that "[t]he Trustee shall not be liable to any beneficiary or to any heir for
an appointed Investment Counsel's acts or failure to act, in directing the
investments of the trust where the Investment Counsel was appointed by the
Donor or the Trust Protectors."
16. The Trust Agreement clearly gives the authority to the Trust Protectors, Amanda
Reed and Araminta Finn, to select Investment Counsel.
17. Amanda Reed and Araminta Finn, as Attorney-in-Fact for the Donor May M.
Moore, selected Keeler and Danner to be the Investment Counsel for the Trust.
18. The Trust Agreement clearly released the Trustee, Community Trust Company,
Page 2 of 3
from liability for investments of the Trust.
19. Keeler and Danner, as Investment Counsel, are the proper parties to respond to the
Objections and/or provide their own separate First and Final Account for their
activities as Investment Counsel.
20. Prior to filing this Petition, the undersigned obtained the verbal consent of
Attorney James M. Stein as counsel for the Objectors.
Wherefore, the Trustee, Community Trust Company, respectfully requests this Court to
issue an order either dismissing the Objections filed by the Trust Protectors or requiring
Investment Counsel to prepare and file a Supplemental First and7/ina cc un..t of their activities
as Investment Counsel and to respond to the Objections.,
/
By: Lowe R. Gates, Esquire P A 46779
Sarah E. . McCarroll, Esquire PA 91102
Gates, albruner & Hatch, P.C.
101 umma Road, Suite 100
Lemoyne, P A 17043
Phone: 717-731-9600
Fax: 717-731-9627
l.r.gates@gateslawfirm.com
Attorneys for Defendants,
Community Trust Company
Date: May 31, 2007
Page 3 of 3
THE MAY M. MOORE
FIVE YEAR CHARITABLE LEAD ANNUITY
TRUST
MA Y M. MOORE, no'.'v' of 3300 Waynecastle Road, Greencastle, Franklin County,
PenIlsylvania 17225 (hereinafter called the "Donor"), hereby establishes Vvith COMl\1UNITY
TRUST COMPANY, now of3907 Market Street, Camp Hill, Cumberland County, Pennsylvania
1 '7(\1 1 (he-e;~~fte'- ~~l1erl +l~e "'T'-"~+"'e"\ A 1\Jf A 1'.1ll A n D1;'1;'n a~r1 AD A l\JfTNT' A 171 1;'.-.171
! '\)1 II 1 111Ql 1 \..-all U Ui 11U~l"'" ), r\.H'.l.r\.l".Lfrl. u. J."'-.I..:.JJ...:J.JJ llU .l.'-.rl.1Y.l..ll'.I.r1. .I:.LJJ..:..J'-J.J..:..J.LJ
(hereinafter "Trust Protectors") and DALE E. DANNER or JOHN R. KEELER, now of
KEELER & DANNER FINANCIAL SERVICES, LLP, now of 50 West Main Street, Suite B,
Mechanicsburg, Pennsylvania 17055 (hereinafter called "the Investment Counsel(s)") the
following irrevocable trust and the Trustee and Investment Counsel(s) hereby acknowledge and
accept the terms thereof and agrees, for themselves and their successors in office, to hold property
recei,,'ed under its tern1S as f0110'.1vs:
FIRST: This trust shall be known as "THE MA Y M. MOORE FIVE YEAR
CHARlT ABLE LEAD ANNUITY TRUST", and shall be administered as follows:
(A) Designation of Charities. From the date this trust instrument is
funded until the termination date, as defined below, the Trustee shall in each year
pay the annuity amount defined below to the following charities according to the
following amounts, provided that the Trustee, with the advise and consent of
AMANDA B. REED and ARAMINTA FLEGEL, may change or remove any
charity or the distribution percentage to any charity hereunder at any time prior to
the termination of the Trust so long as any change must conform to the
requirement that all mlliuity distributions shall be to Charities as described in
Sections 170(b)(1 )(A), 170(c), 2055(a) and 2522(a) of the Internal Revenue Code
of 1986, or corresponding provisions of any subsequent federal tax laws
(hereinafter collectively called the "Code") :
1\l A Mli' OJ<' ru A D1TV
J. ., .t-..J.l'.....a.;...o '-'.... ...............1. Jl.............. ..
PERCENTAGl<
1)
HABITAT FOR HU1'viANITY
JOO%
2)
3)
4)
5)
6)
,
.L
(B) Annuitv Amount. Subject to the Ai1icle SECOND below, the
annuity amount for purposes of this trust instrument shall be FIVE PERCENT
(5~/o) of the initial net fair market value of the trust assets.
(C) Termination Date. The te1111ination date Gfthe trust hereunder
shall be FIVE (5) YEARS from the date of demh of the Donor, provided thai the
Donor, through her revocable trust or her estate has made the distributions to the
Charities iisted above as required herein. If and in the event that the Donor,
tD..rough her revocable trust or her estate has not made the distributions to the
Charities listed above as required herein, then the termination date of the trust
hereunder shall be FIVE (5) YEARS from the date this Trust is initially funded.
(D) Distribution Upon Termination. On the termination date, the
t,..n"t "h,,']1 t"n......;,.,.,t" .,,.,rl th" ,'"n...",;,...;nn trnet nr;nrin",! eh",1I hp r!;ct,.;hntpr! in pnn511
l.~ '-1..;Jl. Jl.lU.ll t........l.llJ.l.l.Ll......\...... LA.l........ l..11...... l......J...........................b ..... .............. .t-'.l....J..l.......l.j-'....... ...............&& -- ............................ ..............-, ........ .....-. ............
shares, to AMANDA B. REED and ARAMINTA FLEGEL. If and in the event
that AMANDA B. REED or ARAMINTA FLEGEL predeceases the
termination date, then the Trustee shall distribute the predeceased individual's
share to their children, in equal shares. If and in the event that AMANDA B.
REED or AF.....AkMINT A FLEGEL predeceases the temlination date without
surviving issue, then the predeceased individual's share shall be distributed to the
surviving named individual.
(E) General Power of Apllointment. AMANDA B. REED and
ARAMINT A FLEGEL are each hereby granted the power to appoint the
principal of this Trust, in any manner and in such proportions as they jointly or
individually deem advisable, up to the full value of their respective share of the
Tmst. This power may only be fulfilled on or after the termination date. This
power shall be exercisable by either or both of their Wills, specifically referring to
this power of appointment of this Trust. The class of permissible beneficiaries to
this power of appointment is limited to AMANDA B. REED, ARAMINTA
YO. r.r"r.y ,I.. _:_ __ ------ :~ - ...-: -...I _, .1.._ +~- ~ -~ +1..e e"e--;-- +\...c;- ;__n_ -- -~..
1'LLULL, 1I1e;u ::,puu::,e;::" 11 Ul<:111 lC;U at tue; tuue; VI 111 A 1\.-1;:)<";, l11 11 1;:);:)W..., VI au]
charity as defined herein. A proposed exercise to any other beneficiary shall be
void. If AMANDA B. REED and ARAMINTA FLEGEL fail, either in whole
or in part, to exercise this power of appointment herein granted, the unappointed
principal shall continue in tmst and shall be administered according to the tenns of
this trust.
SECOND: Payments of the annuity amount shall be subject to the following provisions,
notwithstanding any other provisions of this trust instrument:
(A). Order of Distribution in Payments. Payments for each taxable
year shall be made annually at the end of each taxable year of the trust. Payments
2
shall be Dlade first from the ordinary taxable income of tbe trust (includina
. D
sho11-term capital gains) which is not urn-elated business income and, to the extent
not so satisfied, the annuity amount shall be paid from FIFTY PERCENT (50%) of
the Uflrelated business income, the long-tenn capital gains of the trust, the balance
of the UI1Jelated business income, the tax-exempt income, any accumulated income,
r>......rl .r:~r.l,.., +1......0 .........:.......,....~.........,1 ,.....f+ho t~",..+ ~,"" +1.,1'3+ 1"'\1-;10"- A,,,,,\'(1 '""'Iat ~,....r^''''\P f",. -:;) t':'V':lhlp
Ulili lUla!l] lIl'-- }llllJLd}-lal \)1 lJ1\... llU.)l:- 1.11 lllUL Ul\J.\....-l. Il} ll'-\' U.1\...VJll...... .LVl u \.<....[\.U.LJl"-'
year in excess of the aJIDuity amount may, in the discretion oftne Trustee, be
t;lt4r1p,1 tf""\ nr~n("in':ll
LlU\..Lv\..J. I.V t-'.L J.l.l'-'.L .t-'UJ..
(B) Proration of Payments. For a short taxable year and for the
taxable year in which allJ1Uity payments terminate, the Trustee shall prorate the
mIDuity amount on a daily basis.
(C) Corrective Pavrne.rlts. In the event that the initial net fair market
value of the property held in the trust has been inconectly determined and as a
result a payment to the Charities under A11icle First, Section (A) (hereinafter "the
Charities") exceeds or is less than the payment required to be made hereunder,
then within a reasonable period after the final determination of the COllect net fair
market value the Trustee shall pay to the Charities (in the event of an
undervaluation), or shall be repaid by the Charities (in the event of an
overvaluation) an amount equal to the difference between the amount which the
Trustee should have paid if the conect valuation had been used and the amount
which the Trustee actually paid.
THIRD: If any of the Charities is not an organization described in Sections 170(b)( 1 )(A),
170(c), 2055(a) and 2522(a) of the Internal Revenue Code of 1986, or conesponding provisions
of any subsequent federal tax laws (hereinafter collectively called the "Code") at the time any
payment is to be made to the Charities under Article FIRST above, the Trustee shall instead
distribute sllch payments to one or more organizations described in said Sections of the Code in
such proponions as the Trustee shal1 select.
FOURTH: This trust is intended to qualify as a charitable annuity lead trust so
that the value of the interest passing to the Charities is deductible as a charitable guaranteed
arlImity under Sections 2055(e)(2)(B) and 2522 (c)(2)(B) of the Code and so that the
mlliuity distributions to the Charities will be deductible from the gross income of the trust
to the extent provided Section 642(c) of the Code; and, notwithstanding any other provisions of
this trust instrument, the trust is subject to the following provisions:
(A) Self-Dealing. The Trustee shall not engage in any act of
self-dealing as defined in Section 4941 (d) of the Code, nor make any taxable
expenditures as defined in Section 4945(d) of the Code.
(B) Business lnterests. Except to the extent provided in Section
3
494 7(b )(3) of the Code, the Trustee shall not retain any excess business holdings
(as defined in Section 4943(c) of the Code) which would subject the trust to tax
under Section 4943 of the Code, nor shall the Trustee acquire any assets which
\vould subject the trust to tax under Section 4944 of the Code or retain any assets
\A,ihich would, if acquired by the Trustee, subject the trust to tax under said Section
4944.
(C) Corrective ActioD. If Section 4942 of the Code is at any time
applicable to this trust1 the Trustee shall n1ake such distributions at suel1 til11e and
in such manner as not to subject the trust to tax under said Section 4942.
(D) Construction of Restrictions. No provision of this trust
instrument shall be construed to restrict the Trustee from investing the trust assets
in a manner which could result in the annual realization of a reasonable amount of
income or gain from the sale or disposition of tmst assets.
(E) Additional Contributions. No additional contributions shall be
made to the trust after the initial contribution.
FIFTH: The trust hereunder is subject to the following provisions:
(A) Spendthrift Provision. No beneficiary shall have the power to
anticipate, encumber or transfer his interest in the Trust Estate in any manner other
than by the valid exercise of a Power of Appointment. No part of the Trust Estate
shall be liable for or charged with any debts, contracts, liabilities or torts of a
beneficiary or subject to seizure or other process by any creditor of a beneficiary.
(B) Distributions to Minors. Any distribution upon termination of the
trust which is to be made to a beneficiary under the age of twenty-one (21) may be
made in any amount, either directly or through a guardian of or custodian for the
beneficiary, or by payment to the beneficiary in person; and the receipt of the payee
<:h::\11 with TP.Snf':ct to e;:lch snch distrihutioll. he a sufficient dischame to the Trustee
__._._, .. ---- - - - r - - - - .- - .. - . - .I ......
so that the Trustee need not see to the fUlther application thereof
In,
.. .
\~J
descendants in the first degree only, references to "grandchild" or "grandchildren"
mean descendants in the second degree only, and references to "issue" mean
descendants in the first, second or any other degree; in each case meaning lawful
descendants, whether by blood or by adoption and whether living on the date of
this tmst instrument or born or adopted thereafter.
Definitions of Familv. References to "child" or "children" mean
(D) Code. Unless otherwise stated, all references in this Trust to
section and chapter numbers are to those of the Internal Revenue Code of 1986, as
amended, or conesponding provisions of any subsequent federal tax laws
A
":t
applicable to this Trust.
(E) Other Terms. Unless the context otherwise requires, the use of
one or more genders in the text includes all other genders, and the use of either the
singular or the plural in the text includes both the singular and the plural.
SIXTH:
Management of the Trust.
(A) Donor's power to direct investments. Donor shall have the power in a fiduciary
capacity to direct the Trustee to purchase, sell, exchange, or otherwise acquire or dispose of
assets. In the case of a variable life insurance or annuity policy, Donor shall have the power in a
fiduciary capacity to direct the investment of the cash value of the policy among the investment
fund options provided in the policy.
During the Donor's lifetime, the Trustee shall not exercise any of the Trustee's powers
over these matters without receiving written directions from the Donor. Notvvithstanding the
Donor's authority or the Trustee's limitations, contained in this section, if the Trustee, in the
exercise of its fiduciary" duties, is required (1) to nlake a discretionas.ry or non-discretionary
distribution to a trust beneficiary, (2) to pay trustee's fees, (3) to pay any taxes relating to the
trust, or (4) to pay any other costs or disbursements relating to the trust, the Trustee shall provide
the Donor written notice of such payment and an estimate of the liquidity requirements, and the
Donor shall have fifteen (15) calendar days (from the mailing of the notice) to advise the Trustee
which trust assets to liquidate in order to make the payment and meet the liquidity requirements.
If the Donor does not provide the advice to the Trustee within the fifteen (15) day period, then
the Trustee is authorized to liquidate those trust assets which it deems appropriate to meet the
liquidity requirements based on the Prudent Investor Rule contained in section 5.01(B).
During the Donor's lifetime and unless the foregoing powers have been relinquished or
delegated, the Trustee shall have no duty to review investments or to suggest investments and
shall not be liable to any beneficiaIY of this trust or any heir of the Donor for losses resulting from
such investments or from failure to make investments while the Donor retains these powers.
Donor, unless having relinquished this duty in writing, retains the obligation to review investments
or make investment suggestions.
Donor may release her power to control trust investments by written instrument delivered
to the Trustee and may reassume the power at any time be written instrument delivered to the
Trustee. If Donor dies or the Trustee receives certificates of two state licensed physicians that
Donor cannot exercise any of these powers, Donor shall be deemed to have released the powers
and the Trustee shall have full power to take any such action, subject to the terms and conditions
of the Prudent Investor Rule. Donor shall be deemed to have reassumed the powers if the
Trustee receives cel1ificates from two licensed physicians that Donor has recovered the ability to
exercise the powers.
5
Donor acting under this clause shall be deemed to have waived the doctor-patient privilege
to the extent necessary to implement this clause. Failure of physician to c.omply \vith the Tmstee
in requests for information shall be deemed to be a release of the Donor's retained authority to
review accounts and make investment suggestion until such time as the physician complies. Any
person may transact business with the Trustee without inquiring whether the Donor has directed
the action and \iy'ithout inquiring V\;}-lether the Donor has relinquisl1ed or beC0111e unable to e;{ercise
the power.
(B) Incorporation of Prudent Investor Rule. Unless otherwise directed herein, the
Investment Counsel shall be subject to the Prudent Investor Rule (the "PIR") as adopted by the
Commonwealth of Pennsylvania at 20 P.S.C.A. 97201 et. seq., as hereby enacted or subsequently
amended, to manage and invest the assets of the trust.
The Donor desires th(\t the lnvestment l.ollnsel, consistent with the standards of the PIR,
continuously assess the appropriate investment risk tolerance of the trust beneficiaries, and then
invest the trust assets consistent with the purposes, terms, and other circumstances of the Tmst
and shall pursue an overall investment strategy reasonably suited to the Trust and the expressed
intent of the Donor.
The Donor believes, consistent with modem portfolio theory, that the trust total
investment return will be determined primarily by the trust's asset allocation; not market timing or
active management in security selection. The Donor believes that the trust should diversify its
investments with regard to assets classes and individual securities to avoid uncompensated risk.
The Donor does not intend to prohibit the Investment Counsel from engaging in active
management of trust assets where the Investment Counsel reasonably believes active management
can aid in achieving the desired balance between risk and return and the intent of the Trust.
(C) Creation ofInvestment Policy Statement. The Donor directs that any Investment
Counsel, in managing and investing the assets of the trust estate, establish, in writing, an
::lnnronriate investment nolicv statement. The investment Dolicy statement shall be reviewed and
-. r r - - r - . .". ~ .... ..
updated at least annually. In making the investment policy statement, the Investment Counsel
shall consider and the Donor shall address such issues as: the size of the trust assets; the intended
duration of the trust; liquidity demands and schedules; the duration of the fiduciary relationship;
the expected tax consequences of decisions and distributions between income and principal; the
role each investment will play in the overall investment strategy; the special value or relationship
of any particular asset to the overall intent of the trust; and, to the extent reasonably known, the
income and resources of the beneficiaries and related trusts. The Investment Counsel shall
annually discuss the projected distributions, expenses and costs of the Trust account and shall
establish an asset allocation model and the investments shall comply to the model. In the event
that no consensus may be reached concerning the asset allocation model, the Investment Counsel
shall operate within the context of the asset allocation model established by the Donor, unless the
Investment Counsel obtains a bond or other security to assure the Donor or Trustee of the
6
preservation of the Trust's goals.
(D) Employment of and Delegation to Investment Agent. The Donor directs that the
investment functions of the Trust shall be held by DALE E. DANNER or JOHN R. KEELER
now of KEELER & DANNER FINANCIAL SERVICES, LLP, now of 50 West Main Street.
Suite B, Mechanicsburg, Pennsylvania 17055, in their individual capacities as the "Investment
Counsel(s)" for the Trust Account. Pursuant to the above-described authority, Donor delegates
Investment Functions to the Investment Counsel, in their individual capacity. In acceptance
thereof, the Investment Counsel shall be granted all investment authority under the governing
instrument and the laws of the Commonwealth of Pennsylvania, subject to the following
limitations:
(1) If the Investment Counsel invests in Mutual Funds,
t1...0.,.... 'tho. T'....."'o.C"t.""Y'\iPnt rr\\l1"\C'pl C'h":lll lnuPC't ;1'\ hlnrlC' '111th -::t l"Yl'inlrrllln1 r~tlnn ^ft1-l1~PP
l..!l'l...tlJ 1..1J'-' ~.lJ.Yv...;tI...1.l1'-'JJ.\. '-''-'''''''.1.1''''_.1 u.l.l.......l.l ...I... ""oJ\. 1..1..1 ...\.A.L........v ...l\.J..l ~ ..l.....l..J....lJ............... ...............b VI. ....1."-0......._
(3) stars under the Morningstar Rating system; and
(2) If the Investment CmIDsel selects any investment not
aiready an assel under the governing instrument at the time of funding of the
governing instrument, Investment Counsel must be able to demonstrate and
document performance history for such proposed investment for the preceding
three (3) years or the investment shall be approved in writing by the Donor or the
Trust Protectors; and
(3) The Donor understands that Investment Counsel
may derive a fee for the investment advisory services provided to
the Trust. The Donor understands that Investment Counsel may
derive a commission from the sale of securities and/or investment
products to, and on behalf of, the Trust. The fees and commissions
will be paid, either directly or indirectly, from the Trust Account by
the Trustee to Investment Counsel.
(4) This Investment Delegation may be changed,
amended or terminated by Donor at any time by thirty (30) days
advance \vritten notice given to the Investment Counsel. As to the
Trustee, the investment direction change, amendment or
termination will become effective with advance written notice given
to, and signed by, the Donor. After the death ofthe Donor, the
Investment Delegation may be changed, amended or telminated by
a majority of the Trust Protectors at any time subject to the same
telms and conditions.
(5) If, prior to the time Donor or Trust Protectors
change, amend or revoke the Investment Delegation, the Trustee
7
receives income or principal from any source, the Trustee is
authorized to invest the funds in a money market-type account at
the Trustee's discretion, including an account from which the
Trustee derives a SEC section 12(b)-1 and/or sweep fee.
(6) Trustee agrees to use its best efforts to execute any
and all investment directions given to it in writing by the Investment
Counsel, provided that Trustee will not be liable to Donor, Trust
Protectors, cunent income beneficiaries and remaindermen if the
investments calIDot be executed due to circumstances beyond the
control of the Trustee, including delay outside the control of the
Trustee.
(7) Unless othenvise directed, the lnvestment Counsel
shall be subject to the Prudent Investor Rule (the "PIR") as adopted by the
Commonwealth of Pennsylvania at 20 Pa.C.S.A. 97201 et. seq., as enacted or
subsequently amended, to manage and invest the assets of the trust.
(8) Except as othelwise provided in this Agreement, the
duties and responsibilities of the Donor, the Trust Protectors, the
Investment Counsel and the Trustee will be controlled by the terms
of the Trust as more fully described in the Trust Agreement..
(E) Trust Protector Directed Investments. Upon the death of the Donor,
AMANDA B. REED and ARAMINTA FLEGEL, as the Trust Protectors, may select, in
writing delivered to the Trustee, either the investments or the Investment Counsel for the Trust,
provided that both AMANDA B. REED and ARAMINTA FLEGEL must agree to such listed
investments and counsel in writing to the Trustee under such terms and conditions as the Trustee
may require including, but not limited to, indemnification agreements. If AMANDA B. REED
and ARAMINTA FLEGEL assume or otherwise accept such responsibility, then the Trustee
shall be exempt from claims of the remaindermen for the investment decisions made by such
Trust Protectors or the Investment Counsel(s).
(F) Nonliability of Trustee for Directed Investments. The Trustee shall not be
liable to any beneficiary or to any heir for an appointed Investment Counsel's acts or failure to act,
in directing the investments of the trust where the Investment Counsel was appointed by the
Donor or the Trust Protectors.
(G) Delegation to Investment Counsel by Trustee. In the absence of
appointment of an Investment Counsel by the Donor or the Trust Protectors, the Trustee may
delegate investment responsibilities to any Investment Counsel for any reason and regardless of
the Trustee's own skills concerning investments; provided, however, Investment Counsel so
selected shall be either registered as an Investment Advisor with the U.S. Securities and Exchange
8
Commission, a Trust Company, or a state chartered or national bank ,.vith fiduciary pO'vvers. If
investment powers are delegated to Investment Counsel, the Trustee shall abide by the Investment
Counsel's decision but shall not be held liable or otherwise surcharged for losses directly
attributable to investments made on the Investment Counsel's advice as consistent with the
standards established for delegation to Investment Counsel under the PIR standards for delegation
of investment powers at 20 Pa.C.S.A. S 7206. \\lhile the investment powers are delegated to
Investment Counsel, the Trustee shall not be required to review trust investments or take action
on trust investments unless the Trustee receives written instructions from Investment Counsel.
The Trustee may, but shall not be required to demand a bond from any professional Investment
Counsel.
The Trustee shall have the power exercisable in the Trustee's discretion to discharge such
Investment Advisor and to employ other counselor to administer the trust without such counsel.
Consistent with the standards of the PIR, the Trustee shall have the responsibility to prudently
select any Investment Counsel and shall only be required to discharge Investment Counsel if
apprized of facts clearly indicating that Investment Counsel is not perfom1ing competently.
Furthermore, the Trustee shall not be held liable for any actions of the professional Investment
Counsel provided that the Trustee has exercised reasonable care in selecting such Investment
Counsel and has established a specific scope and term of delegation or responsibility for such
Investment Counsel.
(H) General Powers. The Donor directs that the general management functions of the
Trust shall be held by COMMUNITY TRUST COMPANY, now of3907 Market Street, Camp
Hill, Cumberland County, Pennsylvania 17011, in its capacity as Trustee. In addition to other
powers, the Trustee shall have the following powers with respect to the trust and its property, in
each case to be exercised from time to time at discretion and without order or license of court;
provided that no power granted herein may be exercised by the Trustee if such exercise would in
any way defeat the intent of the Donor that the trust hereunder qualify as a charitable annuity lead
trust so that the value of the interest passing to the Charities is deductible as a charitable
guaranteed annuity under Sections 2055(e)(2)(B) and 2522(c)(2)(B) of the Code and so that the
arlnllit)' distributions to the Charities \l/ill be deductible froD1 gross inc.ome of the tPJst to the
extent provided by Section 642(c) of the Code:
fl\
\1}
To retain indefinitely, and to invest and reinvest in, stocks, shares, general or
limited interests, obligations and other securities or any other kind of personal or
real property, even though any or all of the investments made or retained are of a
character or size which but for this express authority not be considered proper for
a tmstee;
(2)
To sell, to exchange, to lease and to make contracts concerning personal or real
property, for such consideration and upon such terms as to credit or otherwise as
the Trustee considers advisable, which leases and contracts may extend beyond the
term of the trust; to give options on real or personal property of the trust; to
9
establish depreciation, depletion, tax or any other reserves; and to execute deeds,
transfers, leases, and other instruments of any kind;
(3) To hold securities or other property in the name of the Trustee or of any other
person, firm or corporation, without indication of any fiduciary capacity;
(4) To compromise or submit to arbitration any claim or matter in dispute;
(5) To give general or special proxies or powers of attorney (which mayor may not be
discretionary and with power of substitution) for voting or acting with respect to
securities; to deposit securities with, or transfer them to, protective committees,
voting trustees or similar bodies; to join in any reorganization; and to pay
assessments or subscriptions called for in connection with securities held by the
Tnl<:tpp'
.... ...-..........-,
(6) To employ investment counsel and consult with them concerning the investments
and management of the trust; to employ a custodian, attomeys and any other
special service; and, in addition to the compensation and expenses of the Trustee,
to pay the compensation and expenses of such investment counsel, custodian,
attorneys and other special services;
(7) To credit particular receipts or gains, and to charge particular disbursements or
losses or charges, to income or to principal of the trust or to apportion them
between income and principal, whether such credits or charges relate to bonds
acquired at a premium, to reserves or to any other matter, all as the Trustee
considers fair and reasonable in each case; and
(8) To make any division or distribution of, or payment from, the trust, in kind by the
fair and reasonable allotment and transfer of specific securities or other personal or
real property or undivided interests therein, at then CUlTent values, in lieu of cash,
as a pal1 or the whole of anyone or more shares or payments. The adjusted basis
for federal income tax purposes of any trust property which the Trustee distributes
in kind to charity must be fairly representative of the adjusted basis for such
purposes of all trust property available for distribution on the date of distribution.
In the event that a named charity is serving as Trustee hereunder, the Trustee may in its
discretion (i) mingle or combine any of the investments or prope11y of this trust with other funds
held by the charity as Trustee in one or more partnerships with investment objectives that the
Trustee deems appropriate, or any other common fund in which each of the several contributing
trusts shall have an undivided proportionate interest and (ii) invest any of the property of this trust
in units of the General Investments Account ofthe charity and thereby commingie the trust
propel1y with other funds held by the charity for investment purposes; provided, however, that in
any event the trust hereunder shall at all times be identified by the charity as a separate and
10
distinct trust and shall so be commingled, combined and invested for convenienc.e of
administration only.
SEVENTH: References in this trust instrument to the 'Trustee" rnean the trustee,
whether original or successor, for the time being in office. Any Trustee rnay resign by giving
written notice to the Charities and the named remainder beneficiaries and to the one or more
persons of full legal capacity then entitled to accounts as provided in Article EIGHTH below.
In case of any vacancy in the office of Trustee, a successor Trustee may be appointed in
writing by the Donor, if the Donor is then living and of full legal capacity, or if the Donor is not
then living and of full legal capacity, by the Trust Protectors, or if none, by the Charities Each
such appointment shall take effect upon written acceptance of the office; provided that neither the
Donor nor a member of the Donor's family shall be appointed as Trustee.
No Trustee named herein or appointed as provided above need furnish any bond or surety.
No one dealing with the Trustee need inquire concerning the validity of anything the Trustee
purports to do or need see to the application of any money paid or property transferred to or
.._~_ ~L ~ T_......~........I.... ......_..1...._
U!-'VIl LJIC 11 U:;lCC::' VI UCl.
EIGHTH: The Trustee shall render an account of the trust at least as often as annually to
the Donor during the Donor's lifetime, and thereafter to the beneficiary or beneficiaries to whom
the remainder interest would be distributed under paragraph (b) of Article FIRST above if the
trust were to terminate on the last day of the period for which the account is rendered; and if the
Donor or any such beneficiary is not of full age and legal capacity when an account is rendered,
such account shall instead be rendered to his or her legal guardian or similar legal representative,
if any. The written assent to any such account by each person of full legal capacity to whom it is
rendered as provided above shall fully protect the Trustee as to all matters and transactions stated
in such account or shown thereby. The failure of any person to whom an account has been
rendered to object in writing within thirty (30) days of receipt of said account shall be deemed an
assent thereto. Nothing in this Article shall be deemed to give anyone the power to modify the
terms of this trust instrument or to alter or shift any beneficial interest created hereunder.
NINTH: The taxable year of this trust shall be the calendar year.
TENTH: This trust shall be in-evocable and shall not be subject to alteration or
amendment, except that the Trustee may in writing amend this trust instrument at any time or
times to enable the trust hereunder to continue to qualify as a charitable annuity lead trust as
described in Sections 2055(e)(2)(B) and 2522(c)(2)(B) of the Code, regulations thereunder and
decisional law. No income or principal of the trust shall be used for the benefit ofthe Donor or to
pay premiums on any policy of insurance on the life of the Donor; no loans shall be made, directly
or indirectly, from the trust hereunder to the Donor; no property shall be bought from, sold to,
exchanged with or leased to or from any person for less than full and adequate consideration in
money or money's worth; and the Donor shall not have the power to control in any manner the
11
administration of the trust hereunder. In the event that any power does exist in this document
which would be in violation of the Code, then such power shall be declared null and void and the
remaining powers and authorities shall remain intact. The Trustee shall take all necessary and
proper actions to preserve the charitable intent of this Trust.
ELEVENTH: The original of each alteration or an1endment of this trust instrument by
the Trustee, each resignation or appointment of a Trustee, and each acceptance of appointment,
shall be kept attached to the original trust instrument, which shall be held by the Trustee. Anyone
may rely on a copy, cel1ifiedby a notary public, of this trust instnnnent or of any v.,rritings
attached thereto as fully as on the original document; and anyone may rely fully upon any
statements of fact ce11ified by anyone who appears from the original document or a certified copy
thereof to be a Trustee hereunder.
TWELFTH: This trust instrument and the trust hereunder shall be governed, construed
~Y"\rl ':lrll''''\'''\~I....~C''t~'~orl ~n -:)f"f"'r\rrl':lnf"P 1l./;th thP n'l-r".I~C'~n.nC' "fthP r"rlp fl~i\m tln,p tn firnp "Annl1('~hlp
Ul~U UUl.1.1.l1.l1vL"-'.1'-'U .111 U'-''-'V.l\...l'-A.J1V'-' "".11...1,,1. \......._ t-'.LV ...1........1....,.1...., Vl ....1.......... ..............,............. ......'-"...1.1 ...........-........ ................ ~t-'t'"'....L..................-
thereto and by the laws of the Commonwealth of Pennsylvania from time to time in force.
SIGNED and SEALED this '7iJr day of November, 2001, for the purposes stated
herein.
J\.iA Y M. MOORE, DONOR
COMMONWEALTH OF PENNSYLVANIA
ss:
COUNTY OF CUMBERLAND
On this. the 7 tI) day of November, 2001, before me, a Notary Public, the undersigned
. -
officer, personally appeared MAY M. MOORE, known to me (or satisfactorily proven) to be the
1 ~ .~ ....~.L.........._=L...-l +..... .1-...... .......:.t...:_ T...-......... ^ ......_,.........-.-......_+ ....._...1 ~.....1.._...........\..........1...........,...J ...t.........+ .....L......
person WJ10se nari1(; b ::>UU:;t;IIU(;U LU LUC W ILlUII J I U::>L /"\./S!(;(;IIICIIL, aJlU a\.-I\.JlUW!CUlSCU l11aL :::'11<::
executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have set my hand and official Seal.
n ,0 I 'Wl r l -)
,/J1)AJ( Or Y jr I
Notary Public -..........
My Commission Expires:
r+~- ,.?.~':~:j ~:>:!r7d
Te:;"j L. V,h-=.E';::3f. f'.:O~crPi P~.ii)!j,::
-- --.- - ,-.... .-. . . . -- .
~)~:: ~=:.: ::~~~:;~:i ~~:~}!;;~i~" ;~~~~.;~: ~ ;:~~;' ,;_{~~~~ 2: 1~:'~ ~~~:j:J
. . .
i
,
!
I
'~;-:-~P('-;;'0'.F~.~:'~--~'~~;:.~~;~tf'~~7~~:.~ \
12
The foregoing Trust Agreement was delivered, and is hereby accepted, at Camp Hill,
Pennsylvania, on November _, 2001.
ATTEST:
COIVIMUNITY TRUST COMPANY~
TRUSTEE
~ .., ty..:::? - /}
_....-~~~C; 4-~
~- /
,--
J_ /. ~
-.::;"U _ /'"", " !J I. / 1..A;.Ir7-J\v' (,1. -J II - ,J> (1/,
.o---r;-J .tL--' U--<7( $'{ (A/ t.~f L- / \---L--<L--..;:j.-t.-c.j '-----
KIMBERL WrHUR-T SLER,
./ ../
PRESIDENT
__ ./ _.:;1 /
.'.__).c:.....,jr.:;.-,'l //./,) :./.;;..5(.:' / .
/../YSJ S/C;.-/!7 .Qc/c7~"~/
I
/
~ /' /,/.://
//1' /;.d>,(~ :-/_~-
~ J_.~777
/ -. . -/ .v-//Z/
/'
WITN"';' '-
~ ~'1
/> /7 /'
.c. , /' '.
" ~/??f ~/;.d; , -~ .e /
~ 1 ';'-'-/
ARAMINTA FLEGEL, \,
TRUST PROTECTOR
~-L ~..
wiTNE~
,1
/J
/{:.;!/iIA I!..-,/,j)
.;
/ .;
<
/j.
_ i
/.1." 'I:} j'
; ,\ . I'
Vi} !./ ._: '-::!"o,,_ ../
AMANDA B. REED,
TRUST PROTECTOR
A TTli'~T.
.{'"':Il.... ....L:...~.._
Vli'li'l li'D ,R. n A l\Jl\Jli'D 171l\J A l\Jrl Al
,S'Jo....L:.JA:.J.L.J..I...:J..l..... ~ LJr1..1....1 ,~..., ~'..I...1 'f-..l ,'-"......rJo...L...I
SERVICES, LLP
/"
J/
,--
BY: ~ r~ *1~--L~
DALE E. DANNER, GENERAL
PARTNER
13