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HomeMy WebLinkAbout06-25-08TRUST ~.~ Cumberland COURT OF COMMON PLEAS OF COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NAME OF TRUST (TRUST UNDER WILL OF or TRUST UNDER DEED OF Harry J. Phillips and Ivah C. Phillips DATED September 27, 1997 c) PETITION FOR ADJUDICATION / STATEMENT OF PROPOSED DISTRIBUTION PURSUANT TO Pa. O.C. Rule 6.9 G ~ ~ ,_ -v t- . C~ ~ ,. cr3 ; ; r l_~ ~ ~` J ---f ~" - Lj'} This form may be used in all cases involving the Audit of Trust Accounts. If space is insufficient, riders may be attached. INCL UDE ATTACHMENTS AT THE BACK OF THIS FORM. Name of Counsel: Gary L. James Supreme Court I.D. No.: 27752 Name of Law Firm: James, Smith, Dietterick & Connelly LLP Address: 134 Sipe Avenue Hummelstown, PA 17036 Telephone: (717) 533-3280 Fax: (717)533-7771 Form OC-02 rev 10.13.06 Page 1 of 10 Name of 1. Name(s) and address(es) of Petitioner(s): Petitioner: Petitioner: Name: Bruce Linn Phillips Address. 1029 Schoolhouse Road Annville, PA 17003 2. Check if any of the following issues are involved in this ca se: A. Appointment of Trustee ................................. .......... B. Interpretation ......................................... .......... C. Discharge of Trustee ................................... .......... D. Transfer of Situs ........................................ ......... E. AppointmentofAdLitem ................................. ......... ~ F. Minor, Unborn or Unascertained Beneficiary(ies) ............. ......... G. Principal Distribution .................................... ......... H. Partial/Full Termination of Trust ........................... ......... I. Missing Beneficiary(ies) ................................. ......... J. Cy Pres ............................................... ......... ~ K. WilliamsonIssue* ...................................... ......... L. Other Issues ........................................... ......... List: Please note: A detailed explanation of issues checked should be set forth at item 13 below. * See Williamson Estate, 368 Pa 343, 82 A.2d 49 (1951), if Trus[ee was also Executor of the settlor/decedent's estate and received commissions in such capacity. Form OC-01 rev 10.13.06 Page 2 of 10 Name of Trust: 3. Testamentary Trust: Decedent's date of death: Date of Decedent's Will: Date(s) of Codicil(s): Date of probate: or Inter Vivos Trust: Date of Trust: September 27, 1997 Date(s) of Amendment(s): October 21, 1997 4. A. If any other Court has taken jurisdiction of any matter relating to this Trust, explain: None B. Identify all prior accountings and provide dates of adjudication. None 5. A. State how each Trustee was appointed: The Trust named Ivah C. Phillips as Death Trustee following the death of Harry J. Phillips (Harry J. Phillips died on April 28, 2000), and Bruce Linn Phillips as Successor Death Trustee following the death of Ivah C. Phillips, who died August 21, 2006. B. If a Petitioner is not a Trustee, explain: Form oc-oz rev 10.13.06 Page 3 of 10 Name of T 6. State how and when the present fund was awarded to Trustee(s): Upon the death of the surviving Trustor, the Trust shall terminate and be distributed as set forth under the Trust provisions. 7 Period covered by accounting: August 21, 2006 to March 31, 2008 8. Current fair market value of the Trust principal is $ 256,833.52 22 of Account.) 9. State concisely the dispositive provisions of the Trust: Central Pennsylvania Conference of the United Methodist Church 10% Bruce Linn Phillips 45% Kathy Eileen Phillips Finley 45% (See page 10. Explain the reason for filing this Account (if filed because of the death of a party, state name of person, relationship to Trust and date of death): Distribution of Residue to charitable beneficiary Form OC-01 rev 10.13.06 Page 4 of 10 Name of T 11. State why a Petition for Guardian/Trustee Ad Litem has or has not been filed for this Audit (see Pa. O.C. Rule 12.4): Not Applicable 12. A. State the amount of Pennsylvania Transfer Inheritance Tax and Pennsylvania Estate Tax paid (including postponed tax on remainder interests), the dates of payment and the interests upon which such amounts were paid: Date Payment /nterest November 21, 2006 November 15, 2007 108.25 11,000.00 B. If any such taxes remain unpaid or are in dispute, explain: Not Applicable 13. Describe any questions requiring Adjudication and state the position of Petitioner(s) and give details of any issues identified in item 2: Petitioner is seeking to distribute Trust funds in accordance with the percentage interests listed in item 15.A. Form OC-02 rev /0./3.06 Page 5 of 10 Name of Trust: 14. Written notice of the Audit as required by Pa. O.C. Rules 6.3, 6.7 and 6.8 has been or will be given to all parties in interest listed in item 15 below. In addition, notice of any questions requiring Adjudication as discussed in item 13 above has been or will be given to all persons affected thereby. A. If Notice has been given, attach a copy of the Notice as well as a list of the names and addresses of the parties receiving such notice. B. If Notice is yet to be given, a copy of the Notice as well as a list of the names and addresses of the parties receiving such Notice shall be submitted at the Audit together with a statement executed by Petitioner(s) or counsel certifying that such Notice has been given. C. If any such party in interest is not sui juris (e.g., minors or incapacitated persons), Notice of the Audit has been or will be given to the appropriate representative on such party's behalf as required by Pa. O.C. Rule 5.2. D. If any charitable interest is involved, Notice of the Audit has been or will also be given to the Attorney General as required under Pa. O.C. Rule 5.5. In addition, the Attorney General's clearance certificate (or proof of service of Notice and a copy of such Notice) must be submitted herewith or at the Audit. 15. List all parties of whom Petitioner(s) has/have notice or knowledge, having or claiming any interest in the Trust, whether such interest is vested or contingent, charitable or non-charitable. This list shall: A. State each party's relationship to the Settlor/Decedent and the nature of each party's interest(s); Name and Address of Each in Interest ~ Relationship and Interest Kathy Eileen Phillips Finley Daughter of deceased 45% 45 Winding River Trail Chagrin Falls, OH 44022 Bruce Linn Phillips Son of deceased 45% 1029 Schoolhouse Road Annville, PA 17003 Form OC-02 rev 10.13.06 Page 6 of 10 Name of Trust: Name and Address o Each Par in Interest ~ Relationship and Comments, if arty I Interest Central Pennsylvania Conference Charity 10% of the United Methodist Church 303 Mulberry Drive P O Box 2053 Mechanicsburg, PA 17055 B. Identify each party who is not sui juris (e.g., minors or incapacitated persons). For each such party, give date of birth, the name of each Guardian and how each Guardian was appointed. If no Guardian has been appointed, identify the next of kin of such party, giving the name, address and relationship of each; and Not Applicable C. If distribution is to be made to the personal representative of a deceased party, state date of death, date and place of grant of Letters and type of Letters granted. 16. If Petitioner(s) has/have knowledge that a Trust share has been assigned or attached, provide a copy of the assignment or attachment, together with any relevant supporting documentation. 17. If a trustee's principal commission is claimed: A. If based on a written agreement, attach a copy thereof. Form OC-02 rev 10.13.06 Page 7 of 10 Name of B. If a principal commission is claimed, state amount. C. If a principal commission is claimed, state the amounts and dates of any principal commissions previously paid in prior accounting periods. Amount Date Paid 18. If a reserve is requested, state amount and purpose. Amount: 5, 000.00 Purpose: 4,500.00 Attorney fees 500.00 administrative closing costs If a reserve is requested for counsel fees, has notice of the amount of fees to be paid from the reserve been given to the parties in interest? ........................................ ~ Yes ~No If so, attach a copy of the notice. 19. Is the Court being asked to direct the filing of a Schedule of Distribution? ............... ~ Yes ~No Form OC-01 rev 10.13.06 Page 8 of 10 Name of Tru Wherefore, your Petitioner(s) ask(s) that distribution be awarded to the parties entitled and suggest(s) that the distributive shares of income and principal (residuary shares being stated in proportions, not amounts) are as follows: A. Income: Proposed Distributee(s) Amount/Proportion See attached schedule of proposed distributions B. Principal: Proposed Distributee(s) Amount/Proportion See attached schedule of proposed distributions Submitted By: (All petitioners must sign. Add additional lines if necessary): Name of Petitioner: Bruce Linn Phillips Name of Petitioner: Form OC-02 rev 10.13.06 Page 9 of 10 Name of Trust: Verification of Petitioner (Verification must be by at least one petitioner.) The undersigned hereby verifies * [that neisne of the above-named name of corporation 1S title and] that the facts set forth in the foregoing Petition for Adjudication /Statement of Proposed Distribution which are within the personal knowledge of the Petitioner are true, and as to facts based on the information of others, the Petitioner, after diligent inquiry, believes them to be true; and that any false statements herein are made subject to the penalties of 18 Pa. C.S. § 4904 (relating to unsworn falsification to authorities). `~ ~~ - Signature of Petitioner * Corporate petitioners must complete bracketed information. Certification of Counsel The undersigned counsel hereby certifies that the foregoing Petition for Adjudication / Statement of Proposed Distribution is a true and accurate reproduction of the form Petition authorized by the Supreme Court, and that no changes to the form have been made beyond the responses herein. Signature o Co se or Petitioner Form oC-oa rev X0.13.06 Page 10 of 10 Ivah C. Phillips Estate and Living Trust SCHEDULE OF PROPOSED FINAL DISTRIBUTION Principal Balance of Accounting filed 256,833.52 Income Balance of accounting filed 10,345.67 Less: Clerk of Orphans' Court, Cumberland County -filing fee for Accounting and petition 265.00 Less: James, Smith, Dietterick & Connelly, LLP -reserve for attorney fees 4,500.00 Less: reserve for closing costs 500.00 Plus Distributions per Accounting 9,039.03 Plus Pennsylvania Inheritance Tax Paid 11,108.25 Net Residue before Inheritance Tax 282,061.47 10% Charitable Share 28,206.15 Balance 253,855.32 Less: PA Inheritance Tax Paid 11,108.25 Balance available for distribution to non-charitable beneficiaries 242,747.07 Actual Balance of Estate and Living Trust 267,179.19 PROPOSED DISTRIBUTIONS TO BENEFICIARIES Central Pennsylvania Conference of the United Methodist Church 28,206.15 Bruce Phillips Less amount previously distributed (121,387.03- 9,039.03) 112,334.50 Kathy Finley 121,373.54 Total Distribution 261,914.19 In the Court of Common Pleas of Cumberland County, Pennsylvania Orphans' Court Division File No. 21-06-1034 Harry J. Phillips and Ivah C. Phillips Living Trust dated 09/29/1997 Late of New Cumberland First and Final Account Bruce Linn Phillips, Successor Death Trustee Date of Death: 08/21/2006 Date of incapacity, if any: None Date of Successor Death Trustee's First Receipt 09/27/1997 Accounting for the period: 09/27/1997 to 03/31/2008 Purpose of Account: Bruce Linn Phillips, Successor Death Trustee, offers this Account to acquaint interested parties with the transactions that have occurred during the Administration. It is important that the Account be carefully examined. Requests for additional information or questions or objections can be discussed with: Gary L. Esq. -. James, Smith, Dietterick 8 Connelty, LLP n ~.. ~: 134 Sipe Avenue ~~ ~~- Hummelstown, PA 17036 ;' ~; ~ ~ ~= ~ ~ - ~ ~~ 717/533-3280 - ;, ~, ~ ~ ~, -~ ~-~ ,, Supreme Court LD. No. 27752 ~_~J--z, ~ ~ ~ _~ w .. 2 ~ N SUMMARY OF ACCOUNT Harry J. Phillips and Ivah C. Phillips Living Trust dated 09/29/1997 For the period of September 27 1997 through March 31 2008 PAGES PRINCIPAL Receipts: This Account 3 - 5 Net Gain (or Loss) on Sales 358,361.53 or Other Dispositions 6 11,785.16 370,146.69 Less Disbursements: General Disbursements 7 - 8 93,950.74 Fees 6 10,336.25 104,286.99 Balance Before Distributions 265,859.70 Transfer to (from) Principal Distributions to Beneficiaries 21 12 85 9,039.03 Principal Balance on Hand 22 256,833.52 For Information: Investments Made Changes in Holdings 23 - 24 INCOME Receipts This Account 25 - 28 10,463.52 Net Gain (or Loss) on Sales or Other Dispositions 0.00 10,463.52 Less Disbursements 29 105.00 Balance Before Distributions 10,358.52 Transfer to (from) Income Distributions to Beneficiaries -12.85 0.00 Income Balance on Hand 30 10,345.67 For Information: Investments Made Changes in Holdings COMBINED BALANCE ON HAND 31 Signature 267,179.19 Verification -2- SCHEDULE A RECEIPTS OF PRINCIPAL Fiduciary Acquisition Value Cash 09/12/2007 Homeowners Insurance -refund 186.43 08/21/2006 PA Central Federal Credit Union share savings 5,012.24 account # 13073-015 -valued per letter dated 03/12/2007 04!20/2007 Sec Fair Fund Distribution -received from 28.14 Edward Jones 08/21/2006 Sovereign Bank checking account # 0771100582 1,836.67 - valued per letter dated 02/15/2007 08/21/2006 Sovereign Bank savings account # 0774042758 - 4.298.56 titled in the Harry J and Ivah C Philips Living Trust dated September 27,1997 -valued per letter dated 02/15/2007 Total Cash 11,362.04 Personal Property 08/21/2006 1.0000 1997 Toyota Camry -valued per sales price 5,000.00 08/21/2006 AIG SunAmerica Annuity account # 83,992.42 P37A0011502 -titled in the name of Harry J and Ivah C Phillips Living Trust dated September 27, 1997 valued per letter dated 02/21/07 - beneficiary is the Harry J. and Ivah C. Phillips Living Trust 06/04/2007 Personal Property -valued per sales price 2,538.60 Total Personal Property 91,531.02 Stocks /Listed 08/21/2006 252.3230 units American Funds Capital Inc Builder Fund 14,518.67 CIA -held in the Edward Jones Brokerage account No. 957-08689-1-0 -titled in the name of Harry J and Ivah C Phillips Living Trust dated September 27, 1997 valued per statement and public listing -3- SCHEDULE A RECEIPTS OF PRINCIPAL Continued 08/21/2006 152.8560 units American Funds Smallcap World A -held in the Edward Jones Brokerage account No. 957-08689-1-0 -titled in the name of Harry J and Ivah C Phillips Living Trust dated September 27, 1997 valued per statement and public listing 08/21/2006 300.0740 units American Funds Washington Mutual Investors Fund CL A -held in the Edward Jones Brokerage account No. 957-08689-1-0 -titled in the name of Harry J and Ivah C Phillips Living Trust dated September 27, 1997 valued per statement and public listing 08/21/2006 1,158.5290 units Van Kampen Equity and Income Fund CL A -held in the Edward Jones Brokerage account No. 957-08689-1-0 -titled in the name of Harry J and Ivah C Phillips Living Trust dated September 27, 1997 valued per statement and public listing 08/21/2006 1.519.1590 units Van Kampen HighYield Municipal Fund CL A -held in the Edward Jones Brokerage account No. 957-08689-1-0 -titled in the name of Harry J and Ivah C Phillips Living Trust dated September 27, 1997 valued per statement and public listing Total Stocks /Listed Bonds 08/21/2006 20,000.0000 Central Pennsylvania Conference Committee The United Methodist Church demand note 5.5% - valued per letter dated 02/22/07 Total Bonds Real Estate 08/21/2006 1.0000 Real estate located at 702 Fifteenth Street, Cumberland County, PA -titled in the Harry J. Phillips and Ivah C. Phillips Living Trust dated September 27, 1997 valued per sales price Total Real Estate 5,797.83 9,866.43 10.241.40 16,817.09 20,000.00 175.000.00 Fiduciary Acquisition Value 57,241.42 20.000.00 175.000.00 -4- SCHEDULE A RECEIPTS OF PRINCIPAL Continued Fiduciary Acquisition Value Total Receipts Subsequent Principal Receipts 12/21/2006 American Funds Capital Inc Builder Fund CI A 12/21/2007 American Funds Capital Inc Builder Fund CI A 12/29/2006 American Funds Smallcap World A 12/29/2006 American Funds Smallcap World A 12127/2007 American Funds Smallcap World A 12/26/2006 American Funds Washington Mutual Investors Fund CL A 12/24/2007 American Funds Washington Mutual Investors Fund CL A 07/24/2007 Real estate located at 702 Fifteenth Street, Cumberland County, PA -refund of county taxes paid by seller in advance per HUD 1 settlement sheet Total Subsequent Principal Receipts 295.22 605.58 497.70 53.65 636.95 250.56 355,134.48 582.14 305.25 3,227.05 Total Adjustments and Subsequent Receipts 3,227.05 Total Receipts of Principal 358,361.53 -5- SCHEDULE B GAINS AND LOSSES ON SALES OR OTHER DISPOSITIONS -PRINCIPAL Gain Loss 11/14/2006 1.158.5290 units Van Kampen Equity and Income Fund CL A Net Proceeds 10,751.15 Fiduciary Acquisition Value -10,241.40 509.75 11/27/2006 AIG SunAmerica Annuity account # P37A0011502 Net Proceeds 95,267.83 Fiduciary Acquisition Value -83,992.42 11.275.41 12/26!2006 1.0000 1997 Toyota Camry Net Proceeds 5,000.00 Fiduciary Acquisition Value -5,000.00 0.00 03/13/2007 20,000.0000 Central Pennsylvania Conference Committee The United Methodist Church demand note 5.5% Net Proceeds 20,000.00 Fiduciary Acquisition Value -20,000.00 0.00 07/24/2007 1.0000 Real estate located at 702 Fifteenth Street, Cumberland County, PA Gross Proceeds 175,000.00 Fiduciary Acquisition Value -175,000.00 0.00 TOTAL GAINS AND LOSSES/PRINCIPAL LESS LOSS NET GAIN OR LOSS 11,785.16 11.785.16 -6- SCHEDULE C DISBURSEMENTS OF PRINCIPAL General Disbursements Advance Auto Parts 08/23/2006 service on 1997 Toyota Camry 16.78 10/27/2006 service on 1997 Toyota Camry 99.33 Allison Finley 12/08!2006 Christmas gift 100.00 ATBT 09/11/2006 service for residence 47.12 10/06/2006 service for residence 158.28 01/01/2007 service for residence 42.87 03/31/2007 service for residence 30.39 Bteys Prescott 08/13/2007 lawn care service at residence 200.00 Borous~h of New Cumberland 08/29/2006 seweNtrash for residence 64.80 11/19/2006 sewer/trash for residence x.80 03/03/2007 sewer/trash for residence 68.04 Bruce Phillips 08/24/2006 cleaning supplies 59.00 116.11 100.00 278.66 200.00 197.64 -7- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 11/11/2006 miscellaneous items for house 13.98 01/20/2007 reimbursement for items purchased for home; 226.02 fuel expense 03/11/2007 reimbursement for fuel to travel to house 39.88 04/15/2007 reimbursement for fuel to travel to house 40,02 04/27/2007 reimbursement for travel expenses for trip to 267.09 Kathy's 05/13/2007 reimbursement for fuel to travel to house 178.85 07!13/2007 reimbursement for gas, food for trip to Kathy's 224.00 with items from house 09/18/2007 miscellaneous items for house 295.00 Castle Clean 06/06/2007 cleaning services 127.20 CB Homesale Services Goua. Inc 07/24/2007 broker's commission on real estate sale 5,067.50 Central Pennsylvania OB-GYN 03/11/2007 annual exam 102.00 Charles J. Dehart III 01/01/2007 repayment of personal loan -loan was for home 13,593.00 repairs at residence Comcast Cable 08/29/2006 service for residence 47.68 1,343.84 127.20 5,067.50 102.00 13.593.00 -8- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 09/24/2006 service for residence 47.68 10/17/2006 service for residence 47.68 11/17/2006 service for residence 48.00 12/15/2006 service for residence 146.14 03/27/2007 service for residence 199.00 Cumberland Count y Recorder of Deeds 07/24/2007 realty transfer tax 1,750.00 CVS Pharmac 08/23/2006 miscellaneous items for house 09/02/2006 miscellaneous items for house Dave Schus 12/20/2006 electrical work -repair fuse panel Edward Jones 11/17/2006 overnight delivery charge 01/28/2008 money market fund investment shares check reorder fees Edward Jones Money Market Fund Investment Shares 02/12/2007 check reorder fees 17.67 9.96 100.00 8.00 6.00 9.00 536.18 1,750.00 27.63 100.00 14.00 9.00 -9- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued Greentree 02/21/2007 payoff of loan 841.04 Gunn-Mowery LLC 03/10/2007 insurance on residence -vacant dwelling 432.76 05/24/2007 insurance on residence -vacant dwelling 317.76 Harris N 08/22/2006 check written 7/26/07 cashed after date of death 259.69 Hepfers Ace Homecenter 08/21/2006 miscellaneous items for house purchased prior 13.77 to date of death 09/17/2006 miscellaneous items for house 6.87 10/07/2006 miscellaneous items for house 28.60 10/08/2006 miscellaneous items for house 35.87 10/15/2006 miscellaneous items for house 4.01 10/22/2006 miscellaneous items for house 15.35 11/12/2006 miscellaneous items for house 10.58 12/16/2006 miscellaneous items for house 4.54 03/04/2007 miscellaneous items for house 19.05 03/10/2007 miscellaneous items for house 9.70 04/01/2007 miscellaneous items for house 13.94 04/15/2007 miscellaneous items for house 32.30 05/26/2007 miscellaneous items for house 20.00 05/27/2007 miscellaneous items for house 11.65 06/03/2007 miscellaneous items for house 12.69 06/03/2007 miscellaneous items for house 51.98 06/12/2007 parts to repair furnace exhaust 334.93 841.04 750.52 259.69 -10- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 625.83 Hi~thmark Blue Shield 10/30/2006 health insurance for period 11/01/06 - 01/31!07 410.55 410.55 Homestead Group Realtor Inc 07/24/2007 broker's commission on real estate sale 5.117.50 07/24/2007 broker's transaction fee 100.00 5,217.50 James C. Lutz Landscaping 10/22!2006 lawn service 76.00 76.00 John R. Zimmerman 11/30/2006 messenger service 38.00 38.00 K Mart 10/10/2006 kitchen curtains 21.18 12/06/2006 miscellaneous items for house 4,72 25.90 Kathy Finley 12/22/2006 repayment of personal loan -loan was for home 12,746.89 repairs at residence 12,746.89 Katie Finley 12/08/2006 Christmas gift 100.00 -11- Keystone Oil 12115/2006 02/02/2007 03/31/2007 04/21/2007 Kim Phillips 01/07/2007 01/11!2007 Kleinfelter Chevrolet 08/30/2006 12/21 /2006 Lentha Zinsky 09/28/2006 Linens 'N Things 12/02/2006 Lowe's 08/21!2006 SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued service for residence 277 64 service for residence 256.65 service for residence 249.90 service for residence 374.85 repayment of personal loan -loan was for home 6,651.79 repairs at residence repayment of personal loan -loan was for home 2.755.76 repairs at residence auto repairs 79.36 auto repairs 177.55 paint for kitchen 28.00 miscellaneous items for house 27.54 miscellaneous items for house purchased prior 36.02 to date of death -12- 100.00 1,159.04 9,407.55 256.91 28.00 27.54 SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 08/21/2006 miscellaneous items for house purchased prior 102.48 to date of death 09/01/2006 miscellaneous items for house 72.30 09103/2006 miscellaneous items for house 32.04 09/09/2006 miscellaneous items for house 25.40 09/24/2006 miscellaneous items for house 110.56 09/27/2006 miscellaneous items for house 106.00 10/10!2006 miscellaneous items for house 63.98 10/17/2006 misceflaneous items for house 6.08 10121/2006 miscellaneous items for house 5.81 10/22!2006 miscellaneous items for house 35.04 10/25/2006 miscellaneous items for house 48.39 10129/2006 miscellaneous items for house 21.05 11111/200fi 207.76 11/18/2006 miscellaneous items for house 7.38 12!02!2006 misceflaneous items for house 32.12 12!05/2006 miscellaneous items for house 32.63 12/16/2006 miscellaneous items for house 43.19 03103/2007 misceflaneous items for house 35.78 03/10/2007 miscellaneous items for house 34.34 03/24/2007 miscellaneous items for house 81.48 04/07/2007 miscellaneous items for house 28.26 04/10/2007 miscellaneous items for house 0.56 04/14/2007 miscellaneous items for house 37.06 04118!2007 miscellaneous items for house 71.78 05!12/2007 miscellaneous items for house 259.07 05!13/2007 miscellaneous items for house 77.87 05/26/2007 miscellaneous items for house 63.18 05/26/2007 miscellaneous items for house 21.30 05/27!2007 miscellaneous items for house 32.71 06102!2007 miscellaneous items far house 27.95 06/03/2007 miscellaneous items for house 16.55 1,776.12 -13- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued Morgan Phillips 12/08/2006 Christmas gift 100.00 100.00 New Cumberland Borough 05/07/2007 sewer/ trash service for residence 64,8Q 07/24/2007 sewer April -June 26.20 07/24/2007 trash July -September $38.60 less adjustment 9.42 for item paid by sell in advance per HUD 1 settlement sheet $29.18 07/24/2007 sewer 07/01/07 - 07/24/07 6.60 107.02 Nicole L. Vanorder 07!24/2007 seller assistance for real estate located at 702 5,250.00 15th Street, New Cumberland per HUD 1 settlement sheet 5,250.00 Ollie's Bargain Outlet 08/24/2006 miscellaneous items for house 5.28 09/30/2006 miscellaneous items for house 5.80 10/20/2006 miscellaneous items for house 269.14 10/21/2006 miscellaneous items for house 5.29 285.51 Outdoor World 02/24/2007 2007 annual dues 169.00 PA Central Federal Credit Union 09/06/2006 Visa credit card payment 15.00 169.00 -14- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 09/24/2006 loan payment 100.00 10/24/2006 loan payment 20.00 11/19/2006 Visa credit card payment 286.00 12/06/2006 loan payment 8,050.00 PA Department of Revenue 04/15/2007 2006 personal income tax 65.00 Penn National Insurance 12/02/2006 homeowner's insurance 71.00 02/02/2007 homeowner's insurance 176.00 Pennsylvania American Water Company 08/24/2006 service for residence 14.26 09/27/2006 service for residence 17.23 10/25/2006 service for residence 16.83 11/12/2006 service for residence 13.22 12/26/2006 service for residence 17.62 01/29/2007 service for residence 17.62 02/27/2007 service for residence 17.03 03/26/2007 service for residence 17.03 04/23/2007 service for residence 18.22 05/25/2007 service for residence 19.42 06/25/2007 service for residence 17.62 07/26/2007 service for residence 17.62 08/15/2007 service for residence 17.03 8,471.00 65.00 247.00 220.75 -15- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued PPL 08/24/2006 service for residence 67 53 09/26/2006 service for residence . 66.64 10/25/2006 service for residence 29.04 11/12/2006 service for residence 30 69 12/26/2006 service for residence . 35.62 01/25/2007 service for residence ~_~ 02/22/2007 service for residence 37.43 03/26/2007 service for residence 41 20 04/24/2007 service for residence . 28.04 05/24/2007 service for residence 24 94 06/25/2007 service for residence . 47.35 07/24/2007 service for residence 45.87 08/14/2007 final service for residence 35.44 Publisher's Clearing House 09/26/2006 48.70 Reslister of Wills 12/13/2006 12/24/2007 Resister of Wills, Agent 11/21/2006 11115!2007 Robin Gasperetti, Tax Collector 12/05!2006 probate fees 132.00 filing fee for PA Inheritance Tax and Inventory 30.00 prepayment 11.000.00 balance of PA Inheritance Tax 108.25 1,487.90 524.33 48.70 162.00 11,108.25 -16- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 12/05/2006 03/28/2007 11.00 07/24/2007 2007-08 school tax $1,365.76 less adjustment for 678.20 56.14 item paid by sell in advance per HUD 1 settlement sheet $1,309.62 2,233.24 SECCO Home Services 03/31/2007 repairs for air conditioning 1.354.68 1,354.68 Sovereis~n Bank savings account # 0774042758 12/29/2006 service fee 0.90 0.90 Stone 8< Murrav Funeral Home 08/21/2006 funeral services 5.053.00 5,053.00 The Home Depot 10/14/2006 miscellaneous items for house 30.91 10/15/2006 miscellaneous items for house 23.65 10/20/2006 miscellaneous items for house 40.37 12/16/2006 miscellaneous items for house 20.10 02/02/2007 miscellaneous items for house 20.93 03/24/2007 miscellaneous items for house 34.83 170.79 The Patriot News 10/29/2006 ad for electric piano 29 25 03/11/2007 ad for Toshiba TV . 24.00 03/11/2007 ad for sleeper sofa 24.00 -17- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 03/11/2007 ad for dining set 03/11/2007 ad for dryer 8: washer 27.50 03/11/2007 ad for piano 31.00 25.75 U.S. Treasury 04/15/2007 2006 personal income tax 310.00 UGI 09/11/2006 service for residence 14 94 10/01/2006 service for residence . 16 43 11/01/2006 service for residence . 16.35 12/11!2006 service for residence 14.80 01/11/2007 service for residence 16.06 02/09/2007 service for residence 15 74 03/09/2007 service for residence . 14.32 04/13/2007 service for residence 14 32 05/11/2007 service for residence . 14.32 06/12/2007 service for residence 17 20 07/12/2007 service for residence . 75 89 08/16/2007 service for residence . 13.21 UPS 08/03/2007 overnight delivery charges 9.31 Verizon 09/12/2006 service for residence 31 03 10/20/2006 service for residence . 26 03 11/12/2006 service for residence . 26.90 161.50 310.00 183.58 9.31 -18- SCHEDULE C DISBURSEMENTS OF PRINCIPAL Continued 12/05/2006 service for residence 26 30 01/11/2007 service for residence . 26 17 03/11/2007 service for residence . 55.43 191.86 Wal Mart 10/25/2006 miscellaneous items for house 44 03 12/06/2006 miscellaneous items for house . 75 27 04/27/2007 miscellaneous items for house . 8418 213.48 Total General Disbursements 93,950.74 Fees James. Smith, Dietterick 8 Connelly LLP 02/07/2007 attorney fees 2 837.50 06/27/2007 attorney fees , 2,767 50 09/18/2007 attorney fees . 1 925 00 12/24/2007 attorney fees , . 1 831 25 02/21/2008 attorney fees , . 975.00 10,336.25 Total Fees TOTAL DISBURSEMENTS OF PRINCIPAL 10,336.25 104.286.99 -19- SCHEDULE D DISTRIBUTIONS OF PRINCIPAL Bruce Linn Phillips 10/15/2007 Community Banks -distribution for Bruce 1,188.00 Phillips 10123/2007 Insti Paymnts -distribution for Bruce Phillips 680.00 11/15/2007 Sunoco Oil Co -distribution for Bruce Phillips 603.00 12/05/2007 George Strohm, Jr. -distribution for Bruce 300.00 Phillips 12117/2007 Sunoco Oii Company -distribution for Bruce 832.00 Phillips 12/18/2007 Ray Wine Dmd -distribution for Bruce Phillips 150.50 12/24/2007 AT S T Mobility -distribution for Bruce Phillips 156.00 12/2M2007 Cash -distribution for Bruce Phillips 400.00 12/26/2007 Comcast Cable -distribution for Bruce Phillips 198.22 12/31/2007 George Strohm, Jr. -distribution for Bruce 306.00 Phillips 01/04/2008 Larry Shuey -distribution for Bruce Phillips 330.00 01/14/2008 Sunoco Oil Company -distribution for Bruce 600.00 Phillips 01/18/2008 Instl Paymnts -distribution for Bruce Phillips 680.00 01/19/2008 Comcast Cable -distribution for Bruce Phillips 123.00 01/30/2008 Fittery Sz Habedeor -distribution for Bruce 398.20 Phillips 02/28/2008 Bruce Phillips -distribution for Bruce Phillips 1,500.00 03/1512008 Fittery SHabedeor -distribution for Bruce 594.11 Phillips 9,039.03 TOTAL DISTRIBUTIONS TO BENEFICIARIES 9,039.03 -21 - SCHEDULE F CHANGES IN PRINCIPAL HOLDINGS 1997 Toyota Camrv 08/21/2006 12/26/2006 # Units 1.0000 inventoried -1.0000 sold o.oooo AIG SunAmerica Annuity account # P37A0011502 08/21/2006 inventoried 11 /27/2006 sold American Funds Capital Inc Builder Fund CI A 08/21/2006 252.3230 inventoried 252.3230 American Funds Smallcap World A 08/21/2006 152.8560 inventoried 152.8560 American Funds Washington Mutual Investors Fund CL A 08/21/2006 300.0740 inventoried 300.0740 Central Pennsylvania Conference Committee The United Methodist Church demand note 5 5% 08/21/2006 20,000.0000 inventoried 03/13/2007 -20,000.0000 sold o.oooo Real estate located at 702 Fifteenth Street Cumberland Coun PA 08/21/2006 1.0000 inventoried 07/24/2007 -1.0000 sold Cost 5,000.00 -5,000.00 o.oo 83,992.42 -83,992.42 0.00 14,518.67 14,518.67 5.797.83 5,797.83 9.866.43 9,866.43 20,000.00 -20,000.00 o.oo 175,000.00 -175,000.00 - 23 - SCHEDULE F CHANGES IN PRINCIPAL HOLDINGS Continued # Units 0.0000 Van Kampen Equity and Income Fund CL A 08/21/2006 1,158.5290 inventoried 11/14/2006 -1,158.5290 sold 0.0000 Van Kampen HiahYield Municipal Fund CL A 08/21/2006 1,519.1590 inventoried 1,519.1590 Total Cost 0.00 10,241.40 -10,241.40 0.00 16,817.09 16,817.09 47,000.02 - 24 - SCHEDULE G RECEIPTS OF INCOME Dividend American Funds Capital Inc Builder Fund CI A 09/21/2006 12/21/2006 12/21 /2006 03/21/2007 06/21/2007 09/21/2007 12/21/2007 12/21/2007 03/24/2008 American Funds Smallcap World A 12/29/2006 12/27/2007 American Funds Washington Mutual Investors Fund CL A 09/18/2006 12/26/2006 03/26/2007 06/25/2007 09/24/2007 12/24/2007 03/24/2008 Edward Jones Money Market Fund 11 /20!2006 12/29/2006 01/22/2007 02/20/2007 03!20/2007 122.36 75.70 123.76 124.82 126.06 127.72 138.78 128.45 131.20 106.39 115.86 48.01 51.01 51.01 54.01 54.01 54.01 54.01 0.02 338.25 150.29 160.76 158.72 1,098.85 222.25 366.07 -25- SCHEDULE G RECEIPTS OF INCOME Continued oa/zo/20o7 05/21/2007 265.43 06/20/2007 238.74 07/20/2007 254.16 08/20/2007 270.04 09/20/2007 615.11 10/22/2007 849.81 11/21/2007 825.01 12/31/2007 714.38 01/22/2008 971.54 02/20/2008 497.24 03/20/2008 516.84 474.59 7,300.93 Van Kampen Equity and Income Fund CL A 09/14/2006 59.08 59.08 Van Kampen HiahYield Municipal Fund CL A 09/01/2006 10/02/2006 75.29 11/01/2006 75.25 12/01 /2006 75.28 01/02/2007 75.25 02/01/2007 75.27 03/01/2007 75.27 04/02/2007 75.27 05/01/2007 71.35 06/01/2007 71.40 07/02!2007 71.34 08/01/2007 71.40 09/04/2007 71.36 10/02/2007 71.34 11/01/2007 71.40 12/03/2007 71.34 01/02/2008 71.40 02/01 /2008 71.36 03/03/2008 71.35 71.38 -26- SCHEDULE G RECEIPTS OF INCOME Continued TOTAL DIVIDEND INCOME 10,430.48 1,383.30 Interest/Bank Pennsylvania Central Federal Credit Union 03/26/2007 interest earned from date of death until closing 20.19 20.19 Sovereistn Bank 09/29/2006 0.18 0.18 Sovereis~n Bank checking account # 0771100582 08131!2006 10/31 /2006 0.16 11 /30/2006 0.10 12129/2006 0.09 01 /31 /2007 0.22 02/28/2007 0•~ 03/30/2007 0•~ 04/30/2007 0.50 05/31/2007 0.25 06/29/2007 0.15 07/31 /2007 0.05 08/31/2007 0.02 09/28/2007 0.01 0.01 2.58 Sovereis~n Bank savings account # 0774042758 09/29/2006 12/29/2006 7.34 2.75 10.09 -27- SCHEDULE G RECEIPTS OF INCOME Continued TOTAL BANK INTEREST TOTAL RECEIPTS OF INCOME 33.04 10.463.52 -28- SCHEDULEI DISBURSEMENTS -INCOME Expense /INCOME PA Deaartment of Revenue 11/15/2007 2006 fiduciary income tax TOTAL DISBURSEMENTS OF INCOME 105.00 105.00 105.00 - 29 - COMBINED BALANCE ON HAND # Units Description Cash Edward Jones #957-08689-1-0 Sovereign Bank #771100582 Sovereign Savings Accoun #774042758 Total Cash Assets 252.3230 American Funds Capital Inc Builder Fund CI A 152.8560 American Funds Smallcap World A 300.0740 American Funds Washington Mutual Investors Fund CL A 1,519.1590 Van Kampen HighYield Municipal Fund CL A Total Assets Current Value Fiduciary 03/31/2008 Acquisition or as Noted __ Value 220,176.08 220,176.08 0.34 0.34 2.75 2.75 220,179.17 220,179.17 0.00 14,518.67 0.00 5,797.83 0.00 9,866.43 0.00 16.817.09 O.o0 a7,ooo.02 220,179.17 267,179.19 -31- In the Court of Common Pleas of Cumberland County, Pennsylvania Orphans' Court Division File No. 21-06-1034 __ __ _ - __._ _. __ _ _ _ _ Harry J. Phillips and Ivah C Phillips Living Trust dated 09/29/1997 Signature Bruce Linn Phillips, Successor Death rustee fn the Court of Common Pleas of Cumberland County, Pennsylvania Orphans' Court Division File No. 21-06-1034 ,Harry J. Phillips and Ivah C. Phillips Living Trust dated 09/29/1997 Verification Bruce Linn Phillips, Successor Death Trustee of the Harry J. Phillips and Ivah C. Phillips Living Trust dated 09/29/1997, hereby declares under oath that he/she has fully and faithfully discharged the duties of his/her office; that the foregoing Account is true and correct and fully discloses all significant transactions occurring during the accounting period; that all known claims against the Trust have been paid in full; that, to his/her knowledge, there are no claims now outstanding against the Trust; and that all taxes presently due from the Trust have been paid. This statement is made subject to penalties of 18 Pa. C.S.A. Section 4904 relating to unsworn falsification to authorities. Bruce Linn Phillips Dated: ~ ~ ~, 3 lii~ Ivah C. Phillips Estate and Living Trust SCHEDULE OF PROPOSED FINAL DISTRIBUTION Principal Balance of Accounting filed Income Balance of accounting filed 256,833.52 Less: Clerk of Orphans' Court, Cumberland County -filing fee for 10,345.67 Accounting and petition Less: James, Smith, Dietterick & Connelly, LLP -reserve for 280.00 attorney fees Less: reserve for closing costs 4,500.00 Plus Distributions per Accounting 500.00 Plus Pennsylvania Inheritance Tax Paid 9,039.03 11,108.25 Net Residue before Inheritance Tax 282,046.47 10% Charitable Share 28,204.65 Balance 253,841.82 Less: PA Inheritance Tax Paid 11,108.25 Balance available for distribution to non-charitable beneficiaries 242, 733.57 Actual Balance of Estate and Living Trust 267,179.19 PROPOSED DISTRIBUTIONS TO BENEFICIARIES Central Pennsylvania Conference of the United Methodist Church Bruce Phillips Less amount previousl di 28,204.65 y stributed (121,366.78- 9,039.03) Kathy Finley 112,327.75 121,366.79 Total Distribution 261, 899.19 Ivah C. Phillips Estate and Living Trust SCHEDULE OF PROPOSED FINAL DISTRIBUTION Principal Balance of Accounting filed Income Balance of accounting filed 256,833.52 Less: Clerk of Orphans' Court, Cumberland County -filing fee for 10,345.67 Accounting and petition Less: James, Smith, Dietterick & Connelly, LLP -reserve for 280.00 attorney fees Less: reserve for closing costs 4,500.00 Plus Distributions per Accounting 500.00 Plus Pennsylvania Inheritance Tax Paid 9,039.03 11,108.25 Net Residue before Inheritance Tax 282, 046.47 10% Charitable Share 28,204.65 Balance 253, 841.82 Less: PA Inheritance Tax Paid 11,108.25 Balance available for distribution to non-charitable beneficiaries 242,733.57 Actual Balance of Estate and Living Trust 267,179.19 PROPOSED DISTRIBUTIONS TO BENEFICIARIES Central Pennsylvania Conference of the United Methodist Church Bruce Phillips Less amount previousl di 28,204.65 y stributed (121,366.78- 9,039.03) Kathy Finley 112,327.75 121,366.79 Total Distribution 261, 899.19 C7 c~ ~ i~ -p -~ --~ t7 [' --- _ _ :~ ~ -':'~. ;i -; C~ "~~ ~~ '~J r_, c__. ~ .,_ , N _ C.f'Z "C' '_.~. N , U~ N NOTICE OF CHARITABLE GIFT (In Accordance with Pa. O.C. Rule 5.5) COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION ESTATE OF Ivah C. Phillips No. 21-06-1034 Chief, Charitable Trusts and Organizations Section Office of the Attorney General Date: Dear Sir or Madam: Notice is given of a charitable gift as follows: 1. The nature of the present proceeding is: 6/19/2008 (a) An Account which has been or will be listed for Audit in the Orphans' Court on August 28, 2008 in Cumberland County, Carlisle (State name of Courthouse and town/city.) The time and place of the Audit is Court Room at 9:30 AM o'clock. If not provided herein, the time and location will be proviTe upd- on request w en a information becomes available. (b) If the proceedings are other than an Account, state the nature of the proceedings and the place, date and time fixed for hearing: If more space is required, attach additional sheets. L~iJt; ,~~_~~~ ?S ~'~ i i?~ 52 CI ~~,` ~- ORFH1~=~.'v' ~ :~Ot1RT ~Uh~~ _~~' F~ '~ ~.~(, . PA ^ SETTLOR Q DECEASED Form OC-OB Rev. 70-73-2006 Copyright (c) 2006 form software only The Lackner Group, Inc. Page 1 Of 4 Estate of Ivah C. Phillips ^ Settlor ~ Deceased 2. Charitable gifts are made as follows: (a) Give full names and addresses of charities, and names and addresses of counsel, if any. Central Pennsylvania Conference of the United Methodist Church 303 Mulberry Drive P.O. Box 2053 Mechanicsburg, PA 17055 (b) If pecuniary legacies, state exact amounts and indicate whether -egacies will be or have been paid in full; if not give reasons therefor. (c) If the charitable interest is a future interest and the estimated present value of the property involved exceeds $25,000, a brief description thereof including the conditions precedent to its vesting in enjoyment and possession, the names and ages of persons known to have interests preceding such charitable interest, and the approximate market value of the property involved. (d) If residuary gift, state nature and value of share. 10% of the Trust property FoRn OC-Q6 Rev. 10-73-2006 Copyright (c) 2006 form software only The Lackner Group, fnc. Page 2 of 2 Estate of Ivah C. Phillips ^ Settlor 0 Deceased 3. Provide a brief statement of all pertinent questions to be submitted to the Court for Adjudication, including unresolved claims and any material questions of interpretation or distribution which may affect the value of the charitable interest. 4. The names and addresses of the fiduciaries are (state whether Executors and/or Trustees): Bruce Linn Phillips, Sucessor Death Trustee 1029 Schoolhouse Road Annville, PA 17003 5. The names and addresses of counsel for the fiduciaries: Gary L. James, Esq. James, Smith, Dietterick, ~ Connelly LLP 134 Sipe Avenue Hummelstown, PA 17036 6. The names and addresses of counsel for any charity who has received notice or has appeared for it: Fomr OC-QB Rev. 10-13-2006 Estate of Ivah C. Phillips 7. (a} A copy of the instrument creating the gift is attached hereto. ^ Settlor 0 Deceased (b) If the gift is other than a pecuniary legacy which will be paid in full, there is attached hereto: (1) A copy of the Account, if one has been filed (2) A copy of any other relevant documents Very truly yours, Signature Gary L. Esq. 27752 Attomey's Name Supreme Court 1. D. No. 134 Sipe Avenue Attomey's Address Hummelstown, PA 17036 717/533-3280 Attorney's Telephone Form OC-OB Rev. 10-73-2006 Copyright (c) 2006 form software only The Lackner Group, Inc. P892 4 Of 4 ~_ ~_,~~,.., i . TO: NOTICE AND CERTIFICATE OF SERVICE Beneficiaries of the Harry J. Phillips and Ivah C. Phillips Living "Trust dated September 27, 1997 (Per Attached Distribution List) T~E ESTATE SECURITY FROM: Gary L. James, Esquire, Counsel for the Successor Death Trustee r-~ c~ DATE: June 19, 2008 ~=o ,~ ~~ c~ RE: .Filing of Trustee's First and Final Account for Court =' -';~ T ~= -.J U Confirmation -- `-`' ~ `~ ~~ ' ~ ~..~ ~ .. We serve as Counsel for Bruce Linn Phillips, Successor Death Trustee o~the Harr. Phillips and Ivah C. Phillips Living Trust dated September 27, 1997. Harry 3. Phillips died on April 28, 2000 and Ivah died on August 21, 2006, a resident of Cumberland County, Pennsylvania. Bruce Linn Phillips was appointed by the Register of Wills of Cumberland County, Pennsylvania, to serve as the Executor of the Estate of Ivah C. Phillips and he was designated Successor Death Trustee of the Harry J. Phillips and Ivah C. Phillips Living Trust dated September 27, 1997. In connection with administration of the Trust and Estate and the final distribution and termination, we now enclose for your review a copy of the First and Final Account of the Trust Estate by the Successor Death Trustee and Petition to Adjudicate First and Final Account that will be filed on or before July 25, 2008 with the Clerk of the Orphans' Court Division, Court of Common Pleas of Cumberland County, Pennsylvania. The Account will be presented for audit and confirmation at the Cumberland County Courthouse, Carlisle, Pennsylvania on Tuesday, August 26, 2008 at 9:30 A.M. It is not necessary for you to appear at the time of audit. Should you have any objections to the account or to the proposed schedule of distribution, the objection should be filed in writing with the Clerk no later than Tuesday, August 26, 2008 by 9:00 A.M. If by then no objections are filed thereto, we expect that the First and Final Account will be confirmed on August 26, 2008. As soon as we receive the final confirmation by the Court, we will distribute the balance of the assets remaining on hand according to the Proposed Schedule of Distribution. Enclosure 134 SIPE AVENUE HUMMELSTOWN, PA 17036 MAILIfJG ADDRESS P.O. BOX 650 HERSHEY, PA 17033 TOLL FREE 1.800.942.3660 TEL. 717.533.3280 FAX 717.533.7771 www.jsdc.com CERTIFICATE OF SERVICE I hereby certify that on June 11, 2008, the foregoing "Notice" with attachments, was mailed by depositing a copy of the same by United States First-Class mail, prepaid to the persons set forth on the attached Distribution List. JAMES, SMITH, DIETTERICK & CONNELLY, LLP B `~ _ Y Gary L. J ~ s, Es wire Attorney . No. 7752 P.O. Box 650 Hershey, PA 17033-0650 (717) 533-3280 DISTRIBUTION LIST Kathy Eileen Phillips Finley 45 Winding River Trail Chagrin Falls, UH 44022 Bruce Linn Phillips 1029 Schoolhouse Road Annville, PA 17003 Central Pennsylvania Conference of The United Methodist Church 303 Mulberry Drive P.O. Box 2053 Mechanicsburg, PA 17055 The Honorable Tom Corbett Pennsylvania Office of Attorney General 16th Floor Strawberry Square Harrisburg, PA 17120 ~~ ~ OR1G#N~L The HARRY J. PHILLIPS AND IVAH C. PHILLIPS LIVING TRUST prepared for HARRY J. PHILLIPS and IVAH C. PHILLIPS c`~ `~' o ;;-~~ ~ t s c~ ~~:. ~Y F~~ LL~ ^ C7 r--~i 'x'' ~ ' ~~ ...IITYYY.titi__~. t+ + V t T I N JAMES, SMITH & DURKIN Attorneys-at-Law 134 Sipe Avenue Hummelstown, Pennsylvania 17036 (717) 533-3280 FAX (717) 533-2795 © James, Smith & Durkin All Rights. Reserved HARRY J. PHILLIPS AND IVAH C. PHILLIPS LIVING TRUST Table of Contents Article One Article Two Article Three Article Four Article Five Article Six Article Seven Article Eight Article Nine Article Ten Article Eleven Article Twelve Article Thirteen Article Fourteen Article Fifteen Trust Creation .................................... 1-1 The Trust Estate ................................... 2-1 Appointment of Trustees .............................. 3-1 Trustors' Lifetime Rights . ............................ 4-1 Administration at Death of First Trustor .................. 5-1 Specific Distributions of Trust Property ................... 6-1 Division into Survivor's Trust and Family Trust .............. 7-1 The Survivor's Trust . ............................... 8-1 The Family Trust .................................. 9-1 Common Pot Trust ................................ 10-1 Division and Distribution of Trust Property . ............... 11-1 Distribution If No Designated Beneficiaries . ............... 12-1 Trustee Administration ............................. 13-1 Trustee Investment Powers ........................... 14-1 General Provisions ................................. 15-1 i HARRY J. PHILLIPS AND IVAH C. PHILLIPS LIVING TRUST Article One Trust Creation Section 1. Parties to Our Trust This trust agreement dated SAP 2 7 1997 is made between HARRY J. PHILLIPS, the husband Trustor, and IVAH C. PHILLIPS, the wife Trustor, and the following initial Trustee(s): HARRY J. PHILLIPS IVAH C. PHILLIPS Section 2. Name of Our Trust This trust may be referred to as the: HARRY J. PHILLIPS AND IVAH C. PHILLIPS LIVING TRUST, dated SEP 2 7 1997 The formal name of our trust and the designation to be used for the transfer of title to the name of our trust is: HARRY J. PHILLIPS and IVAH C. PHILLIPS, Trustees, or their successors in trust, under the HARRY J. PHILLIPS AND IVAH C. PHILLIPS LIVING TRUST dated c ~ „ ,~ and any amendments thereto Section 3. Revocable Living Trust Our Trust is a revocable living trust. Section 4. Trustors as Trustees Unless otherwise provided in this trust agreement, when either one of us is serving as Trustee under this trust, that Trustee may conduct business and act on behalf of our trust without the consent of any other Trustee. 1-1 Section 5. Our Family a. The name(s) and birth date(s) of our children are: Name Birth date BRUCE LINK PHILLIPS KATHY EILEEN PHILLIPS FINLEY January 29, 1956 February 15, 1957 All references to our children in this instrument are to these children and any children subsequently born to or adopted by us. Section 6. Creation of Internal Revenue Code Section 401 (a) (9) Retirement Subtrusts Notwithstanding any other provision of our trust agreement, the irrevocable retirement subtrust of any Trust described in Article Seven is hereby deemed to be irrevocable upon execution of our trust agreement. Any such irrevocable retirement subtrust shall remain unfunded until funded at the death of the first of us. 1-2 Article Two The Trust Estate Section 1. Initial Transfer of Property We hereby assign, convey, transfer and deliver to our Trustee all property set forth on Schedule "A", attached hereto, and made part of this trust agreement. Our Trustee acknowledges receipt of all assets listed on the attached Schedule. All assets titled in the name of our trust or in the name of our Trustee, but not listed on Schedule "A", shall be considered a part of our trust estate as if they had been set forth on the attached Schedule. Section 2. Additional Transfers to Trust We, or any other person or entity, may transfer or devise to our Trustee additional assets, real or personal, and may name our Trustee as the beneficiary of life insurance policies, annuities, retirement plans or similar contracts; such assets, policies and proceeds, upon delivery thereof to our Trustee, shall be a part of the trust estate, subject to all the terms of this trust agreement. Section 3. Character of Trust Assets Unless otherwise provided in this trust agreement, each of us shall own a separate share in our trust estate which shall consist of an undivided one-half (1/2) beneficial interest in our trust estate and such interests shall be held as tenants in common. Nevertheless, to the extent allowed by law, any community property, as invested and reinvested (and including any income and profits, as applicable), transferred to our trust by either or both of us shall fully retain its character as community property for as long as allowed by law, and this retention of character shall continue in spite of any change in the situs of our trust. Section 4. Acceptance of Trust Property All property transferred to our trust and not disclaimed by our Trustee shall be held, administered and distributed according to the terms of this agreement. 2-1 Section 5. Trust Property Schedule The trust property transferred to our trust is set forth on Schedule "A". 2-2 Article Three Appointment of Trustees Section 1. Definition of Trustee All references in this agreement to "Trustee" shall be deemed a reference to the person or entity who is then serving as Trustee and shall include alternate or successor Trustees or Co-Trustees, unless the context requires otherwise. Section 2. Resignation of a Trustee Any Trustee may resign at any time without court approval by giving written notice to both of us or to our respective personal representatives. If both of us are not then living, written notice shall be given to our successor Trustee, or if there is no successor, to the beneficiaries then entitled to receive income or principal distributions under this trust agreement, to their respective personal representatives, or if such beneficiaries then be minors, to the persons having the care or custody of them. Section 3. Removal of a Trustee Any Trustee may be removed under this agreement as follows: a. While We are Both Alive and Competent While we are both alive and legally competent and if we both agree, we shall have the right to remove any Trustee appointed under this agreement at any time with no requirement that the removed Trustee receive any reason for such termination. b. While One of Us is Alive or Competent After the death of one of us or when both of us are alive but only one of us is legally competent, any Trustee appointed under this trust agreement may be removed by the competent Trustor at any time for cause. 3-1 c. Removal by Others After the death or legal incompetency of both of us, any Trustee may be removed by a majority vote of the beneficiaries then entitled to receive income or principal distributions under this trust agreement or their respective personal representatives at any time for cause. d. Notice to Removed Trustee Written notice of removal under this agreement shall be effective immediately when signed by the person or persons authorized to make the removal and delivered to the Trustee personally or deposit by United States certified mail, return receipt requested. The written notice removing a Trustee shall designate a successor Trustee. e. Transfer of Trust Property The Trustee so removed shall promptly transfer and deliver to the successor Trustee all property of the trust under the Trustees' possession and control. Section 4. Designated Successor Trustees Whenever a Trustee is removed, dies, resigns, becomes legally incapacitated, or is otherwise unable or unwilling to serve, that Trustee shall be replaced as follows: a. The Death or Disability of a Trustee While We are Serving as Trustees We may serve as the only Trustees or we may name any number of Trustees to serve with us. If any of these other Trustees subsequently die, resign, become legally incapacitated or aze otherwise unable or unwilling to serve as a Trustee, we may or may not fill the vacancy, as we both agree. b. Disability Trustees of HARRY J. PHILLIPS Upon the disability of HARRY J. PHILLIPS, if he is then serving as an initial Trustee, he shall be replaced by the following Disability Trustee(s): IVAH C. PHILLIPS If, for any reason, the Disability Trustee(s) named above are unable or unwilling to serve, the following successor Disability Trustee(s) shall serve until the successor Disability Trustee(s) on the list have been exhausted. Unless otherwise 3-2 specified, if Co-Disability Trustees are serving, the next following named successor Disability Trustee shall serve only after all of the Co-Disability Trustees cease to act as Trustees. (I) BRUCE LINK PHILLIPS; THEN (2) KATHY EILEEN PHILLIPS FINLEY; THEN (3) KIM S. PHILLIPS AND JAMES FINLEY, JOINTLY, OR THE SURVIVOR OF THEM c. Disability Trustees of IVAH C: PHILLIPS Upon the disability of IVAH C. PHILLIPS, if she is then serving as an initial Trustee, she shall be replaced by the following Disability Trustee(s): HARRY J. PHILLIPS If, for any reason, the Disability Trustee(s) named above are unable or unwilling to serve, the following successor Disability Trustee(s) shall serve until the successor Disability Trustee(s) on the list have been exhausted. Unless otherwise specified, if Co-Disability Trustees are serving, the next following named successor Disability Trustee shall serve only after all of the Co-Disability Trustees cease to act as Trustees. (I) BRUCE LINK PHILLIPS; THEN (2) KATHY EILEEN PHILLIPS FINLEY; THEN (3) KIM S. PHILLIPS AND JAMES FINLEY, JOINTLY, OR THE SURVIVOR OF THEM d. Death Trustees of HARRY J. PHILLIPS Upon the death of HARRY J. PHILLIPS, if he is then serving as an initial Trustee, he shall be replaced by the following Death Trustee(s): IVAH C. PHILLIPS If, for any reason, the Death Trustee(s) named above are unable or unwilling to serve, the following successor Death Trustee(s) shall serve until the successor Death Trustee(s) on the list have been exhausted. Unless otherwise specified, if Co-Death Trustees are serving, the next following named successor Death Trustee shall serve only after all of the Co-Death Trustees cease to act as Trustees. (I) BRUCE LINK PHILLIPS; THEN (2) KATHY EILEEN PHILLIPS FINLEY; THEN (3) KIM S. PHILLIPS AND JAMES FINLEY, JOINTLY, OR THE SURVIVOR OF THEM -, ~-~ e. Death Trustees of IVAH C. PHILLIPS Upon the death of IVAH C. PHILLIPS, if she is then serving as an initial Trustee, she shall be replaced by the following Death Trustee(s): HARRY J. PHILLIPS If, for any reason, the Death Trustee(s) named above are unable or unwilling to serve, the following successor Death Trustee(s) shall serve until the successor Death Trustee(s) on the list have been exhausted. Unless otherwise specified, if Co-Death Trustees are serving, the next following named successor Death Trustee shall serve only after all of the Co-Death Trustees cease to act as Trustees. (I) BRUCE LINK PHILLIPS; THEN (2) KATHY EILEEN PHILLIPS FINLEY; THEN (3) KIM S. PHILLIPS AND JAMES FINLEY, JOINTLY, OR THE SURVIVOR OF THEM Section 5. Definition of Disability A Trustee shall be considered disabled in the event that a court of competent jurisdiction determines that such Trustee is legally incompetent, or in the event that a Trustee is not adjudicated incompetent but, by reason of illness or mental disability, such Trustee has been certified by two licensed physicians to be unable to properly handle his or her own affairs. Section 6. No Designated Successor Trustees If at any time there is no Trustee acting under this agreement and there is no person or institution designated and qualified as a successor Trustee, a majority of the beneficiaries then eligible to receive distributions of income or principal under this agreement or their legal representatives shall appoint a successor Trustee. If any trust existing under this agreement lacks a Trustee and no successor is appointed pursuant to this Section, the vacancy shall be filled by a court of competent jurisdiction. 3-4 Section 7. Responsibility of Successor Trustees A successor Trustee shall have the same rights, powers, duties, discretions and immunities as if it had been named as initial Trustee under this agreement. No successor Trustee shall be personally liable for any act or failure to act of any predecessor Trustee or shall have any duty to examine the records of any earlier Trustee. A successor Trustee may accept the account rendered and the property delivered by or on behalf of a predecessor Trustee as a full and complete discharge of the duties of the predecessor Trustee without incurring any responsibility or liability for so doing. 3-5 Article Four Trustors' Lifetime Rights Section 1. Income and Principal a. Right to Trust Income and Principal Our Trustee shall pay to or apply for our benefit during our joint lifetimes all or such part of the income and principal of the trust estate as we may direct. We may not, however, direct our Trustee to make gifts from trust property to third parties. If our Trustee inadvertently makes a distribution we intended as a gift directly from the trust to a third party, that distribution shall be construed as a distribution to us first, then a gift to the third party from us. Unless directed in writing to the contrary by either of us: 1. Our Trustee shall be authorized to accept and execute instructions received from either Trustor regarding distributions of the income or principal of the trust estate to or for the benefit of either or both of us. 2. Our Trustee shall be authorized to make distributions of the income or principal of the trust estate in the sole name of a Trustor as instructed by either of us. b. Trustee Liability Upon any distribution of the income or principal of the trust estate authorized or directed by a Trustor, our Trustee shall incur no liability to the other Trustor in respect of such distribution, shall be under no obligation to seek the approval or verification of the concurrence of the other Trustor to such distribution and shall have no responsibility for the application of any distribution made in the name of a Trustor. 4-1 c• Tracing of Income Not Required Unless otherwise provided or specified by either or both of us during our joint lives, with respect to any distributions of income to either of us, our Trustee shall be under no obligation to allocate, trace or otherwise identify the actual source of such income. Section 2. Trustors' Rights During Disability a. Definition of Disability A Trustor shall be considered disabled in the event a court of competent jurisdiction determines that a Trustor is legally incompetent or in the event that a Trustor is not adjudicated incompetent but by reason of illness or mental disability a Trustor has been certified by two licensed physicians to be unable to properly handle his or her own affairs. s b. Income and Principal Distributions Our Trustee during the period of a Trustor's disability shall pay to or apply for that Trustor's benefit as much of the net income and principal of our trust estate as our Trustee in its sole discretion shall deem necessary or advisable. c. Payment of Obligations Our Trustee during the period of a Trustor's disability shall, from time to time, pay that Trustor's valid obligations, medical expenses and provide for his or her comfortable maintenance and welfare, taking into consideration his or her other income or resources. d. Income and Principal Distributions for Non-disabled Trustor During the lifetime of either or both of us, should either or both of us become disabled, then our Trustee shall pay to or apply for the non-disabled Trustor's benefit as much of the principal and net income of the disabled Trustor's separate property estate and his or her interest in the joint marital property estate and community property, if any, as our Trustee in its sole discretion shall deem necessary or advisable, from time to time, for the non-disabled Trustor's health, maintenance, support and education, taking into consideration his or her other income or resources. 4-2 e. Trustee Guidelines In making distributions under this Section, our Trustee shall give primary consideration to the needs of the disabled Trustor and secondary consideration to the needs of the non-disabled Trustor. f. Tax Planning During our joint lives, should either or both of us become disabled our Trustee may exercise the following powers as attorney in fact on our behalf, either alone or in conjunction with any other attorney in fact under a durable power of attorney for a disabled Trustor, but the primary concern of our Trustee shall be for our welfare and secondarily for the welfare of our lineal descendants for tax planning: 1. Our Trustee may make additional distributions to our lineal descendants, equally by class, for the purpose of continuing any gift program initiated by us which our Trustee reasonably determines will achieve beneficial results for estate and/or income tax planning purposes. 2. Our Trustee may initiate a gift program on our behalf which our Trustee reasonably determines will achieve beneficial results for estate and/or income tax planning purposes by making distributions to our lineal descendants, equally by class, so long as such distributions are made in the form which qualify for and are limited to the annual exclusion for federal gift tax purposes. 3. During any disability of a Trustor our Trustee shall be under no obligation to initiate, recommend or consider any tax planning objective or program for us and any exercise of its discretion in this regard, when conducted in good faith, shall not subject- it to liability to any person affected thereby. Section 3. .Right to Amend or Revoke Our Trust The Trustors may at any time or times, by written notice filed with the Trustees, amend any provision hereof or revoke this Trust in whole or in part, provided however, that each Trustor shall only hold the powers to amend and revoke as to his or her respective Share in the Trust. Furthermore, each Trustor shall have the power to partition this Trust into separate Trusts. 4-3 a. Power to Revoke and Amend While Both of Us Are Living Except as to the irrevocable Family and Survivor's Retirement Subtrusts, while both of us are alive, we may at any time or times, by written notice filed with our Trustee, amend any provision hereof or revoke this Trust Agreement in whole or in part, provided however, that each of us shall only hold the powers to amend or revoke as to our respective share in our Trust estate; and, each of us shall have the power to partition our Trust into separate trusts. b. Power to Revoke and Amend After Death of First Trustor Except as to the irrevocable Family and Survivor's Retirement Subtrusts, after the death of the fast of us, the Surviving Trustor may at any time amend, revoke or terminate, in whole or in part, the Survivor's Trust in which the Surviving Trustor has a general power of appointment. All other trusts shall become irrevocable and shall not be subject to amendment after the death of the first of us. c. Method to Revoke or Amend Any amendment or revocation of this trust or any trust created by our Trust Agreement shall be made by written instrument signed by both of us or by the Trustor making the amendment or revocation and delivered to our Trustee. If the instrument making the amendment or revocation is signed by only one Trustor and the other Trustor is living at that time, a copy of the instrument making the amendment or revocation shall also be delivered to the other Trustor. An exercise of the power of amendment substantially affecting the duties, rights and liabilities of our Trustee shall be effective only if agreed to by our Trustee in writing. d. Delivery of Property After Revocation After any revocation or termination with respect to our trust (and any trust created hereunder), our Trustee shall promptly deliver the trust property to the Trustor or Trustors to the extent of their interest in the trust property. e. Trustee's Retention of Assets Upon Revocation In the event of any revocation of all or part of our trust, our Trustee shall be entitled to retain sufficient assets to reasonably secure the payment of liabilities our Trustee has lawfully incurred in administering the trust and any fees that have been discharged and fees paid, unless we indemnify our Trustee against loss or expense. 4-4 Section 4. Exercise of Trustors' Rights and Powers by Others Any right or power that either of us could exercise under the terms of our Trust Agreement, except the power to amend, revoke or terminate any trust created by our Trust Agreement, may be exercised for and on behalf of that Trustor by any attorney in fact who, at the time of the exercise, is duly appointed and acting for that Trustor under a valid and enforceable durable power of attorney executed by that Trustor or, if there is no such attorney in fact, by a duly appointed and acting guardian or conservator of that Trustor after petition to a court of competent jurisdiction. The power to amend, revoke or terminate any trust created by our Trust Agreement is personal to us and may not be exercised by any other person or entity. Section 5. Rights Concerning Standby Property It is contemplated that certain assets may be added to the trust estate from time to time with the possession and control thereof retained by or redelivered to us. If we execute and deliver to our Trustee an instrument effectively transferring such assets to our Trustee together with any further documentation necessary to effect the record transfer thereof, in the event of a Trustor's death or incapacity the assets shall be deemed to be assets of the trust estate and held by us as the nominee of our Trustee. During the period such assets are in our possession they shall be subject to the following terms and conditions: a. We may receive directly and devote to our own use and benefit any dividends, interest, income or distributions from or upon such assets and neither we nor our Trustee shall have any duty of accounting to the other or to any other person with regard thereto. b. Any sale, exchange or other transfer of such assets by us shall constitute a withdrawal of such assets from the trust estate and our Trustee shall have no further interest therein or duties with regard thereto. Though not a condition precedent to any such withdrawal, we agree to notify our Trustee of all such withdrawals. 4-5 c. We shall be responsible for the reporting of the income from such assets to the appropriate taxing authorities and our Trustee shall have no responsibility for including such income on any fiduciary returns prepared by it or for the preparation of any other income tax return -with respect thereto unless we duly notify our Trustee of such income items and a full and adequate accounting thereof is made and presented to our Trustee. d. We shall protect and indemnify our Trustee against all losses, liabilities and expenses which may result directly or indirectly from our use, possession, management or control of such assets. e. Upon the death or incapacity of either of us, our Trustee shall be entitled to the possession thereof and thereafter shall have all the rights, powers and duties with respect to such assets which are otherwise granted to our Trustee herein. It is understood that our Trustee shall be responsible only for the assets- which actually come into its possession and control. However, it is also understood that our Trustee shall use any reasonable and prudent means to secure possession of any trust assets of which it has knowledge. Our Trustee shall have no duty, accountability or responsibility to us or to any other person with respect to any assets. of which it has no knowledge or of which it is unable to obtain possession and control. Section 6. Trustor/Trustee Bank Accounts It is contemplated that we may establish a joint bank account or accounts with our Trustee and create powers of attorney in respect thereof in other persons. Deposits from time to time made by us or other authorized persons into such an account shall constitute transfers to the trust estate and withdrawals therefrom, which may be made without the co-signature of our Trustee, shall constitute withdrawals from the trust estate. However, our capacity and other authorized persons with respect to any such account shall be that of nominee of our Trustee, not co-owner. At any given time the trust estate shall include the then balance of any such account. 4-6 Section 7. Life Insurance Policies and Retirement Plans Unless otherwise provided in our Trust Agreement or elsewhere, either or both of us shall have all powers over life insurance policies and retirement benefits owned by or made payable to our trust, including the following: a. Payment of Premiums We shall be responsible for the payment of premiums and other charges on each policy of insurance owned by or made payable to our trust. Our Trustee shall have no duty to make any payment or be responsible to determine whether such payments have been made. b. Custody of Policies Our Trustee shall not be responsible for the custody or safekeeping of any life insurance policy before its actual delivery to our Trustee nor after a subsequent withdrawal of such policy from such trust. c. Change Beneficiaries We shall have the right to change the beneficiary and to receive any dividends or other earnings of such policies or plans without accountability therefor to our Trustee or any beneficiary in our Trust Agreement. d. Assignment We may assign any policy or plan benefits to any lender to the extent allowed by law, including our Trustee, as security for any loan to us or any other person. e. Surrendered Policies If any life insurance policy is surrendered or if the beneficiary of any policy is changed, our Trust Agreement shall be revoked with respect to such policy. However, no revocation of the trust with respect to any policy, whether pursuant to the provisions of the preceding sentence or otherwise, shall be effective unless the surrender or change in beneficiary of the policy is accepted by the insurance company. Section 8. Undistributed Net Income Any net income not distributed under the provisions of this Article shall be added to the trust principal. 4-7 Article Five Administration at Death of First Trustor Section 1. Trustee's Discretion to Pay Debts and Taxes After the death of the first of us to die, our Trustee, in its sole discretion, may pay all or any part of the deceased Trustor's following expenses, debts, claims and taxes becoming due or payable by reason of the death of the first of us: a. Final medical expenses and all funeral costs; b. Legally enforceable claims against the deceased or the estate; c. Reasonable expenses of administration of this trust and the deceased's probate estate, if any; d. Any allowances mandated by a court of competent jurisdiction to those dependent upon the deceased Trustor; e. Any estate, inheritance, succession, death or similar taxes payable by reason of the death of the first of us; and f. Any penalties or interest on any of the above claims, debts or taxes owed by the deceased or the estate. Section 2. Payment by Our Trustee or Personal Representative Our Trustee in. its sole discretion may make distributions authorized under this Article either directly to the person or entities to whom payment is owed or to the personal representative of the deceased Trustor's probate estate. Written statements by the deceased's personal representative that such sums aze due and payable by the estate shall be sufficient evidence of their amount and propriety for the protection of our Trustee. Our Trustee shall be under no duty to see to the application of any such payments made to the deceased's personal representative. Section 3. Tax Elections With regard to the payment of any income tax, gift tax, estate tax, inheritance tax or any other tax required because of the death of the first of us, our Trustee shall have the right to make any 5-1 available elections allowed under the law. Our Trustee is authorized to sign and file any tax return required because of the death of the first of us. Section 4. Payment of Death Taxes, Claims and Expenses a. Payment out of Trust Property All death taxes, claims and expenses payable under the provisions of this Article shall be paid by our Trustee out of the trust estate, except as specifically provided for elsewhere in this agreement. b. Exception for Property Passing Outside of Trust Notwithstanding any other provision in our trust, all death taxes, claims and expenses incurred by reason of assets passing outside of our trust or probate estate shall be assessed against those persons receiving such property. c. Payment from Deceased Trustor's Share Notwithstanding any other provision in this or any other instrument, no death taxes, claims and expenses payable under the provisions of this Article shall be paid from the beneficial Shaee owned by the surviving Trustor. ~-2 Article Six Specific Distributions of Trust Property Section 1. Fractional Gift of Income in Respect of a Decedent After the death of the first of us, our Trustee shall distribute a fraction of all items of income in respect of a decedent attributable to the Deceased Trustor's share of the trust estate to the Survivor's Trust. Any income in respect of a decedent not distributed to the Survivor's Trust shall be distributed to the Family Trust to the extent such allocation will not fund the Family Trust in an amount which exceeds the Deceased Trustor's Unified Credit Equivalent. The fraction to be distributed to the Survivor's Trust shall be determined by dividing the Surviving Trustor's Unused Unified Credit Equivalent reduced by the balance of the Surviving Trustor's then taxable estate, after taking account of all property passing which is includable in the Deceased Trustor's gross estate, other than by any form of Beneficiary Designation, by the value of all items of income in respect of a decedent in the Deceased Trustor's share of the trust estate or received by our Trustee due to the death of the Deceased Trustor. Section 2. No Other Specific Distributions Our Trustee shall make no other specific distributions of trust property to any beneficiaries under our trust agreement after the death of the last of us to die. All distributions of trust property shall be made in accordance with the Articles that follow. 6-1 Article Seven Division into Survivor's Trust and Family Trust Section 1. Division of the Trust Estate Upon the death of the first Trustor to die, our Trustee shall allocate and distribute the remaining trust estate, including any property that becomes distributable or payable to our Trustee at the deceased Trustor's death, into two separate shares to be identified as the Survivor's Share and the Family Share. a. Surviving Trustor's Property Transferred to the Survivor's Share The Survivor's Share shall consist of the surviving Trustor's one-half (1/2) interest in all of the assets representing the trust property held by our Trustee. b. Deceased Trustor's Property Transferred to the Survivor's Share The Survivor's Share shall also consist of assets having a value equal to the unlimited federal estate tax marital deduction allowable to the deceased Trustor's estate, subject to the following: 1. The Survivor's Share shall be reduced by the net value for federal estate tax purposes of all other property that passes or has passed to the surviving Trustor under our trust agreement, the deceased Trustor's probate estate or otherwise that qualifies for the federal estate tax marital deduction. 2. The Survivor's Share shall be reduced by all federal estate tax deductions actually allowed other than the marital deduction; 3. The Survivor's Share shall be reduced by the amount, if any, needed to increase the deceased Trustor's taxable estate for federal estate tax purposes to the largest amount that after allowing for the unified credit against federal estate tax, will result in the smallest, if any, federal estate tax being imposed on the deceased Trustor's estate; 7-1 4. The Survivor's Share shall be reduced by the credit for state death taxes available to the estate of the deceased Trustor, to the extent that the use of that credit does not result in or increase any death tax payable to any state; and 5. The Survivor's Share shall be reduced by any other allowable credits available to the estate of the deceased Trustor, except the credit for tax on prior transfers from a "transferor", as defined in Code Section 2013, who dies within two years after the date of death of the deceased Trustor, but only to the extent that those credits do not disqualify this gift from receiving the marital deduction. 6. Notwithstanding any other provision in this Section, the Survivor's Share shall never have assets with a value less than the maximum amount after allowing for the unified credit against the federal estate tax as of the date of the deceased Trustor's death, unless the value of the surviving Trustor's trust property (less all liabilities) and the deceased Trustor's gross estate (less all allowable deductions except the federal estate tax marital deduction) is less than the maximum amount after allowing for the unified credit against the federal estate tax, in which case the entire amount of the deceased Trustor's trust property shall be allocated to the Survivor's Share. For purposes of this calculation, the Survivor's Share shall be reduced by the net value for federal estate tax purposes of all other property that passes or has passed to the surviving Trustor under our trust agreement, the deceased Trustor's probate estate or otherwise that qualifies for the federal estate tax marital deduction. c. Survivor's Share to be Administered as Survivor's Trust The Survivor's Share shall be held, administered and distributed according to the provisions of the Survivor's Trust as set forth in Article Eight of our trust agreement. Our Trustee, however, shall allocate to a separate irrevocable subtrust of the Survivor's Trust, to be known as the Survivor's Retirement Subtrust, all assets to be received by reason of any Beneficiary Designation. Except for (i) the irrevocability of the Survivor's Retirement Subtrust and (ii) our direction that if the Survivor's Trust is divided into two shares that the Retirement Subtrust shall 7-2 be made part of the Survivor's Share that does not hold the Surviving Trustor's interest in our trust estate, our Trustee shall administer the Survivor's Trust and the Survivor's Retirement Subtrust with like effect as if each, separately, were the Survivor's Trust. d. Property Transferred to the Family Share The Family Share shall consist of all assets not distributed to the Survivor's Share. e. Family Share to be Administered as Family Trust The Family Share shall be held, administered and distributed according to the provisions of the Family Trust as set forth in Article Nine of our trust agreement. Our Trustee, however, shall allocate to a separate irrevocable subtrust of the Family Trust, to be known as the Family Retirement Subtrust, all assets to be received by reason of any Beneficiary Designation. Except for the irrevocability of the Family Retirement Subtrust, our Trustee shall administer the Family Trust and the Family Retirement Subtrust with like effect as if each, separately, were the Family Trust. f. Administration of Irrevocable Retirement Subtrusts under Internal Revenue Code Section 401(a)(9) Any irrevocable retirement subtrusts created under this Section shall be held, administered, divided and distributed in accordance with the provisions outlined in this Section; provided, however, that our Trustee, in its sole discretion, may continue the method of distribution from such plans which was being used by me prior to my death. Section 2. Allocation and Valuation of Assets In allocating assets between the Survivor's Share and the Family Share, our Trustee shall allocate the trust assets that qualify for the marital deduction between the Survivor's Share and the Family Share in cash or in kind, or partly in each, on a pro rata or non pro rata basis, and in undivided interests or not; subject, however, to the following: a. Qualification for Marital Deduction Only assets that qualify for the marital deduction shall be allocated to the Survivor's Share. b. Valuations of Allocations in Kind 7-3 Assets allocated in kind shall be deemed to satisfy the marital deduction amount on the basis of their values as finally determined for federal estate tax purposes; provided, however, that our Trustee shall act impartially, consistent with equitable principles, requiring impartiality among beneficiaries, in allocating assets in satisfaction of the marital deduction share, so that any distribution of assets in satisfaction of the marital deduction share shall be made of assets, including cash, fairly representative of appreciation or depreciation in the value of all property thus available for distribution. c. Income The Survivor's Share shall be entitled to a pro rata share of the income earned on deceased Trustor's residuary probate and trust assets from the date of deceased Trustor's death, including a share of income earned on assets used to discharge liabilities. d. Foreign Death Tax Credit Our Trustee shall not allocate assets that qualify for the foreign death tax credit to the Survivor's Share unless all other assets or interests available for allocation have been so allocated. e. Insurance on the Life of the Surviving Trustor Our Trustee shall not allocate any policy of insurance on the life of the surviving Trustor to the Survivor's Share. f. Insurance on the Lives of Others Any incidents of ownership to a policy of insurance on the life of a person other than the deceased Trustor shall be allocated to the Family Share. g. Lack of Property to Fully Fund the Survivor's Share If there is insufficient property qualifying for the federal estate tax marital deduction to fully fund the Survivor's Share, the funding to the Survivor's Share shall be reduced accordingly. Section 3. Intention that Survivor's Share Qualify for Marital Deduction We intend that the Survivor's Share qualify for the federal estate tax marital deduction and this agreement shall be construed accordingly. All other provisions of our trust agreement shall be 7-4 subordinate tc- that intent. If the granting of any right, power, privilege, authority, or immunity to our Trustee or another person and the imposition of any duty upon our Trustee or another person by any provision of our trust agreement, would disqualify any share or interest of a beneficiary hereunder from qualifying for the federal estate tax marital deduction provided by Section 2056 of the Code, such provision shall be ineffective if and to the extent that the same, if effective, would so disqualify such share or interest. The provisions of this Section shall also apply to the deceased Trustor's probate estate, personal representative and all beneficiaries, devisees and legatees. Notwithstanding any other provision in our trust agreement to the contrary, the surviving Trustor at any time shall have the right to direct our Trustee, in writing, to convert, within a reasonable time, any unproductive trust property to income producing property. Section 4. Disclaimer of Property Any property or portion of property that is disclaimed by the surviving Trustor shall be held, administered, or distributed according to the following terms: a. Property Disclaimed The surviving Trustor may disclaim any property held or distributed to or for the benefit of the surviving Trustor under our trust agreement. b. Time to Disclaim The suuviving Trustor may disclaim within the time limits and under the conditions permitted by the laws regulating disclaimers. c. Delivery of Disclaimer to Our Trustee A disclaimer by the surviving Trustor may be exercised by the delivery to our Trustee of an irrevocable and unconditional refusal to accept any or all property interests passing to the surviving Trustor or the Survivor's Share. d. Disclaimer of Survivor's Share If the surviving Trustor exercises a disclaimer with respect to any or all property set aside as the Survivor's Share, such disclaimed interest shall be added to the Family Share. 7-5 e. Disclaimer of Family Share If the surviving Trustor exercises a disclaimer with respect to any or all property set aside as the Family Share, such disclaimed interest shall be distributed under the relevant terms of this agreement as though the surviving Trustor had predeceased the deceased Trustor. Section 5. Retirement Accounts If our Trustee is named the beneficiary of an interest in one or more plans which are qualified under Code Section 401 or one or more Individual Retirement Accounts qualified under Code Section 408 (hereinafter "Retirement Accounts"), then our Trustee shall allocate the benefits payable from such Retirement Accounts to the Survivor's Trust (or a share hereunder) without underfunding the Family Trust, if possible. Furthermore, if one or more Retirement Accounts are distributed to the Survivor's Trust in installment payments, the following provisions shall apply: a. Amount To Be Distributed Our Tn~stee shall pay to or apply for the sole benefit of the surviving Trustor, at least quarterly, the greater of (i) all of the net income earned by the Retirement Account, or (ii) the amount required to be distributed from such Retirement Account under Code Section 401(a)(9). Our Trustee shall take all of the necessary action to cause the Retirement Account to distribute to the Survivor's Trust the amount required to be distributed to the Surviving Trustor under this pazagraph. b. Qualifying Income Interest Our Trustee shall take all of the necessary action to assure that the interest of the surviving Trustor qualifies as a qualifying income interest for life pursuant to Code Section 2056(b)(7). c. Principal and Income Allocation Our Trustee shall allocate to the income of the Survivor's Trust all of the net income earned by the Retirement Account and paid to that trust regardless of whether the Retirement Account is allocated to principal for trust accounting purposes. Our Trustee shall allocate to principal of the Survivor's Trust all other distributions from the Retirement Account. 7-6 d. Underproductive Property The surviving Trustor shall have the power to direct our Trustee to compel any Retirement Account from which distributions are made to the Survivor's Trust to be invested in income-producing assets. e. Power to Accelerate Distributions Our Trustee shall elect an option under each Retirement Account which allows our Trustee in its discretion to accelerate distributions and to receive one or more lump sum payments from such Retirement Account so that our Trustee has the flexibility to withdraw principal in its discretion from the Retirement Account. If such an option is not available under the Retirement Account, our Trustee shall take all. of the necessary action to cause such Retirement Account to be transferred to an Individual Retirement Account which offers such flexibility and which is titled in the participant's name and is qualified under Code Section 408; provided however, that such transfer is not treated as a taxable distribution for income tax purposes. 7-7 Article Eight Survivor's Trust Section 1. Rights of Surviving Trustor in the Survivor's Trust Our Trustee shall hold, administer and distribute the assets of the Survivor's Trust as follows: a. Payment of Income Our Trustee shall pay to or apply for the benefit of the surviving Trustor, so long as the surviving Trustor lives, the entire net income of the Survivor's Trust in monthly or other convenient installments agreed upon by the surviving Trustor and our Trustee, but not less often than annually. If our Trustee is entitled to payments from any Retirement Account, it shall allocate to income from payments received in any calendar year an amount equal to the income earned by the account in such year, and any excess shall be allocated to principal, and if the payments in such year shall be less than the amount equal to the income earned by the account in such year, the surviving Trustor shall have the continuing right to require our Trustee to withdraw from the account and pay to him/her as income an additional amount so that he/she can be paid an amount equal to such income. Notwithstanding the preceding sentence, if the Internal Revenue Service should determine that for the Survivor's Trust to qualify for the marital deduction all of the income earned by the account does not have to be distributed to the surviving Trustor or be subject to his/her withdrawal right, then only the amount required for such qualification shall thereafter be distributed to him/her or be subject to his/her withdrawal right. b. Discretionary Payment of Principal At any time or times during the trust term, our Trustee shall pay to or apply for the benefit of the surviving Trustor so much of the principal of the Survivor's Trust as our Trustee deems proper for the surviving Trustor's comfort, welfare and happiness.. In exercising discretion, our Trustee shall give the consideration that our Trustee deems proper to all other income and resources then readily available to the suuviving Trustor for use for these purposes that are then known to our Trustee. 8-1 c. Right of Surviving Trustor to Withdraw Principal Our Trustee shall pay to the surviving Trustor as much of the trust principal of the Survivor's Trust as the surviving Trustor may from time to time demand in a signed writing delivered to our Trustee. d. General Power of Appointment Upon the death of the surviving Trustor, our Trustee shall distribute all of the trust property, including the trust principal and accrued and undistributed income, to any person or entity and upon any trust, terms and conditions, or to or in favor of the estate of the surviving Trustor as the surviving Trustor may direct by his or her last: will or living trust agreement. No exercise of this general power of appointment shall be effective unless it refers to this trust agreement and expressly indicates an intention to exercise this general power of appointment. Our Trustee may rely upon any instrument admitted to probate as the last will of the surviving Trustor in carrying out the terms of the power of appointment and shall not be liable for any good faith act in reliance upon that will even if for any reason it is later determined to be invalid with respect to its purported exercise of this power of appointment. If our Trustee receives no notice of the existence of a will of the surviving Trustor within six (6) months after the death of the surviving Trustor, our Trustee may distribute the trust assets and income as though this power of appointment had not been exercised and shall in that event be conclusively presumed to have acted in good faith, even if a valid will is thereafter discovered. Section 2. Trustee's Discretion to Pay Debts and Taxes The Survivor's Trust shall terminate upon the death of the surviving Trustor. Our Trustee, shall hold, and admizuster the unappointed balance or remainder of the Survivor's Trust as follows: a. Surviving Trustor's Debts and Taxes Our Trustee in its sole discretion may pay all or any part of the surviving Trustor's following expenses, debts, claims and taxes becoming due or payable by reason of the surviving Trustor's death: 1. Final medical expenses and all funeral costs; 2. Legally enforceable claims against the surviving Trustor or the surviving Trustor's estate; 3. Reasonable expenses of administration of this trust and the surviving Trustor's probate estate, if any; 8-2 4. Any allowances mandated by a court of competent jurisdiction to those dependent upon the surviving Trustor; 5. Any estate, inheritance, succession, death or similar taxes payable by reason of the death of the surviving Trustor; and 6. Any penalties or interest on any of the above claims, debts or taxes owed by the surviving Trustor or the surviving Trustor's estate. Section 3. Payment by Our Trustee or Personal Representative Our Trustee in its sole discretion may make distributions authorized under this Article either directly to the person or entities to whom payment is owed or to the personal representative of the surviving Trustor's probate estate. Written statements by the surviving Trustor's personal representative that such sums are due and payable by the estate shall be sufficient evidence of their amount and propriety for the protection of our Trustee. Our Trustee shall be under no duty to see to the application of any such payments made to the surviving Trustor's personal representative. Section 4. Tax Elections With regard to the payment of any income tax, gift tax, estate tax, inheritance tax or any other tax required because of the death of the surviving Trustor, our Trustee shall have the right to make any available elections allowed under the law. Our Trustee is authorized to sign and file any tax return required because of the death of the surviving Trustor. Section 5. Administration of Survivor's Trust Remainder After payment of debts, expenses and taxes, our Trustee shall hold and administer the unappointed balance or remainder of the Survivor's Trust as provided in the Articles that follow. 8-3 Article Nine Family Trust Section 1. Rights of Surviving Trustor in the Family Trust Our Trustee shall hold, administer and distribute the assets of the Family Trust as follows: a. Payment of Income Our Trustee shall pay to or apply for the benefit of the surviving Trustor, so long as the surviving Trustor lives, the entire net income of the Family Trust in monthly or other convenient installments agreed upon by the surviving Trustor and our Trustee, but not less often than annually. b. Discretionary Payment of Principal At any time or times during the trust term, our Trustee shall pay to or apply for the benefit of the surviving Trustor so much of the principal of the Family Trust as our Trustee in its discretion deems proper for the surviving Trustor's health, maintenance, support and education. c. Guidelines for Trustees Discretion No amount paid or applied need thereafter be repaid to our Trustee or restored to our trust. In exercising discretion, our Trustee shall give the consideration that our Trustee deems proper to all other income and resources that are known to our Trustee and that are readily available to the surviving Trustor for use for these purposes.. Our Trustee shall accumulate and add to principal any net income not distributed. d. Limitation on Discretionary Payment of Principal by Trustee We recommend, but it is not mandatory, that our Trustee shall first exhaust the principal from the Survivor's Trust before making discretionary payments of principal to the surviving Trustor from the Family Trust. e. Surviving Trustor's Right to Withdraw Principal The surviving Trustor shall have the power to withdraw from the Family Trust principal each calendar year those amounts that shall not exceed the greater of five thousand dollars ($5,000) or five (5) percent of the assets, valued as of the end of 9-1 the preceding calendar year. The surviving Trustor shall exercise this power by a written instrument signed by him or her and delivered to our Trustee. This power is noncumulative and to the extent it is not exercised by the end of January of each calendar year, it shall lapse. This power shall exist each year until the death of the surviving Trustor. Section 2. Termination of the Family Trust On the death of the surviving Trustor, the Family Trust shall terminate. All undistributed trust assets, including any accrued and undistributed net income, shall be held, administered and distributed in the Articles that follow. 9-2 Article Ten Common Pot Trust After the death of the surviving Trustor, our Trustee shall not create a Common Pot Trust. All trust property that has not been distributed under prior Articles of this trust agreement shall be held, administered, divided, and distributed according to the provisions of the Articles that follow. 10-1 Article Eleven Division and Distribution of Trust Property Section 1. Distribution of of Real Estate Upon the death of the surviving Trustor, our Trustee shall distribute our residence located at 702 Fifteenth Street, New Cumberland, Cumberland County, Pennsylvania (the "Real Property") to BRUCE LINK PHILLIPS and KATHY EILEEN PHILLIPS FINLEY, In equal shares. In the event that either BRUCE L,INN PHILLIPS or KATHY EILEEN PHILLIPS chooses not to include his or her one-half (1/2) interest in the Real Property as part of his or her trust share, the value of said Real Property shall be appraised at the time the Real Property is divided into shares as set forth below and the beneficiary choosing not to include his or her one-half (1/2) interest in the Real Property as part of his or her trust share shall receive a distribution of trust assets equal in value to such beneficiary's one-half (1/2) interest in the Real Property. Both BRUCE LIMN PHILLIPS and KATHY EILEEN PHILLIPS shall have the right to encumber said Real Property in order to equalize the value of the trust shares. Section 2. Division of Trust Property Into Shares Our Trustee shall divide ail trust property not previously distributed into separate shares as follows: Beneficiary Name Share BRUCE :LINK PHILLIPS 1/2 KATHY EILEEN PHILLIPS FINLEY 1/2 Section 2. Distribution of Trust Shares for Our Beneficiaries The trust share of each beneficiary named in Section 1. of this Article who survives us shall be held, administered and distributed as follows: a. Distribution of Trust Share for BRUCE LINK PHILLIPS The trust shaze set aside for BRUCE L1NN PHILLIPS shall be held, administered and distributed as follows: 11-1 1. Distributions of Net Income Our Trustee shall immediately pay to, or apply for the benefit of such beneficiary all accumulated net income, free of the trust. 2. Distributions of Principal Our Trustee shall. immediately pay to, or apply for the benefit of, BRUCE LIMN PHILLIPS alI principal, free of the trust. 3. Distribution on Death of Beneficiary If such beneficiary should die before the complete distribution of the trust shaze, such trust shall terminate and our Trustee shall distribute the balance of the trust property to such beneficiary's then living descendants per stirpes. If such beneficiary has no then living descendants, our Trustee shall distribute the balance of the trust property to our then living descendants per stirpes. If we have no then living descendants, our Trustee shall distribute the balance of the trust property as provided for in the Articles that follow. b. Distribution of Trust Share for KATHY EILEEN PHILLIPS FINLEY The trust share set aside for KATHY EILEEN PHILLIPS FINLEY shall be held, administered and distributed as follows: 1. Distributions of Net Income Our Trustee shall immediately pay to, or apply for the benefit of such beneficiary all accumulated net income, free of the trust. 11-2 2. Distributions of Principal Our Trustee shall immediately pay to, or apply for the benefit of, KATHY EILEEN PHILLIPS FINLEY all principal, free of the trust. 3. Distribution on Death of Beneficiary If such beneficiary should die before the complete distribution of the trust share, such trust shall terminate and our Trustee shall distribute the balance of the trust property to such beneficiary's then living descendants per stirpes. If such beneficiary has no then living descendants, our Trustee shall distribute the balance of the trust property to our then living descendants per stirpes. If we have no then living descendants, our Trustee shall distribute the balance of the trust property as provided for in the Articles that follow. Section 3. Distributions to Underage or Disabled Beneficiaries Notwithstanding any other provision in this trust agreement, if any person otherwise entitled to receive a distribution of trust property is under 27 years of age or is mentally disabled or legally incompetent as defined in Article Fifteen, our Trustee shall retain and administer that person's trust property for his or her benefit as follows: a. Onr Trustee's Discretion Our Trustee may pay to or apply for the benefit of such beneficiary so much of the net income and principal of the trust as our Trustee in its discretion deems proper considering all other sources of income and resources available to such beneficiary and known to our Trustee. b. Payments Made to Beneficiary or Personal Representative Our Trustee is authorized to make payments under this Section either directly to the beneficiary, to the beneficiary's personal representative or to any other person our Trustee may deem proper, to be used for the benefit of the beneficiary. 11-3 c. Trustee's Decisions are Final All decisions by our Trustee as to those it makes payment to, the purposes for which these payments are made, and the amounts to be paid out of the trust are within our Trustee's sole but reasonable discretion. d. Undistributed Net Income All undistributed net income shall be accumulated and added to the principal of the trust. e. Termination and Distribution Our Trustee shall distribute the trust property to a beneficiary under this Section when such beneficiary reaches age 27 or when he or she is no longer disabled as determined by a court of competent jurisdiction, or upon certification by two licensed. physicians that such beneficiary is able to properly care for his or her property and person. f. Death of Disabled or Underage Beneficiary Upon the death of a beneficiary under this Section, our Trustee shall distribute all of such beneficiary's remaining trust share, including the trust principal and accrued and undistributed income, to any person or entity and upon any trust, terms acid conditions, or to or in favor of the estate of such deceased beneficiary as he or she may direct by his or her last will or living trust agreement. No exercise of this general power of appointment shall be effective unless it refers to this trust agreement and expressly indicates an intention to exercise this general power of appointment. 11-4 Article Twelve Distribution if No Designated Beneficiaries NONE 12-1 Article Thirteen Trustee Administration Section 1. Required Vote for Co-Trustees a. Trustors Serving as Co-Trustees Unless otherwise provided in this trust agreement, if either one of us is serving as a Trustee under this trust agreement, that Trustee may make decisions and bind the trust in the exercise of all powers and discretions granted to us as Trustees without the consent of any other Trustee. b. Unanimous Vote for Two Trustees If only two Trustees are serving other than the two of us, they shall act unanimously in the exercise of all powers and discretions granted to them under this agreement. c. Majority Vote for More Than Two Trustees At any time that there are more than two Trustees serving under this agreement, they shall act by majority vote and any exercise of a power or discretion by a majority of the Trustees shall have the same effect as an exercise by all of them. d. Court Order Resolves Disputes If the Trustees, other than the two of us, are not able to reach agreement on any decision as set forth in this Section, they shall petition a court of competent jurisdiction for instructions and shall take no action on the disputed matter until a court order deciding the issue has been rendered. Section 2. Power to Delegate Notwithstanding any other provision of this agreement, any one or more of the Co-Trustees serving under this agreement may from time to time delegate to another Co-Trustee or Co-Trustees routine acts of trust administration. 13-1 Section 3. No Bond Required No Trustee under this agreement shall be required to post any bond for the faithful performance of its responsibilities. Section 4. Trustee Compensation Our Trustee shall be entitled to reasonable compensation for services rendered payable without the need for a court order. In calculating the amount of compensation customary charges for similaz services in the same geographic area for the same time period shall be used as guidelines. Our Trustee shall also be entitled to reimbursement for reasonable costs and expenses incurred during the exercise of its duties under this agreement. Any corporate :fiduciary shall be entitled to receive compensation for its services in accordance with its published fee schedule in effect from time to time. Section- 5. Change in Corporate Trustee Any corporate successor to the trust business of any corporate Trustee named under this agreement or acting hereunder shall succeed to the capacity of its predecessor without re- conveyance or transfer of trust property. Section 6. Power to Divide or Combine Trusts Our Trustee shall have the power to divide a single trust into separate shares, each to be administered in accordance with the terms and conditions of the single trust from which they were created when our Trustee in its discretion determines that division is desirable or advisable in view of tax considerations, including considerations related to the income tax, the gift tax, the estate tax or the generation-skipping transfer tax or other objectives of the trusts and their beneficiaries. Our Trustee shall not be required to make a physical segregation or division of the various trust shares created under this trust agreement except as segregation or division may be required by reason of the termination and distribution of any of the trusts, but my Trustee shall keep separate accounts and records for different undivided interests. 13-2 Our Trustee in its discretion shall have the further power to combine two or more trusts having substantially the same terms into a single trust for purposes of administration when tax or other factors indicate; that such combination would be desirable or advisable. In deciding whether to combine trusts our Trustee should consider the generation-skipping "inclusion ratio" of the trusts to be combined. Trusts having the same inclusion ratios may be combined. Trusts having different inclusion ratios should generally not be combined unless their inclusion ratios are maintained unchanged through substantially sepazate and independent shares of different beneficiaries within the meaning of LR.C. Section 2654(b), and the applicable regulations ther. eunder. Specifically, o~u Trustee has the authority to allocate any portion of our respective exemptions under Internal Revenue Code Section 2631(x) to property as to which we are the respective transferors, including any property transferred by us during our lifetime as to which we did not make an allocation prior to our death, and our Trustee has the authority to make the special election under Internal Revenue Code Section 2652(x)(3). If Internal Revenue Code Section 2631(x) or 2652(x)(3) is not interpreted as to allow a Trustee to exercise such election, then our respective personal representatives are authorized to allocate our respective exemptions and to exercise the said special election. If our Trustee considers that any distribution from a trust or share hereunder, other than pursuant to a power t~o withdraw or appoint, is a taxable distribution subject to the federal generation-skipping transfer tax payable by the distributee, our Trustee may increase the distribution by .an amount which our Trustee would estimate to be sufficient to pay that tax, and shall charge the; same against the trust or share to which the tax relates. If our Trustee considers that any termination of an interest in the trust property hereunder is a taxable termination subject to the federal generation-skipping transfer tax, our Trustee may pay that tax from the portion of the property to which the tax relates, without any adjustment of the relative interests of the beneficiaries. Section 7. Termination of Small Trust Our Trustee shall have the power in its discretion to terminate any trust created under this trust agreement after the death of both Trustors whenever it becomes so small in relation to the costs of administration as to make continuing administration uneconomical. Upon termination, our Trustee shall distribute the principal and any accrued or undistributed net income to the income beneficiaries in proportion to their shazes of the income. If no fixed amount of income is payable to specific beneficiaries, our Trustee shall distribute the principal and any accrued or undistributed net income in equal shares to those beneficiaries who would then be entitled to income payments from the trust. I3-3 Section 8. Limit on Trustee's Discretion Notwithstanding any language purporting to confer absolute, sole or unrestricted discretion on our Trustee in exercising any discretionary power with respect to this trust, our Trustee shall at all times act in accordance with fiduciary principles and shall not act in bad faith or in disregard of the purposes of our trust. Notwithstanding; any other provision in this trust agreement, no individual Trustee who is also a beneficiary hereunder shall have any right, power, duty or discretion concerning this trust if such right, power, duty or discretion conferred upon such Trustee under this trust agreement is determined to be; a general power of appointment under Internal Revenue Code Section 2041 or 2514 which would cause any assets of this Trust to be included in the estate of such Trustee-beneficiary. Any such right, power, duty or discretion with such effect shall be null and void with respect to such Trustee-beneficiary. No Trustee who is under a legal obligation to any beneficiary of this trust or other person shall under any circumstances partake in any decisions relating to any discretionary distributions of income or principal of this trust which can be used for any such legal obligation to any such beneficiary or other person. Section 9. Written Notice to Trustee Until our TrusteF: receives written notice of any death or other event which triggers the right to payments from any trust created under this agreement, it shall incur no liability for distributions made in good faith to persons whose interests may have been affected by such event. Section 10. Duty to Account Our Trustee shall render accounts, upon request, to the income beneficiaries under this trust agreement at least annually, at the termination of a trust created hereunder, and upon a change in the Trustees iri the manner required by law. Section 11. No Court Supervision No trust created under this agreement shall require the active supervision of any state or federal court. 13-4 Article Fourteen Trustee Investment Powers Section 1. Trustee's Powers To carry out the; purposes of the trusts created under this agreement and subject to any limitations stated elsewhere in this instrument, our Trustee shall have all of the following powers in addition to all of the powers now or hereafter conferred on Trustees by law: a. Retention of Property Our Trustee shall have the power to retain any property received into the trust at its inception or later added to the trust without regard to whether the trust investments are diversified as long as our Trustee considers that retention is in the best interests of the trust or in furtherance of our goals in creating the trust. Our Trustee shall have the power to invest and reinvest in any property that may be considered by applicable state law to be underproductive or unproductive in nature, and specifically to be exempt from any minimum income requirements called for under local law. b. Additions Our Trustee shall have the power to receive additions to the assets of the various trusts created under this agreement from any source. c. Business Participation Our Trustee shall have the power to terminate, to continue or to participate in the operation of any business enterprise including a corporation, a sole proprietorship or a general or limited partnership and to effect any form of incorporation, dissolution, liquidation, reorganization, including but not limited to recapitalization and reallocation of classes of shares or other change in the form of the business enterprise or to lend money or make a capital contribution to any such business enterprise. d. Permissible Investments Our Trustee shall have the power to invest and reinvest the assets of the trust as our Trustee may determine to be in the best interests of the trust without Iimitation by any la`N applicable to investments by fiduciaries. The permitted investments 14-1 and reinvestments may include securities such as common or preferred stock, mortgages, notes, subordinated debentures and warrants of any corporation and any common trust fund administered by a corporate fiduciary or other property real or personal including savings accounts and deposits and interests in mutual or money market funds or investment trusts, annuities and insurance whether or not such investments are unsecured or of a wasting nature. Our Trustee shall have the power to obtain, by purchase or by gift (or by conversion, reissue, consolidation or by any other means), and hold as an asset of this trust, policies of insurance on the life of either of us or any other beneficiary of this trust. Our Trustee is authorized and empowered to exercise, either before or after our death, all of the rights, options, elections or privileges exercisable in connection with such policies. These rights and options should include, but not be limited to, disability benefits, the right to borrow money with which to pay premiums (or other charges) on any policy owned by this trust (including any automatic premium loan feature) or for any other trust .purpose, the right to elect among ;>ettlement options offered by the insurance company which issued such policy, 'the right to convert such policy to paid-up insurance, extended term insurance or to any different form of insurance, and the right to arrange for the automatic application of dividends in reduction of premium payments (or other charges), with regazd to any policy of insurance held in the trust estate. e. Dealing with Property Our Trustee shall have the power to acquire, grant or dispose of property including puts, calls and options (including options on stock owned by the estate), for cash or on credit, including maintaining margin accounts with brokers at public or private sale upon such terms and conditions as the fiduciary may deem advisable and to rraanage, develop, improve, exchange, partition, change the character of; abandon property. or any interest therein or otherwise deal with property. Specifically, our Trustee shall have the power to use and expend the trust income and principal to conduct environmental assessments; audits, and site monitoring to determine compliance with any environmental law or regulation thereunder; to take all appropriate remedial action to contain, clean up or remove any environmental hazard including a spill, release, discharge or contamination, either on our Trustee's own accord or in response to an actual or threatened violation of any envu•onmental law or regulation thereunder; to institute legal proceedings concerning environmental hazards or contest or settle any such legal proceedings brought by any local, state or federal agency concerned with environmental compliance, or by a private litigant; to comply with any local, state or federal agency order or court order directing an assessment, abatement or cleanup of any environmental hazards; to employ agents, consultants and legal counsel to assist or perform the above undertakings or actions; and in general to take all 14-2 appropriate actions to prevent, identify, or respond to any actual or threatened violations of any environmental law or regulation thereunder. No Trustee under this trust agreement shall be liable for any loss or depreciation in value sustained by this trust as a result of the Trustee retaining any property upon which there is later discovered to be hazardous materials or substances requiring remedial action pursuant to any federal, state or local environmental law, unless the Trustee contributed to the loss or depreciation in value through willful default, willful misconduct, or gross negligence. Moreover, no Trustee shall be obligated to accept any property on behalf of this trust without first having the opportunity to satisfy itself, in its sole discretion, that such property is not contaminated by any hazardous or toxic materials or substances, and that such property is not being used and has never been used for any activities directly or indirect:(y involving the generation, use, treatment, storage, disposal, release, or discharge of any hazardous or toxic materials or substances. Finally, such Trustee shall have the power to disclaim any power which, in its sole discretion, will or may cause such Trustee to be considered an "owner" or "operator" of property held in our trust estate under the provisions of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), as amended from time to time. This power to disclaim as contained herein shall apply to any such power, whether actually set forth under this trust agreement, incorporated by reference herein, or granted or implied by any statute or rule of law. f. Borrowing Authority Our Trustee shall have the power to borrow funds from any person including our Trustee, guarantee indebtedness or indemnify others in the name of the trust and to secure any such obligation by mortgage, pledge, security interest or other encumbrance and to renew, extend or modify any such obligation for a term within o:r extending beyond the administration of the term of the trust. No lender shall be bound to see to or be liable for the application of the proceeds of any obligation and our Trustee shall not be personally liable for any obligation. g. Leasing Authority Our Trustee shall have the power to make, renew or amend for any purpose a lease as lessor or lessee for a term within or beyond the term of the trust with or without option to purchase. h. Natural Resources Our Trustee shall have the power to enter into any arrangement or agreement, including a lease, pooling or unitization agreement for exploration, development, operation., conservation and removal of minerals or other natural resources. 14-3 i. Voting Rights Our Trustee shall have the power to vote a security in person or by general or limited proxy, to participate in or consent to any voting trust, reorganization, dissolution, liquidation or other action affecting any securities and to deposit securities with and transfer title to a protective or other committee. j. Title to Assets Our Trustee shall have the power to hold securities and other property in negotiable form or in the name of a nominee (including "street name" of a broker) or by deposit to a clearing corporation with or without disclosure of the Trustee relationship, but our Trustee shall be responsible for the acts of any nominee or clearing corporation in connection with the property. k. Insurance Our Trustee shall have the power to insure the assets of the trust against any risk and our• Trustee against liability with respect to third persons. 1. Settlement of Disputes Our Trustee shall have the power- to pay or contest any debt or claim and to compromise, release and adjust any debt or claim and to submit any matter to arbitration. m. Payment of Expenses Our Tnistee shall have the power to pay any taxes, assessments, reasonable compensation of our Trustee and other expenses incurred in the collection, management, care, protection and conservation of the trust property. n. Principal and Income Our Trustee shall have the power to allocate items of income or expenditure to either income or principal and to create reserves out of the income, all as provided by law and to the extent not so provided to allocate or create reserves as our Trustee in its discretion deems appropriate and our Trustee's decision made in good faith with respect thereto shall be binding and conclusive on all persons. Notwithstanding the preceding sentence, if the Survivor's Trust (or a share hereunder) is the beneficiary or owner of a Retirement Account, income earned after the participant's death in the account shall be income of the Trust or share, and if our Trustee is required to pay all of the trust income to a beneficiary, our 14-4 Trustee shall collect and pay the income of the account to the beneficiary at least quarterly (and to the extent that all of the income cannot be collected from the account, the deficiency shall be paid from the principal of the trust). o. Division of Trust Our Trustee shall have the power to make any distribution or payment in kind or in cash or partly in kind and partly in cash and to cause any share to be composed of casr~, property or undivided interests in property different in kind from any other share, either pro rata or non pro rata, without regard to differences in the tax basis of such property and without the requirement of making any adjustment of the shares by reason of any action taken pursuant hereto. Any division, allocation, apportionment or valuation of the property to distribute the assets to or among any of the trusts or beneficiaries shall be made by our Trustee and the good faith determination of our Trustee shall be binding and conclusive on all parties. p. Merger of Trust If at any time the Trustees are Trustees of two or more Trusts or Shares with substantially the same terms and benefiting the same beneficiaries, created hereunder, or under any other instrument by the Trustors or by any other person, the Trustees may commingle the assets of such Trusts or Shares and hold them as a single Trust or Share. q. Litigation Our Trustee shall have the power to prosecute or defend actions, suits, claims or proceedings for the protection or benefit of the trust and our Trustee in the performance of our Trustee's duties. r. Employment of Agents Our Trustee shall have the power to employ agents, including attorneys, accountants, investment advisors, custodians, appraisers or others, to advise or assist ow• Trustee and to delegate to them fiduciary powers and to indemnify them against liability for positions taken in good faith and with reasonable basis. s. Corporate Fiduciary If any stack of a corporate Trustee or of any affiliate or successor of a corporate Trustee shall be included in the assets of the trust, the Trustee shall have full authority in the Trustee's sole discretion and notwithstanding any regulation or 14-5 rule oil law to the contrary to retain the stock and any increases resulting from stock dividends and stock splits and from the exercise of purchase rights and the purchase of fractional shares needed to round out fractional share holdings that may arise concerning the stock. The Trustee shall vote the stock either directly or by proxy, except to the extent the Trustee is prohibited by law from voting the stock, in accordance with the written instructions of a majority of the living beneficiaries then entitled to current distributions of income or their personal representatives. In the event there are no eligible beneficiaries to give instructions, the Trustee is authorized to vote the stock in the best interests of the beneficiaries, in view of the purposes for which the trust was created. t. Investment Transactions With regard to record keeping for investment transactions, our Trustee need not provide copies of confirmations or similar notifications each time a trade or investment transaction occurs, but investment transactions shall be set forth in our Trustee's periodic accounting. u. Repairs and Improvements Our Tn~stee shall have the power to make ordinary or extraordinary repairs or alteratians in buildings or other structures, to demolish any improvements, to raze existing or erect new parry walls or buildings. v. Business Personnel Our Trustee shall have the power to elect or employ directors, officers, employees, partners or agents of any business and to compensate such persons, whether or not any such person is a Trustee, director, officer, partner or agent of a Trustee or a beneficiary of the trust. w. Farm or Ranch Property With respect to farm or ranch property, our Trustee shall have the ,power to participate in and operate any farming (including tree farming) or ranch operation personally or with hired labor, tenants or sharecroppers to lease any farm for cash or a share of crops under a lease which permits or precludes the material participation of our Trustee to fertilize and improve the soil, to employ conservation practices and tv participate in government programs and to perform any other acts deemed necessary or desirable to operate the property. In making a decision whether to materially participate in farming or ranch operations, our Trustee shall consider whether an election should be made or has been made under IRC § 2032A to qualify for special farm-use valuation. 14-6 x. Ancillary Trustees If, for any reason, our Trustee deems it advantageous to act through an ancillary Trustee, our Trustee may designate an ancillary personal representative or Trustee qualified to serve in the jurisdiction where such ancillary Trustee is to act and may delegate to such ancillary Trustee such of the powers granted under this agreement as our Trustee deems advisable without being chargeable with loss if any arising out of ;such designation or delegation. Our Trustee may specify whether any corporate Trustee or any person or persons acting in an ancillary capacity hereunder shall serve with or without bond. Except as may be otherwise specifically provided, no ancillary Trustee need comply with the provisions of any Uniform Trustee's Accounting Act, the Uniform Trust Act or similaz acts in force in any :>tate where the fiduciary may be acting. y. Retention of Closely Held Interest Our Trustee shall have the power to retain any real estate interests, closely held securities or affiliated companies or business interests, and to sell or dispose of such interests only after cazeful consideration and after determining that sale or disposition is in the existing circumstances in the best interests of the trust or its beneficiaries. If at any time, this trust holds any stock in an S corporation, and our Trustee deems it appropriate for such corporation to maintain its Subchapter S election, our Trustee may take all of the necessary actions to segregate the S corporation stock and assets of this trust, and in our Trustee's sole but reasonable discretion, and otherwise consistent with the terms of this trust to the greatest extent possible, may form new trusts and may amend the terms of this trust agreement as would be necessary to establish Qualified Subchapter S Trusts to hold the said S corporation stock and assets in compliance with Internal Revenue Code Sections 1361(b) and 1361(d)(3). z. Exercise of Authority Except as otherwise provided in this agreement, our Trustee shall have the power to do all acts that might legally be done by an individual in absoluteownership and control of property. 14-7 aa. Powers of an Interested Trustee Any 'Crustee who has an interest as a beneficiary in our Trust Agreement or any trust created by it shall be an interested Trustee. In all instances where an interested Trustee distributes or participates in the distribution of trust income or principal to or for the benefit of such Trustee which is Iimited by any standard other than the standards of education, health, maintenance and support, then the distribution shall be limited by the ascertainable standards of education, health, maintenance and support. 14-8 ~ 1 ~ Article Fifteen General Provisions Section 1. Spendthrift Protection Neither the principal nor the income of any trust created or contained under our Trust Agreement shall be Iiable for the debts of a beneficiary nor shall the same be subject to seizure by any creditor of any beneficiary under any lien or proceeding at law or equity. Except to the extent otherwise expressly provided in our Trust Agreement, no beneficiary shall have the authority or power to sell, assign, transfer, encumber or in any manner to dispose of a beneficial interest whether income or principal. The limitations herein shall not restrict the exercise of any power of appointment or the right to disclaim by any beneficiary. Section 2. The Rule Against Perpetuities Unless sooner terminated or vested in accordance with other provisions of our Trust Agreement, all interests not otherwise vested including but not limited to all trusts and powers of appointment created hereunder shall terminate one day prior to twenty-one (21) years after the death of the last survivor of the group composed of us and our lineal descendants living on the date of the death of the first of us to die. At that time, distribution of all principal and all accrued, accumulated and undistributed income shall be made to the persons then entitled to distributions of income or principal and in the manner and proportions herein stated irrespective of their then attained ages. Section 3. Incapacity A person shall be considered incapacitated in the event such person has been determined to be legally incompetent by a court of competent jurisdiction; has been certified to be unable to property handle his or her own affairs by reason of physical illness or mental illness; or is unable -freely to communicate for a period of 90 days. Section 4. Income and Principal Payments All payments of income or principal shall be made in such of the following ways as our Trustee determines appropriate: 15-1 i ~ ~ a. To each respective beneficiary in person upon his or her personal receipt; b. Deposited in any bank to the credit of such beneficiary in any account carried in his or her name or jointly with another or others; c. To the parent or legal representative of the beneficiary; d. To a Custodian under a Uniform Transfers to Minors Act or Uniform Gifts to Minors Act selected by our Trustee for such period of time under applicable law as our Trustee determines appropriate; e. To some near relative, friend or institution having primary responsibility for the care and custody of the beneficiary; f. By our Trustee using such payment directly for the benefit of such beneficiary; or g. To the Trustee of any revocable trust of which the beneficiary is the Trustor. Section 5. Limit on Trustee's Discretion Notwithstanding any other provision in our Trust Agreement, other than a Surviving Trustor with respect to a Survivor's Trust, no individual Trustee who is also a beneficiary hereunder shall have any right, power, duty or discretion concerning our Trust Estate if such right, power, duty or discretion conferred upon such Trustee under our Trust Agreement is determined to be a general power of appointment under Code Section 2041 or 2514 which would cause any assets of our Trust Estate to be included in the estate of such Trustee-beneficiary. Any such right, power, duty or discretion with such effect shall be null and void with respect to such Trustee-beneficiary. No Trustee who is under a legal obligation to any beneficiary of our Trust Agreement or other person shall under any circumstances partake in any decisions relating to any discretionary distributions of income or principal of our Trust which can be used to discharge any such legal obligation of such Trustee. Section 6. No-Contest Clause If any person or entity, other than us, singularly, or in conjunction with any other person or entity, directly or indirectly, contests in any court the validity of our Trust Agreement, including any amendments thereto, then the right of that person or entity to take any interest in our Trust Estate or to act: in any f duciary capacity shall cease, and that person (and his or her descendants) or entity shall be deemed to have predeceased us. 15-2 Section 7. Disclaimer by Beneficiary A beneficiary shall be entitled to accelerate any distribution to the beneficiary or to terminate his or her trust :interest and thereafter receive outright distribution by use of a disclaimer. Section 8. Captions The captions of Articles, Sections and Paragraphs used in our Trust Agreement are for convenience of reference only and shall have no significance in the construction or interpretation of our Trust Agreement. Section 9. Severability Should any of the provisions of our Trust Agreement be for any reason declared invalid, such invalidity shall not affect any of the other provisions of our Trust Agreement, and all invalid provisions shall be wholly disregarded in interpreting our Trust Agreement. Section 10. Statutory References Unless the context clearly requires another construction, each statutory reference in our Trust Agreement shall be construed to refer to the statutory section mentioned, related successor sections and corresponding provisions of any subsequent law including all amendments. Section 11. Simultaneous Deaths For purposes of our Trust Agreement, if we die under circumstances in which the order of our deaths cannot be established, the Trustor with the smaller taxable estate shall be deemed to have survived the Trustor with the larger taxable estate. If both of our taxable estates are equal, the Husband Trustor shall be deemed to be the survivor. If any beneficiary under our Trust Agreement and either or both Trustors die under circumstances in which the order of deaths cannot be established, the Trustors or Trustor shall be deemed to have survived the beneficiary and -our Trust Agreement shall be construed accordingly . 15-3 ~ • Section 12. Gender and Number In our Trust Agreement where appropriate except where the context otherwise requires, the singular includes the plural and vice versa and words of -any gender shall not be limited to that gender. Section 13. Governing State Law Our Trust Agreement and the trusts created under it shall be construed, regulated and governed by and in accordance with the laws of the Commonwealth of Pennsylvania. Section 14. Definitions The following terms as used in this Trust Agreement are defined as indicated: a. Beneficiary Designation The term. "Beneficiary Designation" means any document executed by a Trustor which affects the manner of payment of amounts held in a plan (of whatever type) subject to the distribution rules of section 401(a)(9) of the Code, or any commercial annuity or any similar deferred payment arrangement. b. Code The term "Code" means the Internal Revenue Code of 1986, as amended from time to time. The terms "gross estate, " "adjusted gross estate, " "taxable estate, " "unified credit, " "state death tax credit, " "maximum marital deduction, " "marital deduction., " and any other form which from the context in which they are used refer to the Code, shall have the same meaning as such terms have for the purposes of applying the Code to our Trust Agreement. c. Child, Children, Issue and Descendants The terms "child" or "children" means lawful blood descendants in the first degree of the parent designated: and "issue" and "descendants" mean the lawful blood descendants in any degree of the ancestor designated provided, however, that if a person has been adopted, that person shall be considered a child of such adopting parent and such adopted child and his or her issue shall be considered as issue of the adopting parent or pazents and of anyone who is by blood or adoption an ancestor of the adopting parent or either of the adopting parents. The terms "child, " "children, " "issue, " "descendant" and "descendants" or those terms preceded by the terms "living" or "then living" shall include the lawful blood 15-4 c ~ • descendant in the appropriate degree of the ancestor designated even though such descendant is born after the death of a parent. d. Death Taxes The term "death taxes" means all inheritance, estate, succession and other similar taxes that are payable by any person on account of that person's interest in the estate of the decedent or by reason of the decedent's death, including penalties and interest but excluding the following: 1. Any addition to the federal estate tax for any "excess retirement accumulation" under Code Section 4980A; 2. Any additional tax that may be assessed under Internal Revenue Code Section 2032A; and 3. Any federal or state tax imposed on a generation- skipping transfer, as that term is defined in the federal tax laws, unless that generation-skipping transfer tax is payable directly out of the assets of a trust created by our Trust Agreement. e. Deceased Trustor The term "Deceased Trustor" means a Trustor who has died. f. Education The term "education" shall be given broad interpretation and may include but not be limited to: 1. High School Education at public or private elementary or high schools, including boarding schools. 2. College Undergraduate and graduate study in any and all fields whatsoever, whether of a professional character in colleges or other institutions of higher learning. 15-5 • ~ ~ r 3. Specialized Training Specialized formal or informal training in music, the stage, the handicrafts, the arts, or vocational or trade schools whether by private instruction or otherwise. 4. Other Educational Activities Any other activity including foreign or domestic travel which shall tend to develop fully the talents and potentialities of each beneficiary regardless of age. g. Heirs at Law References to someone's "heirs at law" mean individuals, who are Living at the event when property is directed to be distributed to them. Those individuals' identities, and the shazes of the distributable property which they each receive, shall be determined under the intestacy laws of the Commonwealth of Pennsylvania which then govern the distribution of the personal property of a resident dying then, without creditors, owning only the distributable assets. h. Personal Representative The term "Personal Representative" means trustee, executor, executrix, administrator, administratrix, conservator, guazdian, custodian or any other type of personal representation. i. Per Stirpes In every case in which a disposition of an interest is to be made to the issue of a perscm "per stirpes" it is intended that such disposition shall be made in accordance with the principle of representation. This principle in relation to our Trust Agreement means that whenever property is to be distributed to the issue of a person such property shall be divided into as many shares as there are, at the time of disposition, living issue in the nearest degree of kinship to such person and then deceased issue in the same degree who left issue who are then living, each then living issue in the nearest degree receiving one share and the share of each then deceased issue in the same degree being divided among his or her issue in the same manner. j. Surviving Trustor The term "Surviving Trustor" means a Trustor who survives a Deceased Trustor. 15-6 k. Trust Estate All of the property, real and personal, intangible and tangible, which has been transfen•ed to our Trustee, whether or not listed on any Exhibits. 1. Trustee's Discretion The term "discretion" with regard to a Trustee means such Trustee's sole but reasonable judgment. In exercising any discretionary power with respect to our Trust, our Trustee shall at all times act in accordance with fiduciary principles and shall act reasonably under the circumstances and not in bad faith or in disregard of the purposes of our Trust. m. Unused Generation Skipping Tax Exemption Equivalent The term "Unused Generation Skipping Tax Exemption Equivalent" means the generation-skipping transfer tax exemption provided in section 2631 of the Code in effect at the time of death of a Trustor, reduced by the aggregate of (1) the amount, if any, of such exemption allocated by a Trustor or by operation of law to a Trustor's lifetime transfers and (2) the amount, if any, a Trustor or a Trustor's Personal Representative or a Trustee has specifically allocated to property other than property to which such exemption is directed to be allocated by any applicable provision of our Trust Agreement. For purposes of our Trust Agreement, if at the time of death of a Trustor, such Trustor has made lifetime transfers of property to which an inclusion ratio of greater than zero would be applicable and for which the gift tax return due date has not expired {including extensions) and a return has not yet been filed, it shall be deemed that the generation-skipping transfer exemption has been allocated to such tran.fers to the extent necessary and possible to exempt such transfers from generation-skipping transfer tax. n. Unused Unified Credit Equivalent The term "Unused Unified Credit Equivalent" means that the value of a Deceased Trustor's taxable estate determined without regard to the marital deduction which can be transferred at death without causing any federal estate tax liability because of: 1. Any available Unified Credit, 2. The Credit for State Death Tax to the extent it does not increase the amount of death taxes payable to any state, 15-7 3. The Credit for Prior Transfers, 4. Allowable exclusions from the Taxable Estate; and which is in excess of the net value of all property includable in the taxable estate of a Deceased Trustor which does not qualify for the marital deduction or any other deduction and which passes outside of this Trust (whether by way of joint tenancy, life insurance contract, will, or otherwise) and under other provisions of our Trust. We have executed our Trust Agreement on the date set forth on the first page of our Trust Agreement. We certify that we have read our Trust Agreement and that it correctly states the terms and conditions under which our Trust Estate is to be held, managed and disposed of by our Trustee. We approve this revocable living trust in ail particulars and request our Trustee to execute it. Husband Trustor, Harry J. Phillips, has appointed Wife Trustor, Ivah C. Phillips, as his attorney-in-fact for purposes of executing this Trust Agreement pursuant to a Power of Attorney dated August 3Q, 1997. 7d ~ ~ ~~~~ HARRY J. PHILLIPS, Trustor by IVAH C. PHIL~PS~rney-in-Fact /~ 9~ c HARRY J. PHILLIPS, Trustee by IVAH C. PHILLIPS, Attorney-in-Fact IVAH C. PHILLIPS, Trustor IVAH C. PHILLIPS, Trustee 15-8 's i ! STATE OF PENNSYLVANIA SS COUNTY OF DAUPH//IN ) /~ ~f ~' , On this theOf ~_ day of 19 ~~7 ,before me, the undersigned. officer, p sonally appeared HARRY J. PHILLIPS by IVAH C. PHILLIPS, his attorney- in-fact, and IVAH C. PHILLIPS, Trustors, known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within instrument and acknowledged that they executed the same for the purposes therein contained. In witness whereof I hereon set my hand and official seal. Notary Public Title of Officer STATE OF PENNSYLVANIA E~~~Tt,~;YAL u;~.~L C~?;sfP,si L. RL:EU~, Peutar/ Public E'~ 3S1~P~/ Fa%~ tic L~~,il C.~i,!R:% SS COUNTY OF DAUPHIN ~ ~y On this the~~ day of - < C~~~ 19 `~ ~ ,before me, G~L-~ the undersigned officer, personally appeared HARRY J. PHILLIPS by IVAH C. PHILLIPS, his attorney in-fact, and IVAH C. PHILLIPS, Trustees, known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within instrument and acknowledged that they executed the same for the purposes therein contained. In wi ss whereof I hereunto et my hand and official seal. ~~ Notary Public ~. t ° ~` % ~ ItlGt3d1/ PufJlic Title of Officer ~ i~a,;~t~;i~ County 15-9 ~~~ The First Amendment to the ' Harry J. Phillips and Ivah C. Phillips Living Trust On September 27, 1997, we, Harry J. Phillips, by Ivah C. Phillips his attorney-in-fact, and Ivah C. Phillips, signed the Harry J. Phillips and Ivah C. Phillips Living Trust, more formally known as: Harry J. Phillips and Ivah C. Phillips, Trustees, or their successors in trust, under the Harry J. Phillips and Ivah C. Phillips Living Trust, dated September 27, 1997, and any amendments thereto. Pursuant to Article Four of our Living Trust, which permits us to amend our Living Trust in writing at any time, we now wish to amend our Living Trust as follows: 1. Article Six of our Living Trust is hereby revoked in its entirety; and amended as follows: Section 2. Specific Distributions on the Death of the Last of Us to Die Our Trustee shall make the following specific distributions of trust property upon the death of the last of us to die: a. Specific Distribution of Cash The 'T'rustee shall make the following cash distribution to the named beneficiary listed. below: Name of Beneficiary CENTRAL PENNSYLVANIA CONFERENCE OF THE UNITED METHODIST CHURCH One-half (1/2) to be used for children and youth work for missions; and One-half (1/2) to be directed to the New Cumberland District of the Conference to be used for children youth work; and c~ ,`, ~ ..~ --~ ~_ ~~ A rn :.- _ _~ QJ i ;;^. .-''~ _) \~~ C fl _• D -~ -~ z~ •-. _7 t.allTlt c... ~4-- ; ~~ 10°~a d~.a N ~~ N r If CENTRAL PENNSYLVANIA CONFERENCE OF THE UNITED METHODIST CHURCH should. cease to exist before the complete distribution of the trust share, the trust share set aside for such beneficiary shall terminate and shall be distributed in accordance with the Articles that follow. Section 3. Specific Distribution Not a Part of Trust Property If the property making up the specific distribution set forth in this Article is not part of the trust property at the time the specific distribution is to be made and will not become a part of the trust property within a reasonable time, our Trustee shall disregard that specific distribution. Section 4. Apportionment of Expenses, Claims and Taxes Notwithstanding any other provision in our trust, all expenses, claims and taxes shall be apportioned to the beneficiaries of any specific trust distributions under this Arricle. Any distribution oil specific trust property under this Article shall pass subject to all liens, mortgages or encumbrances. All other articles are hereby ratified and confirmed. We executed this amendment on October 21, 1997 We certify that we have read the foregoing First Amendment to our Living Trust and that it correctly states the changes we desire to make in our Living Trust. We approve this First Amendment to our Living Trust in all particulars, and request our Trustees to execute it. ~~ ~ „ ~~ arty J. Phillips by Ivah C. Phillips, Attorney-in-Fact Ivah C. Phillips r ACKNOWLEDGEMENT COMMONWEALTH OF PENNSYLVANIA SS COUNTY O:F DAUPHIN The foregoing amendment to the Harry J. Phillips and Ivah C. Phillips Living Trust was acknowledged before me on Cr~'~~~-'~x-' t \ ~ ~ ~ ~~.~by Harry J. Phillips by Ivah C. Phillips, his attorney-in-fact, and Ivah C. Phillips, as Trustors and Trustees. Witness my hand and official seal. My commission expires: ~ ~ ~ _~ Notary Public r, ;- '% < ~-.jL r ,~4 ~ ,tarJ±~u~~:~ r f+Ca~~~y "~~_ COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE NOTICE OF INHERITANCE TAX 9' BUREAU OF INDIVIDUAL TAXES APPRAISEMENT, ALLOWANCE OR DISALLOWANCE INHERITANCE TAX DIVISION OF DEDUCTIONS AND ASSESSMENT OF TAX PO BOX 280601 REV-1547 EX AFP C06-05) HARRISBURG PA 17126-0601 ~ DATE 03-10-2008 ESTATE OF PHILLIPS IVAH C ~~ DATE OF DEATH 08-21-2006 FILE NUMBER 21 06-1034 COUNTY CUMBERLAND GARY L JAMES ESQ ACN 101 JAMES ETAL APPEAL DATE: 05-09-2008 13 4 S I P E AV E (See reverse side under Objections ) HUMMELSTOWN PA 17036 Amount Remitted MAKE CHECK PAYABLE A~ REMIT _ YMENT T0: REGISTER OF WILL~~ c. __ CUMBERLAND CO COi ~t~~USC~' CARLISLE, PA 17;033`;',-~ ~~ - s_ ' (~i r. -• .. CUT ALONG THIS LINE _ ~1 R_ETA_IN LOWER PORTION FOR YOUR RECORDS f~+~'-'` --------------------..I ..--------F-'---~---- REV-1547 EX AFP (03-05) NOTICE OF INHERITANCE TAX APPRAISEMENT, ALLOWA,~N~~-OR DISALLOWANCE OF DEDUCTIONS AND ASSESSMENT OF 'flyJC _ ESTATE OF PHILLIPS IVAH C FILE N0. 21 06-1034 ACN l.ll~-~ DA7~~ 03x10-2008 ~., r TAX RETURN WAS: (X) ACCEPTED AS FILED C ) CHANGED N RESERVATION CONCERNING FUTURE INTEREST - SEE REVERSE APPRAISED VALUE OF RETURN BASED ON: ORIGINAL RETURN 1. Real Estate (Schedule A) (1) .00 NOTE: To insure proper (2) 20,342.39 credit to your account, 2. Stocks and Bonds (Schedule B) submit the upper portion 3. Closely Held Stock/Partnership Interest (Schedule C) (3) '00 of this form with your 4. Mortgages/Notes Receivable (Schedule D) (4) .00 tax payment. 5. Cash/Bank Deposits/Misc. Personal Property (Schedule E) C5) 11,84 9.03 6. Jointly Owned Property (Schedule F) (6) .00 7. Transfers (Schedule G) c7) 320,536.91 Ce) 352,728.33 8. Total Assets APPROVED DEDUCTIONS AND EXEMPTIONS: 44,111.72 9. Funeral Expenses/Adm. Costs/Misc. Expenses (Schedule H) (9) 10. Debts/Mortgage Liabilities/Liens (Schedule I) C10) 20.043 .74 46 155 C11) . 64. 11. Total Deductions 288,572.87 12. Net Value of Tax Return (12) 28,857.28 13. Charitable/Governmental Bequests; Non-elected 9113 Trusts (Schedule J) C13) 2 59,715.59 14. Net Value of Estate Subject to Tax (14) NOTE: If an assessment was issued previously, lines 14, 15 and/or 16, 17, 18 and 19 will reflect figures that include the total of ALL returns assessed to date. ASSESSMENT OF TAX: 00 00 .00 C15) t l . _ X - 15. e ra Amount of Line 14 at Spousa 59 715 259 045_ 11,687.20 16. Amount of Line 14 taxable at Lineal/Class A rate (16) . , 00 X 12 .00 C17) t . _ X 17. e Amount of Line 14 at Sibling ra 00 15 .00 ral/Class B rate C18) t ll C . X 18. a e o Amount of Line 14 taxable at 11,687.20 19. Principal Tax Due _ C19) TAX CREDITS• DISCOUNT C+) PAYMENT RECEIPT AMOUNT PAID DATE NUMBER INTEREST/PEN PAID C-) 11-21-2006 (0007467 578.95 11,000.00 25 108 11-14-2007 (0008977 .00 . 20 4 03-03-2008 SBADJUST .00 . TOTAL TAX CREDIT 11,687.20 BALANCE OF TAX DUE .00 INTEREST AND PEN. .00 TOTAL DUE .00 * IF PAID AFTER DATE INDICATED, SEE REVERSE ( IF TOTAL DUE IS LESS THAN 41, NO PAYMENT IS REgUIRED. FOR CALCULATION OF ADDITIONAL INTEREST. IF TOTAL DUE IS REFLECTED AS A "CREDIT" CCR), YOU MAY BE DUE A REFUND. SEE REVERSE SIDE OF THIS FORM FOR INSTRUCTIONS.)