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HomeMy WebLinkAbout08-17-11 In re: THE MOSHER FAMILY IRREVOCABLE TRUST FRANK A. MOSHER, ANNE CORBIN and EILEEN MOSHER FREEBY, Petitioners v PAUL M. MOSHER, Respondent IN THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT NO: 21-10-~ 3C~ ~~ JOINT STIPULATION OF FACTS The Petitioners, Frank A. Mosher ("Frank"), Anne Corbin ("Anne";), and Eileen Mosher Freeby ("Eileen") (collectively the "Petitioners"), by and through their attorneys, Mette, Evans & Woodside, and the Respondent, Paul M. Mosher ("Paul"), by and through his attorneys, Cunningham and Chernicoff, file this Joint Stipulation of Facts, as follows: 1. Frank A. Mosher ("Frank") is an adult individual residing at 5245 Magnolia Court, Cumberland County, Mechanicsburg, Pennsylvania, 17055. 2. Frank and his now deceased wife, Virginia B. Mosher ("Virginia") ar£e~the _, ,-- . ~. grantors of The Mosher Family Irrevocable Trust (the "Trust"). ~ ~ ~- ~ ~ ? ~ F ~" ` .y :~ '~ " ~ F C~ ' J 3. Virginia died testate on July 12, 2009. ~-%=- --~ .-~: ' ' _~ c ~ ~ c~ -~ -. ,- _~,, ~ _N: -- -- ~..'. '~. ~T7 ~~ 4. The Trust was created pursuant to a Trust Agreement dated August 3, 1993. A true and correct copy of the August 3, 1993 Trust Agreement is attached hereto as Exhibit `A.' 5. Anne Corbin ("Anne") is an adult individual residing at 13213 Barrister Place, Woodbridge, Virginia, 22192. 6. Anne is a daughter of Frank and Virginia and is a beneficiary of the Trust. 7. Eileen Mosher Freeby ("Eileen") is an adult individual residing at 3158 Sound View Drive W, University Place, Washington, 98466. 8. Eileen is a daughter of Frank and Virginia and is a beneficiary of the Trust. 9. Paul M. Mosher ("Paul") is an adult individual residing at 256 Winding Way, Camp Hill, Pennsylvania, 17011. 10. Paul is a son of Frank and Virginia and is the sole Trustee of'the Trust. 11. Frank and Virginia created the Trust in 1993. 12. Anne and Eileen are the primary beneficiaries of the Trust. 13. The Trust Agreement designated Paul as the sole Trustee of the Trust. 14. The Trust obtained an insurance policy issued by New York Life Insurance Company, Policy #44964091 (the "Insurance Policy"), on the lives of Frarik and Virginia to Paul M. Mosher, Trustee. A true and correct copy of the Insurance Policy :is attached hereto as Exhibit `B.' 15. Beginning in the year 2002, the Insurance Policy paid the premiums out of dividends earned. 16. As of November 10, 2009, the Insurance Policy provided far a death benefit of $500,000.00 and a cash value of $236,330.00. 2 17. Pursuant to Article III of the Trust Agreement, the Trust corpus was divided into two equal shares for each Anne and Eileen upon creation. One share was designated for Anne and one share was designated for Eileen. 18. Pursuant to the terms of the Trust Agreement, upon the death of the survivor of Frank and Virginia, after the survivor's estate administrative expenses are paid, the remaining balances of the separate shares are to be paid to Anne and Eileen, if then living. 19. Prior to the year 2001, Frank and Virginia owned the majority of the issued and outstanding voting common stock of a Tennessee business corporation known as Security Savings System, Inc. ("SSS, Inc."), having its principal place of business at 901 Market Street, New Cumberland, Pennsylvania. 20. SSS, Inc. was incorporated on January 18, 1930 by Frank's father and several others, as a Tennessee business corporation. 21. SSS, Inc. was authorized to do business in Pennsylvania as a foreign business corporation on or about November 22, 1999. 22. SSS, Inc. is a printing company. Its business is the production of financial documents. 23. Paul and his wife, Jean M. Mosher ("Jean") were employed by SSS, Inc. until November 10, 2009. 24. Until November 10, 2009, Paul was the president of SSS, Inc. 25. Anne and Eileen have never been involved in the management of SSS, Inc. 26. Frank had his counsel prepare a Shareholders Agreement (the "Agreement") dated January 11, 1997 between SSS, Inc. and Paul and Jean referred to as Shareholder therein. The final Agreement is attached hereto as Exhibit `C.' 3 27. stock. SSS, Inc. issues two types of common stock: (1) voting stock; and (2) non-voting 28. In April of 1999, Frank and Virginia consulted with James H. Arnold ("Arnold") about their estate plan and business succession planning for SSS, Inc. Arnold prepared and recommended a proposed estate plan. A true and correct copy of the proposed estate plan is attached here to as Exhibit `D.' 29. At all times relevant hereto the votin stock in SSS, Inc. was owned and continues to be owned, as follows: (a) Frank -1,961 shares (49.56%) (b) Virginia -1,582 shares (39.98%) (c) Paul - 207 shares (5.23%) (d) Jean - 207 shares (5.23%) 30. In the years 2001 and 2002, Frank and Virginia made transfers of the common non-votin sg tock of SSS, Inc. to Paul and Jean. A chart identifying the ownership and transfers of non-voting stock follows: e Name of Non-Voting Non-Voting Non-Voting Non-Voting Percentag Owner Stock held as Stock Stock Stock held at of Non- of 1/2/01 transferred on transferred on present Voting 12/20/01 1/14/02 Stock as of July 12, 2009 Frank 17,649 -5000 -5000 7,649 21.48% Vir inia 14,238 -5000 -5000 4,238 11.90% Paul 1,863 +5000 +5000 11,863 33.31% Jean 1,863 +5000 +5000 11,863 33.31% 31. Frank and Virginia each submitted U.S. Gift Tax Returns (Form 709) for 2001 and 2002. True and correct copies of the returns are attached hereto as Exhibit `E.' 32. Paul and Jean did not pay income taxes on the stock received. 4 33. As of July 12, 2009, the following individuals owned the following shares of both non voting and voting common stock in the following percentages: (a) Frank - 9,610 shares (24.29%) (b) Virginia - 5,820 shares (14.71%) (c) Paul -12,070 shares (30.50%) (d) Jean -12,070 shares (30.50%) 34. When Virginia died on July 12, 2009, her shares of SSS, Inc. common stock assed to Frank as Trustee of a testamentary trust established by Virginia's Will. A true and P correct copy of Virginia's Will is attached hereto as Exhibit `F.' 35. By letter dated October 28, 2009, Jean and Paul notified SSS, Inc. of their resignations from SSS, Inc., effective as of November 10, 2009. A true and correct copy of said resignation letter is attached hereto as Exhibit `G.' 36. In their October 28, 2009 notice, Paul and Jean requested that Frank either purchase their stock in SSS, Inc. or alternatively, transfer all SSS, Inc stock from Virginia's Estate to Paul and Jean. 37. Frank declined Paul and Jean's request that he purchase their stock in SSS, Inc. 38. Paul and Jean then offered their stock in SSS, Inc. for sale to one individual, Jack Nissley. 39. Mr. Nissley declined Paul and Jean's offer. 40. By Agreement dated April 16, 2010, Paul, as Trustee of the Trust, as the buyer, and his wife, Jean, as the seller, entered into a Stock Purchase Agreement whereby Jean would sell her 12,070 shares of common stock in SSS, Inc. to the Trust for Three Hundred Thousand ($300,000) Dollars, payable One Hundred Fifty Thousand ($150,000) Dollars now and the 5 Fift Thousand ($150,000) Dollars within sixty (60) days following the remaining One Hundred y and correct copy of the Stock Purchase Agreement of April 16, 2010 is death of Frank. A true attached hereto as Exhibit `H.' rovided a copy of the Stock Purchase Agreement to Frank and SSS, Inc. 41. Jean p ted A ri120, 2010. The April 20, 20101etter contained an offer to sell under cover letter da p d to SSS Inc. A true and correct copy of the letter dated Apri120, 2010 Jean's stock to Frank an is attached as Exhibit `I.' 42. Frank and SSS, Inc. did not agree to purchase Jean's stock. 1 did not et a valuation of the stock prior to purchasing it in his capacity as 43. Pau g Trustee of the Trust. ' ce 1986 SSS, Inc. has had in effect an election to be treated as a small 44. Sin , oration as defined in Section 1361(b) of Subchapter `S' of the Internal Revenue business core Code for Federal and Pennsylvania corporate income tax reporting. tter dated August 10, 2010, Paul and Jean advised the IRS that they had 45. By le t to SSS Inc.'s Subchapter `S' election. A true and correct copy of the letter revoked their consen dated August 10, 2010 is attached as Exhibit `J.' letter dated September 1, 2010, counsel for Paul and Jean notified SSS, Inc. 46. BY kin SSS, Inc.'s subchapter `S' election. A true and correct copy of the letter that they were revo g dated September 1, 2010 is attached hereto as Exhibit `K.' B letter dated September 7, 2010, counsel for Paul and Jean delivered a 47. y ed Se tember 3, 2010 entitled "Stock Power" executed by Jean. A true and correct document dat p letter dated September 7, 2010 and Stock Power is attached hereto as Ex. `L.' copy of the 6 48. Paul as Trustee of the Trust and legal owner of the life insurance policy withdrew Two Hundred Thousand ($200,000) Dollars as a policy loan by check from New York Life Insurance Company to Paul as Trustee, and paid One Hundred Fifty Thousand ($150,000) Dollars to his wife Jean for her 12,070 shares of common stock of SSS, Inc. to be transferred to the Trust. A true and correct copy of the check made payable to Jean is attached hereto as Exhibit `M.' 49. By letter dated November 23, 2010, the IRS advised Paul and Jean and SSS, Inc. that attempted revocation by shareholders requires corporate participation which, SSS, Inc. will not give. A true and correct copy of the IRS's response dated November 23, 2010 is attached hereto as Exhibit `N.' 50. Paul and Jean have taken the position that the Stock Power document of September 3, 2010 has made the Mosher Family Irrevocable Trust the owner of Jean's 12,070 shares of common stock of SSS, Inc. and that the Trust has not elected to be a Small Business Trust under IRC § 1361(c)(2)(A)(v). A letter from counsel for Paul and Jean to the IRS dated January 17, 2011 so stating is attached hereto as Exhibit `O.' 51. By Notice of Termination of Status as an S Corporation dated March 7, 2011, a copy of which is attached hereto as Exhibit `K', the IRS revoked SSS, Ines `S' Corporation Status effective as of September 1, 2010. 52. By letter dated March 1 1, 2011, counsel for SSS, Inc. disputed the IRS's March 7, 2011 Notice. A true and correct copy of the letter dated March 11, 2011 is attached hereto as Exhibit `P.' 7 Respectfully submitted, By. METTE, EVANS & WOODSIDE r Ronald L. Finck, squire Sup. Ct. I.D. No. 89985 CUNNINGHAM AND CHERNICOFF By. B ce J. arshaws , F;squire Sup. Ct. I.D. No. 58799 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 -Phone (717) 23 6-1816 -Fax Attorneys for Petitioners Date: August 16, 2011 541286v1 2320 North Second Street P.O. Box 60457 Harrisburg, PA 17106-1)457 (717) 238-6570 -Phone Attorneys for Respondent 8 EXHIBIT A • 5-22-93 4 ~ THE MOSHER FAMILY IRREpOCABLE TRIIST This trust agreement is executed on by FRANK A. MOSHER and VIRGINIA B. MOSHER, bo of New ~ 1993, Cumberland, Pennsylvania (individually, a "Grantor"; collect' the "Grantors") ively and PAIIL'M. MOSHER,.(the "Trustee"), on the following terms and conditions hereinafter stated. ARTICLE I Purposes and Funding the Trust A. The Grantors create this Trust as a means by which assets, which may include one or more policies of insurance on their lives that may be held for the benefit of persons of thei ItmisythenGrhe terms and conditions set forth in this instrume r nt. antors intent in creating this Trust that all gifts made to it be complete and that the assets of this Trust, including any life insurance proceeds, be excluded from their gross estates for federal estate tax purposes. The Grantors also intend that the share of this Trust for each of their dau ht shall be included in the gross estate of such child for federal estate tax purposes, thereby invoking the rules for there bein "Crummey powers with testamentary control g more specificall ~ ", all as hereinafter y provided. All provisions of this Trust shall be construed in such a manner as best to effect these intents. B. The Grantors transfer to the Trustee the property listed in Schedule A, to be held and administered accordin t the terms of this Trust. The Grantors and anyone else ma g o transfer additional property to the Trustee at any time, to be held and administered according to the Trusts terms. The Trustee may refuse to acceptaany gift if the Trustee deems such rejection to be in the best interests of the Trust and the beneficiaries, and the Trustee may accept a gift subject to one or more conditions imposed by the Trustee or the donor, if the Trustee deems such conditional acceptance to be in the best interests of the Trust and the beneficiaries . No ~~ondition imposed on a gift and accepted by the Trustee may :in an wa alter, amend, or change the rights of a beneficiary with res ect to any prior gifts. The Grantors retain no right, title, orp interest in any trust property. r ARTICLE II Irrevocability ~~~.. This Trust and all interests in it are irrevocable, and neither Grantor has any power to alter, amend, revoke or terminate any trust provision or interest, whether under thi Trust or any statute or other rule of law. s ARTICLE III Distributions From the Trust The Trustee will divide the trust fund into as many separate equal shares as may be required to provide one separate equal share for each of the Grantors' daughters living on the date this Trust is created and will hold the separate share for each of the Grantors' daughters. The Trustee need not divide or segre ate any assets held collectively by these separate shares, although the Trustee must maintain such records as will enable the Trustee to render a separate accounting and prepare separate income tax returns, if required, for each such share. A. Until the death of the later of the Grantors to die, immediately following any contribution to the Trust, the Grantors' daughter who is the separate share (the "Primary Beneficiarynefshally °f such • to withdraw the total amount of the contribution hbut the right calendar year during which the Grantors are married fordtheng any entirety of such year, not more than two times the amount of the federal gift tax annual exclusion in such calendaz• year. The Grantors recognize that the gift tax annual exclusion is now ten thousand dollars ($10,000), but that it may be changed from time to time, and this demand power shall reflect the annual exclusion in effect on the date of the individual gift. With res ect to these demand powers, the following rules shall a 1 P PP Y= 1• The Primary Beneficiary can exercise this demand power by a written request delivered to the Trustee. If the Primary Beneficiary is unable to exercise this demand ower because of a legal disability,.including minority, hispor her parent (if the Primary Beneficiary is a minor) or any other legally authorized personal representative, including (but not limited to) a guardian, committee, or conservator, may make the demand on the Primary Beneficiary's behalf. However, in no event can either Grantor make the demand for a Primary Beneficiary, regardless of such Grantor's relationship to such Primary Beneficiary. ` 2• The Trustee must reasonably notify t:he person who would exercise each Primary Beneficiary's demand power of its existence and of any contributions made to the Trust that are - 2 - • • subject to the power. An adult Primary Beneficiar ma w future notices. Y y aive all 3. Each Primary Beneficiary's demand power is noncumulative and lapses sixty,(60) calendar da s date of the transfer to which it relates. Y following the 4• The Trustee may satisfy a Primary Beneficiary's demand for a distribution by distributing cash, ather assets fractional interests in other assets, as the Trustee deems ~ or appropriate. Without limiting the Trustee's power to select assets to satisfy a demand the Grantors tangible assets be distributed before liferinsurance colic~r intangible assets, unless the Trustee decides that anotherles and selection is warranted. 5• "Contribution" means any cash or other assets transferred to the Trustee to be held as part of the trust funds The amount of any contribution is its federal determined by the Trustee at the time of the transferx value, as B. Until the death of the later of the Grantors to die, the Trustee may use some or all of the Trust's net income and principal remaining after the exercise or nonexercise of the demand powers under paragraph A, to a life insurance on the life of eitherpor both1Grant orpolicies of principal any income not so used. s, adding to 1- The Trustee will not, however, use any trust income or principal in a manner that would discharge either Grantor's legal support obligation or give either Grantor an pecuniary benefit. Y 2• If any Primary Beneficiary shall die before the later of the Grantors to die, the Trustee will distribute the Trust share for such Primary Beneficiary to the person or ersons to whom such Primary Beneficiar a P reference in his or her last will toothis sene share by specific appointment. This power of appointment may berexepcisedoin of any member or members of a class that includes all of thefavor descendants of the Grantors and the creditors of the estate of such predeceased Primary Beneficiar equally or une all Y, and it may be exercised qu y, and either outright or in continued trust, on such terms as such Primary Beneficiary shall indicate in his or her will. In default of such appointment, the 'T'rustee will continue to hold such separate share, to be ultimately distributed pursuant to paragraph C. C• Upon the death of the later of the Grantors to die, the Trustee will hold the Trust funds of each separate .share created hereunder (except to the extent a different result is created b Y - 3 - t ~-, t the exercise of the power of appointment granted in ara ra as follows: p g ph B~ 1. During the administration under state law of the estate of the later of the Grantors to die the all of such trust funds, in the Trustee's discretiontetomle use money to and buy assets from such estate, on such terms andnd conditions as the Trustee deems to be in the best interests the Trust and the beneficiaries. The Trustee will not howevf make grants to such estate or otherwise distribute funds exceet~ through bona fide loans or purchases, it not being the Grantop ' intention to make any persons other than their descendants ants heirs at law the beneficiaries of any trust created hereunderd except as may occur by the exercise of the powers of appointment granted hereunder. If no personal representative is appointed under applicable state law with respect to the estate of the later,of the Grantors to die, the "administration" of such estat will include the settlement of debts, claims, and taxes in e respect of such Grantor's estate by the trustee o.f any revocable trust or by any other person in actual possession of assets in which such Grantor had a legal or equitable interest. 2. Upon the termination of the administration of the estate of the later of the,Grantors to die, or upan such earlier date as the Trustee determines that the purposes of item 1 of this paragraph have been effectuated, the Trustee will: ~ , a. Distribute outright and free of trust the separate equal share to each of the then-living Primary Beneficiaries; and b. Distribute the trust share for any Primary Beneficiary who has died prior thereto, to the person or persons to whom such child appoints such trust funds by specific reference in his or her last will to this general power of appointment. This power of appointment may be exercised in favor of any member or members of a class that includes all of the descendants of the Grantor and the creditors of the estate of such deceased Primary Beneficiary, and it may be exercised equally or unequally, and either outright or in continued trust, on such terms as such Primary Beneficiary shall indicate in his or her will. In default of such appointment, the Trustee will distribute such share of the Trust outright and free of trust subject to the provisions of Article IV, to the then-living descendants, collectively, of such Primary Benefici.ar descendants to take ~ ~ y, such per stirpes the share that their ancestor, such deceased Primary Beneficiar If such deceased Primary BeneficiaryoofdthevGranton if living. survived by then-living descendants, then in defaultlofnthe exercise of such power of appointment, the Trustee will dis- tribute such share of the Trust outright and free of trust sub- - 4 - • ~ ject to the provisions of Article IV, to the other then-liv' Primary Beneficiaries and the then-living descendants of aning the Primary Beneficiaries who have theretofore died, er sti °f p rpes. c. The Trustee has the sole discretion to make an equitable division of the trust assets, pursuant to this paragraph, and the Trustee may distribute the trust assets in kind, in cash, or partly in each, and the Trustee ma fractionalize any trust asset or sell it and distribute the cash as the Trustee deems to be in the best interests of the Trust and the beneficiaries. D. If all of the beneficiaries of any trust created under this article should die before the trust assets have vested in them, the Trustee will distribute all of the remaining assets of each such trust as follows: 1; One half (_) ~(or all, if there are no persons to take under item (2)) to the heirs and distributees of FRANK A. MOSHER who would have taken his estate and in such shares as the would have taken it, had he died unmarried and without a valid y will, determined on the later of his death or the death of the last of such beneficiaries to die; and 2: One half (z) (or all, if there are no persons to take under item (1)) to the heirs and distributees of VIRGINIA H. MOSHER who would have taken her estate and in such shares as the would have taken it, had she died unmarried and without a valid y will, determined on the later of her death or the death of the last of such beneficiaries to die. ARTICLE IV Interests Vesting in a Minor If, when any trust created by this instrument ends, any principal vests in absolute ownership in any minor beneficiar the Trustee may, if deemed appropriate, hold such ,interest iny~ trust until the beneficiary attains age twenty-five (25) pa in so much (including all or none) of the trust's net income and. g principal to the beneficiary as the Trustee deems appropriate for the beneficiary's health, education, support, and maintenance, adding to principal any undistributed Income. The Trustee ma make such payments to the beneficiary, or to his oY- her parent, guardian, or to the person with whom the beneficiary resides, without having to look to the proper application of` those payments. The Trustee may also make any payments t:o a custodian (who may be a Trustee) under any applicable Uniform Transfers (or Gifts) to Minors Act. When the beneficiary attains age twent - five (25), the Trustee will pay him or her all of h.is or her y remaining trust funds and this trust will end. If the - 5 - C7 beneficiary dies before Trustee will pay all of The authority conferred not operate to suspend beneficiary. r, , attaining age twenty-five (25), the such funds to the beneficiary's estate. on the Trustee is a power only and will absolute vesting of any property in such ARTICLE V Spendthrift Clause To the greatest extent permitted by law, no interest of any beneficiary of any trust created under this instrument shall be subject to the beneficiary's liabilities or creditor claims or to assignment or anticipation. ARTICLE VI Definitions A. At the time this Trust is executed, the Grantors have two daughters, ANNE and EILEEN. A person in gestation who is later born alive shall be treated as alive during the period of gestation for purposes of determinin died without leaving descendants surviving himhor hey person has right to distributions on the termination of a trustrcreatedhe under this instrument; and (3) any person's right to share in required principal distributions, though for all other purposes such person's rights accrue only from the date of birth. B. A Trustee is "disabled" or under a "disa:bility" when- ever any Trustee other than a disabled Trustee or, if there is no such Trustee, any person who would become successor Trustee on such determination of disability, receives written certification from two physicians regularly attending such Trustee, at least one of whom is board-certified in the specialty most closely associated with the alleged disability, that such Trustee has become physically or mentally incapacitated, regardless of cause and regardless of whether or not there has been any adjudication of incompetence, mental illness, or need for a committee, conservator, guardian, or other personal representative. A Trustee is recovered from his or her disability whenever a then- serving Trustee receives written certification from two physicians regularly attending such disabled Trustee, at least one of whom is board-certified in the specialty most closely associated with the alleged disability, that he or she is no longer incapacitated and is again able to manage his or her own personal and f financial affairs. No Trustee is liable to anyone, including a Grantor, for removing anyone from the Trusteeshi such Trustee relied in good faith on the aforementioned p~ if physicians' certifications. No one else is liable 'to anyone for - 6 - - ~' • dealing with a Trustee other than the one removed for disabili if such removal was made upon good-faith reliance on the ty~ aforementioned physicians' certifications. C• No person shall be deemed to have survived either Grantor for purposes of this Trust unless he or she is livin o the date thirty ( 3 O) ~ days after the date of such Grantor' s de n as determined by applicable legal death certificates. ath, D. All tax-related terms mean the same things in this Trust instrument as they mean in the Internal Revenue Code of 1986, as amended. E. "Per stirpes" means by right of representation, and a disposition to an individual and his or her "descendants er stirpes" requires that the individual's children, whetherpor not living at the time of the disposition, be treated as the on final stocks and that a further subdivision be made at each succeedin generation. g F. There is only one signed original of this Trust. Anyone may rely on a copy of said document as certified by a notary public or similar official to be a true co original (and of the amendments or other wz'itingspyiffanye signed endorsed on or attached thereto) to the same effect as if such copy were the signed original. Anyone may rely upon any statement of fact certified.by anyone who appears from the original document or a certified copy thereof to be a Trustee hereunder. ARTICLE VII Trustee's Powers A. The Trustee is exclusively empowered to do the following, in the Trustee's fiduciary capacity: 1• To hold and retain all or any property received from any source, without regard to diversification, risk, productivity, or the Trustee's personal interest in such propert in any other capacity, and to keep all or part of the trust y property at any place within the United States or abroad. 2. To invest and reinvest the trust funds (or leave them temporarily uninvested) in any type of property and every kind of investment including (but not limited to) corporate obligations of every kind, preferred or common stocks securit' of any regulated investment trust and ies partnership interests. - 7 - - ~' • 3• To participate in the operation of any business or other enterprise, and to incorporate, dissolve, or otherwise change the form of such business. 4. To deposit trust funds in any commercial savings or savings and loan accounts. 5. To borrow money for any reasonable trust purpose and upon such terms, including (but not limited to) interest rates, security, and loan duration, as the Trustee deems advisable. 6. To lend trust fund terms, including (but not limited and loan duration, as the Trustee however, that the Trustee may not estate without receiving adequate of interest. s to such persons and on such to) interest rates, security, deems advisable; provided, lend money to either Grantor's security and an adequate rate 7. To sell or otherwise dispose of trust assets, including (but not limited to) trust real property, for cash or credit, at public or private sale, and with such warranties or indemnifications as the Trustee deems advisable. $• To buy assets of any type from an terms, including (but not limited to) cash or credPtrsonterestch rates, and security, as the Trustee deems advisable• however, that the Trustee may not buy assets from eithervided, Grantor's estate other than at their fair market value. 9. To improve, develop, manage, lease, or abandon any trust assets, as the Trustee deems advisable. l0. To hold property in the name of any custodian or nominee, without disclosing this Trust; but the Trustee is responsible for the acts of any custodian or nominee so used. 11. To pay and advance money for the Trust's protection and for all expenses, losses, and liabilities sustained in its administration. 12. To prosecute or defend any action far the protection of the Trust, the Trustee in the performance of the Trustee's duties, or both, and to a claim by or against the Trust or theyTrusteesin theSeerfo any of the Trustees duties. ~ P rmance 13. To employ persons, even if they are associated with the Trustee, to advise or assist the Trustee i:n the performance of the Trustee's duties. - 8 - "r' 14. To determine what is principal or income and what items shall be charged or credited to either. 15. To execute and deliver any instruments necessar or useful in the exercise of any of these powers. Y B. With respect to any life insurance policies held as part of the trust funds, the following special rules shall a PP1Y= 1. The Trustee may, in the Trustee's discretion, pa any premiums or other charges from trust Income or princi al. i the trust funds are inadequate to pay such premiums or char es f the Trustee may, in the Trustee's discretion do one or more of the following: (a) use any automatic premium loan feature• (b) borrow against any policy cash reserves (whether or not on the policy for which premium or charges will be paid); or (c) elect any automatic nonforfeiture feature. The Trustee shall have no duty to do any of these unless the Trustee has received specific written notice that a premium or charge has not been paid. 2. Any additional insurance policies, no matter how acquired (including, but not limited to acquisition b conversion, reissue, consolidation Y gift, A, but failure to do so does not affectothe Trulisted on Schedule ownership, st's policy 3. The Trustee may, in the,Trustee's discretion, refuse to enter into or maintain any litigation, endorse polic payments, or take other action respecting any trust insurance Y policies, until indemnified against all expenses and liabilities that, in the .Trustee's judgment, may be involved in such action. 4. The Trustee need not inquire whether or not the Trustee or the Trust has been designated the beneficiary of an insurance policy or other death benefit, and the Trustee need not act with respect to such policies until receipt of written notice that the Trustee or the Trust is a beneficiary of 'the polic Y• C. In making any payment to a minor or disabled bene- ficiary, the Trustee may expend such a such beneficiary or make such a P yments for the benefit of his or her parent P yments to such beneficiary, or to guardian, personal representative, or the person with whom he or she resides, without having to look to the proper application of those payments. limit the Trustee's powers and must be construedgtoph does not Trustee to give each beneficiary the fullest possiblenbenefiteand enjoyment of all of the trust income and principal to which he or she is entitled. - 9 - • s ARTICLE VIII The Trustee A• A Trustee may designate any individual or institution a~s a co-trustee, by a written instrument. An co-tru successor Trustee may, without liabilit y stee or examination or review the accounts renderedcandtt:hethrot delivered by any predecessor Trustee. P perty the same title, powers and duties as theaTrusteeesucr Trustee has without any additional conve once, seeded, serve only as long as the Trustee who appointedesuo named shall (or, if such co-trustee was named by more than onecTrusteeuactin together, by the last to serve of such Trustees) g trustee shall not become a successor Trustee upon the deathco- resignation, or disability of the Trustee who appointed such co- trustee, unless such co-trustee is elected as successor Trustee pursuant to paragraph E of this article. Any reference to a "Trustee" refers equally to any successor Trustee. B. Any Trustee may, from time to time, delegate to any other Trustee by written instrument any or all of such Trustee's powers (except those, if any, not exercisable by such other Trustee). Such delegation may be temporary or permanent, and if temporary, may be for any duration of time or until any event specified by the delegating Trustee An faith with any Trustee may rely without inquirynuponlthe in good Trustee's certificate with respect to any delegation. C. No Trustee shall be required to provide surety or other security on a bond. D• Any Trustee may resign by giving written notice specifying the resignation's effective date to the designated successor Trustee, if there is one, or otherwise to each adult beneficiary of the current trust income, to a custodial parent of each minor beneficiary of current trust income, and to the le al guardian of any beneficiary of current trust income having a g legal guardian, each determined at the time such notice is iven. A corporation authorized to render trust services shall be named successor Trustee by majority vote of the income beneficiaries, with the adult beneficiaries voting on,their own behalf, one vote being cast for each minor income beneficiary by his or her custodial parent, and one vote being cast by the legal guardian for any beneficiary having a le al this article, the right to recegve gsupport" from purposes of right to current trust income. he Trust is a no event may either Grantor voteNinwtheselectio the: foregoing, in Trustee. n of any successor E. No Trustee shall be required to obtain the order of any court to exercise any power or discretion under this Trust. - 10 - • ~ F. No Trustee shall be required to file any accounting with any public official: The Trustee must, however, maintain accurate records concerning the trust. Each year, furthermore, the Trustee shall furnish an annual accounting of the Trust's condition, including receipts and disbursements, to each adult beneficiary of the current trust income, to a custodial parent of each minor beneficiary of current trust income, and to the legal guardian of any beneficiary of current trust income having~a legal guardian, each determined at the time such, notice is given. This required accounting may be satisfied by a copy of the Trust's federal income tax return, if one is required. G. Any corporate Trustee is entitled to compensation based on its published fee schedule in effect at the time its services are rendered. ARTICLE IX Miscellaneous A. This Trust shall be governed by and construed according to the laws of Pennsylvania. B. Whenever the context of this Trust requires, the masculine gender includes the feminine and neuter, and vice versa, and the singular number includes the plural, and vice versa. C. In accordance with the purpose of the Z'rust the Trustee is authorized,,with,or without Court approval, to make administrative and ministerial modifications to t:he provisions of this Agreement for the purpose of conforming to changes in law or factual or economic circumstances. Any such modification shall be in all events consistent with the Grantors' intent upon creation of the Trust, and shall be in writing, signed by the Trustee, with copies delivered to the Grantors and the beneficiaries of the Trust . D. If the Trustee is acting as Trustee of another trust with terms and provisions substantially similar to this Trust, the Trustee is empowered, in the sole discretion Hof the Trustee, reasonably exercised, to consolidate the trusts herein created with such other trust,'. insofar as it is practicable, not in substantial conflict with the terms of this Trust or of such other trust, and not in derogation of any tax-saving provision of any applicable state or federal law. Provisions of this Trust and such other trusts shall be considered substant Tally similar even if there are minor variations as to the management and distribution of the trusts. The determination by the Trustee as to any consolidations hereunder shall be final and conclusive upon all parties. - 11 - • • E. If the market value of any separate trust hereunder shall fall below Twenty-Five Thousand Dollars ($25,000.00), and provided the Trustee, in the Trustee s discretion determines that the continuation thereof is no longer consistent with the trust purpose and in the best interests of the beneficiary(s), the Trustee may distribute the property of such trust to the person or persons then entitled to receive the income therefrom, and in the proportions as such persons are then entitled to receive the income therefrom, insofar,as specified in 'such trust, otherwise in equal shares. In determining whether or not to make an early distribution in accordance with the foregoing, the Trustee shall not only take into account the present fair market value of the trust, but if trust property includes one or more contracts, the Trustee shall also take into account, to the extent the Trustee deems appropriate, the anticipated value of such contracts at maturity. IN WITNESS WHEREOF, the Grantors and the Trustee have hereunto set their hands and seals all as of the day and year first above written. Witness: G T RS: . FRANK A. M SH ~~,w~ /1. ~.,,2. 1-X.[I~CC /T•~A-ri1_D/.L~4w.C.LI --~~. VIRG IA B. MOSHER TRUSTEE: / rl~ PAUL M. MOSHER - 12 - t • SCHEDULE A One Dollar ($1.00) - Attached below We, the undersigned F A. MOSHER and DIRGINIA B. MOSHER, this ~~ day of 1993, do hereby acknowled a that in our capacity as Gra tors of the accompanying MOSHER FAMILY IRREVOCABLE TRIIST, we have paid to PAIIL M. MOSHER as Trustee thereof One Dollar ($1.00) in cash, appearing above, such payment representing the initial funding of such Trust. FKANK A • I~~IER l~ ~ ~_ VIRGINI B. MOSHER ACKNOWLEDGEMENT OF RECEIPT PAIIL M. MOSHER - 13 - • • COMMONWEALTH OF PENNSYLVANIA : SS: COUNTY OF ~ ,~ 2,t~t~. On this, the -~-~~ , day of 1993 , before me, a Notary Public, the undersigned office personally appeared FRANR A. MOSHER and VIRGINIA B. MOSHER, known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within MOSHER FAMILY IRREVOCABLE TRIIST, who acknowledged to me that they executed the same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public (SEAL ) NOTARIAL SEAL Judith A. Nordstrom, Notary Public Harrisburg, PA Dauphin County My Commission Expires Sept. 21,1993 r ~~ - 14 - EXHIBIT B .. , . _._ ,' _. ; - -t i ..., - ~. - .. ~ L _ ` • FRANK A MOSHER ~t } ~, INSUREDS` ~ , {~~ ~ r w~, , , ~ ' ;; . . ,> ~. ~ P ' ~ A VIRGIN~I-A B MOSHER - . _~ j~t .. ~~ ~ • u ~. , ,. 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C ~ ' tiM _ ~_ .~ . .. 991-100:26 . _ I I } ~, r- : _ _ ~ r... .. .. .. ~ -. i ... .. k _ .. .. .. .. ..41 TABLE OF GUARANTE ED VALUES END OF POLICY PAID-UP LIFE: YEAR CASH VALUE INSURANCE END OF ON LAPSE POLICY YEAR 1 2 ~~~~~ 3 $18,500.00 ~~~ 4 $37,000.00 539,500 1 5 555,500.00 575,000 2 6 573,500.00 5107,000 3 7 591,500.00 5136,000 4 8 5108,500.00 $162,000 5 q 5124,500.00 5184,500 6 lp 5140,000.00 5204,500 7 11 5154,000.00 5221,500 8 12 5167,000.00 5236,000 9 13 5177,500.00 5247,500 10 14 5186,500.00 5256,000 11 15 5192,000.00 5261,000 12 16 5194,500.00 5262,500 13 17 5214,000.00 5259,500 14 18 5232,000.00 5279,500 15 19 $249,000.00 5297,500 16 20 5265,000.00 5314,000 17 5280,500.00 5328,500 18 5342,500 19 THIS TABLE ASSUMES THAT PREMIUMS HAVE BEEN PAID 20 ON AN INTEREST RATE OF 5.5% PER YEAR. THEY DO NOT I TO THE POLICY YEAR SHOWN„ THESE VAL ' POLICY LOANS. NCLUDE DIVIDEND ACCUMULATIO UES ARE BASED NS, PAID UP ADDITIONS, OR VALUES FOR END OF POLICY YEAR NOT SHOWN WILL BE FURNISHED ON REQUEST. POLICY DATA NEW YORK LIFE INSURANCE COMPANY PAGE 2A TABLE OF GUARANTEED VAL~IES END OF POLICY PAID-UP LIFE YEAR CASH VALUE INSURANCE END OF ON LAPSE POLICY 1 YEAR 2 ~*~~~ 3 518,500.00 *** 4 $37,000.00 539,500 1 5 555,500.00 $75,000 2 6 573,500.00 5107,000 3 7 591,500.00 $136,000 4 8 5108,500.00 5162,000 5 9 5124,500.00 5184,500 6 10 $140,000.00 5204,500 7 11 $154,000.00 5221,500 8 12 5167,000.00 5236,000 9 13 5177,500.00 5247,500 10 14 $186,500.00 5256,000 11 15 5192,000.00 5261,000 12 16 $194,500.00 5262,500 13 17 5214,000.00 5259,500 14 18 5232,000.00 5279,500 15 19 5249,000.00 5297,500 16 20 5265,000.00 5314,000 17 5280,500.00 5328,500 18 5342,500 19 THIS TABLE ASSUMES THAT PREMIUMS HAVE BEEN P 20 ON AN INTEREST RATE OF 5.5% PER YEAR. THEY DON AID TO THE POLICY YEAR SHOWN, T'H POLICY LOANS. OT INCLUDE DIVIDEND ACCUMULATIO ESE VALUES ARE BASED NS, PAID-UP ADDITIONS, OR VALUES FOR END OF POLICY YEAR NOT SHOWN WIL L BE FURNISHED ON REQUEST. 'OLICY DATA NEW YORK LIFE INSURANCE COMPANY r, PAGE 2A C~~AA ~w PREMIUM SCHEDULE PREMIUMS PAYABLE AT MONTHLY INTERVALS, AS FOLLOWS SEE ENDORSEM (Premium includes the following amounts for ENT HEREON any supplementary benefits) BEGINNING AS OF M0. DAY YR. PREMIUM ## 8- 3-1993 51,623.00 8- 3-1994 51,623.00 8- 3-2008 53,243.00 PAYABLE UNTIL THE YOUNGER INSURED IS OR WOULD HAVE BEEN AGE 100 *~ #~# IF YOU CHANGE YOUR PREMIUM PAYMENT TO ANOTHER INTERVAL, THE PREMIUM PAYABL FOR THAT NEW INTERVAL WOULD BE AS FOLLOWS: E ANNUAL SEMI-ANNUAL QUARTERLY $18,555.00 $9,524.00 MONTHLY $4,830.00 $1,623.00 ** PREMIUM PAYING PERIOD MAYBE SHORTENED BY USING DIVIDEND VALUES TO MAKE POLI CY FULLY PAID-UP. THE INTEREST RATE REFERRED TO IN THE BASIS OF COMPUTATION SECTION IS 5.5% PER YEA R. POLICY DATA NEW YORK LIFE INSURANCE COMPANY PAGE 2 (Con't) 91100.26-2 .x k. PREMIUM SCHEDULE PREMIUMS PAYABLE AT MONTHLY INTERVALS, AS FOLLOWS (Premium includes the following amounts fSoEE ENDORSEMENT HEREON any supplementary benefits) BEGINNING AS OF M0. DAY YR. PREMIUM ~# 8- 3-1993 $1,623.00 ' 8- 3-1994 $1,623.00 8- 3-2008 $3,243.00 PAYABLE UNTIL THE Y011NGER '` INSURED IS OR WOULD HAVE _, BEEN AGE 100 ~* #~ IF YOU CHANGE YOUR PREMIUM PAYMENT TO ANOTHER INTERVAL, THE PREMIUM PAYABLE FOR THAT NEW INTERVAL WOULD BE AS FOLLOWS: ANNUAL SEMI-ANNUAL QUARTERLY MONTH $18,555.00 Y $9,524.00 $4,830.00 ~1 ~~~ nn LY :~~ "* PREMIUM PAYING PERIOD MAYBE SHORTENED BY USING DIVIDEND VALUES TO ti1AKE POLICY FUL LY PAID-UP. THE INTEREST RATE REFERRED TO IN THE BASIS OF COMPUTATION SECTION IS 5.5°~ PER YEAR. POLICY DATA NEW YORK LIFE INSURANCE COMPANY PAGE 2 (Con't) 91100.26-2 ~. WE&YOU In this policy, the words "we", "our" or "us" refer to New York Life Insurance Company, and the words "you" or "your" refer to the owner or owners of this policy. CONTENTS When you write to us, please include the policy number, each Insured's full name, and your current address. POLICY DATA PAGES Policy Identification and Specifications• Table of Guaranteed Values / 2_ZA ' LIFE INSURANCE PROCEEDS Life Insurance Proceeds / q POLICY OWNERSHIP Owner; Successor Owner; Change of Ownership / q BENEFICIARY Naming of Beneficiary; Change of Beneficiary; Death of Beneficiary / 4 PREMIUMS Payment of Premiums; Grace Period; Nonpayment of Premium; Options Upon Lapse; Reinstatement; Premium Adjustment at Death / 5-6 CASH VALUE Cash Value; Loan Value; Loan Interest; Loan AND LOANS Interest Rate; Automatic Premium Loan (APL ; Loan Repaym~snt; When Unpaid Loan Exceeds Loan Value / 6.7 DIVIDENDS Annual Dividend; Dividend Options; Automatic Dividend Option; Dividend Values; Fully Paid-up Policy; Dividend at Death / 8 PAYMENT OF POLICY PROCEEDS Payment; Election of Optional Method of Payment; Change of Option; Pa yees; Minimum Payment; Options 1A and 1 B. Proceeds at Interest; Optionis 2A and 2B. Elected Income; Options 3A, 3B and 3C Life I GENERAL PROVISIONS . ncome / 8_~p Entire Contract; Applications I ; ncontestabili • Suicide Exclusion; Dates; Age and Sex; ty, Assignment; Protection Against Creditors; Payments to Compan ; Poli C y cy hanges; Policy Split Option; Basis of Computation; Conformity with Law; Votincl Rights / 11.12 APPLICATIONS Attached to the Policy. RIDERS OR ENDORSEMENTS Attached tb the .Policy. (IF ANY) Note: This policy is a legal contract between the policyowner and the READ YOUR POLICY CAREFULLY FOR FULL DETAILS. Company. PAGE 3 AAAnn w LIFE INSURANCE PROCEEDS 3 Life Insurance Proceeds We will pay the life insurance proceeds to the beneficiary promptly when we have proof that both Insureds died while this policy was in farce, if premiums have been . ~ : paid as called for in the Premiums section. These proceeds will include the face amount and any other benefits from riders or dividends which are payable because of the last surviving Insured's death, all as stated in the policy. When we determine these proceeds, there may be an adjustment for the last premium. We will deduct any unpaid loan. POLICY OWNERSHIP Owner In this policy, the words "you" and "your" refer to the owner of this policy. If the policy is owned by mare than one person, the words "you" and "your" refer to all current owners of the policy. As the owner, you have all rights of ownership in this policy while at least one of the Insureds is living. If the policy is owned by more than one person, we will require the written con- sent of all current owners before any rights in this policy may be exercised. However, you do not need the consent of any successor owner or beneficiary. If more than one person is named as owner or successor owner, unless otherwise stated, on the death of one owner or successor owner, ownership rights will pass to the surviving owners or successor owners. Successor Owner A successor owner can be named in the application, or in a notice you sign which gives us the facts that we need. The suc- cessorowner will become the new owner when you die, if you die before both Insureds. If no successor owner survives you and you die beforE~ both Insureds have died, your estate becornes the new owner. Change of Ownership You can change the owner of this policy, from yourself to a new owner, in a notice you sign which gives us the facts that we need. When this change takes effeci:, all rights of ownership in this policy will pass to the new owner. When we record a change of owner or successor owner, these changes will take effect as of the date 'you signed the notice, subject to any pay- ment we made or action we took before recording these. changes. We may require that these changes be endorsed in the policy. Changing the owner or naming a new successor owner cancels any prior choice of successor owner, but does not change the beneficiary. BENEFICIAIRY Naming of Beneficiary One or more beneficiaries for any life insurance proceeds can be named in the application, or in a notice you sign which gives us the facts that we need. If more than one beneficiary is named, they can be classed as first, second, and so on. If 2 or more are named in a class, their shares in the proceeds can be stated. The stated shares of the proceeds will be paid to any first beneficiaries who survive both Insureds. If no first beneficiaries survive, payment will be made to any beneficiary surviving in the second class, and so on. Beneficiaries who survive in the same class have an equal share in the proceeds, unless the shares are stated otherwise. Change of Beneficiary While at least one of the Insureds is living, you can change a beneficiary in a notice you sign which gives us the facts that we nee When we record a change, it will take effect as of th date you signed the notice, subject to any pay- ment: we made or action we took before recording the change. Death of Beneficiary If no beneficiary for the life insurance proceeds, or for a stated share, survives both Insureds, the right to these proceeds or this share will pass to you. If you are one of the In- sureds, this right will pass to your estate. Unless statE;d otherwise in the policy or in your signed notice which is in effect at the last surviving Insured's death, if any beneficiary dies at the same time as that Insured, or within 15 days after that Insured but before we receive proof of that Insured's death, we will pay the proceeds as though that beneficiary died first. PAGE 4 91100-4 PREMIUMS Payment of Premiums Each premium is payable, at our Home Office or at one of our Service Offices, while either Insured is living, on or before its due date as shown in the Premium Schedule on the Policy Data page. However, if this policy is still in effect on the policy anniversary when the younger Insured is or would have been age 100, this policy will be made fully paid-up with no more premiums due. The premium far this policy can be paid at inter- vals of 3 months or 6 months, or once each year. The method we use to determine the premium rate for each of these intervals is the method that was in effect as of the policy date shown on the Policy Data page. The interval can be changed by paying the correct premium for the new interval. Premiums can be paid by any other method we make available. Grace Period We allow 31 days from the due date for payment of any premium after the first. All insurance coverage continues during this grace period. We calculate the amount of paid-up insurance as of the due date of the overdue premium. We do this by applying the sum of the cash value and dividend values, less any unpaid loan, at the net single premium rate based on the attained age of each Insured. In most cases, this amount will be less than the face amount of this policy. Unless stated otherwise in any rider attached to this policy, no insurance or benefits from riders will be provided after this paid-up insurance option goes into effect. This insurance can be surrendered at any time. It has cash value and loan value, and is eligible for dividends. The cash value is equal to the net single premium for the amount of insurance inforce. All insurance will e:nd when you send us your signed request for the cash value proceeds. 2. Surrender for Cash Instead of paid-up insurance, you can surrender this policy for its cash value and dividend values, less any unpaid loan, as suited in the Cash Value pro- vision. All insurance will end when you send us your signed request for the cash value proceeds. Nonpayment of Premium If a premium is not paid ' by the end of the grace period, this policy will lapse. All insurance will end at the time of lapse, if the policy has no cash value and no dividend values. ' If the policy has cash value or dividend values, insurance can be continued as paid-up insurance, but unless stated otherwise in any rider attached to this policy, insurance or benefits from riders or dividends will end at the time of lapse, even if paid-up insurance continues. Options Upon Lapse If the policy has cash value or dividend values at the time of lapse, it will con- tinue under the Paid-up Insurance option. Instead of paid-up insurance, you have the option to surrender the policy for its cash value proceeds. 1.Paid-up Insurance Paid-up life insurance begins as of the date we record your notice elect- ing it, or begins at the end of the grace period if later. No more premiums are due for this insur- ance. It is payable to the beneficiary when we have proof that the last, or both, of the Insureds died while this paid-up insurance option was in effect. Reinstatement Within 5 years after lapse, you may apply to reinsi`ate the policy if you have not surrendered it, and provided both Insureds are alive, or one Insured is alive and the non- payment of premium occurred after the death of the other Insured. ~Ne must have evidence of in- surabilitythat is acceptable to us. All overdue premiums must be paid, with interest at 6°r6 per year from each of their due dates. If a policy loan interest: rate of less than 6% is in effect when the policy is reinstated, the interest rate for all overdue premiums at the time of reinstatement will be the same as they policy loan interest rate, or rates that were actually in effect for that period. However, that rate wilt never be more than 6%. Any un- paid loan, and any loan deducted when we determined the paid-up insurance, must also be repaid. Interest on the loan will be compounded once each year on the policy anniversary and will be based on the policy loan interest rate or rates that were in effect since the time of lapse. All or part of these payments can be charged as anew unpaid loan if there is enough remaining loan value. We do not need evidence of insurability if we PAGE 5 91100.26-5 PREMIUMS (continued) ~` ,. a remium paid for the period after the policy receive the required payment within 31 days after month in which the last surviving Insured dies. the end of the grace period, providing all the other requirements in the first paragraph are met. If the last surviving Insured dies during a grace eriod, ~Ne will reduce the proceeds by an amount Premium Adjustment at Death We will in- equal to the premium for one policy month. crease the life insurance proceeds by any part of I CASH VALUE AND LOANS Cash Value Cash values for this policy at the end of selected policy years an the Policn Data . Table of Guaranteed Val wn on the Policy Data page. For values not sho page, the Standard Non-Forfeiture Law is used to calculate cash values. The values shown assume that premiums have been paid as called { for in the Premiums section. These values do ~-_ ~ not include dividend values and they do not . ; ~ +`~; ~ reflect any unpaid loan. Cash values at othrenrs ~~.j times depenaidnand on how much tpme has passed have been p , since the last policy annivers uryh clash value ask us, we will tell you how m there is. ~ The cash value on the due date of an unpaid I . premium will not decrease during the 3 months . , after that date. Also, the cash value of any 1 ~ paid-up insurance on a policy anniversary will not decrease during the next 31 days after that anniversary. At any time after the policy has cas{ forltheor I . dividend values, you can surrender i sum of these values, less anurance will end when any accrued interest. All ins you send us your signed request for these sur- f; render proceeds. !~ '` We may defer paying these proceeds for up to j 6 months after the date oft deferred beyond that _~ ~ , will be paid on any amoun _ = ~.~., date for 30 days ar more. We set the interest rate each year. This rate will be at least 3.5% per year. Loan Value You can borrow any amount up to the loan value, using this policy as sole security. On a policy anniversary, on a premium due date, or during the grace period, the loan value is the cash value, plus any dividend values, less any un- paid loan and accrued interest. At any other time, the IQan value is the amount which, with interest, will equal the loan value on the next anniversary or on tl~e next premium due date, if earlier. We miry require that you sign a loan agreement. We may defer a loan, except to pay a premium due us. for this policy or any other policy you have with us, for as long as 6 months after we receive your loan request. Loan Ilnterest Loan interest accrues each day. Interest is due the earli the date of ldeath of the . on each anniversary, on last surviving Insured, the date of a surrender, a lapse, a loan increase or loan repaym the tonanrand est not paid when due becomes part of will also bear interest. Loan Interest Rate The loa s~described in thish~s policy may go up or down a provision. However, the rate at any given time will apply to the entire amount of an unpaid loan. We may set this rate as often as ch a aeThe oan hs, but ~Nill set it at least once ea y interest rate will not be moroeWnan Moody's Coyporai Average Corporates yield sh Bond Yield Average publish od bo Mat service estors Sen+~ice, Inc., or any success (the published monthly average), for the calendar month ending 2 months before the date on which the rate is determinedished monthly avler time, as determined by the pub age, is 0.5% or more above the current loan interest ratE;, we have the right to increase the loan in- terE;st rate to reflect this. However if the rate, at i;his time, as determined by the published monthly average, is 0.5% or more below the PAGE 6. 91100.26.6 VALVE AND L~A-NS (continued) CASH urrent loan interest rate, we will reduce the loan in- c est rate to reflect this. The loan inter he base pal- ter never be less than the inteta taaeeplus 1°!0. icy shown on the Policy Da P 9 We will tell you the interest rate in'ufm Loan (APL), is loan, including an Automatic Prem ade and when we send you notice of loan interest m 40 days or more be- due. If a loan is outstanding _ fore the effective date of an increaa{ in ease terest rate, we will notify you of th at least 30 days prior to its effec the nteereste ou of any increase in will notify y the 40 days before rate when a loan ~ of thee ncrease. the effective date It may happen that the published monthly average ceases to be published. In this ca ance supervisory roved by the insu a new basis app official of the state or district in which the policy is delivered. Automatic Premium Loan (APL) If elected, APL provides an automatic loan which pays an over- due premium at the end of the grace period, subject to 2 conditions. First, the loan v clondmif premiums enough to pay that premium. Se APL for 2 years in a row, the have been paid by aid by APL. After a next premium will not be p premium is paid other than by APS canf again be end of the grace period, premium paid by APL. APL can be elected in the application. You can also elect APL in your signed notice whie odeYou can ceive before thetion for fut ue premiums by tell- cancel this elec ing us in your signed notice. Loan Repayment All or part of an unpaid loan and accrued interest can be rep beforeo ou he death of the last surviving ill deductrany unpaid surrender the policy. We w able. loan when policy proceeds are pay continued as paid-up insur- If the policy is being that ance, any loan which we deducted in determining be re aid only if the policy is rein- insurance may P we will not de- stated. If that loan isoi act re ocleeds are payable. duct it again when p Y P When Unpaid Loan Exceeds Len that based on the given policy year it may happ loan interest rate in effect whets during that year), (ignoring any higher interest ra an unpaid loan and accrued interest ndlvaluesalnhe sum of the cash value and any divide this case, we will mail a notice to y ssa neeuon our known address, and a copy to any a 9 records. All insurance will end 31 a of the excess of date on which we maaccrued ~nterest over the sum of the unpaid loan and the cash value and any dividend values is not paid within that 31 days. ha en that After a given policy year begins, it maytake effect a lower loan interest rate or rates may aid loan and during that year. In that case, if an unp divi- accrued interest exceeds the casof nlterestan ny dend values, we wila~ betan rWe will also take into effect when that ye 9 uting the account the lower rate or rates in comp eriod while that lower accrued interest for the p rate or rates were in effect. We will not terminate this policy in a given year as the sole result of a change in the loan interest rate during that policy year. In addition, we will that policy year until the maintain coverage Burin would otherwise have time at which the policy terminated if there is no change in the loan interest rate during that policy year. PAGE 7 91100.26-7 DIVIDENDS ~: olic is in force, it is Annual Dividend Whu~ed visible surplus. Each year we eligible to share in °,s share, if any. This share, is paY- determine the policy if all prem- able as a dividend on the policy anniversary, ect a ue before then have been pa-d. We do not exp iums d a able before the second anniversary. dividend to be p Y lied Dividend Options Each dividS{e below. An option tions li under one of the 4 °P lication. You can also can be elected in the app change the option for future dividends if elect or you tell us in your signed notice. lied to provide paid- 1.Paid-up Addition App e insurance at the net single premium rate up lif es of the Insureds. No more for the attained ag remiums are due for this insuraSCB f he the s P ible for dividend value and is elig ou can surrender last surviving Insured's death, y onion of t aenst The amount paid-up additions for the p value that has not Beene at the astsurviving of this insu a{~ w ~If be part of the life insurance Insured's d proceeds. 2, Dividend Accumulation Left Cit anniver- accumulate at interest. On he ~ateowe set each sary, we credit interest at t er ear. year. This rate will be at I n u ed's deaf ,you can Before the last surviving I cumulations that have not bee ~eirrowed withdraw ac a ainst, with interest to the da{ ~I ha a atrthe last 9 Any accumulations which we s 'vin Insured's death will be part of the life survi g roceeds. insurance p 3. Premium Payment Applied toward paY- rovided any balance of that ment of a premium, p art of the premium is also paid when due. AeYrnPum will be dividend not needed to pay the p used to pay any loan interest da d ~n cash Any have asked to have not used to paY a Premium part of the dividend aid in cash. or loan interest will be p 4. Cash Paid in cash. Lion is tion If no othea able, we Automatic Dividend Op in effect when a dividend additionSlpwe PaY a will apply it as a paid-up ' 'dend in cash, and the dividend chaends not dive ear after that div cashed within one y I the dividend as became payable, we will app Y a paid-up addition instead. idend Values Dividend values are any divi- Div lus the cash value of any dend accumulations p paid-up additions. shorten the prem- Pulicy You may it made Fully Paid-uP olic b having ium paying period for this p Y y with no more prem-ums dhe suhmsof the fully paid-up be done on any premium due date,uals the total cash value and dividend valveth a face amount equal le remium for a policy sing P olio lus the death to the face amount ders,'based on the attained age benefit under any r~ our signed notice of each Insured. We m date ceive y within 31 days of tha art of any annual divi- Dividend at Death The P alit anniversary to dend earned fromlic emonth in which the last sur- the end of the Po y , art of the life insur- viving Insured dies will be p ante proceeds. F POLICY PROCEEDS PAYMENT O a the life insurance proceeds Payment We will p Y art of these gro- in one sum or~ ~f aced under one or more of the ceeds may be pla ree, the options described in this secdeioeome other proceeds may be placed un method of payment instead. ife insurance proceeds paid in onrom he Iaast Any I ounded each year f bear interest comp a ment. We surviving Insured's death to theThisr ate w II be at set the interest rate each year least 3.5% per Year, and will not be less than re- quired by law. lection of Optional Method of Payment While E ou can elect or at least one of the Insureds is living, Y e one or han a an option. You can also nurancer p oceeds c 9 more beneficiaries fee oh plaYeessunder that option. who will be the paY arson who is to After the surviving Insured dies, any p eeds in one sum (other than an e~son who receive pros tion and name payees. The p can elect an op is an option can also name one trw have at the elec un aid amoun payees to receive any P a a ee or payees cancels death of a payee. Naming ogee for such unpaid amou prior choice of successor p Y PAGE 8 91100-8 MENT OF POLICY PROCEEDS (continued) PAY q payee who did not elect the option does not have the right to advance or assign payments, take the payments in one sum, or eakVen { ether change. However, the payee may b g right to do one or more of these things if the person who elects the option tells us in writing. Change of Option A payee who elects Option 1 A, 1 B, 2A or 2B may later elect to have any unpaid amount we still have.lacedeundersome value of any elected payments, p other option described in this section. payees Only individuals who are to receive payments in their own behalfumless we gree to payees or successor payees, some other payee. We may require proof of the age or the survival of a payee. It may happen that when the last surviving payee dies, we still have an unpaid amount, or there are some payments which remaint wt h nterest to we will pay the unpaid amoun the date of payment, or pay the present value of the remaining payments, to that payee's estate in one sum. The present value of any remaining payments is based on the inseiess than then sum. compute them, and is alway Minimum Payment When any payment under an option would be less sent $al~ue oof any remain ng unpaid amount or pre payments in one sum. Options 1A and 1B. Proceeds at Interest The policy proceeds may be left with us at in- terest. We set the interest rate each year. This rate will be at least 3.5 /o per year. every 3 months or every 6 mon~the(od of eaas or year, as chosen, fora{ 1Ne set t e interest rate for for an elected amoun these options each year. This ratthanl3 5%,tWeast 3.5°/° per year. If the rate is more will increase each payment to~ reflect this. 2A. Income for Elected Period We make the payments fos based on 3.5 /years elected. Monthly payment interest are shown in the Option 2A Table. OPTION 2A TABLE Minimum Monthly Payment per 51,000 of Proceeds Years Years Years Years 1 $84.65 5 $18.12 9 $10.75 1.~ ~ 10 9.83 20 5.75 y 43.05 6 15.35 13.38 11 9.09 2_ $_-__ 3 29.19 7 11.90 12 8.46 ~ _ q 22.27 8 When asked, we will state in eriti3 months or h payment would be, if made e ry every 6 months, or once each year. 2B. Income of Elected Amount We make payments of the elected amount until all proceeds and interest have bmust be atheast total payments made each y 5% of the proceeds placeds{ of attlelast 315% on Each year we credit inters the amount we still have. Options 3A, 3B, and 3C. Life Income 1A. Interest Accumulation We credit interest each Yen be w thdrawn at any still have. This amount ca interest to time in sums of drawal on sumsuwthdrawn. the date of with 1 B. Interest Payment We pay interest once each month, every 3 months or every 6 months, or once each year, as chosen, based on the amount we still have. Options 2A and 2B. Elected Income We make equal payments once each month, We make equal payments each month during the lifetime of the named payee or payees. We deter- minethe amount of the monthly payment by ap- plying the policy proceeds to purchase a cor- responding single premium life annuity policy which is being issued when the fast oa ~ ate yis due. Payments { re emeum ` tee n of e p at that adjusted annul y p time, but will not be less than a tables for pp ing minimum amount based on th tions 3A, 3B, and 3C in this~p98 Table a"nmo~m amounts are based on the tality table with project:oon, and with interest com- pounded each year at 4 /o. PAGE 9 91100.26-9 PAYMENT OF POLICY what the When asked, we will stack ~o they payment would minimum amount of ea be under these options. It is based onto eesx n and the adjusted age of the payee or p y the year the first payment is due. To find the ad- e, we increase or decrease the payee's justed ag age at that time, as follows: 1990-91 1992-98 1999-2006 2007-2013 2014-20 2021-28 20293 o _1 -2 -F 3 + 2 -F 1 3A. Life Income-Guaranteed Period We make a payment each mots do note hange, lifetime of the payee. Paymen ears, as and are guaranteed for 5,1 dies soonery even if that payee PROCEEDS (continued) 3B. Life Income -Guaranteed Total Amount We make a payment each mops do note hange, lifetime of the payee. Payment and are guaranteed until the total amount paid equals the amount placed under this option, even if that payee dies sooner. OPTION 3B TABLE Minimum Monthly Payment per 51,E of Proceeds Payee's payee's Adjusted Adjusted A e Male Female A e ' Male Female $6.47 $5.87 60 $4.93 $_ 4_ 5~ 73 6.01 64 6 61 5.02 _ 4•~ 74 . 6 81 6.17 chosen, 62 OPTION 3A TABLE - ~ pa ent per 57,E of Proceeds FEMALE Minimum Monthly A C M payee's ranteed Period Guaranteed Period Yrs 15 Yrs 20 Yrs Adjusted Gua s 15 Yrs 20 Yrs 5 Y 10 r qge 5 Yrs 10 $4 68 $4.65 $4.61 $4.54 60 $5.14 $5.08 $4.98 $4.84 73 4.68 4.60 6 4 61 5,25 5.18 5.07 4.91 . 4.76 4.67 81 4.75 4 4.97 ~ 5.36 5.28 5.15 . 4.84 89 4.83 4.73 4 5 04 ~ 5.48 5.39 5.24 . 4.93 4.80 99 ' 4.91 4 64 5.61 5.50 5.33 5.10 . 5.03 08 5.00 4.87 5 ~r 5.75 5.62 5.42 5.17 . 5,13 19 5.09 4.94 5 ~ 5.89 5.75 5.52 5.23 . 5.25 30 5.18 5.01 5 67 6,05 5.88 5.62 5.30 . 5,36 41 5.28 5.08 5 6.21 6.02 5.72 5.36 ~ . 5.49 54 5.38 5.16 5 69 6.39 6.16 5.82 5.42 . 5.63 67 5.48 5.23 5 6.57 6.31 5.92 5.48 70 . 5.78 81 5.59 5.30 5 71 6.77 6.46 6.02 5'~ . 5.94 95 5.70 5.37 5 72 6.97 6.62 6.13 5.60 . 6.11 5.44 11 5.81 6 73 7.19 6.78 6.23 5•~ g,29 . 5.50 27 5.93 6 74 7.42 6.95 6.33 5.69 . 6.49 04 5.56 6 75 7.66 7.12 6.42 5.74 . 6.70 6.44 15 5.62 6 91 7.29 6.52 5.78 7 . 6,92 6.61 67 5 . 76 46 6.60 5.81 7 . 7,16 6.80 6.27 . 77 8.18 42 6.98 6.37 5.72 7 78 8.47 7.64 6.69 5.84 , 18 6.48 5.76 7 79 8.77 7.82 6.77 5.87 , 7,69 37 6.58 5.80 7 80 9.08 8.00 6.84 5.90 . 7.98 6.67 5.84 57 7 81 9.41 8.17 6.91 5.92 . 8.29 77 6.75 5.87 7 9.74 8.34 6.97 5.94 ~ . 8.62 97 6.83 5.89 7 83 10.10 8.51 7.03 5.95 . 8.96 16 6.91 5.92 8 84 10.46 8.67 7.08 5.96 . 9,33 34 6.97 5•~ 8 85 10.84 8.82 7.13 5.97 . 9,71 & over 5.11 4.71 ~~- 75 00 7 6.34 5.20 , ~._ 76 . 19 7 6.51 5.30 ~- 77 . 70 6 6 78 7.40 . 5.40 . ~ - 62 7 6.90 5.52 ~- 79 . 85 7 7.11 7 5.63 5.14 ~ . 8 09 7.33 S 5.75 5.25 81 35 8 7.57 9 5.88 5.36 ~ . 61 8 7.81 0 6.02 5.47 ~ . 8 89 8.07 71 6.16 5.60 ~ . 19 9 8.35 73 5 85 & over . 72 6.31 . 64 ~r ~ 6 6 7 3C. Life Income -Joint and Survivor We make a payment each monthPa 1ments dor ane of the two payees are living y ears, not change, and are guaranteed for 10 y even if both payees die sooner. OPTION 3C TABLE '10 YEAR GUARANTEED PERIOD ent er 51,E of Proceust d Age Minimum Monthly Paym Female Payee s Adj Male Payee's ~ ~ 75 70 Adjusted Age 50 $4 a $4.67 $4.82 $-• . ~ $4.32 -~- 4.66 4.42 _ 4.91 5.15 ~- 4.81 4.51 5.14 5.49 7~_ 4.92 4.57 5.34 5.81 7-~- 4.99 4.61 5.49 6.07 ~ PAGE 10 91100-10 GENERAL PROVISIONS Entire Contract The entire contracendorslemsents this policy, any attached riders or lications. Only our and the attacheddentpSec~etary, op one of our Vice Chairman, Presi Presidents can change the contract, thetcontract in writing. No change Nol a eent reauthorized to without your consent. 9 change this contract. Applications In issuing this policy, we have relied on the statements made in the applications. All such statements are deemed assumethese state- tions and not warranties. We menu are true and complete t ho made thehm. knowledge and belief of those No statement made in conneus'to void theepolicy applications will be used by or to deny a claim unless that statement is a material misrepresentation and is part of the applications. Incontestability We will not contest this policy after it has been in force during the ~~ sue The rght Insured for 2 years from the date of is to contest beyond this 2 year period is limited to only that Insured who died during ct {o the Ilnsured policy is incontestable with respe ' ' who survived the 2 year period. Before the end of the second policy year, we will send a notice to you requesting n ov'ide nlotice of e death of any Insured. Failure to pr such death to us will not void our right to contest the policy. Please refer to the Incontestability of Rider provi- sion that may be in any rider or riders attached to this policy. Suicide Exclusion In the event ofne or n's ne of the first of the Insureds, while sa olic will within 2 years of the date of issue, the p y continue in force on the surviving Insured. Suicide of or the surviving Insured, both Insureds at the same time, while sane or insane, within 2 years of the date of issue, is not covered by this policy. In that event, this policy will end and the only amount payable will be the premiums paid to us, less any unpaid loan. Dates Policy years, months, and anniversaries are measured from the policy date. Age and Sex In this policy when we refer to a person's age on any date, we mean his or her age on the birthday which is nearest that date. However, if an Insured is classified in an smokerathattlnsured's than standard or standard no age is increased by an additional number of years, as e. In this case, unless described on the Policy Data pag stated otherwise, all references to that Insured's age in this policy will be based on this increased age. If a date on the Policy Data page is based on an age that is not correct, we may change the date to reflect the correct age. If the age or sex of either Issue under thCS policy as stated, any amount payabaid would have pur- will be what the premiums p chased at the correct age and sex. Assignment While at least one ofo` ae~ln'nterests living, you can assign this policy y in it. If you do this, your interest, and anyone else's is subject to that of a sh asthat havesnot been you have the rights of own p assigned. An assignee may not Chang ctho change anhop- beneficiary, and may not ele olic tional method of payment of proceeds. Any p Y proceeds payable to the assignee will be paid in one sum. We must have a copy of any assignment. We will not be responsible for the validity of an assign- ment. It will be subject to any payment we make or other action we take before we record it. Protection Against Creditors Ex enPs we make's the Assignment provision, paym under this policy are, to the extenents oa evees its, exempt from the claims, attachm , of any creditors. Payments to Company Any payment made to us by check or money order must b hen askled, we will York Life Insuranc ed recea t s geed by our Pres- give acountersign premium paid to us. ident or Secretary, for any p PAGE 11 91100-11 ERAL PR4V~S~~NS (continued) GEN ree ou may have riders Policy Changes If we a9 ~ y ed to added to this policy, or have it thong another plan or to a smaller amount of insura lit , tion You may exchange this po Y Policy Split OP orate life pol- without evidence of ins uredslwithin 6 months of the icies on each of the Ins effective date of a change in the Fee unl matedaw a reduction in th rovision which results in a) Federal Estate Tax maritanal Revenue Code), or b) (Section 2056 of the Inte a reduction of at least 50% in TaxlActlpayable estate tax rate from the 1986 on death. and both nest the exchange in writing You must req when we receive your re- Insureds must be living lan which quest. Each new policy will be on a life p was being offered by New York Life Insurance Company olic The new policies on the policy date of this p Y• may not be on a plan that provides term insurance. olicy date of each new policy will be the same Thep olic as the policy date of this p Y• olic owner and bene- Unless otherwise stated thvel P be t e same as on ficiary of each new policy this olicy. At the time each new policy is issued, p licable an insurable interest must exist under app state law. The remium rates for each new policy wilt be de- P e sex and risk termined based on a ate of thisdpol cy.~lf an In- class on the policy d risk class othefe was will cured is classified in any standard or standard non-sum for the new policy use to determine the pees before the increase will be that Insured's a9 a e, and the risk class shown on the Policy Data p 9 will be the risk class that lnsureate of this policy. been eligible for on the policy d manner. 'll take place in the following 4 5. In the event that the cash vale{helca h value the new policy is greater than necessary for the new policy, the excess will be a plied against the premium for one interval, due P olic An amount remaining after under the new p Y~ Y lied as paid-up paying this premium will be app additions. Any paid-up life insurance in force'aedattached policy and any paid-up additions to this policy will be surrendered ew folic a The value allocated equally to each n p Y cash value of the surrendered paid-up life urchase paid-up life insurance will be used to Policies on the date of ~insuranc:e under the new p exchange. olic will be divided Any unpaid to ~ e wally toseach new policy. In adc and transferee q tion, if this policy has been assigned, the assign- mentwill apply to each new policy. The new policies will take effect when all these requirements have been meth values and net Basis of Computation All cos olic are single premium rates referr ie and Fehma e, Smoker and based on the 1980 CSO Ma ounded Non-Smoker tables of mortalityte~est rate shown on the each year at the guaranteed i Policy Data page. Curtate functions are used. olic ear not shown in the At the end of each p Y Ya e, the cash value is Table on the Policy Data p 9 the reserve based on the Commthe cash value of Valuation Method. At any time, insurance or paid-up additions of any paid-up is the net single premium on each of these. We have filed a statement with the in his nolicy is ficial in the state or district in'wthe method we delivered. It describese cash values. Each value is used to compute the at least as much as the law requires. Conformity with Law This policy is subject to all laws whit:h apply• Voting Rights Each year there is an ul have the persons to our Board of Directors. YOOUr olic is right to vote in person or by mail if y P Y in force, and has been in fort o f°nd out mores year aftE:r the dot o the Secretary at our Home about this, write t Office, 51 Madison Avenue, New York, New York 10010. The exchange wi term riders 1 _ The face amount of this policy and any olic will be split equally attached to this P olicies. between the new p olic will be divided 2. The cash tureen the' new policies on the date of equally be exchange. for the 3. If the guaranteed cash value necessary new policy is more than the cash vasueoii y' a IY allocated to the new policy from th p payment will be required whichvaluesal to the difference between these cash pAGE 12 91100.26-12 pWNERSHIP T'S REQUEST IN THE APPLICATION FOR THILYPORREVOCABLE IN ACCORDANCE WITH THE APPINCACCORDANCE WITH TERMS OF THE MOSHER FAMI PAUL M. MOSHER AS TRUSTEE ST 3 1993 SHALL BE THE OWNER OF THIS POLICY. TRUST DATED AUGU NEW YORK LIFE INSURANCE COMPANY BY f~ ,,e,.,F~,~r~ .~ . .: , ENDORSEMENT RRANGEMENT CHECK-O-MATIC PREMIUM PAYMENT A matically be changed to quarterly if the quarterly This policy is issued under New York Lif an e- premium would be at least $12.50, to semi- Insurance Company's Check-0 Matic arr 9 annually if the semi-annual premium would be at ment under which the Company has been a least $15.00 and a quarterly interval is not avail- authorized to draw checks monthly againsn order able, or to annually if asemi-annual interval is Bank Depositor's specified bank account i not available. to collect premiums. While preman emenththe e a able under this a 9 The automatic premium interval) change shall be policy ar p Y effective beginning with the due date of the first Company's Check-O-Matic premium rate will premium following the termin i i a abletwould fall apply' 2 months so that a premium, p Y If the Check-O-Matic arrangemen aioWi hiau oclicy due on a policy anniversary. is terminated, the premium interv Secretary NEW YORK LIFE INSURANCE COMPANY • in. Presi ent 5023-76 RIDER PURCHASE OF PAID-UP ADDITIONS (PUA) Benefit We will pay the amount of i asu When we force under this rider t sureds d ed while this rider have proof that both In was in effect. Any paid-up life insurance purchased under this rider is a paid-up addition, and no more premiums are due for this insurance. The amosuredfs death surance in force at the surviving In will be part of the life insurance proceeds of the policy to which it is attached. However, if the policy lapses or isce underthis the values of any paid-up insuran rider will be included in the de seU n Lapsef any proceeds under the Option p provision in the policy. Purchase of Insurance The a a °i nbasedaon the net insurance purchased each ye single premium rate for the ages ffecte Insureds on the date the purchase takes e the total of all Unless we agree otherwise, olic ear cannot be scheduled payments in any p Y Y. more than 100% of the annual premin m aem ums for the basic plan of insurance (exclude g p any riders and excluding the policy fee) based on a standard class of risk. Additional payments may be made from time to time, if we a olic Inea~ under can the total payments in any p Y Y this rider be less than $100. No insurance may be purchased under this rider after it ends, or while it is not in effect. Effective Date of New Insurance We must receive each premium for any new paid-up insurance no later than 31 days after its due daU ondreceipt at least one of th uch new nsulran a wll take effect of the premium, s as of its due date. Values The paid-up insurance under this rider has cash and loan values, and is eligible for dividends. The cash values and net single pre th ~ 980 CSO the paid-up insurance are based on Male and Female, Smoker and Non-SmokerTabtes of Mortality. Curtate functions ar 5°u°sed. Interest is compounded eacamount which may be granted In determining the as a loan under the "Loan Value" provision of the policy, the term cash value will be deemed to include the cash value of this rider. urchase an amount Excess Purchases You may p of paid-up insurance, the premium for which exceeds the maximum amount, if we agree. The excess amount roof of insurability of insurance is subject to any p which we may require for the porch i sfor th s ex sur- ance.The applications used to app y art of cess amount will be attached to and made a p this policy. The time periods which relate to a suicide exclusion or to a c fo ~hatfexcess amount purchased under this rider will begin as of the policy date amolunt of new versary as of which that excess insurance is purchased. Reinstatement If this rider is reinstated, new paid-up insurance can be purchased onlYe a°n tote nni- versarywhich is on or after the date of th ment. Evidence of insurability, acceptable to us, will be required with any such reinstatement. Contract This rider is made a part of the policy, based on the application for the rider. Incontestability of Rider We will not contest this rider after it has been in forcers from the date of time of each Insured for 2 yea issue of this rider. The right to co i t {hob insured this 2 year period is limited to on y who died during such period. The ridoeSU~iived thet able with respect to the Insured wh 2 year period. Before the end of the second policy year, we will send a notice to you requesting notifica- tion of the death of any Insur{0•u aw II not void provide notice of such death our right to contest the rider. (over) 10( ~ig ; ~; l~ ~~ PURCHASE OF uicide Exclusion In the event of three o~Cnsane, S while sa of the first of the Insureds, within 2 years of the date of issue hetsurvi vn9 the rider will continue in force on t Insured. ' e of both Insureds at the same ti With n 2e Suicid surviving Insured, while ~ of this r dereis not years of the date of issu Bred b this rider. In that even able' wind be all cov Y amount PaY will end and the only miums paid to us under this rider, less any pre unpaid loan. ates This rider and the policy have the D date of issue, unless the rid {~ S cased o a same in force. In policy whichssuel of hys rider is shown in an the date of ~ ut in the policy. add-on rider which we P When Rider Ends You caonthis, wetmiust receive d ate. To d rider as of any our signed notice within 31 days of that date. Y aid when remium is not p This rider ends when any P remium. due or within the grace Pinsurdance inn force under In this case the paid-up but no more new insur- this rider will continue, ance can be purchased unless the rider is reinstated. This rider will not be in effect if the policy is insurance. In this continued in force as. paid-up case, the paid-up insurance in force mount of such rider will continue, except that the a an unpaid paid-up insurance will be reduced by Y ol'ic~ loan under the p . y~. ~ ' . ' `~ ~ ' ses, ends Also, this rider ends if the policy lap or is surrendered, without values eider will continue. all paid-up insurance under th : ; ,., , , ~.. ~. .i 4 : 1 :: _~ . .,_ ~~,.= ~°~~~~F~NEW YORK LIFE INSURANCE COMPANY ,. '.t r'.fl ~~ ~.t t ,st r- F . r i F} J t ~ '` • ,~ ° t ,+ ~~-~~};~~'~ President ;,i~ ~'~#t 11.1 ~~b=irZ..,"~ \~ ~i+~~~~, t ~. ~ z ; , ~~ „ Y _ Secretary ~' is aY ~~ ~, _ ~ °~~' ` ` _' ? - t ~ i 4 ysl'i it }~i ~•} i~.~ w~ S mil '~ ~w,},.pp yz.~t,~i~" ' ~ 'i ~ °i ~~=~~t 4: n~*t~ r ~ V t 1 f 5~ .,n S i ~' ~ 1 i i f I j .1 ~~~ t{ `:~j4~},j~fr~h (!.{~ ~• Y'Ylit j t, 4 :. r ~ _5T lS t t •~4 't Yt1 `~ .. '1 ~4~, .~ t.}1' i` tit s • ~ , t _. t: , t ~ t. 'i PAID-UP ADDITIONS (pUA) (continued) f AMENDMENT I 1 NOTE This requirement must not. be changed or modified in any wa , but as made out by New York Life Company y NAME MOSHER, FRANK A. The New York Life Insurance Company will please accept the following answers in lieu of the answers to the corresponding questions in my application for insurance dated as indicated at NUMBER 44 964 091 the left. APPLICATION DATED 06/22/93 QUESTION IN CONNECTION WITH THE ANSWER ON YOUR APPLICATION N0. "* CONCERNING LATEST CONSULTATION IT IS UNDERSTOOD AND AGREED THAT DETAILS TO THIS ANSWER INCLUDE THAT: RECOVERY WAS COMPLETE WITH NO FURTHER TREATMENT OR CONSULTATION ADVISED. and I hereby agree that the above answers shall form a part of my said application for insurance, the agreement in which I hereby renew and confirm, and shall apply to any policy issued thereon. Dated 19 Proposed Insured WitnessARNOLD,JAMES H HEINRICHS,BRETT J Appliciant Forward to the Central Records Division from V85 General Office 19 2ss~s~ AMENDMENT 100 prig a NOTE This requirement must not be changed or modified in any way, but as made out by New York Life Company -' The New York Life Insurance Company will please accept the NAME MOSHER, MRS. VIRGINIA B. following answers in lieu of the answers to the corresponding ~~~ questions in my application for insurance dated as indicated at NUMBER 44 964 091 the left. 3 APPLICATION DATED 06/22/93 L< IUESTION IN CONNECTION WITH THE ANSWER ON YOUR APPLICATION 10. ** CONCERNING LATEST CONSULTATION IT IS UNDERSTOOD AND AGREED THAT DETAILS TO THIS ANSWER INCLUDE s THAT: RECOVERY WAS COMPLETE WITH NO FURTHER TREATMENT OR CONSULTATION ADVISED. __ g! S d I hereby agree that the above answers shall form a part of my said application for insurance, the agreement in ich I hereby renew and confirm, and shall apply to any policy issued thereon. ~J i `.ed 19 :nessARNOLD,JAMES H HEINRICHS,BRETT J Proposed Insured Appliciant Forward to the Central Records Division from V85 General Office 5) 19 ~~ li! li ll. LJ r j ~ U G J J LIFE INSURANCE APPLICATION (PART I) TO: NEW YORK LIFE INSURANCE COMPANY (NYLIC) 51 Madison Ave., New York, N.Y.10010 p YORK LIFE INSURANCE AND ANNUITY CORPORATION (NYLIAC) (A Delaware Corp.) 51 Madison Ave., N.Y., N.Y. 10t ew ^ Amend Application ^ Reinstatement Pol. No ^ Conversion ^ Att age ^ Orig Dated / / ^ Change Request } ^ GIO/PPO/GIR/SPO Application ^ OCV7YTR ^ Desig. Insd. - 51~u ~r'1na msa - ~w~ ^ SCI Spouse' ^ CPB Applic. ^ Sex ~/ T~itle~ ^ Mr Relation ^ M CdF [~3'Mrs ^ Ms ^ to PI w~~~ Namt/eM~d I~I( IK~.~ I~ 4r'~ I~ h I 1=~I I I I I I I I I I I I IAST NAME~y ~~ I~I ~I ~ I I I I I I I I I I I I(( l I & Suffix {{ rr `'ll~ `` ^ Maiden I I I I I I I I I I I I I I I I I I I I ^ Known as Born , , irthplace M/D/Y ~~ l t I 1 1 State, Ctry. ~ ~~ ~S~ Soc ` JC - 1 6 - I ~ W - Sec Address ~~ /~ ~~ ~ L ~T2 Fr, -~ Street C~ city N~~ Cv~~~2L~~ I ~{ ~ ~ + Time , State ~1LJ Zip L~LL_J Yr/Mo ~ . Prev Str (within 2 yrs) City Occupation Duties /~o~i~~i~~cF2 Employer Streetss 43 CA~oL sr% ~~F %~ city ~~~ CuM~~2L~ ~ >~ 4~ ~ -7 + ~ Time .~ p ~ I_pl State 171 Zip Yr/Mo Prev Occupation (wittiiri'2 yrs) Previous Duties Previous Employer Previous Street City I I I + Time ~ I State W Zip L_LI~J Yr/Mo I ( I + Time I I I ~ • If SCI Spouse, answer through Soc Sec only State W Zip WSJ ~ Yr/Mo W DEPENDENT It~ISURED(Sj under SCI or CI (single, under age 18, resides with PI) I I I I I II I I I I I I I I I I I I I I I I 1 1~~ 1 I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 11 1 Name- Relation I I ^ M Born ' ' I / ~, ~ Name Relation ._ .... ~ ^ M Born I I I 1J/ / ^ F M/D/Y ~ to PI ^ F M/D/Y t ~ ~ to PI -- I I I I I I I I I I I I I I I I I I I I I I I N L1~1 I I I I I l l l l l l l l l 1 I l Name Relation I ^ M Born I I I, I I I~~ I ame Relation I ^ M Born I I I, I I I, I Y t ~ ~ L~J to PI ^ F M/D/Y t ~ ~ tJ-1 to PI L ^ F M/0/ ^ Check box if more than 4 dependents. Use Details, ~. 18. 99z-500 _ Cj7 oo~cnn~ ~,v/~-~JC~~L ~F_25o~li~EL~i~iin~is~; ~'EG u Rf~ iL S~i~SYS~~~S /~ '3 ~~akE~ -~- 9TH s~~r~~~' /j By ~ ~ 73 iiR'YGSiFdlE!tA'. at+rea:,4 •: .'¢:.: i'SIICSt~XR~. A~rWfi~tROi>~'s.~Ei :4% RIDERS ^ WP ^ WP ^ WP ^ WP ^ PUAR ^ WP ^ ADB ^ADB ~. ^ADB $ADB Sched. ~ ADB $ $ $ $ ^ OPP ^ COM ^ OPP ^ COM ^ PPO ^LBR Unsched. ^ SCI Sched. Sched. $ ^ $ # units $ $ ^7YTRP1 ^DOT ^CI Unsched. Unsched. $ $ # units $ $ ^ADB ^ LTR ^ PPO ^ DOT ^ DOT ~ $ $ $ $ $ ^ PPO ^ EDB ^LBR ^ CPB ^ SCI $ $ ^ ^ SCI # units ^ 7YTR/oci 1 ~ DTR # units ^ CI $ ^ CI # units ^ADB yrs - # units ^ PPO $ ~ ITR ^ PPO $ ^ PPO $ $ ^ 7YTR PI $ ^ ^ 7YTR PI $ ^ 7YTRJoci 2 $ ^ 7YTR/oci 1 $ ^ lYTR/oci 1 $ ^ADB $ ^ 7YTR/oci 2 $ ^ 7YTR/oci 2 $ ^ PPO $ ^ 7YTR/oci 3 $ ^ 7YTR/oci 3 $ ^ 7YTR/oci 3 $ ^ 7YTR/oci 4 $ ^ 7YTR/oci 4 $ ^ADB $ ^ I PTR $ ^ IPTR $ ^ PPO $ ^ SPO $ ^ SPO $ ^ 7YTR/oci 4 $ ~~^ LBR $ ^ LBR ^ ^ADB ^ $ ^ PPO ^ LBR '~ ~ . ~ Y ~ ..:f TT •• - ' ~ ~t- i 4 ~ ~~ ~~. ~ T . ~5~ ~.` '.~• : iy ~. _ ~ v INSURANC~~~ ~~~~~.... ~>~~ ~~~` i.K KM K. - ; ~ ~ DQ~~o~h~v~ ~ I R 9;o e~~ °~fQ ~' If "Yes;-~'7ota ~A ~o :a ~ =.a ' ~~ ~ a~~es ~ m~ or issued in s-~~a11 ~C~s ~~ pend L~ e h ve other Do you ,~ ; a y e k...si. _ If Yes, Person Company ^ MDW a LBR ^ ADB ^ ^ GIR ^ CI # units ^ OCI PI ^ OCI 1 ^ OCI 2 ^ OCI 3 ^ OCI 4 ^LBR .:~ [Uv .¢~ Yes No Yes No Yes No Yes N . ~: , ens ~~ : ~~ ; . Yes No Yes No Yes No Yes P k r ~6,~ ~:. ^ ~ ^ ^ ^ ^ ^ Amount $ Plan No. • 992-500.07 992500 9(a): Answer if4cash ~s`mtended tobe paid with this application:; Is~ it:ag:reed that .cash wiel~j the attached receipt, that any coverage'will.be provided only as. stated m the attach ~a coverage~are met and ghat any such coverage will be temporary='and limited m amour z' s kj6 fe ~"~.,`"~ryF,: .x ~ tx ~~'~~.; P=,.. "~'''fz s. N^ s ~.a ~` 1{ „`?si s If'`N~o" to 9~a~ or,ifan ~,part~of~Questions;;8(a); 8(b)Ro~~8(cj~are answe~re~~es: ~,cas b ~T-OTAL CAS~~sPA1D~~ . ,~D .~M~, ~ ~? ar~~dmen~,~cas,~~ via -:. ; ~~~ YY ~.~: pendentcch(~ a '~ I ~in ~,or~SCl/Gl tiffs coTverage~~' If~yes~~ee'~3Pa~ 1~ 10.~,Is a spouse,ork ~~ ~~ ~. k =~~. ~.:~~~,..~,~~._ . .^"J2o,.;.. c...., ...'~n.v;ti:`l. ..-t.~f .. Y. P. .:i i4rJ3;'Y..i~"06 t'?f ,.bt L. ...?PS .S.'s .< .. 11 INSURANCE ON CHILD? Answer if Proposed or Other Covered Insured under 18 yrs. n any "No" in Details. . /~/ Yes Ni ' arent or le al uardian attach proof of guardianship) of Proposed Insured or Other Covered Insured .. ~.......... ^ C (a) Is Applicant a p 9 9 ( (b) Is Applicant employed and providing Proposed Insured's or Other Covered-Insured's main support? ............................................ ^ C (c) Is all life insurance in force on Applicant at least equal to that on Proposed Insured or Other Insured ? .......................................... ^ C If Child resides in NY and age is over 4 yrs 6 mos is amount in force on applicant at least equal to 2 times amount on Child? ...... ^ C If Child resides in NY and age is under 4 yrs 6 mos is amount in force on applicant at least equal to 4 times amount on Child? .... ^ C (d) Are all other children in family insured or to be insured for an amount at least equal to that on Proposed or Other Insured? ......... ^ C 12::TOBA000/N,IC.U~T1N~;~~ ~ z ` s= ~ ~_~ ~`~~~~ ~ ~ _ ~~ OTHER 1 OTHER 2 OTHER 3 OTHER 4 If a{/,~~~e~~ or over~~ ~~o~tcy~Qate;-have you ~ ~..f~~= ~ ~ ~` Y, a ~ fmv4s ~ '"yy4 ~t ,S.iy, $ ~ ^~ ,tZ, t n,;`s ~ ~ ~~ usedt~bacco or mine r`: rl form In~last 5 ; 4 Yes .Wo~ x~ Yes o Yes No Yes No Yes No IfeaYes~ndicat~~t~~ . e~~~ ~ ~ i = ~{r ~ ~ ~ ~, . date af: ~s~ ~, ~ ~~ x x ~a "j7,~ V ~.F. ~, s &a w`~a ~ ~ k 3, fix. :~Y: k R r ~ ~ 3 ~ ~v. 6 ~, ~ I ~. &~'a, f ~k~ ~27Y Y t- G v .. fx .~L $? ~ lam. W ~ 4 SI S'. F °. .~( ^1Kx e". T F < .. ~~ ~ i y.. S ~ 1 R~.x ~~ ~ A~' ~~~~ ~ ~~~~ ~ ~ ilNQERWF~ } , 13 DEPENDENTS OTHER 1 OTHER 2 T _ _ _ . .... .. .r .. ; + $ ... ~r 'hx 4 ' z 1a _ . ~ en~e ~.;it ~ ~ . ~ I ~ ia" m ~ote~ I dependents nam ed in Q. 1. R. . a irk ast 2~, ~~~ ~ $, . ( )% ~ ~. you4Enow int 3 ~ t ~~ ~~„ F w ~ ~ If "Yes", suht~ ~ ~ ~' °~~ 4 ,~~`.~¢ ~ } y ^ ~~~° 9 ~ - s ft t ft fly ircr ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes n e ~ i ~ . a a ~ ._ ~ • ~3 a ;.. z ~ $i . n motorcycCr~ ~ ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes Y ~ . $A~ ~ ,~;,_~~ ; [~~. a $ ~~ snp~vmoGli la~ . Y ^ Yes ^ Yes ^ Yes ^ Yes es ^ Y 3 . ~ r,.~ ~ motorize..:: ~ ~,. ~~ . , ~< ~T~~M^f` ~_ ^.~ . . - ~ x« R~ ~ ~ ~ ~ ~ ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes es ^ ^ Yes : ~ n ^ ~ : # . scuba divine ~( T ]~ ~3 =i 7 "^ ~:~ ~ ~ l: bal~oonin ` ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ~ ~ ;~~ ~.~~~ ~ ~ ' ~ ~_-~ ~ ~ ~°~ ~ ~ ~~ . ~ _ ~ ~`~°.p Y s pa~~ichu#~~ ~_:~ ~ : ~~ ~ r4. ~: ,. ~ .. ~ - ~ ' ~ ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes , ~ ~.0 Yes. ; . ~ z . hang gl~dr r`:: ~.~~ ~ r~S ~~~` ~ _ ~ ~~ ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes Y _ ~ ,: ~ p ~ -y .~ ~ ~ ~ ntai~i +~u 'r~~ ^ Yes ^ Yes ^ Yes ^ Yes es ^ . . . r~~eo r~~i : x ~ : ~ ~~ ;~ ~ ~.~ ^ ~ y~~ ~,: ~ ^ Yes ^ Yes ^ Yes ^ Yes ^ Yes ^ No _. .~. ~ x ; ; ~X`~ Each p~~rT of f~t~ ~ ~ .~ f. o ^ No ^ No - . {b) In I,~~t 2 y~~ _ ~~ " n es~ed~Q~ ~ x g, ;: ~, ~ ~ No Y Yes No Yes No Yes No >~ ~N~ r. F~Yes :: im ..risoned~ a _ ~ .~ s.. ~ a :ybur~~~ ~ ~ ` ed~~ ~ ' c ~ ' ~ Yes No ^ ^ es ^ ~ ^ ^ ^ ^ ^ ^ : . ~ok ,~r~s li e , driY: ; .h , :x ~.$ Jf yes give `d ~ t ~ ~ ~~yer~~s lick _ ~ : _~~~ ~ . r x " `` ~ ~ State of Iic~ i _ ~~ ~} ~~ '$~'~ ~~~~_~ . ~ ~_ sy ~~.~~ c In~last 2 `ears~~i a ~b~~ rt~de~ined~~ar ~~~ ?° 1 ~` q Y }' ~ ( . ~»~s°a~ bM-,.v'~x¢ xaY~r Ar; .k „~, ~.` 3 s .4 "!c : S~c / issue, reinstate.,p~en ~~rr new ~~~' ~~ Yes No ~ ~ Rfa y., Yes No Yes No ~ Yes No Yes ^ No ^ Yes ^ No ^ type;~~of Life or=3Health ~nsuranc.5~e'~ f T~ _ ~.-~ ~,~ x £ ~ ; ^ ^ ^ . ^ ^ ; ~ .`. r If "Yes", give Cgmpanna[ne an.~ reason in: , Details Q. 18 ~~ ~.: :°~ _ ~:. :~~: 3 ~ °_ (d) In last 2 years~h~ve you traVe~ed'or resided ~~ outside the.U.Sor Canada~Ar db~you intend Yes N ~ Yes No Yes ~ Yes No Yes No ^ Yes ^ No ^ to do so within the next 12'mas? ^ . ^ ^ ^ . ^ ^ ^ If "Yes",give Where, When, Flow long in Details, L~. 18. ~ 992-500.07 9925000 18. Details: Give nature and severity, dates and duration, treatment, including prescription medication, and results for each "Yes" answer to questions 14,15 and 16. Also use this space for any other additional details and special requests. (Indicate Ques. No. if applicable). Q.# I Name ~ Details (Name, Addr of OrJHosp. t9. APPLICANT (If not Prop: Ins . 'i~*JMid ~~~~~ ~, l l l l l l l l l l l l l l l l Street ,, t_ ,. _..:. .,. dame LAST NAME ~ t, ~ P ~j V CdY ~ . b Suffix - r' :. °~ '~:~~'~ Zip. ~:;=K.~~::=Xw~<: Born ~~ ~ ~ 3 ~ ~ ~ + ....~~s ~ ~y"-x~A~'~•.: ~. ~~ 1 / 1 ~ l~ State ~'` AAID/Y I I I :~.~. _ :. ~..: Employer=~~: _..:._: ~:~. Sec L_1~U - W - L_L~1.J ID# W Relationship to Proposed Insured Business ^ Spouse ^ Parent ^ Employer ~ ~ ~~ V 5 ~ ~F Street , Address ^ Same as PI Res Same as PI Bus ^ other as follows City l I .~..I I I I I I Mail. ~=~ ~: a;. 20. OWNER (If not First/Mid ll__y"*I ~~I ~~ I I I I I I I I I I I I I I I I Name LAST NAME v ~ R s & Suffix Min L~~~~~ Sec t__1__1J- W - L_1~U ID#W Relationship to Proposed Insured ^ Spouse ^ Parent ^ Employer ~ ~~ u5 %~ %~ Street .~~ ~: e° . :.~~.; 'City 1 W . + 1~ :z :.k~. State Zip ' `~ ~' Y If Corp., ::"Yc l I ..~: - I glace Inc. 'Inc. Successor~Uwner Relationship L1 PI ^ a~ below ' to Prop Insd II I I I I I Mail Addr ^ Same as PI's ame as A lies ^ other as follows Name I I I I I I I I I I I I I 1 l 1- 1 1 ~ 1 I I PP ^ Check if multiple owners. Give addl name, birthdate, SS#, relationship in Details, D. 18. Unless otherwise specified in question 18, if more than one owner i shown, ownership will be joint with right of survivorship. 21. AMENDING APPLICATION PREVIOUSLY SUBMITTED. Since the date the application for the policy (including any Part II) has been completed, has any person proposed for coverage: Yes No (a) been admitted to a hospital, sanitarium, or other medical facility? If "Yes" to (a), subm'r~t a new application Part II. ^ ^ {b) had any illness, or consulted any physician or practitioner for any reason? If "Yes" to (b), give full details in Q. 18. ^ ^ ~ 992-500.07 992500 _ __ ____ roiicy Numner _~ NEW YORK LIFE INSURANCE COMPANY (if known)? ~ ~ ^ NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION (A Delaware Corp.) Answers to the Medical Examiner, forming Part II of ~ 51 Madison Avenue, New York, N.Y. 10010 Applicatian for Insurance. Complete this form in private. Full Name of //~~ /~ b. Date of c. Soc. Sec. or p Person Examined? _v~tL~l1~~/_~ ___„~r______,~~2~~~1~---- Birth? Mo: l f Day:L~Yr:v~ Soc. Ins. No.? ~7_~-~~ 3a~p ,rsonal Physician a. Name. ~ ~ - - If none or if~not~ b. Address and Phone~No.? -- -___--~ -- ~----~!~~~~='-~----- ---'---~~-~--~-- ------~~~~`2-'I~/~`' - ,,Q :onsulted in last c. Last consulted: Date? _~_~~_ _~~____^ eason? ;______.~/.lJ'_~___ ~!~-Y__Q~_~___'-______________________________________ i yrs., so state. d. Treatment: TYPe? ------=--------- --- -------1-- --1_~1~?- ~-----------------Medication? ------------------------------------------- Give the~followin information so far as known for the erson bein examined. If "Yes" to an uestion ive full details in uestion 11. ast 10 years, has such person consulted a physician or practitioner 5. I n last 2 years, has any such person had any of the following: Yes No , been treated for, had, or been informed that he or she had Yes N a. unexplained weight loss or swollen glands; recurring diarrhea, ~ :hearttrouble,angina, stroke, murmurorirregularpulse? ...... ^ feverorinfection;persistentcough,pneumonia,orthrush? .... ^ Qa or elevated blood su ar. ~ b. chest discomfort, edema, transient visual loss, muscle weak- diabetes g ~ • • • • • • • • • • • • • • • • • • • • • • • • ^ Hess shortness of breath, or internal bleeding? . ^ C~J b chronicbronchitis,emphysema, asthmaorotherlungdisorder? . ^ c • ~ ~ • ~ ~ • ~ ~ • cancer, tumor, lymphoma; lupus or collagen disorder; rheuma- 6. In last 10 years, has any such person been counselled, treated or told arthritis or muscular disease? ....... hospitalized for any psychiatric, emotional or mental health pancreatitis; urine sugar; hepatitis, cirrhosis or livertrouble? ... ^ condition, or for the use of alcohol or drugs? ................. ^ 'm une deficienc ? ^ m f 7. Other than as stated, has any such person during past 2 years had AI DS, AI DS-related complex (ARC), or other i m y elevated blood pressure; thrombophlebitis, embolism or other a. treatment or surgery in a hospital or other facility? ......... ^ a ~circulato disorder; kidne disease; albumin or blood in urine? .~j ^ ~ b. an electrocardiogram, x-ray or other diagnostic test, or an ulcerative colitis, ileitis or other chronic intestinal disorder? .. ^ ~ examination for checkup or other purpose? ................ ~ ^ b c. advice about any treatment, surgery or diagnostic testing seizures, dizzinessorfainting; other nervoussystem disorder? .. ^ i which was not completed? .............................. ^ c anemia, thyroid or other blood or gland disorder? ........... ~ ^ g. Has any such person, for physical or mental health reasons, ever ulcer;hernia;varicoseveins; gallbladderdisorder;kidneystones? ^ received disability benefits, compensation or pension; or been back, spine, joint or bone disorder; eye, ear or skin disorder? .. ^ I rejected for, ordischarged from, military service? .............. ^ ;if a male) disorder of prostate or reproductive organs? 9. Any history of angina, heart trouble or stroke before age 60 among ;if a female) disorder of pelvic organs, breasts, menses or ^ ~ natural parents, brothersorsistersofanysuchperson? .. ...... ^ pregnancy, ores she now pregnant ................. If "Yes", give relationship, age at onset and subsequent history. . - ,y such'ers~n new taking'rescri'ti~n medication? ......... ^ 10. Has such Berson smoked any ciEarettes in the past 12 months? .... ^ 11. GIYE FULL DETAILS FOR EACH "YES" ANSWER IN QUESTIONS 3-10 e :s. b. Reason -nature and severity of condition? c. Onset? ~ d. Recovery? e. Names and Addresses of Physicians, Include f uenc treatment medication sur er and results. Mo. Yr. Mo. Yr. Hos itals or Medical Facilities? •--- ----------- ---j - - - -- j ----------- - --- ---- --_- 4 - -~ ~ y _ ~ --- ---------------------------------------------------------------------------------- -------------- -------------------- ----------------------------------------------------- -- ------~~~---~___----jam- ~~-'-------------------------------------------- -------------- -------------------- ----------------------------------------------------- _ --- -- _ _ - ~. --- - -- ---- - ------- ~.-- ---------------~---~~-~~~~--~~ ~~-- -------------- --C--------------.-- -----------------------------------------------~---- ;... ~DERSIGNED DECLARE THAT, to the best of their knowledge and belief, all answers given i)n this Part II are correctly recorded, complete d true. t ~ liZ on ~ ,19 ~ U/y v - Signature of person examined :ed by Medical Examiner (indicate degree) Signature of Patentor Guardian, if person examined is under 14 years 6 months ^ ^ -T aJ U L V ~J • nswer (hies. 14-17, so,far as known, for any persons proposed for coverageif t a h lies to allyde~tendents named bn Q j Application Part II is not. Details ~e required for all "Yes answers No may only be checked for dependents pp P 14„MEDICALUNDERWRITING~="~ s~~ /~~€~~°~~ ~~~~P ~ ~~~ DEPENDENTS OTHER 1 OTHER 2 OTHER 3 OTHER 4 'a)~l~ last~l0year~~ aue you hatl Qrbeen treated f±or~~°~ ~'"~1iea'~rt~~roubl`"', ~" ~ ~ ` ~ ~ ~`~..~-~ ~Ye ~ ^Yes ^Yes ^Yes ^Yes ^Yes ~_~~ z~. ~ a. ,, - ~~.~. Y ~ =1('~F ^Yes ^Yes ^Yes ^Yes ^Yes :;.~~~9~?a ~ r~ ~ ~ ~~ ~~~, ~, ~~ ~ ~fe~ ~ ^Yes ^Yes ^Yes ^Yes ^Yes ~ .e..s Y ..,, w~ ,'.~i,~ .f"'Y»a*`x k lie , ~~ ^Yes ^Yes ^Yes ^Yes ^Yes ~:~~rregular pulse, sy' .~ _ ~ _, ~~ ~s~, ~ ^Yes ^Yes ^Yes ^Yes ^Yes ~. ~y~rt hypertension ~ ^ , s ~ ~ ~, ~~ dtabefes . ; ~ - '~x a ~~~~ ~,CI•Y~s4~ ~ . - D Yes ^Yes ^Yes ^Yes ^Yes ~Q .-~:. ~~: ' ~ ~ e~ ~ ^Yes ^Yes ^Yes ^Yes ^Yes .cancer '~ ~~ Y ^Yes ^Yes ^Yes ^Yes ^Yes b i ~ ~ - 3 i ,yv ~ .: 'tc%mbr ; , ~ ~ b a` ^ No ^ No ^ No ^ No ^ No Each `art of this ques is~answered ~ ~~~ _ , ~. Frk ~ 4 b b ... P x$ M~ b) ln=last 10 years havey~ou bee~o:un$~ie~., ~~ _ treated or hosp~~a~~dford ~~ z~.;~ 'b ,~ >~ *~ ~~~ ~ °~~:~ x~A ~~ ~ Y ~ ,~~ ^Yes ^Yes ^Yes ^Yes ^Yes psyC~tlatnc card=d~f ~~ti ~~ ~~~~ £~ :: ~ ~, : ;~~ ~~ ^Yes ^Yes ^Yes ^Yes ^Yes ~~ emotionaljconditroy _ ~~ >vy :rne to ~ ~ ^Yes ^Yes ^Yes ^Yes ^Yes att {cq ~ t~ n ~ ,.~' f~ ~ .f ^ No ^ No ^ No ^ No ^ No :Each art:~.~rths~q. ~~1~~~ansy.~.:~~ed~g~.. ~ ~~~ ~.~~....._~ . ~~ ~ b~. ~) I ylas ~1o,year ~ ~Y~ ~ ~ use~=~: K a 6 ~ ~ ` ~° ~ ~~` ^Yes ^Yes ^Yes ^Yes ^Yes ~~~~e F b b : ". i ~yL', i`SP ~~ -iY~ .~o tc~~ontra~.I r s nc ~ ~ ~~, r ` "~;, ~ ~e?~: ^Yes ^Yes ^Yes ^Yes ^Yes "r 3, `~^" ~ ~ ~A ilk o.~ 'tr3 '. .~Y .. .. ~,,, Sri ~ ~youah.~ ~co_ eted; treats >~r - ~ ^Yes ^Yes ^Yes ^Yes ^Yes °~i~s~i atized.fio~ ~ se~~ . ~ ~_ ~ ~ . ^ No ^ No ^ No ^ No ^ No AXE/ n 7i• . Your,tieighty(ft Your weight (It 992-500.07 ,~~- ~`' Ilse e~ ~ ~; 3 } :. ~ .:r O <`~ ~R a x~ i .i ~:. ~ ..} may. •tv ~~'S f. D Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ^Yes ^No ^No ^No ^No ^No ^Yes ^Yes ^ Yes ^Yes ^ Yes ^Yes ^ Yes ^Yes ^ Yes ^Yes ^ Yes ^Yes ^ Yes ^Yes ^ Yes ^Yes ^ No ^ No ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^ No ^ No ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^ No ^Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ^Yes , D Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ^Yes ^ No ^ No ^ No ^ No ^ No ^Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ~ ^Yes ^ Yes ^Yes ^Yes ^ ` ^ Yes ^Yes ^Yes Yes ^ ^Yes ^Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes D Yes ^Yes ^Yes ^ Yes ^ No ^Yes ^Yes ^ Na ^ No ^Yes ^ No ^Yes ^ No ^Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^Yes ^Yes ^Yes ^Yes ^ Yes ^ No ^Yes ^ No ^Yes ^ No ^Yes ^ No ^Yes ^ No 99250007E 3. Eh1DORSEMENTS AND OTHER REQUESTS . ^ TSA ^ Pens. Trust ^ Keogh ^ Keogh with Lt. Jt. Control ^ U.S. Tax Qualified: ^ Contributory ^Non-Contributory Split Dollar: ^ Basic ^ Estate Reduced Pd. Up at lapse ^ Yes Pension Option ^ Yes "Non-Trsf." Option ^ Yes Term to Mo / Dy / Yr ~ / / (available on WL, MPWL only) Note Policy Date question is not applicable if prelim. term ~relimmary ~.....~ ._._w... _ ._ .. _._.. ... ._..,,.,>u..,,.~.~e..«.:k. ..+:•!re~~.t~s"a`,>!4ie,'~*";~..*,.k~~~`. a~ ~~A'ohl~e' .~f1::f1• t/'i,~~~~:h~i 5~: POLICY D (a) later°da1 (b) : the ~poli • <• y «~ine.'' ------- 6. REPLACE Is the tnsur If "Yes", Nal If CI Rider Standard Family Designation I Standard Family Designation II Spouse ~:}_ p~ ~• Spt p : -:1.5 .~ 2~i nor -:.~: e'i~.#o be~~;named~ ~ . .. . It 5G1 Klaer ^ Standard Family Designation Spouse NOTE: Use Named Beneficiaries section if non-Standard T I~µ,a~vv ask ~~~.~.~_ ~£• - _.~.., S'R-.: .user-: .. .Qri~.1~.t~~ly~Gi~~~~7~41,.~.;4v'i~t;at:; ~?x~`i:: ix.Z' Insured N"~t,~, ~ ~~ :~ .. ~: .: ..'•5 ~ ~!-~~ M ~S~#.'1Z .~' ~ ~! {'lL V 5.. ~ E y .. . E $/3 5~ -- .K. .,:.:,_ yr :_ .::rz m:: ~ ~, :~.: :.... i 5 N ..~...y i _~ S f ' ~...:. : '. > . - <.:: " . „ .~.` ... : .~:~ ,:.SU n w'9 ;t r o '1 ... ... ' 3:,. p S ... . 5::. x^... .+' ~ X'. ` ~ tate of Insure te: For the following designations, use the above section ^ iform Gifts to Minors (recoma a ea Ebal, if any, to" d) ) No ^ Creditors ( as interest may pp , ~ Fractions (Specify order, shares, full names and relationships) reement ive Name of Trustee and Date of Trust) ^ Split Dollar (Pt A, bus. ~ B, of last surv benediBEst Txj Insd Trust Ag (9 „ ^ Other if Basic, Est ~ Last Will and Testament (indicate Testamentary Trust") ~ pl DEPS. OTHER 1 OTHER 2 OTHER 3 OTHER 4 ~~~ `".~~"~ .~ `"ti ` ~ •~all dependents named in O. 1. `d., y.a~. ~, , ~a :. o Yes o Yes No Yes No Yes No Yes No Yes No c~ r~~ ~ ~ r one: mot~i~ti }.a~ ,,. x x;. y ~A .. tT ~; a~ 3+. R > .:e < ~.~i~c~sp~talrocothe~~ b :~ Yes No Yes No Yes No Yes N^o Ye^s o Ye^s ^o :, km ~ ~:.c (' ~ ; ~ ~on~ecutive days'i!~~~:: ~ ., ~: :~ pconsult a~ physician for. ,~ Yes No Yes No Y'es N Yes No Yes No Yes a anji reason (e. b „~ in~~mtn. ~ ~o(ds)? ^ Vote: If "Yes" to any part of question 8, cash CAN NOT be paid and an Application Part II must be completed for that person in all cases. 9925000 992-500.07 ~ ~ y. JULJJ OTHER INSURED 2 sex Title ^ Mr ~ Relation toPl ~M ^F ^M rs OMs ^ ~irsUMid Jame A5T NAME ~ Suffix ~ Maiden ~ I ~ Known as Y W D ~ W 1J Birthplace State, Ctry. I / u roc ~ _ W- . l I~ . ~o~W- ~ec address street ~~~ I I I + Time I I I ~ I I I Yr/Mo W t ~ ~ ;fate W ZiP 'rev Str within :yrs) 'i~ ~:_ ~ ~ ~ ~ ~ ~+ ~ I I I I J Time Yr/Mo V I W I I / L_ L_ OTHER INSURED 3 sex Title ^ Mr V ^ L I L I W I Relation to PI 7 M ^ F ^M rs ^ M s irsUMid lame 4ST NAME Suffix ~ Maiden I I 7 Known as porn I I I Y ~ W Birthplace State, Ctry. W A/D/ roc ~ ; - W- ~ I 11_ J ~ BUJ ec ,dd ress street '~~ I I I I I I Time I I I~ I I I I I I Zi L.1~.1._1--J + ~~~ Yr/Mo W w Mate W P 'rev Str Nithin yrs) 'i~ I I I I ITime I I I ~ W W + L~J Yr/Mo l~ fate Zi OTHER INSURED 4 -ex Title ^ Mr V I I I Relation 7 M ^ F ^M rs ^ Ms ^ L L1 ~ -~ to PI irsUMid !ame SST NAME Suffix 7 Maiden I I l I I I I l I I l l l l l l l l 7 Known as ~ ~ ~ I I I Birthplace Ctry. I ~ i State ~ I I I I c L~ J J - ~ I I W - , I I I ~ I D# W . ~ e .ddress treet Occupation Duties Employer Address Street city / I I I Time I I I State W Zip ~~ + ~ ~Yr/Mo W Prev Occupation (within 2 yrs) Previous Duties Previous Employer Previous Street • city / I ~ I + Time State W Zi L_L_l_-~-~ Yr/Mo :, Occupation Duties Employer Address Street City / +I I II ITime State W Zip I i i_1_.J Yr/Mo W Prev Occupation ' (within 2 yrs) Previous Duties Previous Employer Previous Street city / I I I + Time ~ W State W ZiP L~1~J Yr/Mo _ Occupation Duties Employer Address Street City I l l I Time I l I~ ~_I State W ZiP L + ~ Yr/Mo W Prev Occupation (within 2 yrs) Previous Duties Previous Employer Previous Street ~~ Time I I I~ I I I I I I + ~~ Yr/Mo I ~~ w fate W ZiP rev Str nrithin Yom) ity / I I I + Time I I I fate W ZiP L_L~.~-~ Yr/Mo W 992-500.07 City I I I I + Time I I I~ I l- State W Zip t L_L_1~J Yr/Mo W 9925000 .. ._ -- -~ POLICY RECEIPT ^ NEW YORK LIFE INSURANCE COMPANY NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION (A Delaware Corporation) 51 MADISON AVENUE, NEW YORK, N.Y. 10010 --'' ~~ r` ; tom, Policy Number ~, ~ ~ ~ n~ y~ 4 ~~r Insured/Annuitant ~`~ of the above numbered policy, which includes a copy of my signed application. I hereby acknowledge receipt ' n for Whole Life, Modified Premium Whole Life, and Survivorship Whole Life Policies Additional Inform zti• for this policy and the values based on those dividends reflect Ne ossible hanges n the Dividends shown in the illustrations e which is not guaranteed nor an estimate of future dividends t b s dlonedividends may be higher or lower than dividend scal , dividends and the values economy and the unpredictability of the future, remiums, or if it shows dividend values being withdrawn, illustrated. If the illustration shows dividend values being used to pay p itional withdrawals, or exercising a policy loan can cause the amount of cash premium payments a change in the dividend scale, add or the amount available for withdrawal to vary. ' idend illustration which shows values based on a reduction in di aneeX m le of Chow lower I have been shown an alternate div fanned actions by New York Life and is only P dividend scale. That illustration does not reflect any P aid may be higher or lower than shown in the illustrations. dividends could affect policy values. Dividends actually p ation and the alternate illustration, along with Form ] 1939 (Howst m~aof f tore dividends I have reviewed the above inform ation ,and understand that dividends are not guaranteed and illustrated dividends are not an e Illustr ) that will be paid. ~ ~~ Date ~ Signature of Owner ~ _ __ -~- -- ' Signature of Agent NOTE: Form 11939 must be given to the policyowner with the illustrations. 20673' 2 0 6 7 3 12 / 9 2 POLICY aWNER'S ~Oe~ 7~, y ~{ ,,,. - ~, _i _..... ... _ . _ E~HI~IT C ~-1-U:3-y? s~~or~$RS AaR$s~r~ THIS Ac~E~NT is made and entered 1997 by and amon into as of I •~ a Pennsylvania c 9' Security Savin s Mosher, and _ rporation .(the ~~ s g Systems, "Shareholders" na d individ h~,s wife )' and Paul M, uall~ ,~ (collectivel , to the following background: y' a Shareholder" .y the )~ with reference A• The authorized capital stock o shares of common stock, with she Company consists of per share . There are s~~~~shares of t Par value o f [$ issued and outstanding as of the d he Com an ~ ~ ---~ shares of the Company~s ca it ate of this AgreemenPital stock or other rights to ownership thereock and an The thereof, whether now or her ~' °Ptions, warrants eafter authorizedcQuire ownership and whether now or hereafter owned b referred to in this Agreement y~the Shareholders acreated as the 'Shares", re B• The Shareholders and the Com an agreement imposing certain restrictions y wish to enter into an Shares by the Shareholders, providin up°n the transfer of from the estate of a deceased Share g for the circumstances holder underucertainof Shares avoid disruptions npthelding for certain other matt management and control of thesComlanto NOW, THEREFO~~ in consideration of P y contained herein, the parties hereto the mutual covenants legally bound hereby, agree as fo1 each intending to be lows: 1. transfer, assi A Shareholder shall not ("transfers ~' Pledge, hypothecate or otherwise a: sell,. any Shares, or agree to transfe isPOBe °f now held or hereafter ac accordance with the quired by the Shareholder,Sexces' whether provisions of this Agreement, Pt in (b) of Shares by a Shareholder that is n fe Any Puz"Ported transfer provisions of the Agreement shall beot in accordance with the operate to transfer an null and void, and shall not to the purported trans eresht' title or interest in such S Permit the transfer of an The Company shall not cause ogres be made on its books unlessctheiticate representin an Agreement and has been made in acransfer is permitted b Shares to cordance with its te~8•this 2. T F mi ~~ A Shareholder may, Burin transfer Shares to or for the benefitareholder's lifetime, of his or her lineal descendants or of his or her spouse or descendant without com 1 In anY spouse of any such transfer shall not be made lnwith Section 3 below, exce t Company. A transferee of Shares undwlthout the consentpoftthe deemed to be a Shareholder from and er this Section shall be for all purposes of this Agreement after the date of transfer Shares sub~eCt to the t and shall receiv anY a erms of this Agreement, includind hold the provisions of this Section. g the person other than a Shareholder whoansfer under this Section to shall be effective only upon the caritas signed this Agreement a transferee to be bound b ten Agreement of the signatory party, y this Agreement as if an original 3. R i crh t o .. r ,~, •_ fa) r Section 2 above, a Shareholder shalltnon~~ Except as unless the Shareholder shall have t transfer an provided in Shares to the Company and Frank first offered to sellhsuch Mosher, or transferees from Frank .AM Moer~ Jr' ' and Virginia Mosher (hereinafter " Sher Jr ' followin ~ Other Shareholder") in accordancelw~tnia g provisions: -' h the (i) proposing to transfer Shares (themDTransfere.Shareholder Shareholder") shall first offer to sel ring transferred (the "Offered Shares 1 the Shares to be to the Company which shall_contain thetne company by notice the prospective transferee and, if the ame and address of transferee is a purchaser, the terms ofprospective exchange or transfer (the "First Notice"the Proposed sale, First Notice shall be delivered to the )• A Copy °f the the time it is delivered to the Com an Other Shareholders at terms of any proposed sale or exchan ey. Regardless of the Company shall be at the g the offer to the next prior fiscal Price per Share as of the Company's year end using the same methodology for valuation as has been used by the acco Company in determining the value at whiunting firm for the Company have customarily been transferrCh shares of the Other Shareholder to the Shareholders ed by gift from the and shall be payable as set forth in s(the Share Value"), If the proposed transfer is to be b ubsection 3(b) below. Company shall be made at a Y gift, the offer to the Share Value or such lower valueeases share equal to the Transferring Shareholder in the FirstaNo be stated by the tics. 2 - - 7~ (ii) A f of 30 days following receipt of the FComnan~,, For a Company, the Company shall have first Notice b period offer contained in the First N the option to acceYtthe exercised in writin otice. Such option shallebe Transferring Shareholderthe Company by notice to the Shareholders the with copies to the Other ( "Exercise Notice") statin Offered Shares that the Company elect g the number of Company elects not to s to purchase. If the the Secretary of the CompanasHhanY of the Offered Shares, that effect to the TransferringaSharehe written notice to the Other Shareholders (the '~Rejectionolder wrath copies to than 30 days following the Compan ~s reNot~ce ) not later Notice. Y celpt of the First (iii) Company does not exercise its option to If the Offered Shares under purchase all the Shareholders shall havertheaohti (a) (li) above, the Other Offered shares that the Com an °n to purchase any of the at the same price P Y dOeB not elect to purchase per share at which the Shares were offers to the Company under d forth in subsection 3 bragraph 3 (a) (i) above, payable as set ( ) above . (iv) 10 days after the receipt of a co 1 Within or the Rejection Notice PY of the Exercise•Notice Shareholder desirin to'acs the case may be, an Other Offered Shares not purchasedlre any part .or all of the the Secretary of the Com an by the Company shall deliver to the Shares or a specified nuynberrofttn election to Notice~~ hem Purchase . If the total number of Shares BaeCRemaining Remaining Notices exceeds the number of P, ified in the Shares, each Other Shareholder shall havavallable Offered purchase such portion of the available Shathe option to of the Shares that each Other Shareholde res as the number total number of Shares held b r holds bears to the electing to purchase. Y all Other Shareholders Within 10 days after receipt of the Remaining Notices from all Other Sharehol Other Shareholder makes no election, wit tiers or, if some the expiration of the 10_da hin 10 days after paragraph for the making of aneelectPonvided by this earlier, the Secretary of the Compan shawhichever is Transferring Shareholder and each Other S11 notify the to purchase of the number of Shares to whi areholder electing was effective, ch such election 3 ~~ (v) l ~ ~ n purchase all the Offered Shares shall b I n A closing to 60 days after recei t b e held not more than P y the Company of the First Notice from the Transferring Shareholder ur 3 (a) (i ) above . I f the Compan an P suant to paragraph do not purchase all the Offered Sharr the Other Shareholders may be transferred b es, the Offered Shares time on or before the ehe Transferring Shareholder at an of recei t b xpiration of 120 days from the date and to the p oshectivpany °f the First Notice, on P e transferee specified in thetFirst~8 Notice. A transfer pursuant to the to Notice shall be consummated in a mannerms of the First all applicable state and federal recur' that complies with Company may require an opinion of counse1es laws, and the Transferring Shareholder to that effect.l to the will hold the Shares subject to the ro The transferee Agreement. A transfer of the Offered Shisions of this made after the end of the 120_da area shall not be change in the terms of the transfereorod' not shall any prospective transferee be the identity of the to the Company and the Remaininttgharwithout a new offering Transferring Shareholder in compliancehwlders by the of this Section. Ith the requirements (b) pavme t T -'~''° • The total urcha Offered Shares under subsection 3(a) abo se Price for the or by certified check, except that at thee shall be paid in cash or any of those Other Shareholders electinoPtion of the Company Shares, as the case may be, up to 90~ o paid by the Compan or a g ° Purchase Offered Y ny such Other Shareholdtal purchase price the unsecured promissoi-y note of the u er may be Payable in e p rchaser with paid by goal installments on the last day of Marprincipal Septe~er and December of each year over ~ h. June, than three years, payments commencer n a period of not more the first full calendar g of later than the end of interest from the date of theenotetor the closin the lowest rate of rim 1e n the outstandintebailth being no unstated interestlforrest that would resultgin there at Internal Revenue Code of 1986, Purp°ses of Section 483 of the provide that if any installment ofchrPncmissory note shall paid when due, and if the default continlpal or Interest is not days after notice, then, at the electi ues for a period of 15 amount of the principal and interest rema n,the holder, the full become immediately due and Ing unpaid shall reasonable attorneys fees poytheeholdd the maker shall pay commenced because of default, er in the event suit is the right to The maker of the note shall have prepay the principal without penalty at an ti Y me and 4 79 from time to time, but prepayments shall of maturity, be in the inverse order 4• P r h se on Death f h er . (a) ComDanv Orion, Upon the death of "Deceased Shareholder"), the Company steal a Shareholder (the period of 75 days after notice of such dea have the option for a Company to purchase any Shares owned b th is received by the The exercise of the option b Y the Deceased Shareholder. e~al to the Share Value andYshall bepany shall be at a price section 4(e) below. Such option shallabeeexerset forth in by notice (the "Election Notice cised in writing personal representative, with co)1e8 the Deceased Shareholder's stating the number of Shares thepCompan teleOther Shareholders the Company elects not to purchase an of cts to purchase. If Deceased Shareholder, the Secreta Y the-Shares owned by the written notice to that effect to heoferBOnCOmpany shall give the Deceased Shareholder with copies Po th al representative of not later than 75 days after the Compan 'serecher Shareholders the death of the Deceased Sharehold Y eipt of notice of er. (b) Other Sh rehc~l yore, .,_._L . exercise its option to ~ o ° ""'' If the Company does not ~- Deceased Shareholder, the p here. S11 the Shares owned by the option for a period of 15 days followinlders shall have the Notice or the Nonpurchase Notice g receipt of the Election from the Deceased Shareholder's estatehancase may be, to Deceased Shareholder not purchased b Y of the Shares ofrthese subsection 4(a) above. ~ Y the Company pursuant to Value and shall be The Price per share shall equal the~Shar Shareholder desiringatobac aer.set forth heretofore , e purchased by the Compan steal a any Part or all of th Sharesr Shareholder's Y 1 deliver to the Deceased not personal representative a written election to purchase the Shares or a s ecified number of n Notice"). If the total number of Share them (a Surviving Surviving Notices exceeds the number of eavpecified in the Other Shareholder shall have ailable Shares, each specified in the Other Shareholder1sYS up,to the number of Shares purchase such portion of the availableu haresg Notice, to Shares that the Other Shareholder holds be as the number of of Shares held by all Other Shareholders, ars to the total number purchased on such a priority basis shall beTae Shares not more successive allocations to those Other Sharocated in one or to purchase more than the number of Shares i eholders electing priority right, up to the number of Shares sn which they have a respective Surviving Notices, in the pecified in their proportion that the number 5 80 of Shares held by each of the Other S number of Shares held b hareholdera bears to the days after receipt of theaguryhe.Other Shareholders. Wit ' Shareholders or, if some or all ptg Notices from all Otherln 10 election, within 10 days after theher Shareholders make no period provided by this subsection fopiration of the 15-day whichever is earlier, the Deceased S r the making of an electio representative shall notif ~ hareholder's personal n' the Secretary of the Com an in writing (the Effective Notice~~ P y and each Other Shareholder electi, to purchase of the number of Shares t effective, o which an ng Y election was (c) the Other Shareholders do not Relectetta ~v~' If the Com an owned by the Deceased Shareholder, the Purchase all of the hares the Deceased Shareholder shall have t Personal representative of Company to purchase any of the Shareshe right to re Other Shareholders have not a that the Compairandhe representative of the DeceasedeShar tO Purchase, Y the purchase of Shares pursuant t eholder elects to ree Personal representative of the Deceased Shas subsection, the Quire the Effective Notice the number of Shareholder shall stater~nnthe representative elects to re res that the price per share shall a Quire the Company topersonal ae set forth heretofore~al the Share Value and ehallabe• The Payable (d) purchase all or part of the Shares of th A closing to shall he held not more than 120 da s - e Deceased Shareholder Deceased Shareholder. Y after the death of the Company or the Other Shareholdhares that are not purchased Shareholder may thereafter be transfom the estate of the Dec aced representative of the Deceased Shareholderby the Personal of this Agreement but any such trans free of the applicable state and federal secur' .fer shall-.comply wpthvallons require an opinion of counsel to the1eerlaws and the Company may the Deceased Shareholder to that effep BOnal representative of ct. 5 • ~nvolunra,~-;~ TransfAr,~ In the event that the Shares owned b be subject to sale or other transfe Y any Shareholder shall or insolvency proceedings, whether voby reason of (i) bankruptc distribution of marital propert fo luntary,or lnvolunta Y distraint, le Y llowing divorce, or (i ~'~ (ii) the Shareholder~owninutthe~ °r any other lnvolunta and each Other Shareholder Writcted Shares shall ~ transfer, ten notice thereof give phe Company prom tly upon 6 81 the occurrence•of such event, stating the t transfer, the identity of the erms of such proposed value or consideration, if readilyodeae~inaferee, the which the Shares are pro osed nable, on the basis P to be transferred, and the numberf of Shares to be transferred. shall have the same rights of firstorpany and Other Shareholders respect to the Shares proposed to be transfe respectivel in Section 3 above, except that the rred as are setwfort Share shall be the lesser of the ripeice tO be h assigned the Shares in Paid for each P value or consideration Value for which the involuntary transfer or the Share provision is hereinbefore made. 6 • himita ~ on on O~1'1Danv Purchase General~• The Company shall not ex ercise an option to purchas Shares, nor shall the Com a purchase Shares, if the P ny be required to prohibited at the time underh15epan the terms proposed would be cable provision of law. C•S• §1551 or other appli- 7 • ~ CO O?"a t i 9n PrOVl 8 i on ~ .. (a) Each Shareholder acknowledges that the Company and each other Shareholder have enter ment with the understanding and expectation thatinto this Agree- be taxed as an "S corporation under the Company will United States:•(ii) the tax laws of the) the tax laws of the vania; and {iii) unless otherwise agreedCtombonwealth of Pennsyl_ the Shareholders, under the tax laws of each~y more than 50~ of status (or similar status) is available and intate where such the Company does business or any Shareholder which at any time Shareholder {and each Shareholder's s ouse is resident. Each necessary and appropriate steps and execute allll take all ppropriate consents and other documents re iredecessary and election to be taxed as an S corporation eft tO make each of the 'United Staten and the respective stfective under the laws Company files an election to be an S co orates in which the z"p ation. {b) ~O~ Attnrr~py • Each Shareholder holder's spouse) hereby irrevocably consti {and each Share- President of the Company, Or any successortutes and appoints the substitution, his or her true and lawful attwith power of agent, to execute, acknowledge, verify, swearrtoy-in-fact and and file, in such Shareholder's ~ deliver, record stead, all consents, instruments~odocumuae s) name, place and may from time to t-ime be re ents and certificates that States, the Commonwealth of Penns loathe laws of the United Y nia, or any other relevant 7 82 state, to effectuate, implement and continue the valid existen of the Company as an S corporation (or similar status). Th. ce power-of-attorney is a special is upon the incapacity, disabilityporeincom etencenot be terminated (or spouse) and shall not be revoked andpahall survivehtreholder assignment or transfer by a Shareholder (or spouse) of all part of his or her Shares. The existence of this or preclude execution of any such instrument by a Shapeholderall not spouse) individually on any such matter. (or e . Cl___osngs . The closing of any purchase and sale of Shares under this Agreement shall take place at the (or such other location as may be agreedpto office of the Company involved). At the closing, the party sellingyShareeashals deliver the certificates for the Shares being sold, dul en for transfer and free and clear of any lien, claim, char a dorsed pledge, security interest or encumbrance whatsoever. g 9. Stock Cert'fic tes. All certificates representing Shares shall be marked wi the following legend: th This certificate of stock and the shares represented thereby are held subject to the terms, covenants and conditions of a certain Shareholders Agreement among the corporation and its then Shareholders, dated as of 199_, and all amendments thereto, and may not be transferred except in accordance with the terms and provisions thereof. holders Agreement and all amendmentsythereto 3hare- at the principal office of the corporation. s on file 10. Termination. This Agreement shall continue in full force and effect until the earlier of (i) such time as the holders of all of the Shares subject to this Agreement at the time shall agree to its termination; or (ii) the Company shall close a public offering of an equity security of the Company. 8 83 11. Ricrhts, Obligations and Remed'p~, None of the parties hereto ma assi dispose of any of their rights or bligationsrunsfer or otherwise ment. All rights and obligations under this Agreementls Agree- inure to and be binding upon the parties hereto and eachhall respective heirs, personal representatives, successors andf their assigns. The rights and obligations under this Agreement ar several, with each party being completely free to enforce ane o all rights or obligations under this Agreement against an Y r party with or without the concurrence or joinder of any otherher party. The Shares are unique, and the damages that might result to any party by breach of this Agreement by any other part are difficult to determine, and, therefore, in addition to allyo other remedies that may be .available under applicable law an the party shall have the right to equitable relief, including, Y without limitation, the right to enforce specifically the to of this Agreement by obtaining injunctive relief against an rms party violating its terms. Y 12 • ' area UDOn Termination of ] ~~ Dieab; ~ ity or Incap ; ~~~, . (a) Rearuired Resal Upon termination of the em to with the Company of a Paul M: Mosher, or in the event thatmPaul M. Mosher becomes disabled or is declared legally incom etent and as a result of such disability or incompetency is unable to discharge the duties of his employment with the Compan for a period exceeding two years, the Company and Other Shareholders shall have the same rights of first refusal, respectivel respect to the Shares owned by him and by his wife at the~timehof such termination, disability or incapacity. The price per share shall equal the Share Value and shall be payable as set forth heretofore. 13. -an ai , (a) ComDUtation of Davs, In computing a number of da s for any purpose under this Agreement, all days shall be countedy including Saturdays, Sundays, and holidays. (b) He_ adinq,~, All headings in this Agreement are for convenience only, and,they do not form a part of this Agreement and shall not affect its interpretation. (c) Gender. Number and "Person". Words used in this Agree- ment, regardless of the gender or number specifically used, shall 9 84 be deemed and construed to include any other gender, masculine, feminine or neuter, and any other number, singular or plural, as the context requires. The term "person" includes a corporation, partnership or other association, as well as a natural person. (d) Wa_iv_e~. No course of dealing by any party or by the holder of any note that may be issued as permitted by this Agreement, nor any delay or failure on the part of any person to exercise any right shall operate as a waiver of such right or otherwise prejudice such person's rights, powers and remedies, nor shall any waiver of one breach be construed as a waiver of any rights or remedies with respect to any subsequent breach. (e) enforceability. If any part of this Agreement is found to be invalid, illegal or unenforceable with respect to any person or set of circumstances under any present or future laws in effect at any time during the term of this Agreement, then and in that event it is the intention of the parties that the remainder of this Agreement shall not be affected thereby, and it is also the intention of the parties that in lieu of the part of this Agreement that is invalid, illegal, or unenforceable, there be added as part of this Agreement a provision as similar in terms to such invalid, illegal, or unenforceable part as may be possible and be valid, legal and enforceable. (f) entire Agreement. This writing represents the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior and contemporan- eous agreements and understandings of the parties in connection herewith. This Agreement may not be amended or modified except by an agreement in writing signed by each of the parties hereto at the time. (g) Countervar s. This Agreement may be executed in several counterparts each of which is an original and any Share- holder may become a party hereto by executing a counterpart hereof. This Agreement and any counterpart so executed shall be deemed to be one and the same instrument. It shall not be necessary in making proof of this Agreement or any counterpart to produce or account for any of the other counterparts. (h) governing Laws. This Agreement shall be governed by and interpreted and enforced in accordance with the substantive laws of the Commonwealth of Pennsylvania, without reference to the principles governing the conflict of laws applicable in that or any other jurisdiction. 10 85 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first written above. SECURITY SAVINGS Name. ~ Title• v Shareholders: Paul M. Mosher ~i ~~.. Mosher Ot~er~}Shareholders F ank A. Mosher, C" ~- ,,~ Vi ginia Mosher it 86 EXHIBIT D C ~~ P A N I E S Dedicated to the Success of Privately-Owned Business F'It~~NK & VIRGINIA NIOSHER ESTATE PLANNING AGENDA MEETING WITH HOWELL C. NIETTE,.ESQ. & JAMES H. ARNOLD, CLU, ChFC 1. Is the current distribution fair to Anne and Eileen? 2. Increase assets in sole name - « ~~ • Change Frank's Life Insurance to Trustees under Insured s Will . • Change Ginny's Life Insurance to "Trustees under Insured's Will". lot next to our home to Ginny's sole name. • Retitle vacant y • Retitle Ca ital Analysts account to Ginny's sole name. ~~ P inorit ift of stock to Paul Mosher in 1999 using available 3. Make a large m y g discounts. an inde endent business appraisal. 4. Have p 5. Execute durable Powers of Attorney. (~. 6 Send out "Crummie" notices on the trust deposits. 7. Implement a shareholders agreement. ~ UPDATED ESTATE AND BUSINESS SUCCESSION PLANNING FoR FR.A.NK AND VIRGIlVIA MOSHER JAm~S H. ARNO~~ CLU, C~e~FC April 1999 Kistler Tiffany C O M P A N I E S a9 s~oo • soo-~ ~ 9a~ i m~i-2soi (rtes Securities and Investment Advisory Services O,~`ered Through Capital Analysts Incorporated: Member NASD resentation is designed to present information on business, taY and estate planning matters in general This p rofessional advice. terms and is not intended to be used as a basis for specific action without obtaining p MOSHER FAMILY INFORMATION Birthdate Ag_e Relationship/Occupation Name ° . MOSHER Feb. 7, 1924 7~ Client, President, 52.3 0 F1~:ANK A Owner of Security Savings Systems, Inc. . MOSHER Nov. 19, 1922 76 Client, 40.x% Owner of VIRGINIA B Security Savings Systems, Inc. ~:G~Y,~ Children 46 Daughter, Married, Employed ~-NNE CORBIN by the State of Pennsylvania. OSHER 37 Son, Married, Four Children, PAUL M. M Vice President of Security Savings Systems, Inc. and 3.6% Shareholder. MOSHER 41 Daughter, Married, Nurse. EILEEN Domicile: Pennsylvania 1 MOSHER PERSONAL OB.r~cTIVES Estate P/anning inimize inheritance taxes to deliver as much of your estates as possible ^ M to your children. ure Ginn an after-tax income of $50,000/yr. in the event of Frank's ^ Ass y death. ^ Treat all children fairly in your estates. Business P/annin fer our stock in Security Savings Systems, Inc. to your son, Paul, ^ Trans y during your lifetimes and/or by will. Provide a fair distribution to Anne and Eileen for any business interest ^ received by Paul. vide a ro riate benefits to protect Paul and his family as an executive ^ Pro pp P of Security Savings Systems, Inc. ' der a 401 k retirement plan with company match to retain valuable Consi ( ) employees. Graduall "turn over the reigns" of day-to-day management to Paul. ^ y 2 CURITY SAVII,tGS SYSTEMS, INC. SE STOCK OWNERSHIP ^ Security Savings Systems, Inc. is owned as follows: Shareholder No. of Shares Frank Mosher 2,069 Virginia Mosher 1,606 Paul Mosher 141 Jean Mosher 141 Total 3,957 ^ Note: Jean is Paul's wife. ^ 12/31/97 book value was $1,247,157. Ownershiu 52.3% 40.5% 3.6% 3.6% 100.0% 3 PERSONAL BALANCE SHEET FOR FRANK A. AND VIRGINIA MOSHER APRIL 19 9 9 ape of Asset In Frank's Name 52.0% Interest in Security Savings Systems, Inc. Note Receivable (Windward Park) IRA Profit Sharing Death Benefit Sub-Total In Joint Name Personal Residence Building Lot, New Cumberland Personal Property Checking/Savings Money Market Funds Special Monetary Instruments Limited/General Partnerships Marketable Securities ~- Misc. Accounts Payable Sub-Total 1/Z Sub-Total Current Current Net Value Liabilities E ui $ 648,500 $ -0- $ 648,500 81,000 -0- 81,000 20,700 -0- 20,700 356,800 -0- 356,800 $ 1,107,000 $ -0- $ 1,107,000 $ 175,000 $ -0- $ 175,000 75,000 -0- 75,000 65,000 -0- 65,000 5,500 -0- - 5;500„~ .._, 186,800 -0- 186,800 179,700 -0- 179,700 59,000 -0- 59,000 377,600 -0- 377,600 _0_ 1,500 (1,500) $ 1,123,600 $ 1,500 $ 1,122,100 $ 561,800 $ 750 $ 561,050 4 Personal Balance Sheet (Cont'd) Tvpe of Asset Life Insurance tGinny Beneficia K of C Insurance NSLI FML Insurance National Home Insurance Principal Mutual Insurance Principal Mutual Insurance Sub-Total FRANK' S TAXABLE ESTATE In Ginny's Name 40.5% Interest in Security Savings Systems, Inc. IRA '/z Joint Property Sub-Total Current Value $ 1,000 10,000 4,076 27,091 155,000 100,000 $ 297,167 S 1,965,967 $ 505,100 20,700 561,800 $ 1,087,600 Current Net Liabilities E ui _p_ $ 1,000 _p_ 10,000 _p_ 4,076 _p_ 27,091 _p_ 155,000 _p_ 100,000 $ _p_ $ 297,167 $ 750 S 1,966,217 S _p_ $ 505,100 _p_ 20,700 750 561,050 $ 750 $ 1,086,850 5 Personal Balance Sheet (Cont'd) Tvne of Asset Life /assurance jFiank BeneficiarYl. Principal Mutual Insurance FML Insurance Principal Mutual Insurance Sub-Total G1NNy'S TAXABLE ESTATE COMBINED TAXABLE ESTATES Outside Estate New York Life Survivorship Life Insurance Sub-Total COMBINED ESTATES Current Current Net Value Liabilities E ui $ 25,175 $ -0- $ 25,175 50,000 14,030 35,970 40,000 -0- 40,000 $ 115,175 $ 14,030 $ 101,145 $ 1,202,775 S 14,780 $ 1,187,995 $ 3,168,742 $ 15,530 $ 3,153,212 $ 500,000 $ -0- $ 500,000 $ 500,000 $ -0- $ 500,000 $ 3,668,742 S 15,530 $ 3,653,212 6 CURRENT SITUATION Wil/s and Trusts th have wills with pour-over trusts that were executed ^ Frank and Ginny bo eements of Trust are drafted to take advantage of the in 1993. Their Agr optimum marital deduction. ^ Characteristics of their wills and trusts are: e er memorandum. Remaining personal property to ^ Personal prop rty P surviving spouse. ^ Marital trust for benefit of surviving spouse. unified credit) for benefit of surviving spouse and ^ Non-marital trust issue. ^ Upon death of surviving spouse: ^ Stock of Security Savings Systems to Paul. 'nin assets to Anne and Eileen in equal shares. ^ Remai g Irrevocable Trust ed an irrevocable trust in 1993 for the benefit of ^ Frank and Ginny Great their daughters. ^ Trust holds $500,000 of survivorship insurance. ' divided into separate shares for Anne and Eileen upon ^ Trust is creation. and settlement of the death of the survivor of Frank and Ginny ( d Eileen. ^ Upon tate remaining balance of separate shares paid to Anne an es ) 7 O~ O~ . ~. w, GL Q .~ V VI C~ 4~ U C~ 4~ i•r w CK r~l 4~ ~•r U s SuMm~Y OF SETTLEMENT CASTS ESTATE 1- gEDECEASES VIRGINIA Fg:A'NK P CTION MU1VI P~IARI.T AL D EDU OPTI Frank's Death $ 31,soo Administration Expenses . $ -0- Federal Estate Tax $ _0_ State Inheritance & Estate Tax 1 800 $ 3, TOTAL COSTS Ginn 's= h $ 34,00 Administration Expenses $ 608,300 Federal Estate Tax $ 155,200 State Inheritance & Estate Tax 4 500 $ 9, Income Tax on Retirement Plans 00 $ 892,7 TOTAL COSTS SS $ 924,500 D COSTS OVER BOTH DEAT COMBINE 2% has been used for Administration Expenses. ~ An accepted percentage of 9 NEEDS AND Sp~,tCE,S LIQ~DITY GII`TN'Y RANK pREDECEASE5 F LIQUID ASSETS In Frank's Name IRA/Profit Sharing Life Insurance SUB-TOTAL In Joint Name Checking/Savings Money Market Monetary Ins~ments Securities SUB-TOTAL In Gi_'~ ~S Name SZ,TB-TOTAL TOTAL LIQUIDITY Less Estate Settlement Costs on Frank's Death NET LIQUIDITY Plus Additional Liquidity on Ginny's Death (Insurance) TY OVER BOTH DEATHS TOTAL LIQUIDI Less Estate Settlement Costs on Ginny's Death lQU1DITY OVER BOTH DEATHS VET L $ 377,00 297,167 $ 5,00 186,800 179,70() 377,600 $ 20,700 ___-- 10 $ 674,667 749,600 20,700 $ 1,444,967 31,800 $ 1,413,167 500,000 $ 1,913,167 892,700 $ 1,020,467 SECURITY FOR GINNY FINANCIAL INCOME OBJECTIVE OME FROM NET LIQUIDITY PROJECTED INC Current Plan ^ ($1,413,167 x 6% Return) CURITY BENEFITS (Maximum) SOC~L SE ^ Commence Currently OTHER SOURCES OF COME ^ Security Savings Systems, Inc. ^ Note Receivable $ SO,000/Yr. 84,800/Yr. $ 16,000/Yr. 11 G OPPORTjJ.NITIES pI,ANNIN Estate Planning ^ Wills and Trusts , d trusts take advantage of the s wills an p Both Frank and Ginny as rovided under the current law. optimum marital deduction p ensure the dispositive provisions eriodically review document tour objectives. ^ P and fiduciaries continue to m-eet yo ^ Increase Assets in Sole Name le name to not have sufficient assets in her is assing by Ginny does erleral, asse p ~ At this time, ~ to ma~m1Ze her unified credit. d be;neficiary desi ation allow her Dint property) an ration of law Cl will not be available to fund the ope retirement plans and life insuran named beneficiary ( ed credit unless the trustee i unlfi Frank may ' 'ncreases ($1,000,0()0 in 2006) d credit. ^ As the unified credit 1 ssets to fully maximize his unifie also not have sufficient a • ' Ze both ease the assets available to utih to incr p Consider the following ed credit: Frank and tinny s unlfi Acquire new assets in sole name. ^ Sever joint title. Retitle in sole name. ^ eneficiary of insurance proceeds. ^ Name trustee as b ortazit, depending in sole name may not be as imp e issue of assets it used during Frank and Ginny's ~ ~ See Business on the amount of the unified. c children (sto~,k, etc.). ' fts to their lifetime to make ~ discussion. Planning for furthe 12 •n p portunities (font' d) plannl g P ~ powers of Attorney r u date existing) powers of attorney• ^ Execute (o P Generation-Skippinb Exemption ^ in exemption ($1,000,000 each nsider utilizing generation-sklpp g ^ Co andchildren. to pass assets to gr ' etime benefit of children and assets in trust for the llf ,nand protection of the assets ^ Passing dchildren provides creditor protec io gran in the event of divorce. Business Planni~7c' ecuri Savings is the Vice President of S tY Frank and tinny s son, Paul, ^ shareholder. S stems, Inc. and is a minority y d G~:y, Paul shall receive all death of the survivor of Frank an ^ Up°n the s S stems, Inc. stock of Security Saving y the stock to Paul now using all or a all or a portion of ~ Consider gifting ~ s unified credits. portion of Frank and tinny aluation of the stock to be gifted. ize all available discounts In the v ^ Util lack of vailable for minority interests, are a ~ Discounts ~ketability and lack of control. m These discounts can run 30% or more. ^ 13 • p portunities (Copt' d) Planning P . mended to determine the fair raisal is highly recom A formal app d the appropriate discounts to be t en market value of the company an before gifting the stock. and non- could be recapitalized into votingo Paul. 1 the non-voting stock gifted t If control is an issue, stock n voting common stock, with o y im u on death of Frank ancVor ainin stock would pass to h p ~ Rem g Gi~y. ^ Shareholders' Agreement be implen1ented to restrict the reholders' Agreement should Sha the urchaSe and sale of stock upnd ~ A rovide for p disability a transfer of stock and P ludin death, retirement, triggering events inc g ,divorce, etc.). involuntary transfer (bankrup y wired by his his stock could be reacq ation. In the event of Paul s death, , dren or redeemed by the corpor ~ ass to his chll parents or sisters, p insurance on stock could be funded throu~ new stock e 'f'he purchase of his to cover the owth and 's life. Acquire $500,000 of key nan shares and ~ Paul exist g wnership (unified credit glft)~ 0 future gifts. awl's stoc;k by Frank and Ginny The purchase of P Use a "wait and see" buy-sell ^ Issue: would reinflate their estates. agreement. 14 COMME~ATIONS RE /, Estate Planning favors Paul too ution fair? If you feel that 1~t dauQ tens in the Is your estate distnb ore insurance for your ~ ^ uire m much, you could acq irrevocable trust. 1 •atilize unified credit in 2006. ase assets in sole name to fill Y d's will:' ^ Incre de,r uisure rank's life insurance to "trnstees un o Change F "trustees under insured's will.' Change Ginny's life insurance to ^ 's sole name. t lot neXt to your home to Ginny ~ Retitle vacan 's sc-le name. a ital Analysts account to Ginny ~ Retitle C P ' all meet with your new let s current wills appe~ fine. However, ^ Your to address the issues listed be ow. attorney ^ Execute polders of attorney. Q out «crnmniey notices" for your' our current law firm Sending ^ Is y irrevocable trust? Business Plannin • al, Consider // rats • ' tock to P aul. Obtain a fonnal app ^ Gift all of Ginny sof marketability discounts. minority and lack ent a Sh~.eholders' Agreemen~t• ^ Implem rotect his man life insurance on Paul to p ^ Acquire $500,000 of key future cash reserve for the business family and to provide a Investment Plannin /II. Ret~rerr~ent c' uri Savings Systems, 401(k) features to the ..>ec ~' ^ Add self-directed lan. Inc. Profit Sharing P 15 PPENDIX A 16 WILL OF FF~~:NK A ~ Mp SHER ~ Dated: August 3, 1993. Berland County, Pennsylvania. ~ Domicile: Cum 1. Tan ible Personal Pro e Q rsonal property to Remaining pe sonal rope~Y Per mem°randum:ldren. ^ Per P • if she does not survive, to chi tinny 2. ReS~ e ower of ro erty over which Frank has a ointment estate (including P P an power of aPP ^ Residuary tment, but excluding y ~~ ement of Tfllst. attorney of aPPom to the trustee of his Estate Plan gre given by tinny) 7. 'T= s estate or from trust if so authorize . Taxes to be paid from Probate ^ g, Fiduciaries ecutors: tinny and son, Paul. ^ Ex aul: Daughters, Anne and F,ileen. ^ Successor for P 17 ESTATE PLAN AGREEMENT OF TRUST OF FRANK A. MOSHER ^ Dated: August 3, 1993. ^ Settlor and Trustee: Frank. ^ Successor Trustee: Ginny and Paul. 1. Durin~Settlor's Lifetime ^ Trust is revocable. ^ Income to Frank. Principal to Frank, at his request., and in the event of disability to Frank and Ginny, in trustee's discretion. 2. Allocation of Assets ^ Upon Frank's death, trust assets to be divided into marital trust and non-marital trust. 3. Marital Trust ^ Income to Ginny. Principal to Ginny, in trustee"s discretion. ^ Ginny given a limited power of appointment at death; unappointed principal, less taxes, to anon-marital trust. 18 Estate Plan Agreement of Trust of Frank A. Mosher {Cont'd) 4. Non-Marital Trust ^ Income and principal to Ginny and issue, in trustee's discretion. ^ Ginny given an annual right of withdrawal of the greater of $5,000 or 5% of the principal. ^ Ginny given a limited power of appointment at death; unappointed principal to be distributed: e If Paul is active in the business, stock of Security Savings Systems, Inc. to Paul. Balance of assets to .Anne and Eileen or their surviving issue. ^ If either daughter is not surviving nor has surviving issue, her share to be divided 1/z to Paul and 1/i to her sister or their surviving issue. ^ If Paul does not survive or is not active in the business, balance to issue, per stirpes. ^ Share of a beneficiary under age 30 to be held per Paragraph 5. 19 Estate Plan Agreement of Trust of Frank A. Mosher (Cont'd) 5. Separate Trusts ^ Share to be held under this Paragraph to be held: ^ Income to beneficiary; principal to beneficiary and issue, in trustee's discretion. ^ Principal distributions of/~ at age 25 and balance at age 30. ^ Beneficiary given a limited power of appointment at death; unappointed balance to beneficiary's issue or as otherwise provided. 11. Taxes ^ Taxes to be paid from non-marital trust. 20 WILL OF VIRGINIA B. MOSHER ^ Dated: August 3, 1993. ^ Domicile: Cumberland County, Pennsylvania. 1. Tangible Personal Property ^ Personal property per memorandum. Remaining personal property to Frank; if he does not survive, to children. 2. Residue ^ Residuary estate (including property over which. tinny has a power of attorney of appointment, but excluding any power of appointment given by Frank) to the trustee of her estate plan agreement of trust. 7. Tax_e_s ^ Taxes to be paid from probate estate or from trust if so authorized. 9. Fiduciaries ^ Executors: Frank and son, Paul. ^ Successor for Paul: Daughters, Anne and F;ileen. ^ Memorandum for personal property August 14, 1993. 21 ESTATE PLAN AGREEMENT OF TRUST OF VIRGINIA. B. 1VIOSHER ^ ~ Dated: August 3, 1993. Amendment dated March la, 1.99. ^ Settlor and Trustee: Ginny. ^ Successor Trustee: Frank and Paul. 1. During Settlor's Lifetime ^ Trust is revocable. ^ Income to Ginny. Principal to Ginny, at her request, and in the event of disability to Frank and Ginny, in trustee's discretion. 2. Allocation of Assets ^ Upon Ginny's death, trust assets to be divided into marital trust and non-marital trust. 3. Marital Trust ^ Income to Frank. Principal to Frank, in trustee's discretion. " ^ Frank given a limited power of appointment at death; unappointed principal, less taxes, to non-marital trust. 22 Estate Plan Agreement of Trust of Virginia B. Mosher (Cont'd) 4. Non-Marital Trust ^ Income and principal to Frank and issue, in trustee's discretion. ^ Frank given an annual right of withdrawal of the greater of X5,000 0~ 5% of the principal. ^ Upon Frank's death, remaining principal to be .added to the Non- Marital Trust under Frank's Estate Plan A~eeme;nt: of Trust. 5. Separate Trusts ^ Share to be held under this Paragraph to be held: ^ Income to beneficiary; principal to beneficciary and issue, in trustee's discretion. ^ Principal distributions of/2 at age 2~ and balance at age 30. ^ Beneficiary given a limited power of appointment at death; unappointed balance to beneficiary's issue or as otherwise provided. 11. Taxes ^ Taxes to be paid from non-marital trust. 23 THE MOSHER FAMILY IRREVOCABLE TRUST ^ Dated: August 3, 1993. ^ Grantors: Frank A. Mosher and Virginia B. Mosher. ^ Trustee: Paul M. Mosher. ^ Article II: Irrevocability , ^ Article III: Distributions From The Trust ^ U on creation of trust, principal to be divided into equal shares for P daughters and held as separate trusts. ^ During Frank and Ginny's lifetimes: ^ Crummey withdrawal rights to daughter who is primary beneficiary of such separate share. ^ Income and principal may be used to pay insurance premiums. ^ Primary beneficiary given a general power of appointment at death; unappointed principal to be distributE;d as provided below. 24 The Mosher Family Irrevocable Trust (Cont'd) U on the death of the survivor of Frank and Virginia, trusts to be held: ^ p Trustee may lend funds to or purchase assets from estate of ^ survivor of Frank and Ginny. ^ U on the settlement of the estate or earlier date as determined by P trustee, balance of each trust shall be distributed: ^ To the primary beneficiary. ^ If rimary beneficiary is not surviving, as per beneficiary's p unappointed principal to the power of appointment; beneficiary's descendants; , if none, to remaining primary beneficiaries or their surviving descendants. ^ In default of beneficiaries, to Frank and ~Ginny's intestate heirs as provided. ^ Article IV: Interests Vesting in a Minor ^ Share of a beneficiary under age 25 to be held in trust. ^ Article VIII: The Trustee trustee ma designate a co-trustee to serve; during the time such ^ A Y trustee serves. uccessor co orate trustee shall be elected by a majority vote of the ^ A s rP income beneficiaries. 25 EXI~IBIT E rt/ M Form 709 United States Gift (& Generatio Department of the Treasury (Section 6019 of the Internal Revenue Code Sk~pp+ng Transfer) Tax Return OMB No. 1546-0020 Internal Revenue Service ) ( gifts made during calendar year 2001) 1 Donor's first name and middle initial - See separate instructions. 200. Freak A, 2 Donor's last name 3 Donor's social security number P 4 Address (number, street, and Mosher 14 6 -18 - 8 66 8 A 93 Carol Street apartment number) _ R 5 Legal residence jdo mlcile) (county & state) T 6 City, state, and ZIP code Cumberland Count New Cumberland, PA 17070 -' Y. PA 1 7 Citizenship $ If the donor died during the year, check here - _ IISA • E 9 If you received an ext. of time to file this Form 709, the k here ~ ate of death • Yes No N 7 0 Enter the total number of separate donees listed on Schedule A -- countt eachperson orn 4868' 2688,23 0, os r extension letter E ~ a, b R 1 '18 Have you (the donor) previously filed a Form 709 (or 709-A) for any other ear ~' once„ . , - 2 ~ •-, L 11 b If the answer to line 11 a is "Yes," has your address changed since you last filed Ff answer is "No," do not complete fine •f 1 b , , ~ ~ ~~ ~~~~~ 12 Gifts by husband or wife to third parties, __ Da you consent to have the gifts (includin 709 (or 709-A)? , , X N by you and by your spouse to third parties during the calendar year considered as m de o eraha~ b klpprng transfers) made (See instructions.) ((t the answer is "Yes," the following information must be furnished and yours ~ouse fa consent shown below. If the answer is "No," skJp Ilnes 13-18 and go to Schedule A. , . y each of your } P must sign the R 13 Name of consenting spouse X M 15 Were you married to one• another during the entire calendar year? (see instructjon ~ 4 SSN .. T 16 ff answer to 15 is "No," check wh s) • - ether married .......... ~ ..... ~ . divorced or " " " ' • • • • • • • • • O 17 WIII a gift tax return for this calendar year be filed b widowed, ~ give date (see inst) - y your spouse? .... . 8 Consent of Spouse -- I consent to have the gifts (and generation-skipppping transfers mad during the calendar year considered as made one-half by each of us. We are both aware of the ' the execution of this consent. ) e by me and by my spouse to third parties Consenting spouse's signature - joint and several liability for tax created by '1 Enter the amount from Schedule A, Part 3, line 15..... Date - 2 Enter the amount from Schedule B, line 3 . ................................. ~ 14 6 , 2 0 0. 0 0 3 Total taxable gifts (add lines 1 and 2). • .................................. ~ ...... ... 2 0 0 0 4 .............................•. ,.... Tax computed on amount on line 3 (see Table for Computing Tax in separate instructions) . • • . • S 14 6, 2 0 0. 0 0 5 Tax computed on amount on line 2 (see Table for Computing Tax in separate instructions 4 37, 660.00 p 6 Balance (subtract line 5 from Ilne 4) . , ) S 0. 0 0 A 7 Maximum un~ed credit (nonresldeni afrens ~ ~ 6 37, 660. 0 R $ ,see instructions) , . ................. ~~ ..... ' 0 T Enter the unified credit against tax allowable for all prior periods (from Sch. B, line 1, col..C) .. , • • , 7 220,550.00 9 Balance (subtract line 8 from line 7) , 8 0.0 0 2 y0 Enter 20%(.2o)ofthe amountaltowed..•.•.~•••~~~~•~••~•~•~•~~""""""•• 9 220,550 T as a specific exemption for gifts made after September 8, 1976, • 0 0 and before January 1, 1877 (see instructions) . X 7 y Balance (subtract line 70 from Line 9) ...................... ~ ~ • ' ' ' ' ' ' ' ' y0 0.00 C ~ 2 Unified credit (enter the smaller of tine 6 or line 11 ~ ~ • ~ ~ ~ - ' ' ' 1 ~ M 'I S Credit for forei n Ift t ) ....... ' .......................... . ..... 2 2 0 , 5 5 0. 0 0 9 9~ axes (see Instructions) .. , , , , , , . , • • 12 3 7 , 6 6 0. 0 0 P ................... 13 0.00 T T 14 Total credits (add fines 12 and 13) ................... ............. . T A '15 Balance (subtract tine 14 from Gne 6 ............................ 14 A j 7 6 ) (do not enter less than zero) . , . , , , • ' ' ' ' ' ' 3 7 , 6 6 0. 0 0 C Generation-skipping transfer taxes (from Schedule C, Part 3, col. H, Total).. ~ • ~ 5 0. 0 H ~ ........ 16 N y 7 Total ............ 0.0 0 H yg tax (add fines 15 and 16) ............................... . E Gift and generation-skipping transfer taxes prepaid with extensio ........................ ~7 0.00 ~ n of time to file .... 18 ........ ,.... 0.00 K ~9 ff line 18 is less than line 17, enter balance due (see instructions)...... • , , , , or M ................,.. 19 0.00 0 20 ff line 18 Is greater than line 17, enter amount to be refunded ..... , . E Under penalties o • .. .. , , , , 20 perju , I declare that I have examined this return, including any •ccompanying schedules and statements, and to the best of my 0 • ~ 0 knowledge. Y Sign knowledge and b lief, i true, correct, co a e. eclaration of preparsr{ rthan donor) Is based on all information of which r o Here R ' ~ p sparer has any E Sig of ~ ~ a ~- R Preparer's ' Date Paid signature ~ Date E Preparer's Firm's name (or ~ ~ Check ff self- Use Only yours ff ette, EvaaB and T~Toodside employed.. - self-employed), 3401 N Front Street PO Sox 5950 address, & ZIP code Harri sbur For Disclosure, Privacy Act; and Pa g' p`~ 17110 - 0 9 5 0 perwork Reduction Act Notice, see the separate instructions for this farm no - 717 - 2 3 2 - 5 0 0 0 CpA ~ 7091 NTF 2665647 GLD 4222 Form 709 (2001) CoPY~ght 2001 Greatland/Nalco -Forms Software Only _ Form 709 A Does the value of any item I'sted on ScheduledAaefl anyS lu tionidscoansfers in Trust) ~ B ~ Check here if you elect under section 529(c)(2)(B) to treat an tran~nY~ If the answer is "Yes,° see instructions .... . ratably over a 5-year period beginning this year. See instructions. Attach explan Gone this year to ~~ qualified state tu-tion programeas made Part 1 -- Gifts Subject Only to Gift Tax. Gifts less political organization, medical, and ed A g ucational exclusions -- see instructions Item • Donee's name and address C number • Relationship to donor (if any) D E • Description of gift Donor's adjusted Date • If gift was made by means of trust, enter trust's EIN & attach basis of gift Value at a description or copy of trust instrument (see instructions) of gift date of gift • If the gift was of securities, give CUSIP number See Sc edu a attac ea subject A Item number ~~r<s ~ Hat are Direct Skips and are Subject to Both Glit Tax and Generation-Sklpp cal order. Gifts less political organization ' ' ' - / to the GST tax at this time as the result of the term nation of a o estexclusions -- see B ate tax inclusion p • Donee's name and address C • Relationship to donor (if any) • Description of gift Donor's adjusted • If gift was made by means of trust, enter trust's EIN & attach basis of gift a description or copy of trust instrument (see instructions) • If the gift was of securities, give CUSIP number ••~• ~~~~~ Hsi Here Direct skips that are ~d. See instructions.) D E Date Value at of gift date of gift Total of Part 2 (add amounts from Part 2, column E) . , , • , _ Part 3 -- Taxable Gift Reconciliation 1 - Total value of nifte ~f ,~,,...._ ._~_. . 2 One- -~ -~"~' `°~" `u~ais nom column E of Parts 1 and 2 - half of items ) • • • ..... . 3 Balance (subtract line 2 from line 1) attributable to spouse (see instru 4 ....................... coons). Gifts of spouse to be included (from Schedule A, Part 3, line 2 of spouse's return -- se ' If any of the gifts included on this line are also subject to the generation-ski a instructions).... , , • here - ^ and enter those gifts also on Schedule C, Part 1. PP~n9 transfer tax, check 5 Total gifts (add lines 3 and 4) 6 Total annual exclusions for gifts listed o • • ~ ~ • ~ ~ ~ ' ' ' ' ' ' ' ' • n Schedule A (including line 4, above) (see instructions) ...... . 7 Total included amount of ifts subtract line 6 from Line 5) Deductions g ( • • • • • ........ • " ' (see instructions) • • • • • ... . 8 Gifts of interests to spouse for which a marital deduction will be claimed bas on items ~ ed 9 Exclusions of Schedule A ......... , g attributable to gifts on line 8.. ' ' ' ' ~~ . 0 0 10 Marital deduction -- subtract line 9 • ~ • ~ ~ ~ ' ' ' ' ' ' ' ' • ' 9 0.00 11 from lines ............. 10 Charitable deduction, based on items ~ • ~ • • • ' ' ' ' ' ' ' 0.00 12 Total deductions -- add lines 10 and 11. , • less exclusions ..... 11 -~, . 13 Subtract line l2 fromline7. •~•••~•"""""•••••••• 14 Generation-skiPPing transfer taxes ................................... ..................... . payable with this Form 709 (from Schedule C, Part 3, col. H, Total)..... . 15 Taxable gifts (add lines 13 and 14). Enter here and on line 1 of the Tax C (If more space is needed, attach additional sheets of same size.) omputation on page 1 ...... • C~ ~ 7092 NTF 2555848 GLD 4222 Copyright 2001 Greatland/Nalco -Forms Software Only 0.00 ~ 166,200 00 2 0.00 3 166,200.00 4 ~x 0.00 .5 166,200.00 6 20,000.00 7 146,200.00 12s~ o.oo 13 14 Tip 15 14 ,200.00 Form 709 (2001) 2 Total of Part 1 (add amn~~~+~ ~.,..... ~_.~ _ Frank ;A . Mosher §SN: 146-18-8668 Page: Schedule A -- Part 1 Gifts Subject Oaly to Gift Tax 1 A B Item Doaee~s a C D ame, relationship to doctor E No. Doctor's Adj. Date of address, and description Value of Basis Gift Gift OTHER GIFTS 1 Paul M. Mosher (Son) 256 Wiadiag Way 12/20/2001 Camp Hill, PA 17011 83.100.00 2500 shs. Class B aoa-votia ' stock, Security Savings Sys ems~I c. ~ $33.24 per share 2 Jean M. Mosher (Daughter-ia-law) 256 Wiadiag y~ay :L2/20/2001 Camp Hill, PA 17011 83,100.00 2500 shs, Class B aoa-voting coamloa stock, Security Savings Systems, Inc. ~ $33.24 per share 166,200.00 Form 709 _-- •-_~~•- r, vain~~uiaiton of taxable Gifts (continued) -' Page 16 Terminable Interest (QTIP) Marital Deduction. (See instructions for line 8 of Schedule A. If a trust (or other property) meets the requirements of qualified terminable interest roe ) a. The trust (or other property) is listed on Schedule A, and P P -'ty under section 2523(f), and b. The value of the trust (or other property) is entered in whole or in part as a deduction on line 8, Part 3 of Schedule A then the donor shall be deemed to have made an election to have such trust or other roe ' under section 2523(f). ( P P rty) treated as qualified terminable interest property If less than the entire value of the trust (or other property) that the donor has included in Part 1 of Schedule A is entered as a on line 8, the donor shall be considered to have made an election only as to a fraction of the trust or• other roe deduction is equal to the amount of the trust (or other property) deducted on line 10 of Part 3, Schedule A. The denominator) is)eTual to herator of this fraction the trust (or other property) listed in Part 1 of Schedule A. q e total value of If you make the QTIP election (see instructions for line 8 of Schedule A), the terminable interest property involved will be include spouse's gross estate upon his or her death (section 2044). If your spouse dis oses b din your income interest, he or she will be considered to have made a transfer of the entt~e property that s subject to hie ripart~of the qualifying life Estates in the instructions). 9 (see Transfer of Certain Life 17 Election Out of QTIP Treatment of Annuities ~ Check here if you elect under section 2523(f)(6) NOT to treat as qualified terminable interest r that are reported on Schedule A and would otherwise be treated as qualified terminable interest property under section 2523 rw Sr annuities Enter the item numbers (from Schedule A) for the annuities for which you are making this election - (fl (ee instructions.) `SCHEDULE B `' Gifts From Prior Periods If you answerprl we~~ .,.. ~~.._ .._ _ - - -- • ••••c ~ ~a ~~ page ~, tart 1, see the Instructions for completing Schedule B. If you answered "No," skip to the Tax Computation on page 1 (or Schedule C, if applicable). A Calendar year or B calendar quarter Internal Revenue office (see instructions) where prior return was filed C D Amount of unified Amount of specific credit against gift tax exemption for prior for periods after periods end. before December 31, 1976 January 1, 1977 E Amount of taxable gifts 1 Totals for prior periods (without adjustment for reduced specific exemption) .............. 1 2 Amount, if any, by which total specific exemption line 1 $ ,column D, is more than 30,000...... . 3 Total amount of taxable gifts for prior periods (add amount, column E, line 1, and amount, if any, on line 2). (Enter here and on line 2 of the Tax Computation on page 1.)....... . (If more space is needed, attach additional sheets of same size.) CAA 1 7093 NTF 2555649 GLD 5850 Copyright 2001 Greatland/Nalco -Forms Software Only 3 Form 709 (2001) 3 Form 709 ____.. .~....p~,,,,~y ~ ranSTEY T8X -- Page 4 Note: Inter vivos direct skips that are completely excluded by the GST exemption must still value and exemptions claimed) on Schedule C. Part 1 -- Generation-Skipaina Trancfe.~ be fully reported (including Item No. VaBlue _ __ _• - (from Schedule A, (from Schedule A C Split Gifts D - E , Part 2, col. A) Part 2, col. E) 1 (enter 1/2 of col. B) (see instructions) Subtract col. C from col B Nontaxable . portion of transfer 2 - 3 - 4 - 5 - 6 - If you elected giftsplitting and your spouse was required to file a separate Forrn 709 (see the instruction f ° Split gifts from ' Value included --' s or S lit Gifts ~ must enter all of the gifts shown on" ~ y°u Schedule A P t spouse s Form 709 (enter item number) from spouse's Nontaxable , ar 2, of your spouse's Form 709 here Form 709 Portion of transfer In column C, enter the item number of each S -~- gift in the order it appears in column A of S your spouse's Schedule A, Part 2. We have preprinted the prefix °S-"to distinguish your S --'--~- spouse's item numbers from your own when S- you complete column A of Schedule C, Part 3. S- -~~- In column D, for each gift, enter the amount S- reported in column C, Schedule C, Part 1, -~- of your spouse's Form 709. S- _ S- __ Part 2 -- GST Exemption Reconciliation (Section 2631) and Section 2652 a 3 Election Check box - if you are making a section 2652(a)(3) (special QTIP) elect on((see instructi Enter the item numbers (from Schedule A) of the gifts for which you are making this election ,ns) ~- 7 Maximum allowable exemption (see instructions) ..... . 2 Total exemption used for periods before filing this return ....... . S Exemption available for this return (subtract line 2 from li ne1) ............... '4 Exemption claimed on this return (from Part 3 5 , col. C total, below) . Exemption allocated to transfers not shown on P ~ • ~ • • • ~ ~ • ~ • ' ' ' ' ' ' • • instructions.) ... , , , , • • • ~ 3, below. You must attach a Notice of A11oc ..................................................ation.(See ... 6 Add lines 4 and 5 ................................................ . 7 Exemption available for future tra nsfers (subtract line 6 from line 3 Part 3 -- Tax Computation A Item No. Net tr C F Net Transfer (subtract col. E from col. Dl Net transfer (subtract col. E from col. D) 1 1 1, 060, 000.00 0.00 3 ~i,o6o,000.00 0.00 5 ~ 0.00 ~- 0.00 • • ' ' ~ 7 11, 060, 000.00 (from ansfer scn. c, (from Schedule C, Pan ~) Part 1, col. F) D E F --~- GST Exemption Divide col. C Inclusion Ratio Maximum Applicable Rate Allocated b (subtract l 1 co col. B . D Estate y from 1.000 (multiply col. E Tax Rate by col. F) Total exemption claimed Ente 55% (.55) . r here and on line 4, Part 2, above. May not exceed line 3 Part 2 55% (.55) Total generation-skipping transfer tax. Enter here , , above . .... ....... , on line 14 of Schedule A, Part 3, and on line 16 of th 0.0 0 e lax (If more space is needed, attach ad Computation on page 1. ditional she t CAA 1 W709C1 NTF 2557590 e s of same size.) Copyright 2001 Gre tl a and/Nalco - Forms Software Only Generation-Ski Transfer Tax ping ~Itiply col. B by col. G) 0.00 Form 709 (2001) Attachment A-1-Form ?09 2001 U. S. Gift Tam Return ~auc Vl aecurit Savln s Non-votin Common Stock Security Savings Systems, Inc. (the "Co has its principal place of b rporation "), a ~'ennessee corporation, usiness at 910 Market Street, New Cumberland Pennsylvania 17070• It is a closely held co rporation owned by :members of the Mosher family. It is engaged in the printin . g and marketing of i"inancial documents in coupon form for banks and savings institutions. The has been coupon books for bank Chri maJor product line historically stmas savings accounts. More recently the corporation has marketed installment loan and wort structure of the Corporation rovide gage coupon books. The capital P s for authorized capital stock of 50,000 shares no par value common stock of which 40,000 shares are of voting common stock and 10 designatE~d as Class Bnon- ,000 shares are designated as Class .A votin c stock. The shares are identical in all res ects ex g ommon p cept a.s to the difference in voting rights. At the date of the gifts herein reference ' d in Schedule A., 3957 shares of Class A voting common stock and 35,613 shares of Class Bnon-voting common stock were issued and outstanding. 3,543 shares of Clas s A voting common stock and 31,887 shares of Class Bnon-voting common stock w ere owned by Frank: A. Mosher, and his wife, Virginia B. Mosher. 414 shares of Class A voting common stock and 3, 726 shares of Class Bnon-voting common stock were owned by Paul M. Mosher and his wife, Jean M. Mosher. Paul M. Mosher is the son of Frank acid Virginia Mosher. Management of the Corporation and its rode Wildeman and Obrock have Pendent outside accountants determined that the fair market value of the Corporation's total capital stock as of Dece tuber 31, 2001 is $2,349;,008. The value of the 39,570 shares issued and outstandin on g that date was $59.36 ~~er share before any adjustments hereinafter referred to as shown on th Wildeman and Obrock atta a Valuation Report of ched hereto and made a part herec-f. The fair market value of the 2,500 shares of the C Corporation referred to in lass B common stock of Schedule A, Part One must be further ad'usted appropriate fair market value for the lack of mar ~ to reach an ketability of rion-voting stock in a closely held family corporation for which no marke t exists, and for the depressing effect on value that lack of control would create in t he mind of any potential willing buyer. Adjustment to the fair market value above determ' discounts for lack of marketabil' med is appropriate for lty and lack of control for non-voting stock as follows• Fait' market value of one share of Class Bnon-vot' Lack of mar'ketabili disc mg stock $ 59.36 tY ount - 30% 17.81 Lack of control for non-voting stock dis 41.55 count - 20% 8.31 Net fair market value of one share of Class Bnon- common stock voting $ 33.24 The foregoing discounts have been determined to States Tax Court in Estci be appropriate by the United to of Frank, 69 TCM 2255 (1995). 300490 1 ~: Security Savings Systems, Inc. New Cumberland, PA 17070 Description of the Assignment Wildeman and Obrock, CPA's has been engaged by Security Savings Systems, Inc., a Tennessee Corporation located, authorized to do busines and operating in Pennsylvania, to estimate the fair market value of common stock of the company as of December 31, 2001. The purpose of the valuation is for filing a gift tax return with Internal Revenue Service. Fair market value is defined as the cash or cash equivalent price at which property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts. Summary Description of the Company Security Savings Systems, Inc. (an S Corporation) is a printing Company. Its main business is the production ofi Christmas Savings Club coupon books and other general printing. As a producer of coupon books they also produce installment loan, mortgage and other purpose coupon books Valuation Methods and Conclusion In developing a value for Security Savings Systems, Inc., we started with the net book value of the Company increased by the market value of the real estate. We discounted this for valuation adjustments and selling expenses using 20%. We valued goodwill by adding 20% of the 5 year average gross sales and the 5 year average net earnings capitalized by 9.5% to arrive at a market - value of the Corporation of $2,349,008 shown on Exhibit 1. Based on the information contained in the narrative report that follows, it is ~~ur considered opinion that the fair market value of the 100% common stock in Security Savings Systems, Inc., is $2,349,008. The valuation of the 39,570 shares of common stock is $59.36 per share. This valuation is subject to the assumptions and limiting conditions presented in Appendix A. Harrisburg, Pennsylvania June 14, 2001 1 SECURITY SAVINGS SYSTEMS, INC. VALUATION OF STOCK DECEMBER 31, 2001 ESTIMATED FAIR MARKET VALUE OF SECURITY SAVINGS SYSTEMS, INC. Year Average Gross Average Net Sales Income 1997 1,998,033 1997 57,963 1998 2,356,582 1998 159,279 1999 2,110,616 1999 35,159 2000 2,471,517 2000 31,469 2001 2,252,717 2001 (8,654) Total 11,189,465 Total 275,216 Average net Average gross sales 2,237,893 incomE; 55,043 Book Value Capitalized @.095 Land 8 Building 406,971 579,402 Allow for Dep. (251,099) Net Book Value 155,872 market Value Per Appraisal 835,000 Land 8 Building Adjustment to MV 679.128 Market Value Net Worth December 31, 2001 973,406 Land & Building adjustment to MV 678,128 Adjusted Net worth 1 652,534 Deduct Valuation and sales discount 20% (330,507) Estimated Net worth value 1,322,027 Going concern value of goodwill Average Gross Sales X 20% 2,237,893 X 20% = 447,579 Capitalized Value of Earnings 579,402 Going concern value of goodwill 1,026,981 Market value of Security Savings Systems, Inc. 2,349,008 Value per share (Gross estimated value divided by 39,570 shares) 59.36 The corporation's stock ownership is as follows: NAME DECEMBER 31, 2001 -- Voting 8non-voting Shares Percent Frank A. Mosher ~ 14,610 36.92%~ Virginia B. Mosher 10,820 27.34%, Paul M. Mosher 7,070 17.87%~ Jean M. Mosher 7,070 17.E{70/, Total 39,570 1425241's Exhibit 1 SECURITY SAVINGS SYSTEMS, 1NC. HISTORICAL BALANCE SHEETS December 31, (Review) ASSETS ASSETS CURRENT ASSETS Cash in bank Accounts receivable Accounts receivable (Affiliate) Inventory Total current assets PLANT, PROPERTY AND EQUIPMENT Land and buildings Equipment, furniture 8~ fixtures Automobiles Less: Accumulated depreciation Net plant, property and equipment 2001 2000 1991 1998 1997 $ 157,326 $ 263,208 $ 412,232 $ 383,071 $ 454,591 309,152 94,424 108,429 220,398 121,694 134 57 14,980 20,773 37,645 121 214 131 171 170.593 157,084 154.793 , , 680,733 528,820 70E~,234 781,326 768,723 406,971 406,971 40Ei,971 406,971 406,971 1,615,501 1,340,253 1,309,406 1,164,172 1,093,033 50,245 50,245 10,989 10,989 10,989 2,072,717 1,797,469 1,'72 ~~,366 1,582,132 1,510,993 766 586 1 736 465 1 1,37:5,052 1,276,749 1,202,488 , , , , 485,951 331,733 35;?,314 .305,383 308,505 OTHER ASSETS Cash surrender value of life 578 283 272,062 254,476 229,566 210,376 insurance Total other assets , 283,578 272,062 254,476 229,566 210,376 Total assets $ 1,450,262 $ 1,132,615 $ 1,313,® $ 1,316,275 $ 1,287,604 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES 312 $ $ 18 29,282 $ 2'5,419 $ 52,950 $ 28,924 Accounts payable , 669 13 15,441 12,967 17,212 11,523 Taxes payable Notes payable-PNC Bank , 185,977 -0- -0- -0- -0- Advance from Officer 154,325 74,325 0 -0- 115 106 -0- -0- -0' -0- Loan payable from life insurance policy 104,573 - - , Total current liabilities 476,856 119,048 - 144,501 70,162 40,447 STOCKHOLDERS' EQUITY Capital stock - no par value, 175,412 175,412 1'75,412 175,412 175,412 Retained earnings ~ accumulated adjustments account 797,994 838,155 - 9'93,111 1,070,701 1,071,745 Total stockholders' equity 973,406 1,013,567 _1_168,523 1,246,113 1,247,157 Total liabilities 8~ stockholders' equity $ 1,450,262 $ 1,132,615 $ 1~313~024 $ 1,316,275 $ 1,287,604 Exhibit 2 SECURITY SAVINGS SYSATEMENTS HISTORICAL INCOMEReview) December 31, INCOME Sales COST OF GOODS SOLD Beginning inventory Purchases Direct labor Commissions Freight Shop & utilities expenses Total Less: Ending inventory Total cost of goods sold Gross profit 2001 2000 1999 - 1998 1997 52 717 $ 2,2 , $ 2,471,517 $ 2~0=616 $ 2,356,582 $ 1,998,033 171,131 170,593 307,877 353,164 625,380 679,181 92,049 112,154 294,829 300,743 113,552 104,146 1,604,818 1,719,981 214,121 171,131 084 157 154,793 151,768 , 944 318 375,762 326,964 , 21 ~'_ 584 593,265 533,066 , 92f3 126 128,715 117,458 , 248,19:? 196,996 189,366 044 75 88,831 78,528 , 191 524 1 1,528,05 1 ~ , , 170,593 157,08 154,793 850 548 1 1,353,598 1,370,975 1,238,873 0 697 1,39 , , , 862,020 922,667 757,018 985,607 759,160 579 229' 377,300 257,360 380,090 130 ~ 41 266,879 35,142 53,193 46,776 35,Ei36 432 85 , 86,040 79,878 83,943 91,519 , -0- 28,040 23,313 8,551 763 97 10,771 79,354 63,830 60,979 261 74 51,429 99,429 , 121,030 90,684 98,303 848 2 , 3,666 3,873 11,076 646 30 2,374 19,617 , 23,194 23,497 10 074 23,425 10,636 , 10,621 10,564 9„095 401 16 , 11,210 14,354 19,407 245 52 13,499 31,104 , 18,074 23,281 107 16 17,784 11,594 , 11,984 17,347 16,790 ' 297 , 29,128 3,290 50,262 19,676 ,, , E; 450 _0_ 21,500 33,610 10,125 777 74 , ~. 7.x,906 ~ 53,490 49,799 59,352 , _ 873,262 895,487 ~71 4,616 840,993 712,425 OPERATING EXPENSES Officers' salaries Office salaries Taxes Retirement plan (401 K) Employee benefits Depreciation Advertising Insurance Telephone Legal and accounting Office expense Travel, auto & entertainment Leases Interest expense Repairs and maintenance Total operating expenses 11,242) 27,180 (Loss) income from operations 42,402 144,614 46,735 7,421 7,531 11,228 OTHER INCOME (EXPENSES) 2,588 5,873 7,134 '0- Interest and dividend income -0_ 1,584 ~_I4,664 Capital (loss) (futures) ., 159 $ 159,279 $ 57,963 $ 8,654 $ 31,469 $ ~35, Net (loss) income Exhibit 3 ... y ;: .. SECURITY SAVINGS SYSTEMS, INC. APPENDIX A ASSUMPTIONS AND LIMITING CON DH OVA.LU~ATION SOURCES OF INFORMATION RELIED ON This valuation is subject to the following assumptions and limiting conditions: 1. Information, estimates, and opinions contained in this report are soturces,from sources considered to be reliable. However, we assume no liability for such com an and its representatives warranted to us that the information they supplied was 2. The P Y nd accurate to the best of their knowledge and that the financial since with generallyn complete a reflects the company's results of operations and financial condition m accor ountin rinciples, unless otherwise noted. Information supplie+j bn o ~agement has accepted acc 9 P been accepted as correct without further verification, and we express no opir-io information. of this re ort, or a copy therof, does not carry with it the right of publication of all or 3. Possession P ur ose b an one but the client without the previous written part of it, nor may it be us a ~ r n a P spent, only with proper attribution. consent of the client or us Y e not re aired to give testimony in court, or be in attendance us arranyement shave been 4. Wear q being valued, unless previo 9 depositions, with reference to the company made. timates of value presented in this report apply to this valuation only and may not 5. The various es used out of the context presented herein. This valuation is valid only for the purpose o be purposes specified herein. reflects facts and conditions existing at the valuation date. Suu h events andts 6. This valuation have not been considered, and we have no obligation to update our report or s conditions. re ared by James F. Obrock, CPA. The Officers of V~/itdemaS S nd Obsolnc. or 7. This report wasp p CPA's do not have any present or contemplated future interest in Security Saving t with res ect of the parties involved, or any other interest that a 9 otn orvevents any personal mteres P from performing an unbiased valuation. Our compensation ~ e use of,tth s report. n resulting from the analyses, opinions, or conclusions m, or th External Documents: raisal Re ort for roperty situated at 9th and Market Streets, New Cumberland, PA by 1. App P P Lester G. Connor, MAI, SRPA, ASA, SCV dated December 3, 1999. Internal Documents . Reviewed Financial Statements of Security Savings Systems, Inc. for the years 1997 to 2001. 1 .a OMB No. 1545-002D es Gift (and Generation-Skipping Transfers Tax Return O (y V nited Stat For ifis made during calendar year 2002) ~O 0 2 Form ~ O (Section 6019 of the Intemai Revenue Code) ( 9 Department of the Treasury - See se state instructions. 3 ponors social security number internal Revenue Service 2 Donor's last name 14 6 -18 - 8 6 6 8 1 Donors first name and middle ini8al M08her -' Fraak A • 5 Legal residence (domicile) (county and state) 4 Address (number, street, and apartment number) Cumberland COUaty, PA g3 Carol Street _ 7' Citizenship 6 City, state, and ZIP code _ IISA erlaad~ pp, 17070 Yes No~ New Cumb and enter date of death __ ~~x~`¢~~~~~ 2688, 2350, or extension letter '°u, ^"~~~: check here - "Y~ ° 8 1f the donor died during the year, 709, ~~ here -^ and attach the Form 4868, °~~'h:si~~~+:{~ o file this Forth ~:~u~Y~~~Y~ g If you received an extension of time to X E the total number of donees listed on Schedule A - counto~eaapxch ersonthe ~~~ s "No," do not complete line 11b .. X c 10 Enter c 11 a Have you (the donor) previously filed has our0 address than ed since u last filed Form 7(~9 nr tran ~)•~~e' ' 11 b If the answer to line 11 a is Ye including generation-s ppi 9 u consent to have the gifts (' e~ ~ Y~~ (~ m 12 Gifts by husband or wife to third parties. - Do Yo ~ r~nsidered ~ made one-hakf by c ~ by you and by your spouse to third parties during the plan r Ye r s se must sign the consent X ' instructions.) (If the answer is "Yes," the following information must be furnished and you p~ r w. tf the answer is "No," skf lines 13-18 and o to Schedule A • 14•SSN • ,_. shown Belo ra t. a- 13 Name of consents s use ere ou married to one another durin the entire calendar ear? see instructions , , ..y 15 W divorced Or wldowad, and glv data (~°° k't"'~0f~ 16 If the answer to 15 is "No" s~ ~ d ~ ear be filed b ur s ouse? - ' ' ' ~ ~ ~ ~ ~ . 17 Willa ift tax return for th i transfere) made by me and by my spcruse to thins parties during the calendar year eneration-skipp ng for ~ created by the execution of this consent. 1 S Consent of Spouse - I consent to have the gifts (and g considered as made one-half by each of us. W e are both aware of the joint and several liability _ pate - 14 4 , 2 0 0.0 0 1 00.00 Consentin souse's si nature- Schedule A, Part 3, line 15 ~ ~ ~ 2 1 1 Enter the amount from • „ • , , . -- . .. 3 290, 400 .00 2 Enter the amount from Schedule B, line . .. , , , , . 84 ~ , p 0 ... 4 3 Total taxable gifts (add tines 1 and 2) .... .. 5 3 7 , 6 6 0.0 0 m uted on amount on line 3 (see Table for Computing Tax in separate instru(rtons) 87 6 .0 0 4 Tax co p 6 4 6, 5 Tax computed on amount on line 2 (see Table for Computing • • . 4 ~ 0 0 7 6 Balance (subtract line 5 from line 4) , ......... . , 3 7 , 6 0 0.0 0 7 Maximum unified credit (nonresident aliens, see instructions) .. _ 8 • .. ... 9 308, 200 .00 e unified credit against tax allowable for all prior periods (from Sch.•B, line 1, col. C) , 8 Enter th ~ 9 Balance (subtract line 8 from line 7) , ...... ' ' ' ' 0 , 0 0 ~ .20 of the amount .allowed as a specific•exemption for gifts made after September 8, 10 m 10 Enter 20% ( ) .. , ............ 11 308, 200.00 ~ and before January 1, 1977 (see instructions) • fl, 1976, • , , , . .. 46, 876 .00 12 0.00 c 11 Balance (subtract line 10 from line 9) .. , .. ~ • ' ' ' 13 x 12 Unified credit (enter the smaller of line 6 or line 11) _ • . . ~ 13 Credit for foreign gift taxes (see instructions) ..... 46, 876.00 ........... 14 0.00 cv 15 14 Total credits (add fines 12 and 13) . • 'do not enter less than zero) .... .. 0 .0 0 o. 15 Balance (subtract line 14 from line 6) ( 16 16 Generation-skipping transfer taxes (from Schedule C, Part 3, col. H, Total), ..., • ' ' 0 , p 0 ......... 17 0.00 .... • 18 17 Total tax (add lines 15 and 16) .. • ' ' re. aid with•extension of time to file ..... . 1 g Gift and generation-skipping transfer taxes p P 0 , 00 a`r 19 v .......... o 19 If line 18 is less than line 17, enter balance due (see instructions , 0 , 0 0 d 20 c o n schedules and statements, and to the best o my E 20 If line 18 is rester than lines Clare that shave examn ed thisfretum, Including an accorriparryi g '- Under penalties of e i claretion o reparer (other than donor) is b ed on all information of which preparer has ° knowledge and b i f, true, corre ~ ~ d m Sign any knowled Here Date t ' Si re ~ Date Check if ° ~ self-employed - `° Preparers C a Paid signature ' Imo' ____ Preparer' Firm's name (or ~ ~ Phone no - Use Only yours if self-em oyed),,See Schedule attached Fomr 709 (2oa2) address, and ZI code For Disclosure, Privacy Act, and Paperwork Reduction Act Notice. see Page 12 of the separate instructions for this forth. JSA 2S9061 2.000 Fr,~ p,, Mosher SSN: 146-18-8668 The preParer s ~ nAdreSS is ae follows: 3401 North Froat Street p.p, Box 5950 Harrisburg, PA 17110-0950 Page 2 Form 709 (2002) Y~-1- ~-' . Com utation of Taxable Lifts Includi on d scount?Sf the answer is "Yes," see instruc+'^"sition rogram as made ~ ar to a qualified state to P Does the value of an item listed on Scheduo~e A r (lest an valua i _ 529 c)(2)(B) to treat any transfers made this Ye A ou elect under sects lanation. B ~ Check here if y ear. See instructions. Attach exp ver a 5-year period beginning this y 1 o anization, medical, and educational exclusiDons -see instructions E ratably o ol-bca r9 C value at Part 1 -Gifts Subject Only to Gift Tax. Gifts less p Date g Donor's adjusted of gift date of gift A basis of gift • Donee's name and address Item • Relationship to donor (if any) number • Description of grft means of a trust, enter trust's EIN and • If the gift was made by of the trust instrument (see instructions) attach a description or,copy, CUSIP number • If the gift was of securities, give 1 See Schedule attached ~ 166,200.00 • • ' • ,n • Transfer Tax. You must list the gifts are Subject to•Both Gift Tax.and Generation-Skipp' g Total of Part 1 add amounts from Part 1, column E • ns -see instructions. (Also list here direct skips par{ 2 _ Gifts That are Direct Skips and olitical organization, medical, and educational exclusio rder. Gifts less p e termination of an "estate tax inclusion eriod."See instructionEs.) in chronological o D tare sub'ect only to the GST tax at this time as the result oft C Date Value at tha B Donor's adjusted date of gift of gift basis of g~ Item • Donee's name and address Relationship to donor (if any) number • • Descripft was m de by means of a trust, enter trust's EIN and f the trust instrument (see instructions) _ • If the g o attach ft ~S a tecurities, give CUSIP number ' • If the g 1 00 0. dd amounts from Part 2, column E 1 16 6 , 2 0 0.0 0 a Total of Part 2 .... Part 3 -Taxable Gift Reconciliation ' ' ~ ~ dd totals from column E of Parts 1 a ouse (see: instructions) 3 t d ab p. 0 0 0 0 2 0 0 6 le to sp lue of gifts of donor (a t 1 Total va . , 16 . . 20ne-half of items •.,,,...•"" 4 see inst.rucflons ... _ act line 2 from line 1) • 2 of spouse's retu bt p , 0 0 im t r 3 Balance (su from Schedule A, Part 3, line ransfer'tax, check of spouse to be included ect to the generation-sklppl g Gift b s j 4 ~ ifts included on this line are also su If any of the g ule C, Part 5 Sched 16 6 , 2 0 0.0 0 0 and enter those gifts also on "" 6 ~ 2 2 , 0 0 0.0 .... here ' line 4, above) (see instructions) 7 5 Total gifts (add lines 3 and 4) .. • ' ' ' ~ • luding ei ted on Schedule li 14 4 , 2 0 0.0 0 • . • . .. n s tai annual exclusions for gifts 5 6 To btract line 6 from ) ~ Ifts su 7 Total included amount of g Deductions (see instructions) 0.00 ~_,...~::,:.' h a marital deduction will be claimed, based 8 'fts of interests to spouse for whic 8 Gi of Schedule A • ' - 0.00 on items 9 "- 0.0 0 .. 10 ifts on line 8 , _ 9 Exclusions attributable to g . 0.00 ..~ ... btract line 9 from line 8 • 11 0.00 - su - 12 10 Marital deduction less exclusions , based on items 11 Charitable deduction, 13 14 4 , 2 0 0.0 0 12 Total deductions-add lines 10 and 11 ....~•"'~ 14 ~ col. H, Total) 12 from line 7 .. fr 9 • , 0 • p 0 4 4, 2 0 0. 0 ( 15 Form 70 13 Subtract line pa a 1... ' in transfer taxes payable with this a Tax Com.putat on orl 4 Generation-sklpp 9 e 1 of t nd o Forrn 7 ~ 9 (2042) 1 Taxable ifts (add lines 13 and 14 . Enter here a size 15 l sheets of same (lf more space is needed, attach additiona JSA 2S9082 3.000 _ _ page : 1 Frank A• Mosher SSN: 146-18-8668 _ part 1 Schedule A - Gifts Subject Oaly to Gift Tax D E C 8 Date of Value of A Doctor's Adj. to doctor, Gift Gift Donee's aame~ relationship Basis Item ~ tion '- address• and descrip No. OTHER GIFTS 1 Paul M. Mosher (Son) 256 Wiadiag Way 17011 Came Hill. PA aoa-voting aommoa 2500 she. Class p+ s Systems Inc. ~ stock, Security Saving $33.24 per share Jean M. Mosher (Daughter-in-law) 2 256 y,~iadiag way17011 Cep Hill, PA non-votiag coamu°a 2500 shs. Clara A Inc. stock, Security Savings Systems, $33.24 per share 0.00 0:1/14/2002 0.00 01/14/2002 83,100.00 83,100.00 166,200.00 3 =orm 709 202 continued ~ Computation of Taxable Gifts st QT1P) Marital Deduction. (See instructions for le n e esS arty under section 2,y"23(f), and 16 Terminable Intere ( ualifled terminab If a trust (or other property) meets the requirements of q a. The trust (or other property) is listed on Schedule A, and rt as a deduction on line 8, Part 3 Hof Schedule A, ert is entered in whole suchptrdust (or other property) treated as qualified terminable interest property b, The value of the trdeemoed to have made an election to hav ule A is entered as a deduction on then the donor shall be under section 2523(f). the trust (or other property) that the donor has included in Part 1 of Sch The numerator of this fraction if less than the entire value of ave made an election only as to a fraction of the trust (or other proPerti-)• , nsidered to h line 10 of Part 3, Schedule A. The denominator Is equal to the total value of line 8, the donor shall be co a deducted on is equal to the amount of th ~rsted m Fart leof g~edule A. o Involved will be inducted In Your the trust (or other prop rty) the terminable interest pr Pe1"tY n life ift or otherwise) 'of all or part of the qualifyi 9 ou make the QTIP electron (see instructions for line 8 of Schedule A , ection 2044). If your spouse disposes (bY g that is subject to the gift tax (sue Transfer of Certain If y spouse's gross estate upon his or her death (s rest, he or she will be considered to have made a transfer of the entire pr income Inte Life Estates on page 4 of the instructions). T1P Treatment of Annuities an oint and survivor annuities that 17 Election Out of ~ • n 2523(f)(6) NOT to treat as qualified terminable interesun~e section 2523(f). (See instructions.) ~ Check here if you elect under sectro ualifled terminable interest properh+ are making this electron ~ _- are reported on Schedule A anschedule A) for the annuities for which you _ N ski to the Tax Enter the item numbers (from P leting Schedule B. If you answered No, ~ Gifts From Prior Periods a e 1, Part 1, see the instructions for comp if you answered "Yes° on line 11a of P g licable). ~ D E utation on page 1 (or Schedule C, If app Amount of unified Amount of specifio Amount of Comp exemption for prior A 8 credit against gift tax eriods ending before taxable gifts ar or Internal Revenue office for periods after p January 1, 1977 Calendar ye calendar quarter where prior return was filed December 31, 197 14 6 , 2 0 0 . 0 0 (see instructions) 3 7, 6 0 0 .0 0 2001 ICiaciaaati, OH 0.00 146,200.00 1 37,600.00 2 • •column D, is more than $30,000. . 1 Totals for prime periods ' ' ' ' ' 14 6 , 2 0 0.0 0 2 Amount, if any, by which total specific exemption. line 1, column i~ line 1, and amount, if any, on 3 rior eriods (add amount, Form 709 (2002) 3 Total amount of fea~alon9inte 2 of the Tax Compute on Page 1.) line 2). (Enter he If more space is needed, attach additional sheets of same size.) JSA 4 ,n Transfer Tax --- Com utation of Generation-Skl lately excluded by the GST exemption must still be fury reported Note: Inter vivos direct skips that are comp Schedule C. - (including value and exempti~s claimed - Transfers E D Nc ntexable -- -Generation-Ski -n c part 1 g Split Gifts Subtract col• C ' portion of transfer A Value (enter 1/2 of col. B) from col. B Item No. from Schedule A, (see instructions) (from gchedule A, ( Part 2, col• E) - Part 2, ~. A) - . 1 ..- 2 ,-_ 3 _. 4 - 5 6 If you elected gift splitting and your spouse to Form 709 Split gifts from 709 Veiue inducted from spouse's Nontaxable portion of tran er was required to file a separa u spouse's Form Ss ~~ ~ ' Yo (enter ftem number) he instructions for Form 709 - ~ (see t must enter all of the 9 our spouse's Form f - Y ~ Schedule A, Part 2, o - 709 here. In column C, enter the Item numberof each S- ears in column A of - gift in the order it app ouse's Schedule A, Part 2. We have ~ - your sp preprinted the prefix"S= to dlsUnguish your our own when - ~ spouse's item numbers from y complete column A of Schedule C, - you S- Part 3. In column D, for each gift, enter the amount S_ Part 1, of hedule C - ~ , reported in column C, Sc your spouse's Form 709. tion Section 263s aad li Election IP)-on 2662 a ~ inytructions) Q - a election ( em tion Reconci T Part 2 -GST Ex a section 2652(a)(3) (pe re making this election ~ u are making __ of the gifts for which You a Check box - if Yo S • • Enter the item numbers (from tan (~ instructions) • - ~ 1 M~dmum allowable exemp - - • 2 Total exemption used for periods before filing this retum . n available for this return (subtract line 2 from line 1) i • o g Exempt col. C total, below) • his return (from Pad 3' ' must • attach •a • N ( otice of Allocation. m tion claimed on t on Part 3, below. You 4 Exe P t shown • . no ~mption allocated to transfers 5 instructions.) ..: ......... . ,.." Add lines 4 and 5 • ' ' g • • • for future transfers subtract line 6 from line 3 ailable = p G 7 Exam tion av utation D Part g -Tax Com E Inclusion Ratio Maximum x T Applicable Rate multiply cd• E ( C A g Divide col. C Net transfer GST Exemption by col. B (subtract col. D from 1.000) a h-state Pate by ~. ~ Item Nb. Allocated om Schedule (from Schedule C, f 50% ,50 r ( C, Part t) Part 1, cd. ~ 50a/o .50 1 50% .50 2 50% .50 3 50% .50 4 50% .50 5 5G% .50 6 50°r6 G50 Total exemption claimed. Enter here and on line 4, Part 2, above. May not exceed line 3, 0 , 0 0 Part 2, above • . (If more space is needed, attach additional sheets of same size. JSA 2S9064 2.000 F Net Transfer (subtract col. E tram col. D) Net transfer (subtract ca• E from col. D) 1,100,000.00 0.00 1,100,000.00 0.00 0.00 0.00 1,100,000.00 H GenerationSkippin9 Transfer Tax ~~,~~Itloly col. B by ~• ~'') to transfer tax. Enter here, on line 14 Total generation-skipp 9 utation of Schedule A, Part 3, and on line 16 of the Tax Come ..., nacre 1 -'~ 0.00 Form 709 (2002) ent A-1-Form 709 Attachm 2002 U.S. Gift Tax R.etw"n V d1 u~ ~_ •.. - _ -- Non-votin Common Stock e "Co oration"), a Tennessee corporation, Security Savings Systems, Inc. (th ~ t 910 Market Street, New C~,imberland, has its principal Place of business a members of the is a closely held corporation owned b~y Pennsylvania 17070. It d marketing of financial documents in er family. It is engaged in the printing an Mosh ons. The major product line historically on form for banks and savings institute coup . tmas savings accounts. More recently t e has been coupon books for bank Chris d mo~gage coupon books. The capital oration has marketed installment loan an ;ock of 50,000 shares of core ital st Co oration provides for authorized cap A non- structure of the rP ated as Class stock of which 40,000 shares are design no par value common common 0 shares are designated as Class B voting . voting Comm°n stock and 10,00 ects except as to t~hE; difference in voting Lock. The shares are identical in all resp e A 3857 shares of Class s s herein referenced in Sched rights. At the date of the g~ Anon-voting common stock were moron stock and 35,613 shares of Class and 21,887 B voting co common stock tand~g• 3,543 shares of Class B voting rand his issued and outs 1, rank A. Moshe , n-voting common stock were owned by shares of Class A no lass B voting common stock and 13,726 Vir 'nia B. Mosher. 414 shares of C • Mosher and his wife, ~ Paul M n-voting common stock were owned by shares of Class A no nia Mosher. Mosher is the son of Frank sand verge Vie, Jean M. Mosher. Paul M• and its independeni~ outside accountants Management of the Corporation rmined that the fair market value of the Wildeman and Obrock have dete 2001 i.s $2,349,008. The value of 's total capita stock as of December 31, e before Corporation d outstanding on that date was $59.36 per s ar the 39,570 shares issued an wn on the Valuation Report of hereinafter referred to as sho ~,y adjustments ~ hereof. ck attached hereto and made a p Wildeman and Obro of the Class A COQ°n stock of 'r market value of the 2,500 shares The fal ust be further adjusted to reach an rred to in Schedule A, Part One m oration refe ketability of non-voting stock in a Corp • market value for the lack of mar f'or the depressing appropriate fair . tion for which no market exists, ~ ial wilting closely held family coreora d o~f any potent control would create in the min effect on value that lack of buyer. ve determined is appropriate for nt to the fair market value abo Adjustme trol for non-voting stock as follows: k of marketability and lack of con discounts for lac stock $ 59.36 one share of Class Anon-voting 17.81 Fair market value of marketability discount -- 30% 41.55 Lack of 8.31 on-voting stock discount - 20% Lack of control for n 33.24 f one share of Class Anon-voting ~ Net fair market value o common stock e a ropriate~ by the United is have been determined to b PP The foregoing discoun Frank, 69 TCM 2255 (1995,x. tates Tax Court in. Estate of S :300490 _1 Security Savings Systems, Inc. New Cumberland, PA 17070 Description of the~Assignment Wildernan and Obrock, CPA's has been engaged by Security Savings Systems, lnc., a Tennessee Corporation located, authorized to do busines and operating in Pennsylvania, to estimate the fair market value of common stock of the company as of December 31, 2001. The purpose of the valuation is for filing a gift tax return with Internal Revenue Service. Fair market value is defined as the cash or cash equivalent price at which property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts. Summary Description of the Company Security Savings Systems, Inc. (an S Corporation) is a printing Company. Its main business is the production of Christmas Savings Club coupon books and other genera! printing. As a producer of coupon books they also produce installment loan,. mortgage and other purpose coupon books Valuation Methods and Conclusion In developing a value for Security Savings Systems, lnc., we started with the net book value of the Company increased by the market value of the real estate. We discouinted this for valuation adjustments and selling expenses using 20%. We valued goodwill by adding 20% of the 5 year average gross sales and the 5 year average net earnings capitalized by 9.5% to arrive at a market . value of the Corporation of $2,349,008 shown on Exhibit 1. Based on the information contained in the narrative report that follows, it is our considered opinion that the fair market value of the 100% common stock in Security Savings Systems, Inc., is $2,349,008. The valuation of the 39,570 shares of common stock is $59:36 per share. This valuation is subject to the assumptions and limiting conditions presented in Appendix A. Harrisburg, Pennsylvania June 14, 2001 1 SECURITY SAVINGS SYSTEMS, INC. VALUATION OF STOCK DECEMBER 31, 2001 ESTIMATED FAIR MARKET VALUE OF SECURITY SAVINGS SYSTEMS, INC. Year Average Gross Average Net Sales Income 1997 1,998,033 1997 57,963 1998 2,356,582 1998 159,279 1999 2,110,616 1999 35,159 2000 2,471,517 2000 31,469 2001 2,252,717 2001 (8,654) Total 11,189,465 Total 275,216 Average net Average gross sales 2,237,893 income 55,043 Book Value Capitalized @.095 Land & Building 406,971 579,402 Allow for Dep. (251,099) Net Book Value 155,872 market Value Per Appraisal 835,000 Land 8~ Building Adjustment to MV 679.128 Market Value Net Worth _ December 31, 2001 973,406 Land & Building adjustment to MV 679.128 Adjusted Net worth 1,652,534 Deduct Valuation and sales discount 20% (330,5D7) Estimated Net worth value 1,322,027 Going concern value of goodwill Average Gross Sales X 20% 2,237,893 X 20% = 447,579 Capitalized Value of Earnings 579,402 Going concern value of goodwill 1,026,981 Market value of Security Savings Systems, Inc. 2.349,008 Value per share (Gross estimated value divided by 39,570 shares) 59.36 The corporation's stock ownership is as follows: NAME DECEMBER 31, 2001 Voting &non-voting 'Shares Percent Frank A. Mosher ~ 14,610 36.92% Virginia 8. Mosher 10,820 27.34% Paul M, Mosher ~ 7,070 17.8't% Jean M. Mosher 7,070 17.8'7°I° Total 39,570 loo.oo°i~; Exhibit 1 SECURITY SAVINGS SYSTEMS, INC. HISTORICAL BALANCE SHEETS December 31, (Review) ASSETS ASSETS CURRENT ASSETS Cash in bank Accounts receivable Accounts receivable (Affiliate) Inventory Tota! current assets PLANT, PROPERTY AND EQUIPMENT Land and buildings Equipment, furniture & fixtures i Automobiles Less: Accumulated depreciation Net plant, property and equipment OTHER ASSETS Cash surrender value of life insurance Total other assets 2001 2000 1999 1998 1997 $ 157,326 $ 263,208 $ 412,232 $ 383,071 $ 454,591 309,152 94,424 108,429 220,398 121,694 134 57 14,980 20,773 37,645 214,121 171,131 170,593 157,084 154.793 680,733 528,820 7'06,234 781,326 768,723 406,971 406,971 406,971 406,971 406,971 1,615,501 1,340,253 1,309,406 1,164,172 1,093,033 50,245 50,245 10,989 10,989 10,989 2,072,717 1,797,469 1,727,366 1,582,132 1,510,993 1,58fi,766 1,465,736 1,375,052 1,276,749 1,202,488 485,951 331,733 352,314 305,383 308,505 283,578 .272,062 254,476 229,566 210,376 283,578 272,062 254,476 229,566 210,376 Total assets $ 1,450,262 $ 1,132,615 $ 1,313,024 $ 1,316,275 $ 1,287,604 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 18,312 $ 29,282 $ 25,419 $ 52,950 $ 28,924 Taxes payable 13,669 15,441 12,967 17,212 11,523 Notes payable-PNC Bank 185,977 -0- -0- . -0- -0- Advance from Officer 154,325 74,325 -0- -0- -0- Loan payable from life insurance policy 104,573 -0- 106,115 -0- -0- Total current liabilities 476,856 119,048 144,5fl1 70,162 40,447 STOCKHOLDERS' EQUITY Capital stock - no par value, ~ Retained earnings & accumulated adjustments account Total stockholders' equity 175,412 175,412 175,412 . 175,412 175,412 797,994 838,155 99~~,111 1,070,701 1,071,745 973,406 1,013,567 1,'I 68,523 1,246,113 1,247,157 Total liabilities 8< stockholders' equity $ 1,450,262 $ 1,132,615 $ 1,31:x,024 $ 1,316,275 $ 1,287,604 1 Exhibit 2 >< . i f INCOME Sales COST OF GOODS SOLD Beginning inventory Purchases Direct labor Commissions Freight Shop & utilities expenses Total Less: Ending inventory Total cost of goods sold Gross profit OPERATING EXPENSES Officers' salaries Office salaries Taxes Retirement plan (401 K} Employee benefits Depreciation Advertising Insurance Telephone Legal and accounting Office expense Travel, auto & entertainment Leases Interest expense Repairs and maintenance SECURITY SAVINGS SYSTEMS, INC.. HISTORICAL INCOME STATEMENTS December 31, (Review) 2001 .2000 1999 1998 1997 $ 2,252,717 $ 2,471,517 $$ 2~1 '10,'10,616 $ 2,356,582 $ 1,998,033 171,131 170,593 157,084 154,793 151,768 307,877 353,164 318,944 375,762 326,964 625,380 679,181 584,212 593,2fi5 533,066 92, 049 112,.154 126, 928 128, 715 117,458 294,829 300,743 248,192 196,996 189,366 113,552 104,146 88,831 78,528 75,044 1,604,818 1,719,981 1, 524,191 1,528,059 1,393,688 214,121 171,131 170,593 157,084 154,793 1,390,697 1,548,850 1,353, 598 1,370,975 •1,238,873 862,020 922,667 757,018 985,607 759,160 229,579 377,300 257,360 380,090 266,$79 53,193 46,776 35,Ei36 41,130 ~ 35,142 83,943 91,519 85,432 86,040 79,878 8,551 10,771 -0- 28,040 23,313 97,763 79,354 63,830 60,979 51,429 121,030 90,684 98,303 74,261 99,429 11,076 2,374 2,848 3,666 3,973 30,646 19,617 23,194 23,497 23,425 10,621 10,564 9,095 ~ 10,074 10,636 19,407 13,499 16,401 11,210 14,354 52,245 31,104 18,074 23,281 17,784 11,984 17,347 16,790 16,107 11,594 50,262 19,676 5,x'97 29,128 3,290 33,610 10,125 6,450 -0- 21,500 59,352 74,777 75,906 ~ 53,490 49,799 Total operating expenses 873,262 895,487 714_fi16 840,993 712,425 (Loss} income from operations { 11,242) 27,180 42,402 144,614 46,735 OTHER INCOME (EXPENSES) Interest and dividend income Capital (loss) (futures)• ., Net (loss) income .Rt`'~ ~~:r,+.Y ;yam i t~l ' y • ~ ~ ,.. 2,588 5,873 7,421 7,531 11,_228 -0- ~ 1,584) ~ 14,664 7,134 -0- $( 8,6.54) $ 31,469 $ 35,159 $ 159,279 $ 57,963 Exhibit 3 "it~t.'i:i t • 1 I,~I ~E. SECURITY SAVINGS SYSTEMS, INC:. APPENDIX A ASSUMPTIONS AND LIMITING CONDIT101'JS SOURCES OF INFORMATION RELIED ON 1N THIS \IALUATION This valuation is subject fo the following assumptions and limiting conditions: 1. Information, estimates, and opinions contained in this report are obtained from sources considered to be reliable. However, we assume no liability for such sources. 2. The company and its representatives warranted to us that the information they supplied was complete and accurate to the best of their knowledge and that the financial statement information reflects the company`s results of operations and financial condition in accordance with generally accepted accounting principles, unless otherwise noted. Information supplied by management has been accepted as correct without further verification, and we express no opinion on that information. 3. Possession of this report, or a copy therof, does not carry with it the right of publication of al! or part of it, nor 'may it be used for any purpose by anyone but the client without the previous written consent of the client or us and, in any event, only with proper attribution. 4. We are not required to give testimony in court, or be in attendance during any hearings or depositions, with reference to the company being valued, unless previous arrangements have been made. 5. The various estimates of value presented in this report apply to this valuation only and may not be used out of the context presented herein. This valuation is valid only for' the purpose or purposes specified herein. 6. This valuation reflects facts and conditions existing at the valuation date. Subsequent events have not been considered, and we have no obligation to update our report for such events and conditions. 7. This report was prepared by James F. Obrock, CPA. The Officers of Wildeman and Obrock, CPA's do not have any present or contemplated future interest in Security Savings Systems, Inc. or any personal interest with respect of the parties involved, or any other interest that might prevent us from performing an unbiased valuation. Our compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. External Documents: 1. Appraisal Report for property situated at 9th and Market Streets, New Cumberland, PA by Lester G. Connor, MAI, SRPA, ASA, SCV dated December 3, 1999. Internal Documents 1. Reviewed Financial Statements of Security Savings Systems, Inc. for the years 199 to 2001. .. - :;;r;;. ~.:. Fom, 709 ~ United States Gift (& Generation-Skipping Transfer) Tax Return oMB 140.1545-0020 (Section 6019 of the fntemal Revenue Code) (For gifts made during calendar year 2001) 200 j Department of the Treasury $e@ Se state instructions. internal Revenue Service - p 1 Donor's first ame and middle initial 2 Donor's last name 3 Donor's social security number STirginia ~ Mosher 195-16-324n P 4 Address (number, street, and apartment number) A 93 Carol Street T 6 City, state, and ZIP code New Cumberland, PA 17070 1 E E R L N O M A I N `J Legal residence (d o miclle) (county & state} Cuxaberlaad County, PA 7 C'ltizenship vsA 8 If the donor died during the year, check here - U and eater date of death _ Yes No 9 if you received an ext. of time to file this Form 709, check here - ~ & attach the Form 4868, 2688, 2350, or extension letter 7 0 Enter the total number of separate donees listed on Schedule A -- count each person only once... - 2 .`•'~~R ` ~ :~~ ~~" ~. - ~ .~~p; 118 Have you (the donor) previously filed a Form 709 (or 709-A) for any other year'? If answer is "No," do not complete line 11 b .. X 11 b ff the answer to line 11 a is "Yes," has your address changed since you last filed Form 709 (or 709-A)? ............... . . . 12 Gifts by husband or wife to third parties. -- Do you consent to have the gifts (including generation-skipping transfers) made by you and by your spouse to third parties during the calendar year considered as made one-half by each of you? (See instructions.) (If the answer is "Yes," the following information must be famished and ynur spouse must sign the consent shown below, !f the answer is "No," skip Ilnes 13-18 and go to Schedule A.) ............................. X 13 Name of consenting spouse = 4 sSN ... 15 Were you married to one another during the entire calendar year`? (see instructions) ... .. ....... _ 16 ff answer to 15 is "No," check whether married divorced or widowed, ~ give date (see inst.) - 17 Will a gift tax return for this calendar year be filed by your spouse? . ... „_ J A _ _ _. .., vv~.avn~ v~ ~Nvusv -- ~ ~~~~~a~~- ~~ ~~avc uio yn~s ~anu yGnCrauQn-sK~ ing uansrer5~ mace oy me•anD oy R1y spouse to tnirtl parties during the.calendar year considered as made one-hall by each of us. a are both aware of the joint and several liability for tax created by the execution of this consent. Consenting spouse's signature - Date - _ 1 Enter the amount from Schedule A, Part 3, line 15 ............................... ........ 1 14 6 , 2 0 0.0 0 2 Enter the amount from Schedule B, fine 3 ............................................... 2 0.0 0 3 Total taxable gifts (add lines 1 and 2) .......................................... ....... 3 14 6 , 2 0 0.0 0 4 Tax computed on amount on line 3 (see Table for Computing Tax in separate instructions) ......... 4 3 7 , 6 6 0.0 0 5 Tax computed on amount on line 2 (see Table for Computing Tax in separate instructions) ......... 5 0.0 0 P 6 Balance (subtract line 5 from line 4) .................................................... 6 3 7, 6 6 0.0 0 A R 7 Maximum unified credit (nonresident aliens, see instructions) .. . . ........... . ........ ,...... , . 7 220,550.00 T 8 Enter the unified credit a afnst tax allowable for all riot eriods from Sch. B, line 1, col. 9 P P ( C) ~, ....... 8 0. 0 0 2 9 Balance (subtract line 8 from Ilne 7) ............................................ „ ....... 9 2 2 0 , 5 5 0.0 0 T 10 Enter 20% (.20) of the amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977 (see instructions) ...........................................: 10 0.00 X 11 Balance (subtract Ilne 10 from line 9) ................................................... 11 2 2 0 , 5 5 0.0 0 C 12 Unified credit (enter the smaller of line 6 or fine 11) ........................................ 12 3 7 , 6 6 0. 0 0 M 13 Credft for foreign gift taxes (see instructions) ............................... . ............. 13 0. 0 0 P A T 14 Total credits (add lines 12 and 13) ..................................................... 14 T A 15 Balance (subtract line 14 from line 6) (do not enter less than zero) ............................ 15 C f 16 Generation-skipping transfer taxes (from Schedule C, Part 3, col. ~H, Total) ...................... 16 H N ~ 17 Total tax (add lines 15 and 16) ....................................................... . 17 E 18 Gift and generation-skipping transfer taxes prepaid with extension of timeto file ...........:..... 18 C K 19 If line 18 is less than line 17, enter balance due (see instructions) ............................. 19 or M 37,660.00 0. 0.00 0.00 0.00 o.ao O 20 iF sine 18 is greater than line 17, errter amount to be refunded .. 20 0.0 0 . ....... . ..... ............. N Under penalties of perjury, I declare that I have examined this return, including any accompanying achsdulea and atatsments, and to the bast of my E knowledge and belie it is tiye, correct, and complete. De ration of preparer (other an donor) fs .based on all inf.or ati n of which preparer has any Y Sign knowledge. _ ~ R Here - _ ~ Signature of donor p Date E Preparer's ~ ~ Dot Check if self- R signature Paid ° H Preparer's Fan's name (or Matte, Evans an t~Too ss.de Use Oni yours if E y self-employed), ' 3 4 01 N Frost Street PO Box address, & Z1P code Harrisburg, PA 17110 - 0 9 5 0 ~~~~~ d Z employed.. - Phone no. - 717-232-5000 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see the separate instructions for this form. Form 709 (2001) CAA 1 7091 NTF 2556847 GLD 4222 Copyright 2001 Greatiand/Nalco -Forms Software Only Form 709 Page 2 ~E~~~ ~.~ Computation Of Taxable Gifts (Including Transfers in Tuust)_ A Does the value of any item listed on Schedule A reflect any valuation discount? If the answer is "Yes," see instructions ...... Yes No B ~ Check here if you elect under section 529(c)(2)(B) to treat any transfers made this year to a qualified state tuition program as made ratably over a 5-year period beginning this year. See instructions. Attach explanation. _ Part 1 -- Gifts Subiect Onlv to Glft Tax. Gifts less political organization, medical, and educational exclusions -- see instructions A B C D E Item • Donee's name and address ' Donor's adjusted Date Value at number rf any) • Relationship to donor ( • Description of gift basis of gift of gift date of gift • If gift was made by means of trust, enter trust's EIN & attach . a description or copy of trust instrument (see instructions) • If the gift was of securities, give CUSIP number See Sc a ule attac ed Total of Part 1 Ladd amounts from Part 1, column E) ....... ... ........ ............. ... ...... - ~ • Part 2 -- Gifts That are Direct Sktps and are Subject to Both Gift Tax and Generation-Skipping Transfer Tax. You must Ilst the gifts In chronological order. Gifts less political organization, medical, and educational exclusions -- see instructions. (Also list here direct skins that are suolect onry to the ~5I tax at tnls time as me resua vT me terminanon oT an ~~ esta>:e tax Incwslon penoa.~~ wee msnucnons.l B Item • Donee's name and address • Relationship to donor (if any) Donor's adjusted Date Value at number • Description of gift basis of gift of gift date of gift • If gift was made by means of trust, enter trust's EIN $ attach a description or copy of trust instrument (see instructions) • If the gift was of securides, give CUSIP number Total of Part 2 Ladd amounts from Part 2, column E) ..................................................... - 0. 0 0 Part 3 -- Taxable Glft Reconctllation 1 Total value of gifts of donor (add totals from column E of Parts 1 and 2) ............................. 1 16 6 , 2 0 0. 0 0 2 One-half of items attributable to spouse (see instructions) . 2 0. 0 0 3 Balance (subtract line 2 from tine 1) ......................................................... 3 16 6 , 2 0 0.0 0 4 Gifts of spouse to be included (from Schedule A, Part 3, line 2 of spouse's return -- see instnayctions)....... 4 0.00 If any of the gifts included on this line are also subject to the generation-skipping transfer tax, check here - ~ and enter those gifts also on Schedule C, Part 1. ,~ : ~,~, 5 Total gifts (add lines 3 and 4) .............................................................. 5 16 6 , 2 0 0.0 0 6 Total annual exclusions for gifts listed on Schedule A (including line 4, above) (see instructions) ........... 6 2 0 , 0 0 0.0 0 7 Total included amount of gifts (subtract line 6 from line 5) ........................................ 7 146, 200.00 Deductions (see instructions) ~. M 8 Gifts of interests to spouse for which a marital deduction will be claimed, based ' 0.00'' on items of Schedule A .............. 8 _ `~ 9 Exclusions attributable to gifts on line 8 ................................ 9 _ . 0 0 ~'~ ' . 10 Marital deduction -- subtract line 9 from line 8 .......................... 10 0.00~~- ~~ ~ . 11 Charitable deduction, based on items less exclusions ..... 11 _ :~ .:~:. 12 Total deductions -- add lines 10 and 11 .......................................... .......... ,12 0.00 13 Subtract line l2 from line 7 ................................................................ 13 ~ - 14 Generation-skipping transfer taxes payable with this Form 709 (from Schedule C, Part 3, col. H, 'dotal)...... 14 15 Taxable gifts, (add lines 13 and 14). Enter here and on line 1 of the Tax Computation on page 1 ........... 15 146, 200.00 (If mote space is needed, attach additional sheets of same size.) Form 709 (2001) CAA 1 7092 NTF 2555848 GLD 4222 Copyright 2001 Greatland/Nalco -Forms Software Only Virginia A. Mosher Page: 1 SSN: 195-16-3240 Schedule A -- Part 1. Gifts Subject Only to Gift Tax A B ~ C D E; Item Doaee's same, relationship to doctor, Donor's Adj. Date of Value of No. address, aad~descriptioa Basis Gift Gift OTHER GIFTS 1 Paul M. Mosher (Son} 12/20/2001 83,100.00 256 Winding Way Camp Hill, PA 17011 2500 shs. Class B non-voting common stock, Security Savings Systems, Inc. C~ $33.24 per share 2 Jena M. Mosher (Daughter-ia-law) •• 12/20/2001 83,100.00 256 Wiadiag Way Camp Hill, PA 17011 2500 shs. Class B aoa-voting common stock, Security Savings Systems, Inc. $33.24 per share 166,200.00 Form 709 (2000 _, Page 3 ~~€.A 1 Comautation of Taxable Gifts (continued) _ 16 Terminable Interest (QTIP) Marital Deduction. (See instructions for line 8 of Schedule A.) If a trust (or other property) meets the requirements of qualified terminable interest property under section 2523(f), and a. The trust (or other property) is listed on Schedule A, and b. The value of the trust (or other property) is entered in whole or in part as a deduction on line 8, Part 3 of Schedule A, then the donor shall be deemed to have made an election to have such trust (or other property) treated as qualified terminable interest property under section 2523(f). If less than the entire value of the trust (or other property) that the donor has included in Part 1 of Schedule A is entered as a deduction on line 8, the donor shall be considered to have made an election only as to a fraction of the trust (or other property). The numerator of this fraction is equal to the amount of the trust (or other property) deducted on line 10 of Part 3, Schedule A. The denominator is equal to the total value of the trust (or other property) listed in Part ~ of Schedule A. If you make the QTIP election (see instructions for line 8 of Schedule A), the terminable interest property involved will be included in your spouse's gross estate upon his or her death (section 2044). If your spouse disposes (by gift or othewise) of all or part of the qualifying life income interest, he or she will be considered to have made a transfer of the entire property that is subject to the gift tax (see Transfer of Certain Life Estates in the instructions). 17 Election Out of QTIP Treatment of Annuities ~ Check here if you elect under section 2523(f)(6) NOT to treat as qualfied terminable interest property any joint and survivor annuities that are reported on Schedule A and would otherwise be treated as qualfied terminable interest property under section 2523(f). (See instructions.) Enter the item numbers (from Schedule A) for the annuities for which you are making this election t '~~~_~.~ i~ :., Gifts From Prior Periods It you answered "Yes" on Ilne 11a of page 1, Part 1, see the Instructions for completing Schedule B. If you answered °No," skip to the Taut Computation on page 1 (or Schedule C, It applicable). A C D Calendar year or B Amount of unified Amount of specfic E calendar quarter Internal Revenue office credit against gift tax exemption for prior Amount of where prior return was filed for periods after periods end. before taxable gifts (see instructions) December 31, 1976 January 1, 1977 1 Totals for prior periods (without adjustment for reduced specific exemption) ........................................ 1 2 Amount, if any, by which total specfic exemption, line 1, column D, is more than $30,000 ................ 2 3 Total amount of taxable gifts for prior periods (add amount, column E, line 1, and amount, if a,ny, on line 2). (Enter here and on line 2 of the Tax Computation on page 1.).. 3 (If more space is needed, attach additional sheets of same size.) Form 709 (2001) CAA 1 7093 NTF 2555849 GLD 5850 Copyright 2001 Greatland/Nalco -Forms Software Only Form 709 (2001) _ Page 4 ~~~~~ ~`= Cem'utati~n of Generation-SiciN~in~ Transfer Tax _ ,._ ... _. Note: Inter vivos direct skips that are completely excluded by the GST exernption must still be fully reported (including value and exemptions claimed) on Schedule C. - .. ~• •_. T..~.~~J-... rai ~ ~ -- Baca ~c~ oa .v. ~-......pp...a .. ~------ - C - F Item No. (from Schedule A, VaBlue (from Schedule A, Split Gifts (enter 1/2 of col. B) SubtracDt col. C B from col Nontaxable portion of transfer Net Transfer (subtract col. E Part 2, col. A) Part 2, col. E) (see instructions) . - from col. D 1 - 2 - 3 - 4 - 5 - 6 - If you elected giftsplitting and your spouse was required to file aseparate Form 709 Split gifts from SpOUSe'S Fom1 709 Value included from SpOUSe'S Nontaxable F>!ortion of transfer Net transfer (SUbtract COI. E (see the instructions for "split Gifts', you (enter item number) Form 709 from col. D) must enter all of the gifts shown on - Schedule A, Part 2, of your spouse's Form 709 h S - ere. In column C, enter the item number of each $- - gift in the order it appears in column A of We have Part 2 dule A ' S h S- - . , e your spouse s c preprinted the prefix "S--"to distinguish your S_ - spouse's item nurnbers from your own when you complete column A of Schedule C, $- - Part 3. _ S - In column D, for each gift, enter the amount reported in column C, Schedule C, Part 1, S- - of your spouse's Form Toe, S- _ Part 2 -- GST Exemption Reconciliation ( Section 2631) and Section 2652(a)(3) Election - Check box - ff you are making a section 2652(a)(3) (special QTIP) election (see instructions) Enter the item numbers (from Schedule A) of the gifts for which you are making this election -_- 1 Maximum allowable exemption (see instructions) .................................................. 1 1, 0 6 0, 0 0 0.0 0 tion used for periods before filing this return ............................................ 2 Total exem 2 0.0 0 p tion available for this return (subtract line 2 from line 1) ........................................ 3 Exem 3 1, 0 6 0 , 0 0 0.0 0 p tion claimed on this return (from Part 3, col. C total, below) ....................... „ ............. 4 Exem 4 0.0 0 p 5 Exemption allocated to transfers not shown on Part 3, below. You must attach a Notice of Allocation. (See 5 0.00 .................................................. ~.............. instructions ) .............. . ..................................................................... 6 Add lines 4 and 5 6 0.00 ..... 7 Exemption available for future transfers (subtract line 6 from line 3) ............. _ 7 1, 0 6 0 , 0 0 0.0 0 . ~..... -- Item No. (from .,.,...r... -_.. Net transfer C GST Exemption ~ Divide col. C E Inclusion Ratio (subtract col D - F Maximurrl Estate G Applicable Rate (multipty col. E H Generation-Skipping Transfer Tax sch. c, Part 1) (from Schedule C, Part 1, C01. ~ Allocated by col. B . from 1.000) Tax Rate by col. F) (multiply col. B by col. G) 1 55% (.55;1 2 55% (.55;1 3 55% (.55;1 5 55% (.55 ) 6 55% (.55) 55% (.55) 55% (.55) 55% (.55) 55% (.55) Total exemption claimed. Enter Total generation-skipping transfer tax. Enter here, on here and on line 4, Part 2, above. line 14 of Schedule A, Part 3, and on line 16 of the Tax May not exceed line 3, Part 2, ~ 0. 0 0 0.0 0 above ............. Computation on page 1.. ... .. _ .. -__ (If more space is needed, attach additional sheets of same size.) runn ..+~ ~~~.. ~, CAA 1 W709C1 NTF 2557590 Copyright 2001 Greatland/Nalco -Forms Software Only Attachment A-1 -Form 709 2001 U.S. Gift Tax Return Fair Market Value of Security Savings Systems, Inc. Non-voting Common Stock. Security Savings Systems, Inc. (the "Corporation"), a Tennessee corporation, has its principal place of business at 910 Market Street, New Cumberland, Pennsylvania 17070. It is a closely held corporation owned by members of the Mosher family. It is engaged in the printing and marketing of financial documents in coupon form for banks and savings institutions. The major product line historically has been coupon books for bank Christmas savings accounts. More recently the corporation has marketed installment loan and mortgage c:ol~pon books. The capital structure of the Corporation provides for authorized capit~~l stock of 50,000 shares of no par value common stock of which 40,000 shares are designated as Class B non- voting common stock and 10,000 shares are designated as Class A voting common stock. The shares are identical in all respects except as to the difference in voting rights. At the date of the gifts herein referenced in Schedtcle A, 3957 shares of Class A voting common stock and 35,613 shares of Class Bnon-voting common stock were issued and outstanding. 3,543 shares of Class A voting common stock and 31,887 shares of Class Bnon-voting common stock were owned b3T Frank A. Mosher.,. and his wife, Virginia B. Mosher. 414 shares of Class A voting corcimon stock and 3,726 shares of Class Bnon-voting common stock were owned by F'aul M. Mosher and his wife, Jean M. Mosher. Paul M. Mosher is the son of Frank: and Virginia Mosher. 1Vlanagement of the Corporation and its independent outside accountants Wildeman and Obrock have determined that the fair market value of the Corporation's total capital stock as of December 31, 2001 i.s $2,349,008. The value of the 39,570 shares issued and outstanding on that date was $59.36 per share before any adjustments hereinafter referred to as shown on the ~Ta]!uation Report of Wildeman and Obrock attached hereto and made a part hE;rE;of. The fair market value of the 2,500 shares of the Class B common stock of Corporation referred to in Schedule A, Part One must be further adjusted to reach an appropriate fair market value for the lack of marketability of non-voting stock in a closely held family corporation for which no market exists, and for the depressing effect on value that lack of control would create in the mired of any potential willing buyer. -Adjustment to the fair market value above determined is appropriate for discounts for lack of marketability and lack of control for non-voting stock as follows: Fair market value of one share of Class Bnon-voting stock $ 59.36 Lack of marketability discount - 30% 17.81 41.55 Lack of control for non-voting stock discount - 20%~ 8.31 Net fair market value of one share of Class Bnon-voting common stock $ 33.24 The foregoing discounts have been determined to be appropriate by the United States Tax Court in Estate of Frank, 69 TCM 2255 (1995). :300490 1 DECEMBER 31, 2001 . ,~, ~~ , Security Savings Systems, Inc. New Cumberland, PA 17070 Description of the Assignment Wildeman and Obrock, CPA's has been engaged by Security Savings Systems, Inc., a Tennessee Corporation located, authorized to do busines and operating in Pennsylvania, t~~ estimate the fair market value of common stock of the company as of December 31, 2001. The purpose of the valuation is for filing a gift tax return with Internal Revenue Service. Fair market value is defined as the cash or cash equivalent price at which property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts. Summary Description of the Company Security Savings Systems, lnc. (an S Corporation) is a printing Company. Its main business is the production of Christmas Savings Club coupon books and other general printing. As a producer of coupon books they also produce installment loan,.mortgage and other purpose coupon books Valuation Methods and Conclusion In developing a value for Security Savings Systems, Inc., we started with the net book value of the Company increased by the market value of the real estate. We discounted this for valuation adjustments and selling expenses using 20%. We valued goodwill by adding 2~0% of the 5 year average gross sales and the 5 year average net earnings capitalized by 9.5% to arrive at a market value of the Corporation of $2,349,008-shown on Exhibit 1. Based on the information contained in the narrative report that follows, it is our considered opinion that the fair market value of the 100% common stock in Security Savings Systems, Inc., is $2,349,008. The valuation of the 39,570 shares of common stock is $59.36 per share. This valuation is subject to the assumptions and limiting conditions presented in Appendix A. ~,~a.~,~,,. ~ D Harrisburg, Pennsylvania June 14, 2001 1 SECURITY SAVINGS SYSTEMS, INC. VALUATION OF STOCK DECEMBER 31, 2001 ESTIMATED FAIR MARKET VALUE OF SECURITY SAVINGS SYSTEMS, INC. Year Average Gross Average Net 1997 Sales _ Income 1998 1,998,033 1997 57,963 1998 2,356,582 1998 159,279 2,110,616 1999 35,159 2000 2,471,517 2000 31,469 2001 2,252,717 2001 _ (8,654) Total 11,189,465 Total _ 275,216 Average gross sales 2,237,893 Average net income _ 56,043 Book Value Land & Building Capitalized @.095 Allow for Dep. 406,971 _ 579,402 (251,099} Net Book Value 155,872 market Value Per Appraisal 835,000 Land & Building Adjustment to MV 879 128 Net Worth Market Value December 31, 2001 Land 8 Building adjustment to MV 973,406 Adjusted Net worth 679 128 Deduct Valuation and sales discount 20% 1,652,534 Estimated Net worth value _. (330,507) 1,322,027 Going concern value of goodwill Average Gross Sales X 20% 2,237,893 X 20% _ Capitalized Value of Earnings 447,579 Going concern value of goodwill _ 579,402 _ 1,026,981 Market value of Security Savings Systems, Inc. , _ 2,349,008 Value per share (Gross estimated value divided by 39,570 shares). , _ 59.36 The corporation's stock ownership is as follows: NAME DECEMBER 31, 2001 Voting ~ non-voting Shares Percent Frank A. Mosher ~ Virginia B. Mosher 14,610 36.92% Paul M. Mosher 10,820 .27.34% Jean M. Mosher 7,070 17.87% 7, 070 17.87% Total 39,570 100.00% Exhibit 1 SECURITY SAVINGS SYSTEMS, INC. HISTORICAL BALANCE SHEETS December 31, (Review) ASSETS ASSETS CURRENT ASSETS Cash in bank Accounts receivable Accounts receivable (Affiliate) Inventory Total current assets PLANT, PROPERTY AND EQUIPMENT Land and buildings Equipment, furniture & fixtures Automobiles Less: Accumulated depreciation Net plant, property and equipment 2001 2000 1999 _ 1998 1997 $ 157,326 $ 263,208 $ 412,232 $ 383,071 $ 454,591 309,152 94,424 108,4.29 220,398 121,694 134 57 14,980 20,773 37,645 214,121 171,131 170.593 157.084 154,793 680,733 528,820 706,234 781,326 768,723 406,971 406,971 406,9'i'1 406,971 406,971 1,615,501 1,340,253 1,309,406 1,164,172 1,093,033 50,245 50,245 10,989 10,989 10,989 2,072,717 1,797,469 1,727,366 1,582,132 1,510,993 1,586,766 1,465,736 1,375,052 1,276,749 1,202,488 485,951 331,733 352,314 305,383 308,505 i OTHER ASSETS Cash surrender value of life insurance 283,578 272,062 254,476 229,566 210,376 Total other assets 283,578 .272,062 254,476 229,566 210,376 Total assets $ 1,450,262 $ 1,132,615 $ 1,313,024 $ 1,316,275 $ 1,287,604 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES j. Accounts a able P Y $ 18,312 $ 29,282 $ 25,419 $ 52,950 $ 28 924 Taxes payable 13,669 15,441 12,967 17,212 , 11 523 Notes payable-PNC Bank 185,977 -0- _0_ -0- , -0- Advance from Officer 154,325 74,325 -0- -0- -0- Loan payable from life insurance policy i 104,573 -0- 106,115 -0- -0- Total can-ent liabilities 476,856 119,048 144,501 70,162 40,447 STOCKHOLDERS' EQUITY Capital stock - no par value, 175,412 175,412 175,412 175,412 175 412 Retained earnings 8~ accumulated , adjustments account 797,994 838,155 993,111 1,070,701 1,071,745 Total stockholders' equity 973,406 1,013,567 1,168,523 1,246,113 1,247,157 Total liabilities & stockholders' equity $ 1,450,262 $ 1,132,615 $ 1,313,024 $ 1,316,275 $ 1,287,604 i i i s Exhibit 2 SECURITY SAVINGS SYSTEMS, INC. HISTORICAL INCOME STATEMENTS December 31, (Review) 2001 2000 1999 1998 INCOME - 1997 Sales $ 2,252,717 $ 2,471,517 $ 2,110,6.16 $ 2,356,582 $ 1,998,033 COST OF GOODS SOLD Beginning inventory Purchases Direct labor Commissions Freight Shop & utilities expenses Total Less: Ending inventory Total cost of goods sold Gross profit OPERATING EXPENSES Officers' salaries Office salaries Taxes Retirement plan (401 K) Employee benefits Depreciation Advertising Insurance Telephone Legal and accounting Office expense Travel, auto & entertainment Leases Interest expense Repairs and maintenance Total operating expenses 171,131 170,593 157,084 154,793 151 768 307,877 353,164 318,944 375,762 , 326 964 625,380 679,181 584,212 593,265 , 533 066 92,049 112,154 126,928 128,715 , 117 458 294,829 300,743 248,192 196,996 , 189 366 113,552 104,146 88,831 78,528 , 75,044 1,604,818 1,719,981 1,524,191 1,528,059 1,393 666 214,121 171,131 170,593 157,084 , 154,793 1,390,697 1,548,850 1,353, 598 1,370,975 1,238,873 862,020 922,667 757,018 985,607 759,160 229,579 377,300 257,36() 380,090 266 879 53,193 46, 776 35, 636 41,130 , 35,142 83,943 91,519 85,432 86,040 79,878 8,551 10,771 -0•- 28,040 23,313 97,763 79,354 63,830 60,979 51 429 121,030 90,684 98,30~i 74,261 , 99,429 11,076 2,374 2,848 3,666 3,973 30,646 19,617 23,194 23,497 23,425 10,621 10,564 9,095 10,074 10,636 19,407 13,499 16,401 11,210 i 4,354 52,245 31,104 18,074 23,281 17,784 11,984 17,347 16,790 16,107 11,594 50,262 19,676 5,297 29,128 3,290 33,610 10,125 6,450 -0- 21,500 59,352 74,777 75 906 ~ 53 490 , , 49,799 873,262 895,487 714,616 _ 840,993 712,425 (Loss) income from operations ( 11,242) 27,180 42,402 144,614 46,735 OTHER INCOME (EXPENSES) Interest and dividend income 2,588 5,873 7,421 7,531 11,228 .t Capital (loss) (futures) -0- 1,584 ( 14,664 _ 7,134 -0- Net (loss) income i t t< . ~f tti , ., 1 ry yS ~ ~ Y~R ~y~~~A~~~ ~~~ ~`L~lK; t~"` F t ~. t }y "} "~~ a,~k41C ~i~ ~ s tr y~l, ~~~kti e' ./31t L+7.~. 1 . -.n..~~~.F'~u-Cd.7.1"-`+'~~ .!'. _+<~<r~7~'u yo-. .. $~_ 8,654 $ 31,469 $ ~ 35,159 ~~ 159,279 $ 57,963 Exhibit 3 SECURITY SAVINGS SYSTEMS, INC. APPENDIX A ASSUMPTIONS AND LIMITING CONDITIONS SOURCES OF INFORMATION RELIED ON IN THIS VALUATION This valuation is subject to the following assumptions and limiting conditions: 1. Information, estimates, and opinions contained in this report are obtained from sources considered to be reliable. However, we assume no liability for such sources. 2. The company and its representatives warranted to us that the information they supplied was complete and accurate to the best of their knowledge and that the financial statement information reflects the company's results of operations and financial condition in accordan~:e with generally accepted accounting principles, unless otherwise noted. Information supplied by management has been accepted as correct without further verification, and we express no opinion on that information. 3. Possession of this report, or a copy therof, does not carry with it the right of publication of all or part of i#, nor may it be used for any purpose by anyone but the client without thE: previous written consent of the client or us and, in any event, only with proper attribution. 4. We are not required to give testimony in court, or be in attendance during arn~ hearings or depositions, with reference to the company being valued, unless previous arrangements have been made. 5. The various estimates of value presented in this report apply to this valuation only and may not be used out of the context presented herein. This valuation is valid only for the F-urpose or purposes specified herein. 6. This valuation reflects facts and conditions existing at the valuation date. Subsequent events have not been considered, and we have no obligation to update our report for such events and conditions. 7. This report was prepared by James F. Obrock, CPA. The Officers of Wildeman and Obrock, ~ CPA's do not have any present or contemplated future interest in Security Savings Systems, Inc. or any personal interest with respect of the parties involved, or any other interest that might prevent us ~' ftom performing an unbiased valuation. Our compensation is not contingent on an action or event ~ resulting from the analyses, opinions, or conclusions in or th e use of, this report. External Documents: 1. Appraisal Report for property situated at 9th and Market Streets, New Cumberland, PA by Lester G. Connor, MAI, SRPA, ASA, SCV dated December 3, 1999. Internal Documents 1. Reviewed Financial Statements of Security Savings Systems, Inc. for the years 1997 to 2001. Form 7 ~ 9 United States Gift (and Generation-Skipping Transfer) Tax Return oMS No. 1545-0c Department of the Treasury (Section 6019 of the Intemal Revenue Code) (For gifts made during calendar year 2002) Intemal Revenue Service - See se crate instructions. _ ~ O O z 1 Donors first name and middle initial 2 Donor's Iasi name 3 I]onors social security number Virgiaia H. Mosher 195 4 Address (number, street, and apartm 93 Carol Street __ -16-3240 s ~.egal residence {domicile) (county and state) Ctmiberland Ca~mty, PA New Cumberland, PA 17070 ~~a¢ensnip = ~ _ IISA 8 If the donor died during the year, check here - and enter date of death _ 9 If you received an extension of time to fife this Form 709, check here - ~ and attach the Form 486+3 2688 2 1 " o` , , 350, or extension letter 10 Enter the total number of donees listed on Schedule A -count each erson on once. - 2 ~ 11 a Have you (the donor) previously filed a Form 709 (or 709-A) for any other year? If the answer is "No," do not complete line 11 b 11 b If the answer to line 11a is "Yes "has our address .chap ed since u last filed Form 709 or 709-A ? . .. 12 Gifts by husband or wife to third parties. - Do you consent to have the gifts (induding generation-skipping transfers) made . C7 - by you and by your spouse to third parties during the calendar year considered as made one-half by each of you? (see . instructions.) (lf the answer is "Yes," the following information must be furnished and your s pouse must sign the consent shown below. If the answer is "No," ski lines 13-18 and o to Schedule A a' '! 3 Narne of ~ ~ _ ti consen n souse 14 SSN ~ ~~ _ 15 Were ou married to one another durin the entire calendar ear? see instructions 16 If the answer to 15 is "No "check whether married divorced or widowed, .nd a~ a.ts (=,,,,,,,~ ~ °~° 17 Willa ift tax return for this calendar ear be filed b ur s ousel ~ ~` 18 Consent of S g ( g -- . pouse - I consent to have the tits and eneration-sktpping Uansfers) made by me and.by my spouse to third parties durfig the calendar year considered as made one-half by each of us We are b th _ . o aware of the Joint and several liability for tax created by the execution of this consent. 1 Enter the amount from Schedule. A, Part 3, line 15 - D ate 2 Enter the amount from Schedule B, line 3 , ~ ~ ' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ' ' ' ' ~ ' ' ' ' ' , 3 Total taxable gifts (add lines 1 and 2) ~ ~ ~ ~ ~ ~ ~ ~ ~ ' ' ' ' ' ' ' ' ' ' ' ' 4 Tax computed on amount on line 3 (see Table for Computing Tax in separate instructions). ~ ' ~ 5 , Tax computed on amount on line 2 (see Table for Computing Tax in separate instructions) ~ R 6 Balance (subtract line 5 from line 4) ' ' V 7 , , Maximum unified credit (nonresident aliens,.see instructions) ~ ~ ' ~ ~ ~ ~ ' ~ ~ ~ ~ ~ ~ ~ ' ~ 6 ~ 8 Enter the unified credit against tax allowable for ail prior periods (from Sch. B, line 1 col. C.)' 8 9 0 , , Balance (subtract line 8 from line 7) , 10 a Enter 20% (.20} of the amount allowed as a specific exemption~for gifts made after September 8 9 1976, and before January 1, 1977 (see instructions) . ' ~ ~ ~ ~ ~ ~ , 1 C c 11 Balance (subtract line 10 from line 9) ~ ' ~ ~ ~ ' ' ' ' ' ' ' ~ 12 , Unified credit (enter the smaller of line 6 or line 11) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ' ~ ~ ~ ~ ~ ~ ~ ~ ' ' 11 ~ 13 Credit for foreign gift taxes (see instructions) . ' ' ' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ' ' ' ' ' ' 1~ N ' 13 14 Total credits (add lines 12 and 13), °- 15 ...... , .... . Balance (subtract line 14 from line 6) (do not enter less than zero) ' ~ , 16 , , .... ... Generation-skipping transfer taxes (from Schedule C, Part 3, col. H, Total), .. .. .. 15 16 m s 17 ~ Total tax (add lines 15 and 1fi) , 18 , Gift and generation-skipping transfer taxes prepaid with extension of time to file ' ' ' ~ ~ ~ ~ 17 , 18 0 ~ 19 !f line 18 is less than line 17, enter balance due (see instructions} _ , ................ 19 No X X 146,200.00 290,400.00 84,53 .00 37,660.00 46,876.00 0. 37,600.00 308,200.00 0.00 308,200.00 46,876.00 0.0 46,876.00 0.00 0.00 0.00 0.00 0.00 V - -- - ' - •~ ' ""•~. •~ ~a. ~ ~~, ~v ~ I GI ICI arrrvuni io Qe reTUnded . 2 p 0. 0 0 C Under penalties of perJury, I declare that I have examined this return, Including any accompanying schedules ,and statements, and to the best of my Y knowledge and belief, It is true, correct, and complete. Declaration of preparer (other than donor) Is based on all Information of which preparer has m Sign any knowled Here ' ~/ ~ - Signature . ~ ` L~ ea Da Q Paid Preparer's , Date -~°-- signature ~ Check if Preparer' ~ ~ 3 (~ self-employed - Firm's name (or , Use Only yours if self-emdoyed) address, andZl code' ee Schedule attached _ Phone nn. - - - ~~ For Disclosure, Privary Act, and Paperwork Reduction Act Notice, see page 12 of the separate instructions for this forrn. zssos~ 2_00o Form 709 (2002) Virginia 8. Mosher SSN: 195-16-3240 The preparer's address is as follows: 3401 North Froat Street P.©. Box 5950 Harrisburg, PA 17110-0950 Form 709 (2002) '~~~1a~1~1~~-~ Computation of Taxable Gifts (Including Transfers in Trust) - Paget A Does the value of an item listed on Schedule A reflect an valuation discount? If the answer is "Yes," see instructions Yes % No B ~ Check here if you elect under section 529(c)(2)(B) to treat any transfers made this year to a qualified state twt~on program as made ratably over a 5-year period beginning this year. See instructions. Attach explanation. Part 1 -Gifts Subject Only to Gift Tax. Gifts less political organization, r, Item • Donee's name and addreB • Reiationshi to donor if an number p (~ Y) • Description of gift • attachg description or opy~the trust'instrument (see instrductions) • If the gift was of securities, give CUSIP number 1 See Schedule attached I'ical, and educational exclusions -see instructions C D E Donor's adjusted Date Value at basis of gift of gift date of gift Total of Part 1 (add amounts from Part 1, column E) - ~ Part 2 Gifts That are Dtrect Skips and are Subject to Both Gift Tax and Generation-Skipping Transfer Tax. You mus 166, 200.00 in chronological order. Gifts less olitica! or anization, t list the gifts P 9 medical, and educational exclusions -see instructions. (Also list here direct skips that are sub'ect onl to the GST tax at this time as the result of the termination of an "estate tax includian eriod."See instructions.) A g C D Item • Donee's name and address Donor's adjusted Date E number • Relationship to donor (ff any) Value at • Description of gift basis of gift of gift date of gift • If the gift was made by means of a trust, enter trust's EIN and attach a description or copy of the trust instrument (see instructions) • If the gift was of securities, give CUSIP number 1 _. Total of Part 2 (add amounts from Part 2, column E) -' I Part 3 Taxable Gtft Reconciltat~on -- ~ 0.00 1 Total value of gifts of donor (add totals from column E of Parts 1 and 2) - , 2 One-half of items ~ attributable to spouse (see inst ti 1 166, 200.00 ruc ons) 2 3 Balance (subtract line 2 from line 1) 0.0 0 • 4 Gifts of spouse to be included (from Schedule A, Part 3, line 2 of spouse's ret i 3 16 6 , 2 0 0.0 0 urn -see nstructions), If any of the gifts included on this line are also subject t th 4 0.00 o e generation-skipping transfer tax, check here - ~ and enter those gifts also on S h d l w `y><~~; ~~~'~~~` c e u e C, Part 1. ~~:~r: 5 Total gifts (add lines 3 and 4) r''~"x'" 6 Total annual exclusions for gifts listed on Schedule•A (including line 4, above •see instructions ~ ~ ~ ) ( ) 5 166, 200.00 7 Total included amount of gifts (subtract line 6 from line 5) 6 2 2 , 0 0 0.0 0 , Deductions (see instructions) 7 144 , 2 0 0.0 0 8 Gifts of interests to spouse for which a marital deduction will be claimed, based r>t=' ~•,.,_.. on items of Schedule A , 0. 0 0 9 Exclusions attributable to gifts on line 8 ~ ~ ~ ~ 8 £~~`~~~~: ~,_. "'~ ~~ "`~ ~wi=i==<~: -~::<~:: ° ~" ~r , . 9 0.0 0 10 Marital deduction -subtract line 9 from line 8 ~ ~ ~ ~ Y; ~~~+~ .:,x::,z~t; ~`~~'~''`~ , 11 Charitable deduction bas ~ ~ ~ ~ ~ ~ ed on items Y...: ~`r'Y~"'~ " ` ~" , less exclusions , 11 0.0 0 12 Total deductions -add lines 10 and 11 - ~` ° ~`~ ~ fig:>~~~-: °~~~'~~°~~'` 13 Subtract line 12 fromline7 ~~~~•'•'"' 12 0.00 14 Generation-ski ~ ~ ~ Aping transfer taxes payable with this Form 709 (from Schedule C P rt 3 l 13 14 4 , 2 0 0 . 0 0 , a , co . H, Total;l 15 Taxable gifts (add lines 13 and 14). Enter here and on line 1 of the Tax Computation n 1 14 0.00 o page _ (lf more space rs needed, attach add~t~ona! sheets of same size.) 1 S 4 , 0 =9082 3.000 Form 709 (2002) Virginia B. Mosher SSN: 195-16-3240 Page: 1 Schedule A -- Part 1 Gifts Subject Only to Gift Tax A B C Item Donee~s name, relationship to donor, Donors Adj. No. address, and description Basis OTHER GIFTS 1 Paul M. Mosher (Son) 256 Winding Way Camp Hill, PA 17011 2500 she. Class A non-voting common stock, Security Savings Systems, Inc. Cm $33.24 per share 2 Jean M. Mosher (Daughter-in-law) 256 Wiadiag Way Camp Hill, PA 17011 2500 shs. Class A non-voting common stock, Security Savings Systems, Inc. $33.24 per share D E Date of Value of Gift Gift 0.00 CI1~'14/2002 0.00 01/14/2002 83,100.00 83,100.00 166,200.00 Form 709 ^~ .i.t. .2T-___ f_f 3 - - ...,,,,puau~wt~ V~ ~ a~au1C V~TiS connnuecr 16 Terminable Interest (QTIP) Marital Deduction. (See instructions for line 8 of Schedule A.) If a trust (or other property) meets the requirements of qualified terminable interest property under section 2523(f), and a. The trust (or other property) is listed on Schedule A, and b. The value of the trust (or other property) is entered in whole or in part as a deduction on line 8, Part 3 ~~f Schedule A, then the donor shall be deemed to have made an election to have such trust (or other property) treated as qualified terminable interest property under section 2523(f). If less than the entire value of the trust (or other property) that the donor has included in Part 1 of Schedule A is entered as a deduction on line 8, the donor shall be considered to have made an election only as to a fraction of the trust (or other property). The numerator of this fraction is equal to the amount of the trust (or other property) deducted on line 10 of Part 3, Schedule A. The denominator is equal to the total value of the trust (or other property) listed in Part 1 of Schedule A. if you make the QTIP election (see instructions for line 8 of Schedule A), the terminable interest property involved wiU be included in your spouse's gross estate upon his or her death (section 2044). If your spouse disposes (by gift or otherwise;) of ail or part of the qualifying life income interest, he or she will be considered to have made a transfer of the entire property that is subject to the gift tax (see Transfer of Certain Life Estates on page 4 of the instructions). 17 Election Out of QTIP Treatment of Annuities ^ ~ Check here if you elect under section 2523(f)(6) NOT to treat as qualified terminable interest property any joint and survivor annuities that are reported on Schedule A and would otherwise be treated as qualified terminable interest property under section 2523 Enter the item numbers (from Schedule A) for the annuities for which (fl• (See instructions.) you are making this election ~ - - - vna~ ~ ~vn~ r~wl r"CfIG7G1S If you answered "Yes" on line 11 a of page 1, Part 1, see the Instructions for completing Schedule B. If you answered "No," skip to the Tax Computation on page 1 (or Schedule C, ff applicable). A _ Calendar year or B ~ D Internal Revenue office Amount of unified Amount of specific E calendar quarter credit against gift tax exemption for prior Amount of (see instructions} where prior return was filed for periods after periods ending before December 31, 1976 January 1, 1977 taxable gifts 2001 Cincinnati, OH 37,600.00 146,200.00 1 Totals for prior periods 1 3 7, 6 0 0.0 0 _ 0.0 0 14 6, 2 0 0.0 0 2 Amount, if any, by which total specific exemption, line 1,.column D, is more than $30,000. 2 . 0 3 Total amount of taxable gifts for prior periods (add amount, column E, Ilne 1, and amount, if arry,. on. line 2). (Enter here and on line 2 of the Tax Computation on page 1.) 14 6, 2 0 0 .00 3 (If more space is needed, aftach additional sheets of same size.) Form 709 2002 ( ) JSA 2S9083 5.000 709 (2002) - - - vvn. u~auv.. v~ VCIICrClilprl-JKl In I ransfer Tax ~ e 4 Note: Inter vivos direcf skips that are completely excluded by the GST exemption musf still be fully reported (including value and exemptions claimed) on Schedule C. Part 1 -Generation-Ski pin Transfers - A B Item No. Value (from Schedule A, (from Schedule A, Part 2 col A C 5pllt Gltts (enter 1/2 of col. B) D Subtract col. C , . } Part 2, col. E) (see instructions) from col. B 1 2 E F Nontaxable Net Transfer portion of transfer (subtract col. E - from col. D) s _ - 4 - 5 - 6 - If you elected gift splitting and your spouse - was required to file a separate Form 709 Split gifts from Value inducted (see the instructions for "Split Gifts"), you souse's Form 709 Nontaxable must enter all of the gigs shown on p from spouse's Schedule A Part 2 of (enter ftern number) Form 709 Portion of transfer your spouse's Form 709 here. In column C, enter the item number of each S- gift In the order it appears in column A of S- - your spouse's Schedule A, Part 2 We have S- .- preprinted the pnsfpc "S= to distinguish your _ spouse's Item numbers from your own when S' you complete column A of Schedule C, ~ - Part 3. In column D, for each S _ girt, enter the amount ~ reported in column C, Schedule C, Part 1, of your spouse's Form 709. ~ - Part 2 -GST Exem tion Reconciliation Section 2631 and Section 2652 a 3 Election _ Check box - if you are making a section 2652(a)(3) (special QTIP) election (see instructions) Enter the item numbers (from Schedule A) of the gifts for which you are making this election - 1 Maximum allowable exemption (see instructions) , - . . 2 Total exemption used for periods before filing this retum _ _ . ...................... 3 Exemption available for this retum (subtract Tine 2 from line 1) , 4 Exemption claimed on this return (from Part 3, col. C total, below ). 5 Exemption allocated to transfers not shown on Part 3, below. You must .attach a .Notice of Allocation. (See. instructions.) . ........................................... 6 Add lines 4 and 5 , ................................................. 7 Exemption available for future transfers (subtract line 6 from line 31 _ _ _ _ _ Part 3 -Tax Com utation a Item No. (tram schedule G Part t) 1 B Net transfer C (from Schedule C, r'ST Exemption Part 1, col. F) Allocated 2 3 4 5 6 D E F G D(v(de col. C Inclusion Ratio Maximum Applipble Rate by col. B (subtract col. D Estate Tax (multiply col. E from 1.000) Rate by col F) Net transfer (subtract col. E from col. D} 1,100,000.00 0.00 1,100,000.00 0.00 0.00 0.00 1,100,000.00 H Generation-Skipping Transfer Tax iultiply col. B by col. 5086 .50 Total exemption claimed. Enter 5a9~6 .50 _ -.__-_ here and on line 4, Part 2, Total generation-skipping transfer tax. Enter here, on line 14 above. May not exceed line 3, of Schedule A, Part 3, and on line 16 of the Tax Computation Part 2, above. 0. 0 0 on a e 1 ~sn (/f more space is needed, attach additional sheets of same size.) .- 0 . 0 0 Form 709 (2002) 'S90e4 2.000 Attachment A-1-Form 709 2002 U.S. Gift Tax Return Fair Market Value of Security Savings Systems, Inc. Non-voting Common Stock Security Savings Systems, Inc. (the "Corporation"), a Tennessee corporation, has its principal place of business at 910 Market Street, New Cumberland, Pennsylvania 17070. It is a closely held corporation owned by :members of the Mosher family. It is engaged in the printing and marketing of .financial documents in coupon form for banks and savings institutions. The major product line historically has been coupon books for bank Christmas savings accounts. More recently the corporation has marketed installment loan and mortgage coupon books. The capital structure of the Corporation provides for authorized capital stock: of 50,000 shares of no par value common stock of which 40,000 shares are designated as Class A non- voting common stock and 10,000 shares are designated as Class B voting common stock. The shares are identical in all respects except as to the d~erence in voting rights. At the date of the gifts herein referenced in Schedule A, 3957 shares of Class B voting common stock and 35,613 shares of Class Anon-voting common stock were issued and outstanding. 3,543 shares of Class B voting commor.~ stock and 21,887 shares of Class Anon-voting common stock were owned by Frank A. Mosher, and his wife, Virginia B. Mosher. 414 shares of Class B voting common stock and 13,726 shares of Class Anon-voting common stock were owned by Paul M. Mosher and his wife, Jean M. Mosher. Paul M. Mosher is the son of Frank and 'Vi:rginia Mosher. Management of the Corporation and its independent outside accountants Wildeman and Obrock have determined that the fair market value of the Corporation's total capital stock as of December 31, 2001 is $2,34G,008. The value of the 39,570 shares issued and outstanding on that date was $59.36 per share before any adjustments hereinafter referred to as shown on the Valuation Report of Wildeman and Obrock attached hereto and made a part hereof: The fair market value of the 2,500 shares of the Class A common stock of Corporation referred to in Schedule A, Part One must be further adjusted to reach an appropriate fair market value for the lack of marketability ofnon-voting stock in a closely held family corporation for which no market exists, and for the depressing effect on value that lack of control would create in the mind of any potential willing buyer. Adjustment to the fair market value above determined is appropriate for discounts for lack of marketability and Iack of control for non-voting stock as follows: Fair market value of one share of Class Anon-voting stock $ 59.36 Lack of marketability discount - 30% 17.81 41.55 Lack of control for non-voting stock discount - 20% 8.31 Net fair market value of one share of Class Anon-voting common stock $ 33.24 The foregoing discounts have been determined to be appropriate by the United States Tax Court in Estate of Frank, 69 TCM 2255 (1995). :300490 1 SECURITY SAVINGS SYSTEMS, INC. NEW CUMBERLAND, PENNSYLVANIA Security Savings Systems, Inc. New Cumberland, PA 17070 Description of the Assignment ock CPA's has been engaged by Security Savings Syste as torlest mate the fae Wildeman and Obr , ration located, authorized to do busines and operaticembee31Sy2001. ~Th~: purpose of the Corpo as of De market value of common sXO a urntwith lntepnal Revenue Service. valuation is for filing a gift to efined as the cash or cash equivalent price at which property would change Fair market value is d illin bu er and a wilting seller, neither being under a compul:>ion to buy or se hands between a w 9 y and both having reasonable knowledge of relevant facts. Summary Description of the Company Company. Its main business is the Security Savings Systems, Inc. (an S Corporation) is a printing roducer of Christmas Savings Club coupon books and other general~prinosine9 oupon books productton of a and other p p coupon books they also produce installment loan, mortgag Valuation Methods and Conclusion Securi Savings Systems, Inc., we started with the net book value of the In developing a value for tY the market value of the real estate. We discountecf20 ~a of the 15 year Company increased by is and selling expenses using 20%. W e valued 9O°dzed b 9~5°/° go arrive at a market adlustmen ear average net earnings capital y average gross sales and the 5 y value of the Corporation of $2,349,008 shown on Exhibit 1. it is our considered opinion Based on the information contained in t oe narrative rstock ~in tSelcurity Saving~~ Systems, Inc., is that the fair market value o the 39;70 shares of common stock is $59.36 $2,349,008. The valuation of .per share. 'ect to the assumptions and limiting conditions presented in Appendix A. This valuation is subs Harrisburg, Pennsylvania June 14, 2001 SECURITY SAVINGS SYSTEMS, INC. VALUATION OF STOCK DECEMBER 31, 2001 ESTIMATEDSAV NGS SYSTEMS, NCF SECURITY Year 1997 1998 1999 2000 2001 Total Average gross sales Book Value Land 8~ Building Allow for Dep. Net Book Value market Value Per Appraisal Land 8~ Building Adjustment to MV Net W orth December 31, 2001 Land & Building adjustment to MV Adjusted Net worth Deduct Valuation and sales discount 20% Estimated Net worth value Going concern value of goodwill Average Gross Sales X 20% 2,237,893 X 20% _ Capitalized Value of Earnings Going concern value of goodwill ~~verage Net Average Gross Income Sales 1,998,033 _ 1997 _, 57,963 279 159 2,356,582 1998 , 159 35 2,110,616 1999 , 469 31 2,471,517 2000 1 , (8,654) 2,252,717 200 - 275 216 11,189,465 Total , _ Average net 55,043 2,237,893 income _ Capitalized @.095 579,402 406,971 _ 251,099 • 155,872 835,000 6Z• Market Vafue 973,406 __ 679_128 1,652,534 (330,507) 1,322,027 447,579 579,402 1,026,981 ' Savings 2,349,008 Market value of Security i f Systems, tnc. Value per share 59.36 (Gross estimated value divided by 39,570 shares) The corporation's stock ownership is as follows: DECEMBER 31, 2001 _, NAME Shares Percent _ Voting 8non-voting •. 14,610 36.92% Frank A. Moshec 10,820 27.34% Virginia B. Mosher 7,070 17.87% Paut M. Mosher 7,070 17.87%! Jean M. Mosher °' 39,570 10p OQ o Total Exhibit 1 SECURITY SAVINGS NCE SH S~SC HISTORICAL GALA December 31, (Review) ASSETS CURRENT ASSETS Cash in bank Accounts receivable Accounts receivable (Affiliate} Inventory Total current assets p~,NT, PROPERTY AND EQUIPMENT Land and buildings Equipment, furniture & fixtures ' Automobiles j Less: Accumulated depreciation and equipment Net plant, property OTHER ASSETS Cash surrender value of life insurance Total other assets Total assets ASSETS 2000 1999 ,_ 1998 1997 2001 8 $ 232 $ 412 383,071 $ 454,591 $ 157,326 $ 263,20 , 429 108 220,398 121,694 309,152 94,424 , 980 14 20,773 37,645 134 57 131 171 , 170 593 _ ~=084 - 154,793 _- 214,121 , 820 528 706,234_ . 781,326 768,723 680,733 , 406,971 406,971 406,971 406 1 309 406,971 1,164,172 406,971 1,Og3,033 9 1,615,501 1,340,253 , , 989 10 10,989 10,98 50,245 50,245 469 797 1 , 1,727,366 1,582,132 749 2 1,510,993 202,488 1 2'072'717 , , 1 736 465 1 375,052 1, 76, , 1,586,766 , , 733 331 352,314 305,383 308,505 485,951 , 578 283 272,062 254,476, 229,566 566 229 210,376 210,376 , 283,578 272,062 254,476. , 615 132 1 $ 1,313,02 1,316,275 ~_ $ 1,287,604 $ 1,450,262 , , $ L1AgILIT1ES AND STOCKHOLDERS' EQUITY ~ $ 850 $ 52 28,924 CURRENT LIABILITIES $ 18,312 $ 29,282 $ 419 25, 12 967 , 17,212 11,523 0~ a able Accounts p Y 13,669 15,441 _0_ , -~~' ~ -0- - -0- Taxes payable a able-PNC Bank Notes p Y 185,977 154,325 74,325 _0_ 6 1 't 5 10 -0- _0_ -0- Advance from Officer oli 104,573 ble from life insurance p cY _0_ X _ 70 162 40,447 Loan paya 8 144.501 , 476,856 119,04 i Total current liabilities QUITY 175,412 175,412 175,412 175,412 STOCKHOLDERS' E 175,412 Capital stock - no par value, 893,111 1,070,701 1,071,745 Retained earnings ~ accumulated 797994 838,155 ~_. - adjustments account 168,,523 1,246,113 1,247,157 973,406 1,013,567 1~_ - Total stockholders' equity 1,316,275 $ 1,287,604 , e ~ $ 1,450,262 $ 1,132,615 $ 1,313,024 $ Total liabilities &. stockholders q ~Y Exhibit 2 SECURITY SAVINGS SYTATEMENTS HISTORICAL INCOME S December 31, (Review) INGOME Safes COST OF GOODS SOLD Beginning inventory Purchases Direct tabor Commissions Freight Shop & utilities expenses Total Less: Ending inventory Total cost of goods sold Gross profit 2001 2000 1999 1998 1997 2 252,717 $ , $ 2,471,517 $ 2,110,616 _$~ 2,356,582 $ 1,998,033 171,131 170,593 157,084 944 318 154,793 375,762 151,768 326,964 307,877 353,164 181 679 , 593,265 533,066 4 625,380 92,049 , 112,,154 126,928 128,715 996 196 58 117, 189,366 294,829 300,743 248,192 831 88 , 78,528 75,044 113,552 104,146 _ , 604 818 1' 1,719,981 1,524,191 593 170 1,528,05 157,08 1'154,793 214,121 171,131 , 1,390,697 1,548,850 1,353,598 1,370,975 1,238,873 862,020 922,667 757,018 985,607 759,160 .OPERATING EXPENSES Officers' salaries Office salaries Taxes Retirement plan {401 K} Employee benefits Depreciation Advertising Insurance Telephone Lega! and accounting Office expense Travel, auto & entertainment Leases Interest expense Repairs and maintenance 229,579 377,300 53,193 ~ 46,776 83,943 91,519 8,551 10,771 97,763 79,354 121,030 90,684 11,076 2,374 30,646 19,617 10,621 10,564 19,407 13,499 52,245 31,104 11,984 17,347 50,262 19,676 33,610 10,125 59,352 74.777 873,262 895,487 Total operating expenses Loss} income from operations ( 11,242) 27,180 { 360 257 380,090 266,879 , 636 35 41,130 • 35,142 , 432 85 86,040 79,878 , ..0_ 28,040 .23,313 830 63 60,979 51,429 , 303 98 74,261 99,429 , 848 2 3,666 3,973 , 194• 23 23,497 23,425 , 09`i 9 10,074 10,636 , 40' 16 11,210 14,354 , 071• 18 23,281 17,784 , 791) 16 16,107 11,594 , 29'7 5 29,128 3,290 , 450 6 -0- 21,500 , 75,906 _ ,490 49,799 714,616 840,993 712,425 42,402 144,614 46,735 OTHER INCOME (EXPENSES) 7,421 7,531 11,228 2,588 5,873 7,134 -0_ Interest and dividend income _0_ 1,584 ~4.--664 Capital (loss) (futures) ., t Net (loss) income ~'1 k~~'.,,, 31,469 $ 35,'159 $_9.279 ~ -~- 57,963 $ 8,654 $ - Exhibit 3 ti 7 ~ SECURITY SAVINGS SYSTEMS, INC. APPENDIX A ASSUMPTIONS AND LIMiT1NG CONDHi OVALUATION SOURCES OF INFORMATION RELIED ON 1N T_ This valuation is subject to the following assumptions and limiting conditions: 1. Information, estimates, and opinions contained in this report are o ources.frorri sources considered to be reliable. However, we assume no liability for such s an and its representatives warranted to us that the informat1Ontateme P nformation 2. The comp y complete and accurate to the best of their knowfed ancialdcondi~ionf n accordance with generally reflects the company's results of operations and fin lied b management has accepted accounting principles, unless otherwise noted.d we exaress no opinion on that been accepted as correct without further venfication, an P information. f this re ort, or a copy therof, does not carry with it the right of publication of ail or 3. Possession o P ose b an one but the client without thE; previous written part of it, nor may it be used for any pure Y Y. consent of the client or us and, in any event, only with proper attribution. of re wired to give testimony in court, or be in attendance dusi agrranyements have been 4. W e are n 4 being valued, unless previou 9 depositions, with reference to the company made. ' ates of value presented in this report apply to this valuation only and may not 5. The various estim ose or ed out of the context presented herein. This valuation is valid only for the pure be us purposes specified herein. flects facts and conditions existing at the valuation date. Suu h events ands 6. This valuation re ave not been considered, and we have no obligation to update our report or h conditions. man and Obrock, is re ort was prepared by James F. Obrock, CPA. The Offi Securi WSlapngs Systems, Inc. or 7. Th p CPA's do not have any present or contemplates nvotved,tor any other interest that might prevent us lased ensation is not contingent on an action or event any persona{ interest with resp aluat on Ours comp from performing an unb esultin from the analyses, opinions, or conclusions in, or the use of, this report. r g External Documents: ort for ro erty situated at 9th and Market Streets, New Curnberiand, PA by 1. Appraisal Rep P P Lester G. Connor, MAI, SRPA, ASA, SCV dated .December 3, 1999. lntemai Documents ements of Security Savings Systems, inc. for the years 1997 to 2001. 1. Reviewed Financial Stat EXIBIT F METTE, EVANS & WOODSIDE ATTORNEYS AT LAW HARRISBURG, PENNSYLVANIA 17110-0950 .---. ~~~ w OF VIRGINIA B. MOSHER I, VIRGINIA B. MOSHER, of Cumberland County, Pennsylvania, do make, publish and declare this to be my Last Will and Testament, hereby revoking all Wills and Codicils by me at any time made. .ITEM I: I direct that all estate, inheritance, and other taxes in the nature thereof ("death taxes"), together with any interest and penalties .thereon, which become payable because of my death, whether as a result of transfers made under this Will or otherwise, shall be paid by the person or persons who receive a beneficial interest in the assets that generate such death taxes, and that such liability shall be apportioned among such persons in proportion to their respective interests in the assets that generate such death taxes, without any equitable adjustment for income taxes that xnay be at any time due or owing on such assets, and my personal representative shall seek reimbursement for such death taxes to the fullest extent permitted by applicable law. ITEM II: I .direct the Executor to pay the expenses of my last illness and funeral'expenses from. the property passing under this Will as an expense and cost of administration of my estate. ITEM III: If I die before my husband, FRANK A. MOSHER, I give to him all of my household furniture and furnishings, books, pictures, jewelry, silverware, automobiles, wearing apparel and all other articles of household or personal use or adornment and all policies of insurance thereon. If I do not die before Page 1 138 my husband, I may leave a written list in my safe deposit box or elsewhere disposing of certain items of my tangible personal property. The Executor shall dispose of items of my personal property as specified in the written list. If no written list is found in my safe deposit box or elsewhere and properly identified b;y the Executor within thirty (30) days after the probate of my Will, it shall be presumed that there is no other statement or list. Any subsequent discovered list shall be ignored. I give to my children living at the time of my death any tangible personal property not set forth in a written list, to be divided among them as they shall agree. If my children are unable to agree, the Executor shall divide this property among my -children in as nearly equal portions as the Executor, in the sole discretion of the ;Executor, deems practical, having due regard to the personal preferences of my children. ITEM IV: I give the residue of my estate, nat disposed of in the preceding portions of this Will, to my husband, FRANK A. MOSHER as Trustee, IN TRUST, to be administered and distributed as provided in this Will. Upon the receipt by the Trustee of the residue of my estate, of any proceeds on account of life insurance, or other property distributable to the Z~ustee as a result of my death, the Trustee shall divide all thus property (hereinafter referred to as "principal") into two (2) parts, each of which shall be held in trust and which will constitute separate trust funds, to be known as "Trust A" and "Trust B". "Trust A": "Trust A" shall consist of a fraction of the principal. The numerator shall be a sum equal to the largest amount that can pass free of Federal estate tax under my Will by reason of.the applicable credit amount and the state death tax credit (provided that the use of this credit does not require an increase in state death taxes) allowable to my estate but no other credit and after taking account of dispositions Page 2 ~~~ ~_ 139 l ~ .. ~ I ~ his Will and property Pass~g outside of this Will under other items of t ali for the marital or charitable deduction and after which do not qu fy lowed as deductions account of charges to p~ciP~ that are not al taking Yn Federal estate tax. The denominator shall be the in computing y 'nci al. For purposes of establishing this fraction, the value of the pri P 1 fixed in the Federal estate tax prodding relating to my values final y be used. I recognize that the numerator of such fraction estate shall 0 in which case no property shall pass under "Trust A" . I may be zero ( ), ' ze that the numerator may be affected by the action of the also recogiu Executor in exercising certain tax elections. "Trust B" : "Trust B" shall consist of the balance of principal not placed in "Trust A" If the Trustee receives any property which is not includible in my estate for Federal estate tax purposes, that property all be added to the principal of either "Trust A" or "Trust B" ~ the sh strument overning the disposition of that property dir In the ui g absence of specific direction, that property shall be added to the principal of "Trust A" ITEM V: The following provisions shall apply to Trust "A": (a) The Trustee shall pay the net income arising from the rincipal of this Trust in quarterly installments to my husband, P FRANK A. MOSHER, during his lifetime. (b) During the lifetime of my said husband, the Trustee shall a to or for the benefit of my said husband so much of the principal of PY Page 3 ~~ ~~ ~~ ~.r 19 ~ ~ i r this Trust as may be necessary for the proper support, maintenance and medical care of my said husband. (c) Upon the death of my said husband, the Trustee shall distribute the remaining principal to such of my issue in the amounts and in the estates as my husband may have directed, either by written instrument filed with the Trustee during his lifetime exercising this Power of Appointment or by his Will making specific reference to this Power of Appointment. If this Power of Appointment is not validly exercised in whole or in part by my husband, then upon his death, or upon my death if my husband fails to survive me, the then remaining principal shall be distributed as follows: (i) If my son, PAUL M. MOSHER, is then living, all shares of my stock in Security Savings Systems, Inc., or any successor thereto, shall be distributed outright and without limitation to my son, PAUL M. MOSHER. The balance of such remaining principal shall be distributed in equal shares to my daughters, ANNE CORBIN and EILEEN MOSHER, and if either daughter is not then living, her share shall be distributed per stirpes to her. issue who are then living, and if either daughter is not then living, and has no issue surviving her, her share shall go to my other daughter, or if she is not then living, her share shall go to her issue, per stirpes. ITEM VI: The following provisions shall apply to Trust "B": Page4 ~~ ~~ 141 (a) Trustee shall have, hold, manage, invest and reinvest the assets of this Trust, collect the income and beginning at my death pay over the net income in quarterly installments to my husband, ' FRANK A. MOSHER, during his lifetime. (b} The Trustee shall also, from time to time, pay to my husband such amounts of principal of this Trust as may be necessary for the proper support, maintenance and medical care of my husband. (c) Upon the death of my husband, the Trustee shall pay all accrued income and all income accumulated but undistributed to the estate of my deceased husband and shall thereafter transfer the then remaining principal of this Trust to Trust "A" to be held, administered and distributed in accordance with the provisions of ITEM V of this Will. (d) If my husband should not survive me, then the provisions of Trust "B" shall be void and the part of my estate which would have constituted Trust "B" shall be added to Trust "A" to be disposed of in accordance with ITEM V of this Will. (e) The Executor shall be authorized in the Executor's sole, exclusive and unrestricted discretion to determine whether to elect (under Section 2056(b)(7) of the Internal Revenue Code of 1986 as amended, or any corresponding provision of the Federal estate law), to qualify all, none or a fraction of Trust "B" for the Federal estate tax marital deduction. The decision of the Executor with respect to the exercise of the election shall be final and conclusive upon all persons whose interests in my estate are directly or indirectly affected by the Page 5 1J~=~'~i u4z r .~ election. Only property which is fully eligible for the marital deduction under Federal estate tax law shall be assigned to this Trust. Notwithstanding anything to the contrary contained in this Will, the Trustee of this Trust shall not retain beyond reasonable time any property which may at any time be or become unproductive, nor shall Trustee invest in unproductive property. Notwithstanding the provisions of subparagraph (b) of this Item, the Trustee shall pay to the Executor of my husband's estate, out of the principal of this Trust upon the death of my husband, an amount equal to the estate, inheritance, transfer, succession and other death taxes ("death taxes"), Federal state and other, payable by reason of the inclusion of the value of Trust property in my husband's estate. Such payment shall be equal to the amount by which (1) the total of such death taxes paid by my husband's estate exceeds (2) the total of such death taxes which would have been payable if the value of the Trust property had not been included in his estate. The determination by my husband's Executor of the amount payable hereunder shall be final. I direct the Trustee to pay such amount promptly upon written request of my husband's Executor. The final determination of the amount due hereunder shall be based upon the value as finally determined for Federal estate tax purposes in my husband's estate. After payment of the amount finally determined to the be due hereunder, the Trustee shall be discharged from any further liab' 'ty with respect to such payment. My husband may waive his estate's right to payment under this subparagraph by Will, in which he specifically refers to the right to payment hereunder given to his estate. ITEM VII: No part of the income or principal of the property held under any Trust created by this Will shall be subject to attachment, levy or Page 6 . _'~~ ~ J ` Jr !43 seizure by any creditor, spouse, assignee or trustee or receiver in bankruptcy of any beneficiary prior to his or her actual receipt thereof. The Trustee shall pay over the net income and the principal to the parties herein designated, as their interests may appear, without regard to any attempted anticipation, pledging or assignment by any beneficiary under a Trust, and without regard to any claim thereto or attempted levy, attachment, seizure or other process against said beneficiary. ITEM VIII: The Executor and the Trustee shall each possess the following powers, each of which may be exercised without court approval and in~ a fiduciary capacity only: (a) To retain any investments I have at my death, including specifically those consisting of stock of any bank even if I have named that bank as the Executor or Trustee. (b) To vary investments, and to invest in bonds, stocks, notes, real estate mortgages or other securities or in other property, real or personal, without being restricted to so-called "legal investments", and without being limited by any statute or rule of law regarding investments by fiduciaries. ~~,~ In order to divide the principal of a Trust or for any other •~K. purpos~t~~ncltlding final distributions, the Executor and Trustee are autho ~to divide and distribute personal property and real property, pally or wholly in kind, and to allocate specific assets among benef curies and Trusts so long as the total market value of each share is not affected by the division, distribution or allocation in kind. The Executor and Trustee are each authorized to make, join in and consummate partitions of lands, voluntarily or involuntarily, including Page 7 ~ 1f f.. ~1 ~ J 44 - ~` ~ wide powers as an - ~~ ~--~~~b~: ^ _~`'~ ~ ~.nf mutual, deeds, or other obligations, with as :~} ... -v -.i.-3J't Y. _ individual owner in fee simple. (d) To sell either at public or private sale real and :personal property severally or in conjunction with other persons, and to consummate sale(s) by deed(s) or other instrument(s) to the purchaser(s), conveying a fee simple title. No purchaser shall be obligated to see to the application of the purchase money or to make inquiry into the validity of any sale(s). The Executor and Trustee are authorized to execute, acknowledge and deliver deeds, assignments, options or other writings as necessary or convenient to any of the power conferred upon the Executor and Trustee. (e) To mortgage real estate, and to make leases of real estate. (f) To borrow money from any person, including the Executor or Trustee, to pay indebtedness of mine or of my estate, expenses of administration or inheritance, legacy, estate and other taxes, and to assign and pledge assets of my estate or any Trust established by this Will. This paragraph shall not be construed to authorize borrowing from "Trust B". (g) To pay all costs, taxes, expenses and charges in. connection with the a 'stration of my estate or any Trust established under this Will. If any death taxes are payable with respect to my estate, these taxes shall be paid from "Trust A". (h) To make distributions of income and of principal to the proper beneficiaries, during the. administration of my estate„ with or Page 8 ~~~ ~~ ~ j , ias r ~ . ~~ ,(`}` } ~`~" .- ~' ounts as the r ~~ ~t'ry. } i. T ~ t ~ ~, , -~~4 '.~~~':.~ ~ wrt order, in such manner and in such am -- without co Executor deems prudent and approp~ate. (i) To vote shares of stock which form a part of my estate or an Trust established under this Will, and to exercise all the powers y 1 incident to the ownership of stock. (j) To unite with other owners of property similar ~ Property in my estate to carry out plans for the reorganization of any company whose securities form a part of my estate. (k) To disclaim any interest in property which would devolve to me or my estate by whatever means, including but not limited to the following means: as beneficiary under a will, as an appointee under the exercise of a power of appointment, as a person entitled to take by intestacy, as a donee of an inter vivos transfer, and as a donee under a third-party beneficiary contract. (1) To prepare, execute and file tax returns of any type required by applicable law, and to make all tax elections authorized by law. (m) To employ custodians of property, investment or business advisors, accountants and attorneys as the Executor or Trustee deems appropriate, and to compensate these persons from assets o~f my estate or trust, without affecting the compensation to which the Executor and Trustee are entitled. {n) To divide any Trust created in this Will into two or more separate Trusts so that inclusion ratio for purposes of the generation- . .1J~,.-~ Page 9 4s ~a' ~. ,:~, . ~~, ~ :.~ `::t r~:.,~-:~~:}- ~~....:: ' : ~:~ ..~..: order that an • .~?•~ ~-' " ~ ` Y` t=8,nefer taa shalt be either zero or one, in ,~ • . ~ :ping ~~~-~ election under Section 2652(x)(3) of the Internal Revenue CC>de may be made with respect to one of the separate Trusts, or for any other reason. (o) To allocate administrative expenses to income or to principal, as the Executor or Trustee deems appropriate. However, no allocation to income shall be made if the effect of the allocation is to cause a reduction in the amount of any estate tax marital deduction or estate tax charitable deduction. (p) To do all other acts in their judgment necessary or desirable for the proper and advantageous management, investment and distribution of the estate and Trusts established under this Will. (q) In the event of a dispute between the Executors as to my estate and the Trustees as to the Trusts, the decision of the Trustees shall control (unless otherwise specifically provided in this ~lVill). ITEM IX: The Trustee is authorized to distribute :principal and/or income in any one or more of the following ways if the Trustee, in the sole discretion of the Trustee, considers the beneficiary unable to apply distributions to the beneficiary's own best interests, or if the beneficiary is under a legal disability: (a) Directly to the beneficiary; (b) To the legal guardian or conservator of such beneficiary; (c) To the Trustee, or to another person selected 'by the Trustee, as custodian under the Pennsylvania Uniform Transfers to Minors Act as to a beneficiary under the age of twenty-one (21) years; Page 10 ~J ~ ~~ lq7 (d) To a relative of the beneficiary, to be expended by that relative for the benefit of the beneficiary; or (e) By directly applying distributions for the benefit of the beneficiary. This power shall not apply to any distribution to my spouse from any trust which has qualified for the marital deduction in my estate. ITEM X: Any person who shall have died at the same time as I shall have, or under such circumstances that the order of our deaths cannot be established by proof shall be deemed to have predeceased me. ITEM XI: I hereby nominate, constitute and appoint my husband, FRANK A. MOSHER, to be the Executor (herein referred to as the "Executor") . My said husband shall have the power to nominate and appoint a successor Trustee and Executor (individual or corporate) to serve upon his death or in his inability or refusal to serve as Executor and Trustee. In the event of the death or inability or refusal to serve of my said husband prior to his appointment or nomination of a successor Executor and/or Trustee, I nominate, constitute and appoint my children to be the successor Executor and Trustee. The Executor, Z~ustee and Guardian are specifically relieved from the duty or obligation of filing any bond or other security. IN WITNESS WHEREOF, I have set my hand and seal to this, my Last Will and Testament, consisting of this and the preceding ten (10) pages, at the end Page 11 ,/V~~ /'~ 48 of each page which I have also set my initials for greater security and better identification this -~ da of ~ ~ . ~ ~ ~ 2008. Y , VIRGINIA B. ~ OSHER We, the undersigned, hereby certify that the foregoing Will was signed, sealed, published and declared by the above-named Testatrix as and for her Last Will and Testament, in the presence of us, who, at her request and in h,er presence and in the presence of each other, have hereunto set our hands and seals the day and year first above written, and we certify that at the time of the execution thereof, the said Tes trix was of sound and di sing mind and memory. . ~ ~ ~ ~-L !~ EAL) Residin at . C1 L~ _ ~ ~ C ~ Cc M ~~ t ~~ ~.... •~ ) Residin at ~'~ . ~ ~ ~~ ~,~c~ .,..f g ~ ~ - , ~• ;~ V (SEAL) Residing at .3 b 3 S ,.,,~w~ i? ~ of 4~~8~~~ ~ 4 9 Page l To Anne ro leaf cherry table - small antique in guest room D p 10 Waterford wine glasses - 5 Diamonds „ ~ R~ ~ Jewelry : Channe 1 s e i nRing (approx . 3 / 4 ~ ~ Solitaire DiamonWide-with flowers Gold Bracelet To Eileen: Audubon Bird Print (yellow breasted chat;i Co er and brass Nativity set..bought in Mexico PP Jewelry: Pearl Bracelet...pearl necklace.. Gold Slide with 3 Diamonds ade to Quinn & Gillian Gold chain with 3 pieces of j ' silver chain with dolphin and blue stone to Quint illian Sterling To Paul:Lenox Birds - 4 of them...Bluebi,rd, Chickadee Golden Crown Kinglet, Baltimore Oriole Jewelry for Jeanne 24" lon Gold necklace,,,Gold Bangel Bracelet..Ring with g az stone. 2 diamonds and 1 top old chain-necklace. For Alison: small diamond on short g Two handpainted bird pins and chickedee pin. e To Frank: Sheraton desk with black chair Jewelry : ~ 24 CI~I~A'~ gold necklace and bracelet . Signed this date Virginia B Mosher ~~~i'~ t/ ~. ? ~j .~ ~ ~„ ~; I ~ ,~ X50 EXHIBIT G Security Savings Systems, Inc. Frank A. Mosher, CEO Security Savings Systems, Inc. 901 Market Street New Cumberland, PA 17070 October 28, 2009 Dear Sir: P.O. Box 373, New Cumberland PA 17070 Phone: (717) 901-7088 1 800 233 7122 FAX: 717-901-7011) Due to your breach of contract, we hereby tender our resignation as employees and officers of Security Savings Systems, effective November 10 , 2009. You will note we are giving you the customary two weeks notice, at your discretion. Should you desire that we stay on through the end of the year, we will consider that in two cases: (1) If you buy back our Security Savings Systems, Inc. stock within the two week period we will continue working as employees under the current employment arrangements through December 31't. (2) If you transfer ail stocks from the estate of Virginia B. Mosher, voting and non- voting, to Paul M. Mosher within the two week period we will withdraw our resignations and remain with the company. Should you choose not to exercise either of the above options, then we will attempt to liquidate our holdings In the company otherwise, at our discretion. Sincerely, 1'l. Jean M. Mosher, Vice President & Paul M. Mosher, President ~~~ EXHIBIT H STOCK PURCHASE AGREEMENT ase a ent is made and entered into this ~ day of stock porch greem • 2010, By and between JEAN M. MOSHER, referred to as Seller, and THE OSHER FAMILY IRREVOCABLE TRUST, referred to as Buyer. A. Seller is owner of 12,070 shares (the "Shares") of the outstanding capital stock of SECURITY SAVINGS SYSTEMS, INC., a corporation organized and existing under the laws of Tennessee, herein referred to as Corporation. B. Buyer desires to acquire, and Seller desires to sell, all of Seller's shares of stock in the Corporation pursuant to the terms of this agreement. Now, therefore, in consideration of the premises, their mutual covenants and promises, and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, and intending to be legally bound, the parties agree as follows: SECTION ONE PURCHASE AND SALE OF STOCK Subject to the terms and conditions of this agreement, Seller agrees to sell, and Buyer agrees to buy, all of Seller's shares of the capital stock of the Corporation for the total price of Three Hundred Thousand Dollars (300,000.00), payable as follows: A. Payment of One Hundred Fifty Thousand Dollars (S 150,000.00) upon the transfer of the Shares; and B. Payment of One Hundred Fifty Thousand Dollars (S 150,000.00) within sixty (60) days of the death of Frank A. Mosher, Jr. The transfer of Shares is conditioned upon: i. Neither the Corporation nor Frank A. Mosher, Jr. nor any transferee of Frank A . Mosher, Jr. exercising a right of first refusal set forth is Paragraph 3 of the Shareholders Agreement dated Janaury 11, 1997 by and between the Corporation, Seller and Paul A. Mosher; and ii. Transfer of the stock certificates evidencing the Shares. SECTION TWO BUYER'S REPRESENTATIONS AND WARRANTIES Buyer represents and warrants to Seller that Buyer is acquiring these shares of Seller's capital stock of the Corporation for its own account for investment and not with a view to, or for 12 sale in connection with, distribution of any of the shares and with no present intention of selling any of them. SECTION THREE ENTIRE AGREEMENT This agreement constitutes the entire agreement between the parties and supersedes any prior written or oral understandings, agreements, or conditions. No change, modification, amendment, or addition will be valid unless it is in writing and signed by the party against whom enforcement of any change, modification, amendment, or addition is assigned. The terms of this agreement will survive the transfer of Seller's stock to Buyer. SECTION FOUR PARTIES BOUND; ASSIGNMENT All covenants, agreements, representations, and warranties set; forth in this agreement are binding on and inure to the benefit of the successors and assigns of the parties. The parties cannot assign this agreement or any of their rights under this agreement except by operation of law to their personal representatives or heirs in the event of their death, incapacity, or dissolution, as the case may be, in which case this agreement and all of the parties' obligations and benefits will be binding on and inure to the benefit of the party's personal representatives, heirs and successors. SECTION FIVE GOVERNING LAW This agreement shall be construed and enforced in accordance, with the laws of the Commonwealth of Pennsylvania. WITNESSES: ~~~~~ -:W~~~1~J1V1DOC3VECU~ITY SAVINGS ~YSTBMl~lteek ~ureYu~ A~n~s~u.r~ JEAN M. MOSHER.("Seller' THE MOSHER FAMII.Y IRREVOCABLE TRUST ("Buyer' By: Paul M. Mosher, Trustee 13 EXHIBIT I I JORDAN D. CtJNNI1~IGHAM ROBERT E. CHERMCOFF MARC w WIIZIG aRUCS J. wARSHAwslc~r ICBi.LY M. IQVIGHT TRACY 4 UPDIICfi CUNNINGHAM ds CHERNICOFF, P. C. ATTORNEYS AT LAW P.O.80X 6057 HARRISBURG, PENNSYLVANIA 17106-0457 TELEPHONE (717) 238-657ip FAX (717) Z38~-4809 ~~ ~ orrE IRS NO.2~Z274135 Street Addrea~ 23ZO IV. ~d Stre!! Harrieb~ PA 17110 WritK'~ Drat Email: biw~ilce ~..~_.•..~ Apri120, 2010 VIA HAND DELIVERY aad REGULAR MAIL Security Savings Systems, Inc. 901 Market Street New Cumberland, PA 17070 Mr. Frank Mosher c% Security Savings Systems, Inc. 901 Market Street New Cumberland, PA 17070 RE: Paul M. Mosher and Jean M. Mosher File No: 915609 Dear Mr. Mosher and Security Savings Systems, Inc.: The Mosher Family Irrevocable Trust c% Paul M. Mosher 256 Winding Way Camp Hill, PA 17011 The Stock Purchase Agreement attached hereto, contains the teens of the proposed transfer. Pursuant to that Shareholders Agreement dated January 11, 1997 by and between Security . Savings System, Inc. ("Security") and Paul M. Mosher and Jean M. Mosher, his wife (the "Shareholders Agreement"), please accept this correspondence pursuant to Paragraph 3 of the Shareholders Agreement. Jean M. Mosher proposes to transfer all of the shares of Security which she owns (totaling 12,070 shares) ("Jean's Shares"). This correspondence also constitutes an offer to sell Jean's Shares to Security. The name and address of the prospective Transferee is: io CUNNING:HAM day CHERIITICOFF, P.C, ATro~YS AT t.~w Apri120, 2010 Page 2 Under the terms of the Shareholders Agreement, this correspondence, which shall be considered the First Notice thereunder, is being simultaneously provided to Security and to Frank A. Mosher, Jr., the only other Security Shareholder (by ~ virtue of the death of Virginia Mosher). Please be guided accordingly. Very truly yours, C GRAM 8t CHERNICOFF, P.C. Bruce J. W wsky . BJW/ja Attachment cc Mr. and Mrs. Paul Mosher Robert E. Chernicoff, Esquire F:ui mr s~-vttvas sYS~.~oiou.ai9to.~a 11 EXHIBIT J ..r Paul M. Mosher Jean M. Mosher 256 Winding WaY 1 Camp Hill PA 17070 ~ {,~a rtment of the Treasury Depa ~ t _ . Internal Revenue Service ~ ;;. ~, i.°,,, j ~;~ i ~;,L. f~J~._ ~ ;;ili;~ ~FE u' ~".~ ~!~'v"r~~R 5th ,,,.r..~.: , ~, :. ~ ....~.. ~. Cincinnati, OH 45999-0013 ~~~~C~~,.~..t~~~ (To La A,~s~! 1~Ptla RQi~~ Dear sirs; ...~. . We are the majority shareholders of Security Savings Systems, Inc. ID# 23-1310 tOF e9boa d of dire tors. longer employed by Security Savings. In addition we have been removed fro „ ~~ Therefore we have decided to terminate our consent to the corporations' election to hanae the ! S,se find attached a statement to that effect. Our CPA told us this is all that is necessary to g status. Would you please confirm the change so that we can notify the company'? lfdodress d env to e incorrect in its form please advise us how to correct it. We enclose a stamped self a P for your convenience. Thanks in advance for your help with this matter. Sincerely yours, Paul M. Mosher Jean /~ ~~~ M. Mosher ~ ~`~~ i~f INTtRNAL REVENIl1= ``ERVI~~ 262 rCE:l1r';~U i•~ ' 4r 1ry • ; ~ 13ATCHING U COVINGTOIN, ~>r ~y76658 04 ,~ ~ ~ O r __ L Statement to Revoke Sub chapter 5 Election (IRC Section 1362(d)) To: Department of the Treasury Internal Revenue Service Cincinnati, OH 45999-0013 Re: Paul M. Mosher & Jean M. Mosher /Security Savings Systems, Inc. 256 Winding WaY Camp Hill PA 17011 ID: 178-38-5435 & 102-40-4301 / 23-1302079 ntioned shareholders of Security Savings Systems, Inc. hereby revoke theerel are 39 570er The above me As of 08/16/2010, th , IRC Section 1362(a) in accordance with IRC Code Section t3 Sa(vn s Systems, Inc.. Attached are signed shares of issued and outstanding shares of stop one h If of the isu ed and outst~inding stock in Security consents by all shareholders holding more tha Savings Systems, Inc.. gy: Paul M. Mosher & Jean M. Mosher Majority Shareholders of Security Savings Systems, Inc. Date: 08/16/2010 ment of Shareholders to Statement of Consent to Subchapter S Revocation Attach d shareholders in accordance with IRC Section 1362(d) hereby consent to emsr IncoclD# n The underslgne e ma'ority shareholders Paul M. Mosher & Jean, M. Mosher for Secu effect vle~ 09/01/2010. by th 1 23-1302079 of its election under IRC Section 1362(4). Such revocatlon Is By: Paul M. Mosher 256 Winding WaY Camp Hill PA 17011 ID: 178-38-5435 By: ' J M. Mosher 56 Winding WaY Camp Hill PA 17011 ID: 102-40-4301 Dat ~~ ~~ Date of this revocation, the issued and outstanding shares of the Security Savings Systems Inc. At the time are held as follows: Frank A. Mosher 9,610 it inia B. Mosher 5,820 (Deceased 07/12/2009 -shares now intrust) V g Paul M. Mosher 12,070 Jean M. Mosher 12,070 c~~~~~~~,~ c QPhYI~'~ (l/~l'V~r c~ 7~~'~~ I~~ Z~'~0 rr~ COMMONWEALTH 10 SeaENNSYLVANIA Notar public 1Mlliam D• ~ye~an, Notary New Cumberland Boro, Cumberland County My Commission Expires Sept 15, 2412 o~ ns Dania Association of Notaries A4em'~Q~ • ...n Y G20 ~ coati Submission r~ssino Center 3! EXHIBIT K GRAM 8t C~~IICOFF, P. C. JoxnAN o• c~~IN~xAM ATtORNE~IS AT LAW gOBER? E. SCOFF ~C w. wnz.~c p Q, BOX 60457 BRUCE 1. w~~'}''~~ e,~gISBURG, FENNSYI-VANIA 17106-0457 II IGELLY M IQIIGHT , TRACY L UPDIICE ' 'I'EL,EPHONE (717) ~ FAX (7I7) 238-48Q9 September 1, 2010 VIA CERTIFIED MAIL UES'TED RETURN RECEIPT RE+Q and REGUL~ MIL Security Savings Systems, Inc. 901 Market Street New Cumberland, PA 17070 gE; Paul M. Mosher and Jean M. Mosher File No: 915609 Dear Sir or Madam: HERSHEY TELEPHONE tn~ 534-2833 IRS N0.23-2274135 StrEet Addxese: 2320 N. 2nd S~e~t xanis~, PA lnlo Writer's Dfrect Email: biwCa~ccfawoe.com t Paul M. Mosher and Jean M. Mosher, each owners of 12,070 s Please be advised tha ' s S stems, Irlc., have consented to the revocation of Security Sav1nB shares of Security SavlnB y 13621 d 1 ' ubcha ter S Election pursuant to 26 U.S.C. § ~ )~ )~~~ Systems, Inc. s S P ch consent and revocation, Paul M. Mosher anal Jean M. Mosh f Security As of the date su collectively, hold more than one-half ('/_) of the shazes of the stoc o shareholders who, Savings Systems, Inc. . Mosher's Consent to Revocation has been submitted to the pain M. Mosher and Jean M Internal Revenue Service. United States Department of Treasury, CZ~IINGH~~M & CHERNICOF~, P.C. r ATTORNEYS AT LAW Security Savings Systems, Inc. September 1, 2010 Page 2 dance is being sent to Security Savings Systems, Inc.'s A courtesy copy of thls correspon wse. hn Obrock, and to its counsel, Howell C. Matte, Esq accountant, Jo Please be guided accordingly. . very truly yow~s, G~.~,Z,,i & CHERNICOFF, P.C. .~ Bruce J. W hawskY BJw~a cc Mr. and Mrs. Paul M. Mosher Mr. John Obrock, CPA• Howell C. Matte, Esquire Robert E. Chernico$, Esquire F:~13~~1HJyy~pOC3~3ECURCt'Y sAV1NG3 SYS'iEMgV,010~,0901 l0.wpd EXHIBIT L .. • ... ~ HERSxEY TELEPHONE JORDA1v D ~nvNnvGHAM CHERNICOFF; P.C:. , CUNNINGHAM EYS AT LAW A'I"TORN (n7) 534-2833 74135 ICOFF ~ ROBERT E. IRS N0.23-22 W G MARL w. BRUCE J. wpgSFtAwstcY P.O. BOX 60457 PENNSYLVANIA 17106-0457 Street Address: t d st KELLY M. KNIGHT HARRISBURG, ~ 2320 N. 2n ree Harrisburg, PA 17110 ~,~~ ~ UPDIKE NICHOLAS A. FANELLI ' 38'6570 TELEPHONE (717) 2 FAX (717) 238-48~ Writer's DGreet Email: bi~r(n~ccia~~.com September 7, 2010 VIA CERTIFIED ~ UESTED RETURN RECEIP'T' Q sod REGUI-~ MAU' Security Savings Systems, Inc. 901 Market Strcet New Cumberland, PA 17070 RE: Paul M. Mosher and Jean M. Mosher File No: 915609 Dear Sir or Madam: the President of Security Savings Please find enclosed a copy of the Stock Power appo~~g es of stock identified in said Stock Power on the Comp~y~~ nest. j Systems, Inc. to transfer the shag Jean M. Mosher to the Mosher Family Irrev transferring the Share previously owned by retain the original. this corre ndence and affirmatively represent that said transfer please aclmowledge receipt of ~ has been effected. Thank you. Please be guided accordingly. Vcry truly yo~~ BJW/ja Enclsoure Irrevocable Trust cc Mr. Paul M. Mosher, Trustee of the Mosher Family ~, Jean M. Mosher Howell C. Mette, Esquire Robert E. Chernicoff, Esquire F:1Home~B7W~DOCSISECURIN SAVII~1aS sYSTEMS1201d~I.090~10.wpd 16 STOCK POWER hereb sell, assign and transfer unto THE MOSHER FOR VALUE RECEIVED, I y OCABLE TRUST, 12,070 shares being part of: FAMILY IRREV Certificate A-4 - 1,863 shares; Certificate A-6 - 5,000 shares; Certificate A-12 - 5,000 shares; and Certificate B-4 - 207 shares YSTEMS~ INC. and I do hereby irrevocably constitute as issued by SECURITY SAVINGS S • ,~~~ ~ JAN f ~~• ~~ or his/her substitute, Attorney-in- and appoint ~ ~ ~ ~] wer ock on the books of the within named Company vnth p° Fit, to transfer said shares of st wig a irises. This Stock Power is granted under and in connection of substitution in the Pre f stock as aforesaid and is to be used only for such purposes. transfer o ~ 2 ~ ~ Date: o~ a M. Mosher COMMON~~TH OF PENNSYLV~~' SS. COUNTY OF ` ~ of~iQ,~Q 2010, before m~e, a Notary Public, the On this, the ~J day --~ aced Jean M. Mosher, known to me (or satisfactorily ecuted undersigned officer, personally apps ent, and acknowledged that she ex rovers) to be the person described in the within ins~ses therein contained. P herein stated and for the purpo the same in the capacity WHEREOF, I hereunto set my hand and official seal. ~ WITNESS n ~ ll Notary Public ,., ~ F:~Home~BJW~DOCSISECURI'I'Y SAVINGS SYSTEIV+~"±•Stc,~Y~Powa•wpd ~Aw10NVyEgLT}1 OF PENN YW Na'fARtAL SEAL Public ~ ~~ ~°^~^'"'°" ' 1. ~~ ~~. . ~~• ~ M ~ A `. ~~ qy.9 C~ ~~ ~~ ~ ~~a xe ~~ ~. ~~c )~~ ~ . ~~ ~~~ ~~~ ~ ~~° A ~S .- x ~~ N ~-] ~o ~' ~ ~ ~ o~ ~v O~ x= ~~ _~ ~~ w~ ~~ O A O ~ ~ 7 -1 A Zy ~nC A A A ~e ~ e~ .. ~~ ~ o x a z ~4 ~ ~ ~ ~, ~ o -~, ~ ~~ ~.~~x~i L ~ ~ ~ ~..r. ~ ~~ o ~ ~ ~ ~ d ~ . ~ O• H ~~ C7 H ~ O ~ ~ w vv ~ d wO w ~, ~ ~ ~ ~ H n x= O ~-1 i ~+ ~ ~ w ~ r ~ ~ ~ ~ ~ ~ ~ I -~ 1 ~ ~~ n N O O ` O .$ A ~> ~x ~~ ~ zy ~~s ~~~~ O~ A D x ZZ A a ~1 S ~i o= A ~{ m A O w Z t ~A~ A w ~J ~~ v A O z .' ~`9 ~~ e ~~~~~ ~ ~'~m ~~ ~~ ,~~~ ~ ~ ~ ~~~ ~~ ~~m ~~~~ ~' ~. I ~ i i ~ 1 9~ 1 ~~ w 1 g I ; 1 = i 0 1 w 1 : 1 -± 1 = 1 1 1 i 1 1 ~. 1 ~~ _~ n n a ~o ~ ~~ ~ zy ~s ~ ~, ~ ~C o~~ ~°~ o~ x= ~~ ~~ O w s~ ~> A z zy ~~ ~~ ~m ~ ~~ ~ C~ v g~ ~ o x ~~ ,'\v a ~_ A s ~~ ~ ¢`~~ ~' ~ ~> ^~ ,~ :~~ ~ ~ ~~~ ~' 4 ~~ n ~~ ~ i~ ~~ ~3 ~~ 9~ ~~ 9~ ~~B ~ ~~ ~ n EXHIBIT M .. • .. ,,- . JoRDArr v. cuNNnvcHAM CUNNINGHAM & CHERNICOFF; P.C. . ROBERT E. CHERNICOFF ATTORNEYS AT LAW MARC w wrrzlc BRUCE J. WARSHAWSICY p O. BOX 60457 KELLY M. KMGHT HARRISBURG, PENNSYLVANIA 17106-045; TRACY L. UPDIICE NICHOLAS A. FANELLI --- TELEPHONE (717) 238-6570 FAX 1717) 23&4809 September 7, 2010 VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED and REGULAR MAIL Security Savings Systems, Inc. 901 Market Street New Cumberland, PA 17070 RE: Paul M. Mosher and Jean M. Mosher Filc No: 915609 Desr Sir or Madam: ~ HERSHEY TELEPHONE (n7) s.~4-aa~ IRS N0.23-2274135 Street Address: 2320 N. 2nd Street Harrisburg, PA 17110 Writer's{ Dtrect Emmil: b1wCa~cclaw>DC.com Please find enclosed a copy of the Stock Power appointing the President of Security Savings Systems, Inc. to transfer the shares of stock identified in said Stock Power on the Company books, transferring the Share previously owned by Jean M. Mosher to the Mosher Family Irrevocable Trust. I retain the original. Please aclaiowledge receipt of this correspondence and affirmatively represent that said transfer has been effected. Thank you. Please be guided accordingly. Very truly yours., & ~~~~C ', P.C. J. BJW/ja Enclsoure cc Mr. Paul M. Mosher, Trustee of the Mosher Family Irrevocable Trust Mrs. Jean M. Mosher Howell C. Mette, Esquire Robert E. Chernicoff, Esquire F:1Home187W1DOCSISECIJ1tTTY SAYIIV~s sYgTE1Ng1ZOl0~I,090710.wpd 16 ". . STOCK POWER FOR VALUE RECEIVED, I hereby sell, assign and transfer canto THE MOSHER FAMILY IRREVOCABLE TRUST, 12,070 shares being part of: • Certificate A-4 - 1,863 shares; • Certificate A-6 - 5,000 shares; • Certificate A-12 - 5,000 shares; and • Certificate B-4 - 207 shares as issued by SECURITY SAVINGS SYSTEMS, INC. aad I do hereby irrevocably constitute and a int ~ / 0 ~ AN f ~~ ~'' or his~~her substitute, Attorney-in- ~~ ~ l PPo Fact, to transfer said shares of stock on the books of the within named Company with full power of substitution in the premises. This Stock Power is granted under and in connection with a transfer of stock as aforesaid and is to be used only for such purposes. ~~ ~ 0 Date: e M. Mosher COMMONWEALTH OF PENNSYLVANIA SS. COUNTY OF ~ ~'~-/~ On this, the ~ day of~~4 , 2010, before me, a Notary Public, the undersigned officer, personally appeared Jean M. Mosher, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. ~~~~ ' - ~ Notary Public 4 F:Woms1BlW1DOCSiSECURITY SAVINGS SYSTE14i~.StcCY Power.wpd ~ iU!~AONWEALTH O~ PENN YLV ' ' " ' NOTARfAL SEAL • ~ ~ JUI.IEANNE AMETRANO~ Notary Public . City of Harrhburq~ Dauphin Gounty • ~ COnxnNMcn 22.2011 ., ~~ •1'~ __ _ . . ~ s z r n,~.4 ~ ~~ ~ ~~ ~ n ~ ~ n ~, ~ `r _~ ~~ ~, ~~ ~~ D ~~ `~ ~l Z ~ x g ~~~ ~~` - ~~ .\ ~~ ~~ 4 ~~~ A ~> .- x ~~ ~ e =y °~ ~' a ~~~ ~~ o~~ x= C ~~ _~ ~a o w •• i ,.~ A m A w A =y AZ ~ ~ ~~A~ ~m ~ ~~ e ~ v ~ ~ O Z li v~ c s z _~ ~~~~9 ~ ~' ~ ~z~ ~~~ H L ~ ~ ~ ~ •••~. ~ a ~ ~ d ~,, ' '~ c ~ ~~ n H ~ ° ~" x . ~ o «. ~ ~ ~~ d ~o ~ ~~ ~' O o y ~~ ~ ~ ~ ~ y~ c~ x o ~ ~~ ~~ d ~ ~ ~ ~ ~ ~ ~ 1 ~~ ~ 1 ~ ~, L~A N n D I-+ m A ~~ °x ~~ ~ z ~3 ~s ~n~~ a o~~ 0 x= ~~ ~~ :~ ~a ~~ ~~~ e= A ~~ 0 w =y A ~~~~ ~~ ~ ~~ C v ~p O ~ °z i~ A \ A ~ ~~ ~9 ~~ ~~ ¢ 8~ ~~ ~~ ~~ ~~~ N O O N ~' x ~ ~ d ~ ~• ~~ ,~ i ~~ ~ w ~ ~ ~ n 19 1 = ~ o 1 " i ' ~ o I ~ 1 ~. ~~ ~A O ~~ ~ x ~' e = ~^] ~s ~'~~~ o~ ~~ ~~ a=~ x~~ ~ M^^~ ~a O w e~ . ~ ~> A i =y a A C~J M C g ~' A O i f 2~ ~~ ~~ ~ > ~' s ~~ ~ ~~ ~~~ i €~ n ~~ ~~ ~~~ ~~ ~~m ~~' ~ F~ ~ z -- ~. ;~ . ~ •~ r ~ t { •. '~- r t}~ _, f s f ~ _ •~ 1 ' `` •L~~4 ~IK 1r~~ ~ ~. ~~~,~ ti~ . . ~,,~ W ~ , .; ..~ ~ r w • *,~ ~' .~~ ~ r- ^-: ~~ .~ • _ x ,~ 1 ~~ . ~ 1 l •t 3r-, , ~~~ ' ~, , . ~~ h t .. t I :) ,~ ~ ,~ ~ i _ .1 1 , ~~~ ~ . ~ rte/ , -,~ ~ . ~ ! z' ~' ~ ~ .~,. - ~ , r :~ . .y ~ . + ~. ,. ~y~~1J ~ ~~ I~epeii1~u~iit e~1•~lte Trenui}' ~j lnlcrnal Ile~~enui Ser~~i~~~ CINCINNATI OH 45999-0046 SECURITY SAVINGS SYSTEMS INC PO BOX 373 NEW CUMBERLND PA 17070-D373 In reply refer to: 0223437223 Nov. 23, 2010 LTR 3064C 1 23-130207'9 000000 00 00005418 BODC: SB Taxpayer Identification Number: 23-1302079 Dear Taxpayer: Thank you for your correspondence dated Aug. 16, 2010. We are unable to process your termination statemennt because it is incomplete. Your statement of termination must contain the termination date, the terminating event, and an authorized signature from an officer of the corporation or person authorized to sign the returns. Your S election will remain in effect until we re~~eive a complete termination statement. We have enclosed your incomplete termination statement If you need forms, schedules, or publications, you may get them by visiting the IRS website at www.irs.gov or by calling toll-free at 1-800-TAX-FORM (1-800-829-3676). Please send us the requested information within 30 days from the date of this letter. We have enclosed an envelope for your convenience. If you have any questions, please call Entity Team 304 at 859-669-5051 between the hours of 6:00 a.m. and 4:00 p.m. ET. If you prefer, you may write to us at the address shown at the top of the first page of this letter. Whenever you write, please include this letter anti, in the spaces below, give us your telephone number with the hours we can reach you. Also, you may want to keep a copy of this letter for your records. Telephone Number ( ) Hours EXHIBIT O ROBERT E ~co~ CU1~1VIlVGHAM & C~~RNICOFF, P.C. MARL w wrrzlc ATTORNEYS AT LAW BRUCE j. wARSxawsxx P.O. BOX 60457 KELLY M. KNICHT ~iARRISBURG, I'ENNSYLVANLA 17106-0457 TRACY L. UPDIICE NICHOLAS A. FANELLI .- TELEPHONE ~n7~ z3s-r~~o FAX (717) Z38-4809 January 17, 2011 VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Internal Revenue Service Cincinnati, OH 45999-0046 RE: Security Savings Systems, Inc. Taxpayer Identification No: 23-1302079 Reference No: 0223437223 Letter dated November 23, 2010 Our File No: 915609 Dear Sir or Madam: HERSHEY TELEPHONE (n~ 534-2833 IRS N0.23-2274135 Street Address; 2320 N. 2nd Street Harrisburg, PA 17110 Writer's Direct Email: biwCa~cclawoc.com Please find enclosed a copy of the above-referenced. correspondence (the "IRS Correspondence") sent by the Internal Revenue Service to Security Savings Systems, Inc. ("Security") with attachments. I represent Paul M1 Mosher and Jean M. Mosher (the "Moshers"). The Moshers are stockholders in Security and authored the correspondence dated August 16, 2010 (received bx the Internal Revenue Service on August 19, 2010) which is attached to the aforementioned letter. The Moshers statement of termination includes a termination elate of September 1, 2010, as evidenced and highlighted on the Attachment of Shareholders to Statement of Consent to Subchapter S Revocation. Additionally, the terminating event is the revocation and termi:aation date effective September 1, 2010. In the IRS Correspondence, the Internal Revenue Service suggests that "an authorized signature from an officer of the Corporation or person authorized to sign the returns" is required CI.TNNINGHAM & CHERNIC OFF, P. C . ATTORNEYS AT LAW Internal Revenue Service January 17, 2011 to process the Subchapter S Termination Statement. The Moshers argue that the requirement is not required under the law specifically, 26 U.S.C.A. § 1362(d)(1) states in pertinent part, "a [Subchapter S] election...may be terminated by revocation...an election may be revoked only if shareholders holding more than one-half of the shares of stock of the C;orporation on the day on which the revocation is made consent to the revocation". Under this section of the law, there is no requirement that an officer of the Corporation or an individual who is authorized to sign tax returns must consent to the revocation. Additionally, the revocation m.ay~ specify a specific prospective date (under Subsection (1)(D)), which the Moshers did in ~~heir attachment, specifying that the revocation was to be effective on and after September 1, 2010. Alternatively, the Subchapter S election terminated on September 3, 2010, when Jean M. Mosher sold her shares to The Mosher Family Irrevocable Trust ("Tru:st"), as evidenced by the enclosed Stock Power. The Trust is not a permitted Subchapter S Shareholder pursuant to 26 U.S.C.A. §1361(c)(2) as the Trust has not elected Small Business Trust Status and a copy of the Trust, attached hereto contains none of the other exceptions contained. in said statutory section as applicable. Thus, the Moshers wish to challenge the Internal Revenue Service's determination that the Subchapter S Status has not terminated and requests reconsideration o:f the decision based upon the information and documentation contained herein. Very truly yours, C GRAM & CHERTIICOFF, P.C. Bruce J. W awsky BJW~a Attachment cc Mr. and Mrs. Paul M. Mosher Security Savings Systems, Inc. c/o Howell C. Mette, Esquire Robert E. Chernicoff, Esquire F:\FiomelBJV1~DOC5\SEC'iJR1Z'Y SAVII~iGS 3YSTEMS~IR5~I.011711.wpd ~ ` ~~~~?aparhnent c+f tha Tra~sury ~,-.;utrrn;:a Rsvenus Service r 'CINCINNATI OH 45999-0046 -- SECURITY SAVINGS SYSTEMS INC PO BOX 373 NEW CUMBERLND PA 17070-0373 CUT OUT AND RETURN THE VOUCHER AT THE•BOTTOM OF THIS PAGE IF YOU ARE MAKING A PAYMENT EVEN IF YOU ALSO HAVE AN INQUIRY. • IRS address must appear in the window. 0223437223 BODCD-SB ., Usa for payments Letter Number: LTR30b4C Letter•Date 2010-11-Z . Tax Pariod : 000000 *231302079* SECURITY SAVINGS SYSTEMS INC INTERNAL REVENUE SERVICE PO BOX 373 NEW CUMBERt.ND PA 17070-0373 CINCINNATI OH 45999-0046 .~ 231302079 AN SECU D0 2 ~000[]l7 670 ooaaaaao0oo ~ ' n~ Drparlnteut ~~1'tltz Trzus+ti j~7.lnlcrt+~+1 Hcrrnuc SerYicr ', , ~ '. CINCINNATI OH 45999-0046 SECURITY SAVINGS SYSTEMS INC PO BOX 373 NEW CUMBERLND PA 17070-0373 In reply refer to: 0223437223 Nov. 23, 2010 LTR 3064C 1 23-130'.079 000000 00 00005418 BODC: SB Taxpayer Identification Number: 23-1302079 Dear Taxpayer: • Thank you for your correspondence dated Aug. 16, 2010. We are unable to process your termination statement because it is incomplete. Your statement of termination must contain the termination • date, the terminating event, and an authorized signature from an officer of the corporation or person authorized to sign the returns. Your S election will remain in effect until we receive a complete termination statement. We have enclosed your incomplete termination statement. If you need forms, schedules, or publications, you may get them by visiting the IRS website at www.irs.go~v or by calling toll-free at 1-800-TAX-FDRM C1-800-829-3676). Please send us the requested information within 30 days from the date of this letter. We have enclosed an envelope for your convenience. If you have any questions, please call Entity Team 304 at 859-669-5051 between the hours of 6:00 a.m. and 4:00 p.m. ET. If you prefer, you may write to us at the address shown at the top of the first page of this letter. Whenever you write, please include this letter and, in the spaces below, give us your telephone number with the hours we can. reach you. Also, you may want to keep a copy of this letter for your records. Telephone Number C ) Hours -, ,* Paul M. Mosher Jean M. Mosher ' 256 Winding Way Camp Hill PA 17070 Department of the Treasury I Internal Revenue Sernce ~ wl,,: T~ ~ ~~~ T ~~~~~~ ~~~ ; Cincinnati, OH 45999-0013 '"""""'° " tt~ch m E ~t Dear sirs; (r~ Da A.~svoiaied R~~ L ..a... We are the majority shareholders of Security Savings Systems, Inc. ID# 23-1302079, and we are no longer employed by Security Savings. In addition we have been removed From the board of directors. Therefore we have decided to terminate our consent to.the corporations'' election to "S" status. Please find attached a statement to that effect. Our CPA told us this i5 all that is inecessary to change the "5" status. Would you please confirm the change so that we can notify the company? If our statement is incorrect in its form please advise us how to correct it. We enclose a stamped self addressed envelope for your convenience. Thanks in advance for your help with this matter. Sincerely yours, 1, Paul M. Mosher r~'C Jean M. Masher ~ ~~~~,~~ INTtRNAL RE ENl!~ ``ERVtC~ 262 CEI~'ED i ., ~ ~~~ . t3ATCHI-N~ U COViNC~TON, K'~ 2 0 2010 ~76b58 04 ~~ ~ ~ ~~ • M a Statement to Revoke Sub chapter S Election (IRC Section 1362(d)) To: Department of the Treasury Internal Revenue Service Cincinnati, OH 45999-0013 Re: Paui M. Mosher & Jean M. Mosher /Security Savings Systems, Inc. 256 Winding Way Camp Hili PA 17011 ID: 178-38-5435 & 102-40-4301 / 23-1302079 The above mentioned shareholders of Security Savings Systems, Inc. hereby revoke their election under IRC Section 1362(a) in accordance with IRC Code Section 1362(d). As of 08/16/2010, there are 39,570 shares of issued and outstanding shares of stock in Security Savings Systems, Inc.. Attached are signed consents by all shareholders holding more than one-half of the issued and outstanding stock in Security Savings Systems, Inc.. By: Paul M. Mosher & Jean M. Mosher Majority Shareholders of Security Savings Systems, Inc. Date: 08/16/010 ~ ~ . t Attachment of Shareholders to Statement of Consent to Subchapter S Revocation The undersigned shareholders in accordance with IRC Section 1362(d) hereby consent to the revocation by the majority shareholders Paul M. Mosher & Jean M. Mosher for Security Savings Systems, Inc, ID# 23-1302079 of its election under IRC Section 1362(a). Such revocation is effective 09/01/2010. By: Paul M. Mosher ~ / Datri 256 Winding Way Camp Hill PA 17011 ID: 178-38-5435 M. Mosher Date 56 Winding Way Camp Hill PA 17011 I D: 102-40-4301 At the time of this revocation, the issued and outstanding shares of the Security Savings Systems Inc. are held as follows: . Frank A. Mosher Virginia B. Mosher Paul M. Mosher Jean M. Mosher 9,610 5,820 (Deceased 07/12/2009 -shares now in trust) 12,070 12,070 PPhy~9~- ~~q~Hr cj ~.~gv~5 I~'~ 20'0 COMMONW~-N~~ Sep NNSYLVANW 1MIIlam D. Wlerman. Notary Publ~ New Cumberland Barn, Cumberland County My Commission Ex>Mes Sept ~ 5, 2012 Mert!ber "ennsylvania Association of Notaries !~ r ~,aC 3i STOCK POWER FOR VALUE RECEIVED, I hereby sell, assign and transfer unto THE MOSHER FAMILY IRREVOCABLE TRUST, 12,070 shares being pait of: • Certificate A-4 - 1,863 shares; • Certificate A-6 - 5,000 shares; • Certificate A-12 - 5,000 shares; and • Certificate B-4 - 207 shares as issued by SECURITY SAVIl~TGS SYSTEMS, INC. and I do hereby irrevocably constitute ~ ~,~"G~, T JAN f ~~ ~'~ or hislher substitute, Attorney-in- and appoint ~l ~ Fac to transfer said shares of stock on the books of the within named Company with frill power of substitution in the premises. This Stock Power is granted under and in connection with a transfer of stock as aforesaid and is to be used only for such purposes. .. Date: , ~ ~ ~ • e M. Mosher COMA~IONWEALTH OF PENNSYLVANIA SS. COUNTY OF On this, the ~.J day of~~0 , 2010, before me„ a Notary Public, the undersigned officer, personally appeared Jean M. Mosher, known to me (or satisfactorily coven to be the person described in the within instrument, and acknowledged that she executed P ,e in the ca aci therein stated and for the purposes therein c~ontamed. the sam p ty IN WITNESS WHEREOF, I hereunto set my hand and official seal. ~• ..~ .,~ F:~HomelBJWtiDOCS1SECURIIY SAVINGS SyyZfly,;," '~S~I~Powawpd ~ '. 1 4 1 .. r. 1 .. • ~ _ ~ . i •; Notary Public COiN°+AONWEALTH OF PE~INSYLYt1N1A NOTARIAL SEAL^ JULIEANNE AMETRANO, Notary Public Clay of Horrisburp~ Cotnty My ~ 22.2011 AN 00 000000 201108 2322 R00354 Department of the Treasury - Intemal Revenue Service CINCINNATI OH 45999-0038 108028 265 SB E 231302079 Date of this notice :March 7 , 2 D 11 Notice Number: CP-265 Taxpayer Identification Number: 23-1302079 000202.843218.0003.001 1 1~ID 0.382 542 lil~ll~lllllittllil~~l~~~~~~l11~1111~111111~~~1~~lll~ll~lllllll~l K•:::~~ 7?~~~~ ' SECUIRITY SAVINGS SYSTEMS INC 6.3.E PO BUX 373 NEW CUMBERLND PA 17070-0373 For assistance, call: 1-800-829-0115 ~oo2oa Notice of Termination of Status as an S Corporation Your election to be treated as an S corporation has been terminated k~eginning Sep. I, ~D10. Under Section 1362(8) of the Internal Revenue Code, you are not eligible to make a new elec#ion for the above year and the four succeeding years without the consent of the Commissioner of the Internal Revenue. After that time, you may make a new election, if eligible, without the consent of the Commissioner. if you have any questions about this notice or the actions we have taken, please write to us at the address shown above. if you prefer, you may call us at the IRS telephone number listed above. if you prefer, you can write us. If you write, please return your inquiry with the stub provided below and provide your telephone number and the most convenient time to call if we need to reach you. Thank you for your cooperation. Q When responding, please detach this stub and place in the envelope o~' CUT HERE so that the IRS return address appears in the envelope window, ~_ Return this stub with your correspondence. ~ Correspondence enclosed: • write your Ta;cpayo; Iden.ifica an Number, Your Telephone Number: Best Time To Call: - tax period and tax form numbar on your ( } AM PM inquiry or corr~espo~dence. 2fl1I08 17953-447-95117-1 Internal Revenue Service CINCINNATI OH 45999-0038 SB5 SECURITY SAVINGS SYSTEMS INC 1~1~~1~1~1~1~1~~1~1~~1~1~~11~~~11.....11,1~~1,~~i1,1 Po Box 373 NEW CUMBERLND PA 17.D70-Q373 231302079 AN SECU 00 2 000000 OOOOOODD000 EXHIBIT P , AN 00 000000 201108 2322 R00354 ~ . Department of the Treasury - Internal Revenue Service CINCINNATI DH 45999-0038 000102.843229.0003.001 1 HB 0.382 542 Ill'll'llllllllllli"I"""III'1111'llilll'~~l'~lll'll'illlll~ll ~'; SECUIRITY SAVINGS SYSTEMS INC PO BUX 373 NEW CUMBERLND PA 17070-0373 iooso2 108028 265 Date of this notice: March 7, 2011 Notice Number: CP- 265 Taxpayer Identification Number: 23-1302079 For assistance, call: 1-800-829-D115 Notice of Termination of Status as an S Corporation Your election to be treated as an S corporation has been terminated beginning Sep. I, 2010. Under Section 1362(8) of the Internal Revenue Code, you are not eligible to make a new e{ection for the above year and the four succeeding years without the consent of the Commissioner of the Internal Revenue. After that time, you may make a new election, if eligible, without the consent of the Commissioner. If you have any questions about this notice or the actions, we have taken, please write to us at the address shown above. If you prefer, you may call us at the IRS telephone number listed above. {f you prefer, you can write us. if you write, please return your inquiry with the stub provided below and provide your telephone number and the most convenient time to call if we need to reach you. Thank you for your cooperation. When responding, please detach this stub and place in the envelope so that the 1RS return address appears in the enveloQe window. _ _ CUT HERE . Return this stub with your correspondence. ~ Correspondence enclosed. ^ writs your Taxpayar Iden:iflca„an Numbzr, Your Telephone Number: Best Time To Lail: tax period and tax tone numbar on your ~ ~ AM PM inquiry or correspondence. 201108 17953-447-95117-1 Internal Revenue Service CINCINNATI off 45999-0038 265 SECURITY SAVINGS SYSTEMS INC SB 11 t l l l l l l l l 11 {~ 11 I l 11 { PO BOX 373 ~ ~• ~ ~ ~ ~ ~~ ~ ~~ ~ ~~ ~" ""' ' " "' ' NEW CUMBERLND PA 17070-Q373 2313D2D?9 AN SECU ao 2 DDDDaD oDOaDDDDDOD SB E 231302079 EXHIBIT Q 1V.IETTE, EVANS & wOODSIDE A PROFESSIONAL CORPORATION ATTORNEYS AT LASV HOWELL C. METTE Internal Revenue Service Cincinnati, OH 45999-0038 3401 NORTS FRONT STS'-F='r P.O. BOX 3930 ~7e~uTCBQgt}~ peg 17110-0930 IAS NO. 23-1983003 T~r.~rpsrONE FA3 (71T) 232-3000 (717) 238-1818 ~rrx~y/www.~~.cam March 11, 2011 Vicz Certified Mczil/ Return Receipt Requested Re: Security Savings Systems, Inc. _ Taxpayer Identification Number: 23-1302079 Notice Number: CP-265 dated March 7, 2011 Form 1120(S) Gentlemen: This off ce and the undersigned represent Security Savings Systems, Inc. ("SSS, Inc.") of New Cumberland, Pennsylvania. Form 2848, Power of Attorney and Declaration of Representative, executed by SSS, Inc. is enclosed. Your office has issued a Notice of Termination of Status as an S Corporation dated March 7, 2011 to SSS, Inc., a copy of which is enclosed. You have received correspondence from counsel for Paul M. an.,d Jean M. Mosher (the "Moshers") purporting to terminate the S corporation election of SSS, Inc. In the most recent correspondence, counsel for the Moshers alleges that SSS, Inc.'s S election "... terminated on September 3, 2010, when Jean M. Mosher sold her shares to the 1993 Mosher Family Irrevocable Trust (the "Trust") as evidenced by the enclosed Stock Power". In this respect your attention is directed to the specific language of the document entitled "Stock Power" submitted to your office. It purports to assign Jean M. Mosher's shares of SSS, Inc. stock to the Trust and appoints "... the President of Security Savings Systems, Inc. or his/her substitute to transfer said shares of stock on the books of the within named Company ... ". This has not occurred. While Jean M. Mosher is purporting to sell her stock to the Trust, no such sale has been completed. She has not presented to SSS, Inc. the certificates for her ~. Internal Revenue Service March 11, 2011 Page 2 shares, endorsed for transfer on the certificates, or by the alleged separate stock power for transfer, and no stock in SSS, Inc, has been, or will. be, issued to Paul M. Mosher, the Trustee of the Trust. All of the common stock of SSS, Inc., as of the date hereof, is issued to individual shareholders and Frank M. Mosher, Trustee U/W Virginia Mosher, a qualified subchapter S trust under IRC §1361(d), all of whom are eligible shareholders as per IRC §1361(d)(1). The effort of Paul M. and Jean M. Mosher to terminate the S election of SSS, Inc. is part of their proposed plan to use trust funds from the Trust to buy Jean's stock in SSS, Inc. and is all subject to pending litigation in the Orphans' Court of Cumberland County, Pennsylvania. Enclosed herewith is a draft of a Trial Brief to be submitted to the judge in the forthcoming trial on these issues for your information. Of particular importance on the issue of the S election at hand in the litigation is a Shareholders Agreement of January 11, 1997 wherein all of the SSS, Inc. shareholders covenant not to take any action which would terminate the S election. See page 13 of the draft which quotes Section 1 of the Agreement, that a transfer of shares not in accordance with the Agreement is "null and void". Again, no stock in SSS, Inc. has been issued to the Trustee of the Mosher Family Irrevocable Trust, and there are no disqualified shareholders. Accordingly, we respectfully request that your office revoke or rescind the Notice of Termination of Status as an S Corporation issued March 7, 2011 as having been issued based on erroneous and misleading information provided to the Department of the Treasury by Paul M. and Jean M. Mosher. Sincerely yours, Howell C. Mette HCM/jeb Enclosures Cc: Frank A. Mosher (w/draft of Trial Brief) Silas Mosher Bc : John A. Obrock, CPA (w/draft of Trial Brief.) 535753v1 1 ~~ ~5~~ _. Power of Attorney ~.~ ~,~. ~~ ~n~ Reclerat~on of Repres~enta#1ve °0A"~'"'"~ °t °w Tr~wry ~ Type or print. ~ See the ae ara~te hatruollona. IMarirt RM~nu. 9~ P ~~ Power of Attorney Caution: Form 2848 wl8 not be hanwvd ibr purposes cthei• than enledorl before the 1R 1 Taxpsycr iniarrnallon. Taxpayer~sl most ri ucd dale This form on gs 2. line 8. Taxpayer nams(e} snd addresr 9oelal aeer~rlly numbor{~} Sacurfty eevlnG>c 8ystetrts, Ina 1 P O Box 973 New Cctmberland, PA i7D70 Caw telephQna nu~rnbar t 7'17) aQi 7088 1'vr IFi>t Use ONtr . ~tef.7lll~d fir Fhrnb "fetaphons ~ Fsarotlorr --, Dry I Ernpldyer Idenh~iiQn Lumbar 23 i3pz~78 Plan number pf apppcabta} haratyy epliv~it~ the lopowinp reprosentailv~e(st ~ ~~eyfSl-~-tact: 2 Ropnraor~tatiw(ej must sign and date this lbrm on page 2. Part il. Namo ertd iddnee CAF Na .----- 0307 ~6213R ------- = - - -- ....-- Howell cr Melao, Esqutro TiM~phQne NQ. --- ~~~':?;~-aooo- ------ P O 6mt 5950 Fax Mo. r - -T17~6_'1915 _ r - - 7 0-0890 _ __ -- t3>ade Ir>,e+r. Address ~ Tei hone No.~ _ -Fax No. ^ dams and address ~F ~ ....rw • •-. r.r..rrrrr.r.rrr.rrr.. rr•rrrr RAnald 1., Plttok, Es~ulre Tdephnne Na _.._,.. 717~31~5~~D.. ._.._., P 0 tax W80 ~ ~, _ 717,236.1318 __ - _ - Har tabu 1'10-0950 _ _ Cheek It neWr. Addroea ~ __ T >~ ~ ~ o. (~ F ~~~ to Na ^ Nams and addreso CAF Na T9lophone Mo. ,..r........ r.r.. r...._...r ._. r... ~++dc M new: ~-ddreea~--r-~Tele ~ ns Nv:~.rr.-Fax Mo. ^ to represent 1fi~ taotpayer(sj t~tora Ilu ~t.r,agi l~rrverwa 6eMce tar tae rdlowlrg tax matcetx S Tmr ~itiere ~aWlf ~a'~,. rwtr,~ motor ~ ~ no o, a ~; moo, ~ ~ ~~ ui~ ~tal~ ~ Incomd fax 11203 81'[20 All Yeses S E1ectlon 5tattts 4 9pedllo use not rsoortilia ets C.n4att~,.d ~rtrstton File (CAFI. It the power of atbomay Is (or asped8a ux not reoordad on CAFE oheck thfa box, gee the icsatru~ctlona 1arlJne ~. 6pee1llo Uralr Not ReQOrded on GAF . • . ,1 ^ ;1 Ade authortaed. The reprenntatlves are authort~d to nueNe and Inspect canadgnttel ~x 4n~n end to perform angr and ai aotr that 1 (wv} can perform with rrbspeCt to the tax matters desal6ed an ono 0, for ommpla~ tlm u,tnp~y to +ttOrt ~ aGrwe~idt, eansanV, or olfter dQOumant+s.Ths adoee not tnchxie the pomr to receive raitind chedss (lee Ilno b beloWJ, the power to etr4edtuhl ~lrpothertrepteeentadve or edd addltlonel apn+entatlvey the power to afpn certain slums, or the power b mcecuta a roqueet for discioeuro of tax r~atume 4r -+vpm Iniiormatton to . tnb,a party. Sa u-* >;ne 5 irralr~rotlorN tar reo!e k~IvrtnaOon. Excopllarar Nr unenroged Tatum prep:rer carrot sign stry doaunent ibr a taxpayer and may only represent taxpaysra in limltod aldrattvns. gee Unenrolled Return Pr+eparer on pegq 1 d the jna~livna, An enn,Ifed actuary may only represent larrpayers to the +extort pnrilded In aectlon 10.0(cry ofTt!aaeury Depar4nant Clncolar Nn. z30 (Clrt:rfar23d~, M errrdled tetirer~renl ptao~ admWatrator may ongr represent tar¢raye-s bo the extort pnavided in section 10~{a} of CS~,hr ySO. Sro ttm ~ g fnetrt~lvrw rvr wars vn Irar matters par#rmnr. in most cases, Me atudetrt praetltloner's pares k and ry authoclty b ItrnRod (tor example, they may prUy pracdcs wrdvt the supervision or anath+er pdrdltlaner). Lill any sperrlQa eddlNorre or~deilone to the ao[a otherwise audarltar! to thft P of ~mey; .,.. .............._.:..-..._......_.... •. r...r• w. rr~ -rrr..rr. .....................~.............................................................. r.r.. r r.... N.. •r rv-r-. rrr. r........ ..•..•_.......n....r..r..r..r....e...o.~ ................._.._......_.._............................w .......o........w... •....s..r....~..... 6 Aeoelpt of rcfurrd ehedcsr ll you want to duthodza a ropt+eaontatllra n ran Ilf+e Q to recvi~e.13UT Nt7T TO E7lDOR9@ OR IrA9Fi, round ctxcla, Infllal hero end fist the ryatna al' Thal ~epra4enlatire below. Name of roQraFantativ4 t0 reCai++e refund cttie+eigs} Far Privacy Act and Paperwork Aeductlon Act Notke, ee~e page +t el the fnatru~fonw Cat Na 7~$oJ Form 288 I)i.r. t1~DOq Forrtr ~4e L~+, t3~ooq ~a 2 7 Notices and eornmuanledttena. Orig(nal ttia4cea 'and outer wrllben wmmunicattorre wlA bs :;ont to You z#nd ~ Ugpy t0 the 11rat . repr~eaertlaltve Qated on tans Z s it you also want the aecand repruentatlwa )!sled t4 r~avv a oaPY of nom and oomtrttrrtlcatiarss, oheck ihls bmc , } b It you dv not want arty notbea or communlcatbne siAt to yn~r repr~iintattvg(p), vhaok this box } ~ 8 Ralanttonlrsveoatldn at prtar pvw-er(aJ vt •tlvrrwy, The- itlit~ of this power o! >,ttorney sutomatlcally rrveknm art sluiler p4"Nat~a) vt altam~ey art file with the Jnternel RavaQ,ue Servltae fa the same taoc ntdttrs acrd years err perbds covered by this doourtrant. U yov dv n ` want to revoke a prior power of attorndy, ah~te hare. . YOU Mt~sT ATTACH A C>aPY OF ANY POWEA t7F A77ORNEY YOIJ WANT fit? AEIVIAIN IN EFFECT. S Sfptratun of iaJCpayar(a}. N a tax ntattar concerns s Joint rottrn, bath twiperd and wire meet d-gn ~ Jolrtt rapr~enGttlan b t+equnted, otherwise, sa>i 117q Irarirlictiona. if ai9ned by a txuparab olTiceri Pamir, 9~~nr t;z mallets Partner. axaau6or, receiver. adminfalratnr, ar trustee on behalf o!•1ha li~ayer, i oatlty That I haMe the autttarIty m e~cut~a this {arm qn b+hidt 4i itre 4~~r, y IF NOT SIG AN DATED, THi$ Pg1NER CP A7TCAlYEY WILL BE RETUANED. b ~_ Vice Prvs(dant Sipnatt~ - - - - r 1?a Title Gt etpp>lcabin) 811at: Masher ^ ^ ~ ^ ^ SactrriEy Swings SytitQms,lna. , Print Name PW Number !'riot rmrne o(~syat Born qne ~ if other ihan Individual -- ~~ -- Sinrtature Print Name PIN Numb T1t18 Qi spplJr~l~lt3J ' Declaration o! Represarttet]rre GtibHant 5tt+danla with a spade! ceder to runt ~;~ )rt Ibd Ldwr bcome Tarrpep-er CAriira or the 8tx~art! Tax G~tk Aroprem Rav~sla 1t; and Q, ~e the >hsuuctlorta for Part 1L tlindar penaltks of per~tiy,1 dreiarr lhot: • 1 am not txrrr+erttly under suspension or dfclorarrttent irgrtr babne the lntamd Aavarnre Service; • 1 acct swan ol'rsgutstlvrq ttvntained fi Clrcvlar 290 01 CFA, Pert 1CJ. sa amended, cortt:.mtng the pravtks of attorneys, oertfrted put~do acoountartis, anroUed epsrdt, irtral(+d actvadew and crtharrrc + 1 am authorized b reprraeortt tttr tarrp~gre~ lldentitied h fart 1 i~or the tax mnlta(sJ speciQad itueref srtd . • 1 am atte of Ore fisollowlnp: e Atlams~-a ~rrembet kt good ~rtdfng of !Fw bsr of its hipheat oovrt o~ thes Jurfadfclfa~n shown tufow b CertlAed tirbitc Aoopurtt'aAf~iuly qua~ilad to prsotlrx s, a aertl(led pub8c ercauntant In lh• (urisdiclfort iilbWn bslgva t: >:ru+oUed Apent•-tnroRed as an spent tinder 1M requ~anenia of Cirouisr 290. d Officer-s bona itde ofifeat of the taa~yrar'a ornanlmtfon. v Fort-'ilrn~e >~r+pbYe4-~a IbU-Urns employee of lha taxpayer, t Famrty t,Aorntti•r~ meter of !fro taxpayer's 1<rtrrtedls~e farttl<y Ifor axarnpGR sperrae, ~P+Inmk . 4roUwr, ar direr). 0 L=rrrvtled Aeluery-•enrodad sa sn actuary 6y the Jnlnt Bares far #re Errtpllmant o(~ ~g ~~ X242 (ttte wihorlly to prxicGoe before the tt>ternal Revenue Sarrtae 1a Orrrltd by section its Qt GirtrWar 730}. h Unenrollad R+4rm t3r~ipltr4r~Ria authvrily 1v prisctke batore Lhe ktterrtet Ae,rerwe 9arrka la tlmiDad t>)r Ctcr~ttar ~3Q, eecdvn 10.7(ca(1J~„ You tntat hwr pegpared fha return h queerton and the rett~t roust be under eteirninmltart by the !R0. Sr! tJneerbll.d Rstvrn Proparer on paps 1 of thta InaLudi>aral. k Studant~Attorre~y-spdgnr who nt~rraa petrnlaalan Eo pntttrfne 6~eldrs thri iR9 by vir~ua a! th•1r asat~ av a IoW atuctent undo section 10.7(4) of CUrarifr g3Q. t 5tadent CP/~-e~nadent who racoitres pamtlidan tq ph~vr-oa bebrr~ Ore If~B by virtiue of thdr sta'Dw es a CPA student under aocdon 10.7(4) of Ctircu{ar 200. r 17trolled Aetlr+emeM f~lart 11q~i~-srwfled e# a rstlnvnen! plan spent urxi~er the requtrerre:nis of t~rcrrlar Z!0 (ihe m,thotlq ~o practlce before me tntetnal Revenue 8anrlcs br 6mitod by eevtiort 10.3(e~. f IP TH113 D>ECL.AHATiQN QF Ei£PRESENTA'T1vE IS NOT Btt~NED AND DATED, THE PoYVEfl of Afi7'oANEY Will. Ei: RETUAi-IED, 5qe fhe Para ll h~sdvt:tltuta. D~slgttattotl•-hrsert above utter a- .Ittt•}adictlotl (state) Qr' Identflicection Slyneturo Date a PA _ f Farm 28118 paw, b-zooery METTE EVANS & WOODSIDE A PROFESSIONAL CORPORATION ATTORNRYlS AT LAW 3401 NORTH FRONT STREET AOWELL C. METTE MARY ALICE BUSBY P.O. BOX 5950 ROBERT MOORE KATHRYN L. SIMPSON HARRISBLTR(3, PA 17110-0950 MARK D. HIPP CHARLES B. ZWALLY THOMAS F. SMH)A RONALD L. FINCK PETER J. RESSLER PAULA J. LEICHT RANDALL G. HURST* JAMES A. ULSH TIMOTHY A HOY IRS NO. MELISSA L. VAN ECK JEFFREY A. ERNICO . HENRY W. VAN ECK 23-1983005 HEATHER Z. KELLY TELEPHONE FACSIMILE AARON T. DOMOTO (717) 232-5000 (717) 238-1818 TOLL FREE: 1-800-982-5097 HT TP://W W W.METTE. COM August 16, 2011 JAMES W. EVANS 1926-2008 * MARYLAND BAR Cumberland County Register of Wills/Clerk of VIA FEDERAL EXPRESS Courts Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 Re: The Mosher Family Irrevocable Trust Frank A. Mosher et al., Petitioners v. Paul M. Mosher, Respondent Cumberland County Orphans' Court No. 21-10-1069 Dear Register/Clerk: Enclosed you will find an original and three copies of a. Joint Stipulation of Facts to be filed to the above-referenced docket. Please file the original and time-stamp the copies for return to me in the enclosed, self-addressed, stamped envelope. As always, if you have any questions or concerns, please do not hesitate to contact me. Very truly yours, METTE, EVANS & WOODSIDE iC . ~~~ Ronald L. Finck RLF:njc Enclosures cc: The Honorable M. L. Ebert, Jr. (w/encl.) Bruce J. Warshawsky, Esquire (w/encl.) 541854v1 Page 1 of 1 From: (717) 232-5000 Ronald L. Finck, Esq. Mette, Evans & Woodside 3401 North Front St. P.O. Box 5950 Harrisburg, PA 17110 Origin ID: MDTA > E J11201104290225 Ship Date: 16AUG11 ActWgt 10.0 LB CAD: 138386011NET3180 SHIP T0: (7171240-6345 BILL SENDER Register of WiIIslClerk of Courts Cumberland County Courthouse 1 CURT HOUSE SQ CARLISLE, PA 17013 o..niiiiiiiiie~iiiii~iiiiiiiiiiiiiiiiiiii~iii ozo~ 79741757 4048 16 GTYA WED -17 AUG A4 PRIORITY OVERNIGHT DSR 17013 PA-US MDT iii i iiiiiiiiiiii i i i iiiii iiiiiiiiiiii After printing this label: 1. 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