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Home My WebLink About07-22-93 IN RE: ESTATE OF ROBERT M. MUMMA, Late of Cumberland County, Pennsylvania IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA No. 21-86-398 ORPHANS' COURT DIVISION RESPONSE AND JOINDER OF ROBERT M. MUMMA II AND GARY M. GILBERT TO PETITION OF GUARDIAN AD LITEM ROBERT M. FREY. ESOUIRE FOR RULE TO SHOW CAUSE Robert M. Mumma, II, individually, and Robert M. Mumma, II and Gary M. Gilbert, Co-Guardians of the Estates of Susan Mann Mumma and Marguerite Mann Mumma, by their attorneys, Charles E. Shields, III of Mechanicsburg, and Gerald K. Morrison, of Harrisburg, file the following Response and Joinder to the Petition for Rule to Show Cause previously filed herein by Robert M. Frey, Guardian ad litem: 1. Robert M. Mumma, II is an adult individual currently residing in Bowmansda1e, York county (Box 58), Pennsylvania, and he is a beneficiary under the will of his father, Robert M. Mumma, the Decedent herein. 2. Robert M. Mumma, II and Gary M. Gilbert are the court-appointed guardians of the Estates of Susan Mann Mumma and Marguerite Mann Mumma pursuant to the Order of the Honorable John T. Miller, of the Court of Common Pleas of York county, Pennsylvania, Orphans' Court Division, dated October 4, 1991. Susan Mann Mumma and Marguerite Mann Mumma are holders of 1907 shifting executory devises under the duly probated will of their grandfather, Robert M. Mumma, and are also interested parties in the administration of his estate. I. Joinder. 3. As more fully hereinafter set forth, Robert M. Mumma, II and Gary M. Gilbert join in the Petition of July 20, 1993 of Robert M. Frey, and seek the same relief sought therein. 4. Robert M. Mumma, II confirms that, should this Court grant the relief sought in the said Petition, he intends to withdraw to the extent agreed upon previously with the Guardian his revocation of his disclaimer and validate his earlier disclaimer, thereby confirming the interest of his minor children in assets of the Companies (Nine Ninety Nine, Inc. and Hummelstown Quarries, Inc.), and further confirms that, since this proceeding relates to a sale of the Companies, Robert M. Frey, Esquire is a proper person to bring the Petition. II. Additional Response 5. Robert M. Mumma, the Decedent herein, died testate on April 12, 1986, a resident of Cumberland County, Pennsylvania. 6. Robert M. Mumma's will, dated May 19, 1982, and the codicil thereto, dated October 12, 1984, were duly probated by the Register of Wills for Cumberland County, Pennsylvania, and -2- 1908 letters testamentary thereon were granted to Barbara McK. Mumma and Lisa M. Morgan, the executrices named therein. 7. At the time of the Decedent's death, he owned a fifty percent (50%) interest in a Pennsylvania corporation known as Lebanon Rock, Inc. ("Lebanon Rock"). The ownership interest was represented by 5,000 shares of common stock of such corporation, and it was valued for federal and state death tax purposes by the executrices of the Decedent's estate at $50,000.00. The remaining 5,000 shares of common stock of Lebanon Rock are owned by Robert M. Mumma, II, one of the Petitioners herein. 8. In addition to his ownership interest in Lebanon Rock, the Decedent also owned at the time of his death 700 shares of the outstanding common stock of a Pennsylvania corporation known as Pennsylvania Supply Company. By reason of such shares, the Decedent held a 98.31461% ownership interest in Pennsylvania Supply Company, which ownership interest was valued for federal and state death tax purposes by the executrices of the Decedent's estate at $9,144,473.00. The remaining shares of Pennsylvania Supply Company were owned, in equal portions, by the Decedent's four children, Linda M. Roth, Barbara M. McClure, Lisa M. Morgan (one of the executrices of the Decedent's estate), and Robert M. Mumma, II. Attached hereto, made a part hereof and marked as Exhibit "A" is a chart which depicts the ownership structure of the Decedent's family enterprise at the time of his death. -3- 1903 9. Pennsylvania Supply Company was essentially the holding corporation for a number of subsidiary corporations and, in order to take advantage of certain favorable tax provisions which were due to expire at the end of 1986, this corporation, and one of its subsidiary corporations, were liquidated by the executrices of the Decedent's estate. The executrices have represented in their First and Partial Account filed herein that the liquidations occurred on December 19, 1986. By reason of the liquidations, the Decedent's estate received, in addition to various other assets, 709.4238 shares of the outstanding common stock of a Pennsylvania corporation known as Nine Ninety Nine, Inc., as well as 900.0761 shares of the 10% preferred stock of such corporation. These shares represented 33.511% of the outstanding common stock of Nine Ninety Nine and 81.825% of the outstanding 10% preferred stock of Nine Ninety Nine. Decedent's estate also received shares of a new corporation formed by the estate know as Hummelstown Quarries, Inc. The total number of such shares equalled 615 and represented 98.08% of that corporation's outstanding common stock. 10. Since the receipt of the aforementioned common and preferred stock, the executrices of the Decedent's estate have transferred the same to themselves, in their capacities as trustees of the marital trust created under Article Seven of the Decedent's will. Following this transfer, Barbara McK. Mumma and Lisa M. Morgan have used a substantial portion of the aforesaid -4- ~910 shares to fund withdrawals by Barbara McK. Mumma under the Decedent's will. 11. By reason of the aforesaid distributions, the respective ownership interests of the Marital Trust and Barbara McK. Mumma have significantly changed from the date of the Decedent's death to the present. The change in the respective ownership interests may be depicted as follows: Nine Ninety Nine Shareholder Interest As Of Death Common 10% Preferred Interest At Present Common 10% Preferred Estate/ Marital Trust 33.511% 81. 825% 16.52% 52.54% Barbara McK. Mumma .5001% 1. 22119% 17.49% 30.59% Hummelstown Quarry Shareholder Interest As Of Death Interest at Present Estate/ Marital Trust 98.08% 79.74% Barbara McK. Mumma 0% 18.34% 12. utilization of the aforesaid plan of distribution has not only significantly depleted the Marital Trust's interests in valuable trust assets, it has needlessly caused the Decedent's estate to incur a capital gain of $1,170,000 and to pay capital gains tax in an amount in excess of $360,000. In addition, Robert M. Mumma, II believes, and therefore avers, that such plan has been used to contravene the Decedent's will which clearly -5- 1911 contemplates that the family business assets are to remain in trust during the lifetime of Barbara McK. Mumma and are ultimately to be distributed, in equal shares, to the Decedent's four children or their issue. Robert M. Mumma, II further believes, and therefore avers, that such withdrawals have been made with a view toward the ultimate sale of the family business to an outside purchaser, thereby enabling Mrs. Mumma to receive, outright and free of trust, the proceeds from such sale rather then being relegated to only an income interest therein as provided for under the marital trust. 13. In defense of their stock withdrawals, the executrices have asserted on various occasions before courts in Central Pennsylvania that, other than an unsuccessful attempt to sell the family business to an Irish group of investors in 1987 for approximately $51,000,000, the executrices have had no plans to sell the family business. Therefore, according to the executrices, Robert M. Mumma, II's assertions as to their motives for the stock withdrawals are erroneous. The executrices have further used their unwillingness to sell the family assets as a pretext for rejecting an offer of $35,000,000 made by Robert M. Mumma, II for the family business in the Fall of 1991 - Spring of 1992. 14. Notwithstanding the foregoing representations by the executrices of their intentions not to sell the family business, on July 12, 1993, the executrices sent a disclosure -6- 191~ document to Robert M. Mumma, II which explains that the executrices had undertaken to sell the family businesses to the same group of Irish investors as were involved in the 1987 bid. The sale price for the family businesses was $32,000,000 plus an assumption of unspecified liabilities. Robert M. Mumma, II was further informed by said document that the executrices had no intention of seeking the approval of this Court for such sale, and that such sale would become binding upon all shareholders of the family corporations within ten days thereof, on July 22, 1993, when a second meeting of shareholders will be held for purposes of ratifying the actions of executrices and Linda Mumma Roth, taken at a shareholder meeting held on July 9, 1993 without notice to Robert M. Mumma, II or his sister, Barbara M. McClure. A. Failure To Comply with The Statutory Reauirements of section 3356. 15. As part of the aforesaid sale to the Irish group of investors, the executrices have preliminarily undertaken a transfer of assets between the Marital Trust and a new corporation which, at the time of the sale and at the present time, is owned in substantial part by the executrices in their personal capacities. This arrangement called for the new corporation to acquire stock of Nine Ninety Nine and Hummelstown Quarries for $28,512,000. -7- 1913 16. The aforesaid transfer by the Marital Trust to the corporation owned individually by the executrices is intended to be a legally binding, substantive transfer, having legally recognized consequences. It is not intended to be a mere sham transaction constituting only a convenient conduit for effecutating the sale to the Irish group. Instead, the transaction was intentionally undertaken by the executrices because the transfer to the new corporation has, in the opinion of the executrices, substantive legal consequences with respect to the elimination of dissenting shareholder rights. In all respects, the transfer is intended to be a legally recognized, enforceable transfer under the Pennsylvania Business Corporation Law. It is a separate, distinct and recognized transaction for tax purposes, and it has been undertaken by the executrices with the full intention of having the transaction recognized at law as a substantive valid transfer. 17. Under section 3356 of the Pennsylvania Probate, Estates and Fiduciaries Code (20 Pa. C.S.A. S3356) as made applicable to trust estates by reason of Section 7133 of such Code, no personal representative or trustee, in his or her individual capacity, may bid for, purchase, or take by exchange, real or personal property belonging to the estate without approval of court. This section is directly applicable to the aforesaid transfer between the Marital Trust and the new corporation individually owned by the executrices. The -8- WM executrices' decision not to seek the approval of this Court with respect to the proposed sale of trust assets clearly contravenes the statutory requirements of section 3356. 18. Failure to comply with the statutory requirements of Section 3356 also jeopardizes the validity of the ultimate sale of assets to the Irish group in that it renders the purchaser's title to such assets voidable. WHEREFORE, Robert M. Mumma, II and Gary M. Gilbert respectfully join in the request of Robert M. Frey, Guardian ad litem that this Court issue a rule against Lisa M. Morgan and Barbara McK. Mumma, the executrices of the Estate of Robert M. Mumma and the trustees of the Marital Trust created under this Will, to show cause why, in accordance with section 3356 of the Probate, Estate, and Fiduciaries Code, and for the reasons set forth in the Petition of said Guardian, they should not be required to secure the approval of this Court with respect to the contemplated transfer of family business assets. B. This Court. Pursuant To section 3355 Of The Code Should Restrain The Proposed Sale To Ensure That It Is Fundamentallv Fair To The Shareholders Affected Therebv And In The Best Interests Of the Estate Beneficiaries 19. The averments of Paragraph 1 through 18 are incorporated hereby by reference. 20. As fiduciaries, the executrices are required to act strictly in accordance with the best interests of the estate and -9- 1915 trust beneficiaries and to maximize the value of the assets under their administration. This Court should not permit the executrices to circumvent the scrutiny of this Court with respect to a sale of assets that represent the principal source of value in the Decedent's estate and marital trust. Instead, the executrices should be required to document to the satisfaction of this Court that the proposed sale is in the best interests of the beneficiaries. Such action would also be in keeping with section 512 and 1712 of the Pennsylvania Business corporation Law which authorize enjoining a sale of a Pennsylvania corporation if such sale is fundamentally unfair to the shareholders thereof. 21. In the present instance, the fairness of the proposed transaction is subject to question in the following respects: (a) The proposed sale was undertaken without the knowledge or participation of the other family shareholders, and it was undertaken at a time when the executrices were actively leading all interested parties into believing that the family businesses were not for sale. (b) The proposed sales price is substantially below the original offer by the Irish investors in 1987 and substantially below the recent offer made by Robert M. Mumma, II. -10- 1916 (c) The proposed sale is being undertaken in a time frame that fails to afford all interested parties a sufficient opportunity to evaluate the price offered and to determine whether any other bidder might pay a higher price. No business purpose has been tendered to justify this inadequate evaluation period and, instead, it appears that the time frame was selected with a view toward thwarting opposition to the sale. (d) In the 1987 negotiations with the Irish group, the executrices made provisions for the continued employment of the executrices and/or their agents by the purchasers. The executrices have not provided sufficient information to determine whether similar agreements have been undertaken as part of the present transaction. (e) Sale is contrary to language of will which states decedent's intent to prefer his children to succeed to ownership of family businesses. Robert M. Mumma, II should be given opportunity to match the offer. 22. Restraint of the proposed sale would be in the best interests of the estate beneficiaries in that it would afford the Court an opportunity to evaluate the reasonableness of the proposed transaction and to determine the feasibility and wisdom -11- 1917 of opening the sale of the family businesses to a bid by Robert M. Mumma, II as well as by any interested party. 23. Restraint of the proposed sale would afford Robert M. Mumma, II an opportunity to evaluate the feasibility of formulating a matching or higher offer for the assets being sold by the executrices. Any such offer would be preferable to the current offer by the Irish group in the following respects: (al A sale to Robert M. Mumma, II would be in keeping with the testamentary wishes of the Decedent, as embodied in Article Thirteen of his will, that the family businesses remain in the control of his descendants. (bl A sale to Robert M. Mumma, II would result in the termination of many of the present litigation matters now pending between the executrices and Mr. Mumma in various courts throughout this Commonwealth; and it could well lead to an overall resolution of all matters now before those courts. A sale to the Irish group would leave all litigation matters intact and would simply relegate the parties to the same positions now adopted by them in such proceedings. (cl A sale to Robert M. Mumma, II does not carry with it the uncertainity now attendant to a sale to the Irish group. Any such sale to the -12- 1918 Irish group could be voided by the superior Court of Pennsylvania if that Court ultimately agrees with the positions adopted by Mr. Mumma in the appeal of Equity 66 of 1988. In that action, Mr. Mumma has asserted rights of first refusal over certain assets being sold by the executrices. If Mr. Mumma prevailed on his appeal, the sale to the Irish group could be voided and the estate could be subjected to suit over breach of its agreement with the Irish group. (d) A sale to Mr. Mumma would be effectuated pursuant to an Order of this Court thereby insulating the estate from any future claims that may be asserted by any party that the transaction is invalid or that the consideration was less than the value of the assets being conveyed. 24. Restraint of the proposed sale would afford this Court the opportunity to evaluate the propriety of the executrices' transfer of family stock to Barbara McR. Mumma in her individual capacity. As matters now stand, Mrs. Mumma will receive, outright and free of trust, approximately $5.48 million in sales proceeds that would have otherwise remained in the trust but for the stock withdrawals. If the stock ownership had remained as it was at the time of Robert M. Mumma, Sr.'s death, Barbara McR. Mumma would -13- 1919 have received $325,000.00 in proceeds from the sale of the Nine Ninety Nine stock and $0 in proceeds from the sale of the Hummelstown Quarries stock. As the stock ownership stands at present, Barbara McK. Mumma will personally receive approximately $5,299,000.00 from the sale of the Nine Ninety Nine stock, and approximately $516,500.00 from the sale of the Hummelstown Quarries stock. As averred previously, such withdrawals contravene the clearly expressed testamentary wishes of the Decedent. Additionally, the executrices have admitted that such withdrawals have caused the Decedent's estate to incur capital gains tax of $360,000 and, even more egregiously, were made at values grossly below the bid prices received by the executrices for such stock. Restraint of the proposed sale will enable the Court to determine whether the stock withdrawals by Mrs. Mumma, the under-valuation of such withdrawals and the ultimate sale of such stock to the Irish group are part of an overall plan by the executrices to divert estate assets to their own financial gain. 25. Although the proposed sale to the Irish group purportedly contains penalty provisions in the event that the sale is not consummated, if this Honorable Court determines that the proposed sale is fundamentally unfair to the shareholders of the corporations being sold, or that it is not in the best interests of the trust beneficiaries, the penalty provision, if it would ever be held to be legally valid, would not cause -14- 1920 liability to the trust but would be the personal liability of the executrices for engaging in a transaction that is in violation of their fiduciary duties. The result would be especially appertaining if this Court found that the executrices had incorporated the penalty provision into the proposed sale in order to stifle opposition to the sale and to frustrate Court review of the transaction. WHEREFORE, pursuant to section 3355 of the Probate, Estates and Fiduciaries Code, Robert M. Mumma, II and Gary M. Gilbert respectfully join in the request of Robert M. Frey, Guardian ad litem, that this Honorable Court issue a rule to Barbara McK. Mumma and Lisa Morgan, in their capacities as executrices of the Decedent's estate and trustees of the Marital Trust, to show cause why their proposed sale of trust assets should not be restrained, why an opportunity should not be given to others, including Robert M. Mumma, II, to make competitive offers, and why an opportunity should not be given to Robert M. Mumma, II to purchase the family business on terms equal to that of the best offer received. -15- 1921 Respectfully submitted, ~~.~~ Charles E. Shields, III Commonwealth National Bank Building Two West Main Street Mechanicsburg, PA 17055 (717) 766-0209 ~' raId K. orrison . ttorney I.D. No. 06876 Vartan Parc 30 North Third Street Harrisburg, PA 17101 (717) 237-4838 Attorneys for Robert M. Mumma, II and Gary M. Gilbert, Esquire -16- .10.<:).... ...J~";'" ] --- .. . . ~ " _c,. . . '. o -- < " ~.-.,. ..' "J ~. ~, . . - " "1 ,- 1 0 i 0 , <l'l 3 ~ ~. )( g " ~ '.? ~ '" -10> 0- ~S - -0-100 103 "(Jl % " ",0'" .. ,,""" 01 :J'!-.O)' 0-' ~ Ul;- a> (Jl- (fI021. ,'!' c:. O.C ~g -0 (/'1-' \l\-g ~~~ -< ..,' 1 '" <J\\1\ 1 .0 o ~ ~. o - ..o~ ,- \1\ ~"O r' :::r 0 % N~ 0 ~ 'Ul "" .Q :>> ~ 0 0 ,-.. 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G~- ..,ro- '" fi ::> "" ('b_-1~~ . t1\-' o Ic" 10-"0 . \O::>~ p.. -a;.-. .. 0>.., -"1 ... -l ""~ "\'I. lil. 21.- ~ -,0' ;~, \~ % ~~ \!l 21.-- .., g % -I 0 ~ ?i -J ::> "" N ~ (Jl P ':f '" ~ .., \1\ - r" '" ~ ~ '" ,- "" 0,' .0 v> , ~ "0 o -. Q o ~ .-' 3 c: 3 3 '" "" ,-.. '" 3 -< -l o vlO ~.~ o r' ?p 00 ,0' ~.r' 53 c: 3 3 a> ~ 0- - N r" ::> .0 - ., N~ ~ ~ <: :;) " \ " "P '-" ------ rn-o--\'P 0) ('\) Q.. ('\) (') :1 .., ~ ::r:>~o; '}~ -J;- ::.;.<o~ 0.",0'" ::>' a> -,,0 - a> 0", (fIo'" c: G "O~.- -0"'''' -<'J@' "v> <: o ~ . 0 -0 3 ~ \ \ \ \ \ I I I \ \ I I \ \ I \ \ \ , \ -- ~ c""'OO _-,..... '3 d. g 3 9.- -0 ~ 0"'- 1\1- ~ ? UlO 00 '0'0 00 00 ~ .., \Y. I , I \ \ , I I I \ \ I , * .-' * 1.923 IN RE: ESTATE OF ROBERT M. MUMMA, Late of Cumberland County, Pennsylvania IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA No. 21-86-398 ORPHANS' COURT DIVISION COMMONWEALTH OF PENNSYLVANIA SS. COUNTY OF DAUPHIN AFFIDAVIT Before me, the undersigned authority, personally appeared ROBERT M. MUMMA, II, Guardian of the Estates of Susan Mann Mumma and Marguerite Mann Mumma, who, being first duly sworn according to law, deposes and says, both personally and as Guardian, that all of the averments set forth in the foregoing document are true and correct according to the best of his knowledge or as he is informed and believes. rJW}1( ~ Robert M: Mumma, II Sworn to and subscr' this ~' day of N(lIaIialSeol ~ A Cros1Iey, Notary PlilIic HarrislJlJrg, DauphIn Counly MyCommiosion ExpIres Jan. 4, 1997 Ment>er, PerYlS}'Ivania- of Lv ~J\()'N\0 D{ f'o. 1it'\lo. 192/1 - 1)HH3 .04: 12PM FROM CGA L.I" ~FF I CE P002/002 :tN RB I TO 12330852 01.' 1!.OBBRT M. , Late of erlaod CQUllty; sylvania IN THI! COURT OF COMMON fLlWl OF CUMBEIW\ND COl.1lfI'Y" . PENNSYLVANIA I I No. 21-86-3j8 I I ORPHANS I COl1R.T DrvISION VERIFICATION I. ry N. Gilbert, Co-Guarl!illJ1 of the Bstat:es of Susan Mann JQ\.U\1Ina II Marguerite Nann MuImIa, v.rify that the BtlLt&ll\liUlts be foregoing docuznect are true and correct to the best of my wledge and !)el isf. I \IlldSaltll.Ild that the sta.tement15 co tained herein are made subject to the penalties provided by 1 Pa, C.B.A i 4904 (relating to \Ulsworn talsification to authoritiesl. ~~ ~~QmrdiaA Dated: July 20, 1993 , 1925 CERTIFICATE OF SERVICE I, Sarah M. Bricknell, do hereby certify that on July 21, 1993, I caused to be served copies of the foregoing RESPONSE AND JOINDER, by depositing said copies in first class mail, postage prepaid, in Harrisburg, Pennsylvania, addressed to the following: william F. Martson, Esquire Martson, Deardorff, Williams & otto 10 East High Street Carlisle, PA 17013 Richard W. Stevenson, Esquire P. O. Box 1166 Harrisburg, PA 17108 Robert G. Frey, Esquire 5 South Hanover Street Carlisle, PA 17013 (By Hand Delivery) Marc J. Sonnenfeld, Esquire Morgan, Lewis & Bockius 2000 One Logan Square Philadelphia, PA 19103-6993 John H. Young, Esquire Porter, Wright, Morris & Arthur 1233 20th street, NW Washington, DC 20036-2395 ~M..~ Sarah M. Bricknell 1926 L "" ---- :s 'II f:! "'0 - i. " ~ ~ 0 ~ :i'i g6 n g (') 0 . cl ~ " t ~ W 0.. \;: l8~!~ i ; a ~ 11) tD 0 1 ii " ~ ~ & 4. l1. :;0. F ~ ~ {; 10 "~ ~ ::> ~ 0 "0 " t i\ ) l1' ','''\\ .' .~ . . IN THE EST ATE 'OF ROBERT M. MUMMA, DECEASED IN TIIE COURT OF COMMON PLEAS OF CUMBERLAND COUNfY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-86-398 PRELIMINARY IN.nJNCTION And now, this day of July, 1993, upon consideration of the verified Petition and Exhibits attached thereto, and the arguments of counsel in support thereof, it is hereby ORDERED AND DECREED: J} That the Executors of Estate of Robert M. Mumma, and the Trustees of the Trust created under the Last Will and Testament of Robert M. Mumma, deceased, are hereby Enjoined, Restrained, and Prevented, preliminarily until the hearing scheduled herein from entereing into any contract for the sale of any interest of the Estate or the aforesaid Trusts in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. That this Injunction shall continue in full force and effect pending a Hearing scheduled for , 1993 at Cumberland County Courthouse, Carlisle, Pennsylvania; That no bond shall be required to be posted by Petitioner. By the Court: m. in Courtroom No. P.J. 1927 -:r= IN THE ESTATE OF ROBERT M. MUMMA, DECEASED IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-86-398 RULE TO SHOW CAUSE And now, this day of July, 1993, a Rule is granted upon all persons interested in the .?) " Estate of Robert M. Mumma, Deceased, to show cause why 1. The sale of shares of stock in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. should not be subject to approval by the Orphans' Court of Cumberland County. 2. Opportunity should not be given to others, including Robert M. Mumma, II, to make competitive offers to purchase the shares of stock in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. 3. Opportunity should not be given to Robert M. Mumma, II to purchase the shares of stock in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. on terms equal to that of the best offer received. By the Court: P.J. 1928 . IN THE EST ATE OF ROBERT M. MUMMA, DECEASED IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA ORPHANS' COURT DIVISION NO. 21-86-398 PETITION FOR PRELIMINARY INJUNCTION AND RlJLE TO SHOW CAUSE BY GUARDIAN AD LITEM ~ ':,/ AND NOW this day of July, 1993, comes Robert M. Frey, the Guardian ad litem for the minor children of Robert M. Mumma, II, who respectfully makes the following statement in support of his request for the issuance of a rule on the parties in the above captioned mattet: 1. Petitioner is Robert M. Frey, Esquire, an adult individual of 5 South Hanover Street, Carlisle, Cumberland County, Pennsylvania. 2. By Order of Court dated December 29, 1988, a copy of which Order and the Underlying Petition is attached hereto and incorporated herein as Exhibit "A", Petitioner was appointed Guardian ad litem "for the minor persons interested in the estate of Robert M. Mumma, deceased,...in all rrtatters related to the sale of Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc....and in any further or other proceedings in the Court of Common Pleas of Cumberland County or the Court of Common Pleas of Dauphin County, Pennsylvania relating to or arising out of such matters." 3. The above-mentioned Order was entered on Petition filed by Barbara Mck. Mumma and Lisa M. Morgan, the Executors and Trustees under the Will of Robert M. Mumma, deceased. This Petition was based on desire of the Executors and Trustees, as set forth in the Petition, to confIrm their authority to sell two assets of the Estate, namely the shares of stock in Nine Ninety- Nine, Inc. and Hummelstown Quarries, Inc., hereinafter referred to as "the Companies", which assets are extremely unique and nearly impossible to replace once sold. 4. The Executors and Trustees further stated in Paragraph 5 of their Petition that Robert M. Mumma, II had fIled a Disclaimer with respect to the trusts under Atticles Seventh and Eighth of the Decedent's Will, thereby creating an interest in Robert M. Mumma, II's two minor children in the Estate and Trusts, including the shares of the Companies. 5. Based on the allegations in the above-mentioned Petition, Petitioner was appointed 1929 . ,~ ',' Guardian ad litem as aforesaid. 6. Since the entry of the above-referenced Order, Petitioner has acted as Guardian ad litem in connection with a proposed sale of the Companies. 7. Subsequent to the entry of the above-referenced Order, Robert M. Mumma, n, filed a revocation of the above-mentioned disclaimer which disclaimer created the interests of the minors represented by Petitioner in the Companies. 8. Because the revocation of the disclaimer by Robert M. Mumma, n, would remove his minor children as interested parties in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc., Petitioner has opposed the revocation as Guardian ad litem exceptions filed with the Clerk of the Orphans' Court of Cumberland County. These exceptions are currently pending before the Orphans' Court of Cumberland County 9. Robert M. Mumma, II, by his joinder in this Petition, which Joinder is to be filed contemporaneously herewith, confrrms his intention to withdraw his revocation of 'his disclaimer and to confirm the earlier disclaimer, thereby confmning the interest of his minor children in assets of the Companies and to further confrrm that Petitioner is the proper person to bring the within Petition on behalf of his minor children. 10. Petitioner has been made aware by counsel for Robert M. Mumma, n, that Executors and Trustees have entered into further negotiations for the sale of the Companies. Petitioner has received no notification from the Executors and Trustees, but has been supplied with a copy of the shareholders' notice received by Robert M. Mumma, n. A copy of this notice is attached hereto and incorporated herein by reference as Exhibit "B". 11. Petitioner has been informed that the contemplated sale of the Companies is for substantially the same assets and to the same purchasers as those for which Petitioner was appointed to represent the minor children. 12. Petitioner has been informed that the contemplated sale is for a total consideration approximately $10,000,000.00 less than the consideration originally contemplated. 13. Petitioner has been informed that the proposed sale additionally contemplates the transfer of assets to the Executrices and Trustees in their individual capacities, and does not contemplate a similar transfer to the minor children of Robert M. Mumma, n. 1930 .;;r 14. Petitioner is unaware of any aspect of this sale having been submitted to the Orphans' Court for approval as was done with the prior proposed transaction. 15. Petitioner is unaware of any effortS on behalf of the Executrices and Trustees to obtain a better price for the sale of the said companies or to obtain competitive bids from Robert M. Mumma, II, who had previously expressed an interest in the purchase of the companies. 16. Petitioner has been informed that funds to complete the sale for the Companies have been paid into escrow and that the transaction is expected to be formally approved by the shareholders of the companies on Thursday, July 22,1993. 17. Petitioner believes that it would be in the best interests of the parties in the above- captioned matter, and in particular, the minor children of Robert M. Mumma, II, to have the terms of sale, and, in particular, the reason for the substantial decrease in the consideration, be presented to and approved by the Orphans' Court of Cumberland County as had been contemplated with the prior proposed sale. 18. Petitioner further believes that an opportunity should be given to other interested purchasers to make competitive offers of purchase. 19. Petitioner believes that an opportunity should be given to Robert M Mumma, II to purchase the Companies on equal terms to that of the best offer to purchase. Petitioner believes that a purchase by Robert M. Mumma, II on equal terms to that of the best offer would further benefit the minor children of Robert M. Mumma, II as they would be potential future heirs or legatees of his interest in the Companies. Additionally, such a purchase would further the expressed desire of Robert M. Mumma, deceased, that ownership of the Companies continue within the family, if possible. 20. Petitioner believes that a Preliminary Injunction is necessary to protect the interests of the minor children of Robert M. Mumma, II and to preserve the status quo. The sale is imminent and Petitioner is unable to evaluate the terms of the transaction as he has been provided no notice directly from the Executors and Trustees and has received only partial information on Friday, July 16, 1993 from counsel for Robert M. Mumma, II. Such time is not sufficient to adequately review the proposal. 1931 ~ WHEREFORE, Petitioner requests your Honorable Court grant a Rule upon all persons interested in the Estate of Roben M. Mumma, Deceased, to show cause why 1. The sale of shares of stock in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. should not be subject to approval by the Orphans' Court of Cumberland County. 2. Opponunity should not be given to others, including Roben M. Mumma, II, to make competitive offers to purchase the shares of stock in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. 3. Opponunity should not be given to Roben M. Mumma, II to purchase the shares of stock in Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. on terms equal to that of the best offer received. Petitioner further requests that a Preliminary Injunction be granted restraining the Executors and Trustees from taking further action in regard to the sale of the shares of stock in Nine Ninety- Nine, Inc. and Hummelstown Quarries, Inc. until such time as the Orphans' Court of Cumberland County has had an opponunity to review the merits of the within Petition. Respectfully submitted, Frey & Tiley bY:_~ ~ Robert G. Frey 5 South Hanover Street Carlisle, Pennsylvania 17013 (717) 243-5838 '~ C I verify that the statements made herein are true and correct and understand that false statements herein are made subject to the penalties of 18 Pa. ,C. S. A. ~ 4904 relating to unsworn falsification to authorities. .-7L Dated: July ^ T993 ~~.hr Roben M. Frey 1932 CONFORMED COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION No. 21-86-398 ESTATE OF ROBERT M. MUMMA, Deceased DECREE AND NOW, this }-.9thday of (J~ ' 19lfY, upon consideration of the annexed Petition, ~m. 1~1~' , is hereby appointed Guardian ad Litem for the minor persons interested in the estate of Robert M. Mumma, ~ deceased, with authorization to represent said minor persons in all matters related to the sale of Nine Ninety-Nine, Inc. and Hummelstown Quarries, Inc. and the actions for Declaratory Judgment and Other Relief pertaining thereto, which actions are now pending before this Court, and in any further or other proceedings in the Court of Common Pleas of Cumberland County or the Court of Common Pleas of Dauphin County, Pennsylvania relating to or arising out of such & matters. By the Court: ~/I~[lL1 r. J. 1933 nH!BfT "A" .. COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION No. 21-86-398 ESTATE OF ROBERT M. MUMMA, Deceased PETITION FOR APPOINTMENT OF GUARDIAN AD LITEM To the Honorable Judges of said Court: The Petition of Barbara McK. Mumma and Lisa M. Morgan, Executors of and Trustees under the Will of Robert M. Mumma, deceased, respectfully represents that: J) 1. Robert M. Mumma (the "decedent") died on April 12, 1986, a resident of Cumberland County, Pennsylvania, leaving a last will and Testament dated May 19, 1982 and a Codicil thereto dated October 12, 1984. Letters Testamentary on decedent's estate were granted to petitioners by the Register of wills of Cumberland County on June 5, 1986. it Copies of decedent's will and Codicil are attached hereto as Exhibit "A". 2. Decedent's will provides that the bulk of his estate, after specific bequests of tangible personal property, be held in two trusts for the benefit of his wife, Barbara McK. Mumma, during her lifetime, a Marital Trust under Article SEVENTH and a Residuary Trust under Article EIGHTH. 193,1 rs<m .i.....,. < c.. ,- ';;:."'".iH;; '-Ii 3. Articles SEVENTH and EIGHTH of the Will further provide that upon the death of decedent's wife, the remaining principal of the Marital and Residuary Trusts is to be distributed to decedent's issue, per stirpes, or, if all of decedent's issue are then deceased, to the POlyclinic Medical Center of Harrisburg, pennsylvania. 4. Decedent was survived by four children, Robert M. Mumma, II, Barbara M. McClure, Linda M. Roth and Lisa M. Morgan, all of whom are of age and sui juris. ~ 5. Decedent's son, Robert M. Mumma, II, by a Disclaimer filed with this court on January 12, 1987, disclaimed his entire interest in the Trusts under Articles SEVENTH and EIGHTH of decedent's Will. Robert M. Mumma, II has two minor children, Robert M. Mumma, III (born 5/12/82) and Susan Mann Mumma (born 6/19/87), who will receive the shares of the Trusts which would have otherwise been distributed to & Robert. A copy of said DiSClaimer is attached hereto as Exhibit "B". 6. Petitioners, as the Executors of and Trustees under decedent's will (the "Estate"), are the largest shareholders in a private family company which decedent personally managed during his lifetime, Nine Ninety-Nine, Inc. ("999") . The approximate shareholdings (based on voting power) of 999 are as follows: -2- 1935 EXHIBIT" A" Estate Barbara MeR. Mumma Robert M. Mumma, II Barbara M. McClure Linda M. Roth Lisa M. Morgan 35.95% 15.45% 11. 46% 11. 39% 11. 39% 14.36% The ownership of the equity in 999 approximates the distribution of the voting power. 7. The Estate is also the largest shareholder of a related company, Hummelstown Quarries, Inc. ("Hummelstown"). The approximate percentage shareholdings of Hummelstown are as follows: JI Estate Robert M. Mumma, II Barbara M. McClure Linda M. Roth Lisa M. Morgan 98.32% .42% .42% .42% .42% 8. Article THIRTEENTH of decedent's will provides as follows: €. Notwithstanding the powers herein otherwise given, I direct that my stock in privately held corporations, supervised and administered by me as the Executive or operating officer prior to my decease or my stock in privately held corporations which otherwise is owned by me at my decease be not sold unless all of my trustees, and particularly my individual trustee or trustees, shall agree in writing that such stock shall be sold. It is my desire that if expedient and possible, the businesses which I have personally directed during my lifetime and of which I have had an interest be continued for the benefit of and under the management and control of my immediate family. -3- ,;X~'HAf; .J' 1936 9. An offer has been made by a publicly traded overseas entity (the HBuyerH) to purchase the stock of 999 and Hummelstown and certain other related real estate owned by the Estate and Mumma family members. 10. Petitioners agree that it is in the best interests of the Estate that 999 and Hummelstown be sold to Buyer. Two of the other five shareholders of 999 (Barbara MeR. Mumma and Lisa M. Morgan) and one of the other four shareholders of Hummelstown (Lisa M. Morgan) (the Hother selling shareholdersH) have likewise agreed to the sale of 999 ~ and Hummelstown and to sell their stock to Buyer. 11. It is possible that a shareholder (a "nonselling shareholderH) may think that 999 and Hummelstown should be retained within the Mumma family pursuant to Article THIRTEENTH of decedent's Will and thus will not agree to the sale to Buyer and will not join the Estate and the other selling & shareholders in selling his or her stock to Buyer. 12. petitioners therefore wish to confirm their authority to sell 999 and Hummelstown and to submit to voluntary judicial arbitration in the Court of Common Pleas of Cumberland County, Pennsylvania or the Court of Common Pleas of Dauphin County, pennsylvania any or all issues which a -4- 1937 ~J-'I"' nonselling shareholder wishes to raise in connection with the sale of his or her interest in 999 and Hummelstown to Buyer. 13. Petitioners have filed contemporaneously herewith actions for Declaratory Judgment and Other Relief asking this Court to construe Article THIRTEENTH of decedent's will to find that it does not bar them from selling the Estate's shares of 999 and Hummelstown to Buyer and to authorize the Estate to submit any issues which a nonselling shareholder may wish to raise in connection with the sale of his or her interest in 999 or Hummelstown to voluntary judicial , arbitration in the Court of Common Pleas of Cumberland county, Pennsylvania, or the Court of Common Pleas of Dauphin County, Pennsylvania, pursuant to 42 Pa.C.S. ~ 7362. WHEREFORE, Petitioners respectfully request the Court to appoint, pursuant to Supreme Court Orphans' Court Rule 12.4, q ~ a Guardian ad Litem to represent the interests of Robert M. Mumma, III and Susan Mann Mumma, the minors interested in the estate of Robert M. Mumma, deceased, with authorization to represent said minors in all matters relating to the sale of 999 and Hummelstown and the actions for Declaratory Judgment and Other Relief pertaining thereto, which actions are now pending before this Court and in any further or other proceedings in the Court of Common Pleas of Cumberland County -5- 1938 EXHIBIT ,. A" or the Court of Common Pleas of Dauphin County, Pennsylvania relating to or arising out of such matters. Respectfully submitted, Barbara MeR. Mumma Barbara MeK. Mumma Lisa M. Morgan Lisa M. Morgan ~ William E. Zeiter William E. Zeiter Joseph A. O'Connor, Jr. MORGAN, LEWIS & BOCKIUS 2000 One Logan Square philadelphia, PA 19103 Attorneys for Petitioners .... q; 1939 -6- ,~~('~'1J~Hn l( JUU-a5-19s..3 14:25 FROM b~:h.lngersol-FRX R TO 12435441' P.03/17 ) :) NOTJ:CB OF SmuumOLDER ACTXONS RIGHT TO BXBRCJ:SB DJ:SS~RS RJ:GHTS AND CALL OF SPBCJ:AL MBETXNGS OF SHAREHOLDERS NJ:NB N:INB'l'Y -NJ:NB, J:NC. BOMMELSTOWN (jUARRXES, mc. D ) To: Barbara Mumma McClure and Robert M. Mumma II as Shareholders of NINE NINETY-NINE, INC. and HtlMMELSTOWN QUARRIES, INC. ( I ) .~ Notice of Shareholder Act:ions Adopting plans of Division by Writ:ten Consent and Related Right to Exercise Dissenters Rights ) Notice is hereby given pursuant to 15 Pa.C.S. S 1766(e) that on July 9, ~993 there were filed with the secretary of each of Nine Ninety-Nine, Inc. ("999") and Hummelstown Quarries, Inc. ("HQJ:") written shareholder consents under 15 Pa.C.S. S 1766(b) to the following corporate action (the "action") of shareholders of record of 999. and HQI, respectively, of each class who would have been entitled on that date to cast the minilllUlll number of votes that would be necessary to authorize the action by a class vote at a meeting of shareholders of the affected corporation at which all shareholders entitled to vote thereon of all classes were present and voting by classes: 1. Adoption by the shareholders of 999 of a plan of division under 15 Pa.C.S. Subchapter 19D <relating to division) as set forth in Annex A hereto (the "999 Plan of Division"). ) 1) lit 2. Adoption by the shareholders of HOI of a plan of division under 15 Pa.C.S. Subchapter 19D as set forth in Annex B hereto (the "HOl Plan of Division") . Under the pennsylvania Business Corporation Law of 1988 no other or further action by the shareholders of 999 or HOI is necessary in order to permit the filing in the Pennsylvania Department of State of Articles of Division with respect to the 999 Plan of Division and the HQl Plan of. Division (collectively the "Plans" and individually a "plan"), and 999 and HQI expect to take corporate action in reliance thereon. However, as indicated in Part II of this notice, 999 and HQI will also hold shareholder I -1- 1940 , !EXHIP''1 "p.C JUL-i6-1993 14:26 FROM Buch.lngersol-FRX R TO 12436441 P.04/17 , ) ~ meetings on Thursday, July 22, 1993, to ratify the actions taken on July 9, 1993 by written consent with respect to the Plans. The purpose of the actions described above is to facilitate the sale of a line of business (the "Pennsy Supply Businesses") pursuant to a certain subscription agreement between the majority shareholders of 999 and HQt and CRH pIc dated as of July 8, 1993, as more fully set forth in a copy of the subscription agreement as set forth in Annex C hereto (the "Subscription Agreement"). Schedules and Exhibits to the Subscription Agreement as executed may be examined by any shareholder of 999 or HQI, or by her or his attorney-in-fact, during the usual hours of business at the offices of Stradley, Ronon, Stevens & Young, 2600 One Commerce Square, Philadelphia, PA 1910347098, Attention: David R. Landrey, Esquire. (the .Service Address"). Any written Consents and Joinders to the Subscription Agreement, as contemplated by the 999 Plan of Division and the HQI Plan of Division ("Consents and Joinders"), must be delivered to the respective corporations at the Service Address not later than 90 days after the date of this notice. "0 D iJ) ;) t You are entitled to exeroise dissenters rights with respect to either or both of the Plans under 15 Pa.C.S. S 1952 (d) (1) if you oomply with the requirements of 15 Pa.C.S. Subchapter lSD (relating to dissenters rights). A copy of 15 Pa.C.S. Subohapters 15D and ~9D (relating to division) is set forth in Annex D. bereto... .No dissenting shareholder notice of intention to dissent from adoption of the Plans by written consent is required under IS Pa.C.S. S 1574. This notice constitutes the notice of adoption of the Plans under 15 Pa.C.S. S 1575. Shareholders desiring to exercise their dissenters rights with respect to either or both of the Plans must send a written demand for payment( on the appropriate form set forth in Annex E-l or E-2 hereto ("Demand for Payment Form"), together with certificates for tbe affected shares of 999 or HQI, or both, to D-E Distribution Corporation. (in tbe case of 999 shares) or G-A-T Distribution Corporation (in the case of HQI shares), in each oase at the Service Address. In the event that a shareholder desires to exeroise dissenters rights with respect to either or both Plans, the sbareholder must deposit at the Service Address the documents referred to in the preceding sentence, not later than 90 days after the date of this notice. '" .J 1) It An Information Statement explaining the general effect of the plans and related transactions is set forth in Annex F hereto. I 19,:11 -2- . ~HIBIT "a" JUL-16-199~ 14:27 FROM Buc~.Ingersol-FAX A TO 12436441 P.05/17 ) ) ) ) ) ) II Notice of Special Meeti~gs of Shareholders to be held Thursday, ~ly 22, 1993 , Notice is hereby given that the boards of directors of 999 and HQI have called special meetings of shareholders of the respective corporations to be held at 10:30 a.m. (in the case of 999) and 11:00 a.m. (in the case of HQI) at 1043 MUmma Road, Wormleysburg, PA 17043, on Thursday, July 22, 1993 to consider and take action on the following matters: 1. Ratification by the shareholders of 999 of the adoption by the shareholders of 999 by written consent of the 999 Plan of Division. 2. Ratification by the shareholders of HQI of the adoption by the shareholders of HQl by written consent of the HQI Plan of Division. 3. Adoption or approval by the shareholders of 999 or HOl, or both, of any corporate action necessary or desirable to facilitate the transactions contemplated by the Subscription Agreement. In each caSe shareholders of record on July 8, 1993 are entitled to notice of and to vote at the meetings. You are entitled to exercise dissenters rights with respect to either or both of the Plans under 15 Pa.C.S. 5 1952 (d) (1) if you comply with the requirements of 15 Pa.C.S. Subchapter 150. The procedures for the exercise of dissenters rights in the case of an actual meeting of shareholders are different than those described in Part I of this notice in the case of shareholder action taken without a meeting. A shareholder who wishes to dissent and obtain payment of the fair value of her or his shares with respect to action taken on the Plans at either or both of the July 22, 1993 meetings must file with the corporation, in each case at the Service Address, prior to the vote at the meeting or meetings, a written notice of intention to demand that she or he be paid the fair value for her or his shares if the proposed action is effectuated pursuant to action taken at the meeting or meetings ("Notice of Intention to Dissent"l, must effect no change in the beneficial ownership of her or his shares from the date of such filing continuously through the effective date of the proposed action or actions and must refrain from voting her or his shares in approval of suoh aotion or actions. A dissenter who fails in any respect will not -3- 19.12 ij:"-'<.I'IS!l "fj' JUL-~6-199J 14:27 FROM Bw,_~. Ingerso!-FAX A TO 124~6441' P.06/17 ) J acquire any right to payment of the fair value of her or his shares under lS Pa.C.S. Subchapter 15D. ) Neither a proxy nor a vote against the proposed corporate action nor the filing of a Demand for Payment Form under Part I of this notice will constitute the required written notice for the PurP<?ses of this Part II. For example, Iihareholc1eZ's who iDtend to effec~iv.ly dissent fZ'OD actioD taken by both 999 and HQ:I should Clomply with both PaZ'ts :I and XX of this Dotice with Z'espect to both corpora~ion., and should file DeJlla%:ld foZ' Payment :rOnlS anc1 No~icell of ZDten~iOD to Dissent with respeClt to both 999 and HQ:I. Following approval of the plans at the meetings, 999 and HQI will mail a further notice to all shareholders who filed a Notice or Notices of Intention to Dissent and who refrained from voting in favor of the proposed action, which further notice will be in Substantially the form of Part I of this notice, and will set forth the same final date for the filing of Demand for Payment Forms and accompanying documentation. :) ) .~ III General J In the event. any shareholders effectively exercise their dissenters rights with respect to either or both of the Plans, neither corporation intends to file on its own initiative an application in the Court of Common Pleas of Cumberland County, Pennsylvania, the court having jurisdiction of such proceedings, requesting that the fair value of the affected shares be determined or to make any payment of estimated fair value of shares to dissenting shareholders prior to final judgment in any dissenters rights proceeding. Each affected shareholder should confer with her or his own legal or other advisors with respect to the matters to which this notice relates. a it I By Order of the Boards of Directors Lisa M. Morgan Secretary July 9, 1993 It 19,13 -4- J 'l;?f:~,'~fl;Wl" ') ~ i) 1) ~ ""'.' " J iIt . t t , . . JUL-16-1993 14:28 FROM Buch.lngersol-FRX R TO 12436441 P.07/17 ANNEX A PI.AN OF D:rvJ:SJ:ON of NJ:NB NJ:NBTY-NJ:NB, :mC. This Plan of Division (the -Plan") is proposed to be adopted by NINE NINETY-NINE, INC., a Pennsylvania corporation ("999"), this 9th day of July, 1993, pursuant to the applicable provisions of the Pennsylvania Business Corporation Law ("BeL"). RECITALS 1. 999 owns of record and beneficially all of the issued and outstanding capital stock of Penney Supply, Inc., a Pennsylvania corporation ("Pennsy"). 2. As of the date hereof, pennsy owns of reoord and beneficially all of the issued and outstanding capital stock of Kim & Kin, Inc., a Pennsylvania oorporation (-K&K") and Elco Concrete Products, Inc., a Pennsylvania corporation ("Blco-). On or prior to the date hereof, Eloo has dividended and will transfer to pennsy on the Bffective Date (as defined below) all of Elco's right,title and interest in and to certain aocounts receivable due from affiliates. On or prior to the date hereof, Penney has also declared a dividend of (i) all right, title and interest of Pennsy in and to a certain tract of land known as Lot #10 in Lemoyne Borough, CUmberland County, Pennsylvania, (ii) all of the issued and outstanding stock of K&K, (iii) all right, title and interest in and to the accounts receivable due from affiliates dividended to pennsy from Blco, and (iv) all right, title and interest in and to certain accounts receivable due from affiliates, payable in each case to 999 as the sole shareholder of Penney on the Effective Date. 3. The authorized capital stock of 999 consists of (i) 500 shares of at Preferred Stock, par value $1200.00 per share ("at Preferred"), (ii) 1600 shares of lot Convertible Preferred Stock, par value $600.00 per share ("Convertible preferred"), and (iii) 10,000 shares of Common Stock, par value $100.00 per share ("Common Stock"). The issued and outstanding capital stook of 999 consists of (a) 245 shares of a% Preferred, (b) 1,100 shares of Convertible Preferred, and (c) 2,117 shares of Common Stock, each share of each such class being entitled to one vote per share. The issued and outstanding stock of 999 is presently owned of re~ord as set forth on Schedule 3 hereto. 194/1: A-l EXHIBIT "8" ) 'J) , , ;) p ;) it . . . . JUL-!6-1993 14:29 FROM Bu~h.lngersol-FAX A TO 12436441 P.08/17 4. All of ~he shareholders of record of 999 on July a, 1993, the date (the "Record Date") fixed by the Board of Directors of 999 for the purposes of action by the shareholders of 999 on this Plan of Division, who are entitled to vote, except Robert M. Mumma II and Barbara M. McClure (collectively, with their successors in interest, the "Minority Group"), held of record on such Record Date all shares of at Preferred, 1006.6915 shares of Convertible Preferred and 1417.456 shares of Common Stock, in each case then outstanding, representing in eXCess of 77~ of all of the votes entitled to be cast by shareholders of record of 999 on the Record Date and as of such date, representing a majority of the votes which each class of outstanding shares of 999 would be entitled to cast if voting as a class. The shareholders of record of 999 entitled to vote on the Record Date other than the Minority Group are sometimes referred to herein ae the "Majority Group". The Minority Group and the Majority Group are sometimes referred to herein collectively as the "Shareholders", and individually as a "Shareholder". 5. In order to facilitate the transactions contemplated by this Plan, certain of the Majority Group have caused to be incorporated as a Pennsylvania corporation, Kodie Acquisition Corp. ("Kodie"). Pursuant to a Subscription Agreement dated the date of this Plan (the "999 Subscription Agreement" ), .Kodie has agreed to purchase from 999, 1, 000 shares of the authorized but unissued shares of Common stock of 999 for a total subscription. price of $25,696,000. Such shares shall be deemed automatically issued and outstanding on the Effective Date upon releaSe to 999 from escrow of the subscription price payable under the 999 Subscription Agreement. . 6. Prior to the Effective Date, the Majority Group, Kodie, and CRH plc, a Republic of Ireland corporation ("Buyer"), will have entered into a Subscription Agreement For The Acquisition Of All OUtstanding Stock Of Kodie Acquisition Corp. dated as of July 8, 1993 (the 'Sale Agreement"), which Sale Agreement contemplates, inter AliA, (i) the acquisition by Buyer of all of the issued and outstanding stock of Kodie after redemption of the stock interest of the existing shareholders therein, and (ii) pursuant to the 999 Subscription Agreement, the acquisition by Kodie of 1,000 shares of Common Stock of 999 which will constitute all of the issued and outstanding Common Stock of 999 on the Effective Date. Upon consummation of these transactions, Buyer shall have indirectly acquired all of the assets of 999, subject to all of the liabilities of 999, except for certain assets and liabilities of 999 included within, but not necessarily comprising all of, the Nonbusiness Assets and Nonbusiness Liabilities as defined in the Sale Agreement (the Nonbusiness Assets owned by 999 and the Nonbusiness Liabilities of 999 are referred to in this Plan as the "999 NOnbusiness A-2 'i"iryf~i~!' "f 1915 JUL-16-199~ 14:29 FROM b, n. lngersol-FRX R TO 12436441. P.09/17 ) >>'f! Assets" and the "999 Nonbusiness Liabilities", respectively}, and except for certain other liabilities as provided in this Plan. 7. In connection with its efforts to sell 999, the Majority Group has consistently endeavored to sell the issued and outstanding stock of 999 because of the reduced costs and cOmplexities of a stock sale as compared with a sale of the assets and the single level of state and federal income taxes associated with a stock sale. From the outset of their negotiations with the Buyer, the Majority Group intended to effect a stock sale and negotiated accordingly with the Buyer. However, due to adverse legal positions taken by one of the Minority Group and the Buyer's insistence on a structure that would eliminate from the acquired businesses potential liability to the Minority Group for dissenters rights, a straight stock sale was not a viable option. This Plan of Division essentially accomplishes the intended stock sale, as well as the important business conditions of the Buyer. Notwithstanding prior adverse actions of one of the Minority Group, the Majority Group desires that the Minority Group join in the Sale Agreement, and has provided in this Plan and in the Sale Agreement such provisions as are reasonably necessary to facilitate their joining in the Sale Agreement. ) >> t t a. Had the Majority Group been willing to sell the assets of 999, it could do so. Under the circumatances, without the consent or assistance of the Minority Group, the Majority Group could effect a sale to the Buyer of those assets of 999 desired by the Buyer, subject to the liabilities of 999 except for the 999 Nonbusiness Liabilities. To do so, the Majority Group could {a} call the at Preferred at its $1200.00 per share call price, {bl call the Convertible Preferred at its $600.00 per share call price, (c) cause 999 to organize a new subsidiary corporation under the BCL {"Newco" I and to transfer to Newco the ,999 Nonbusiness Assets.subject to the 999 Nonbusiness Liabilities, {d} declare a dividend of the Newco shares pro rata to the holders of record of the outstanding Common Stock, (e) under 519.32 of the BCL {relating to voluntary transfer of corporate assets} cause 999 to sell its assets, subject to its liabilities, to the Buyer for cash {wherein the Minority Group would under S1932{c} (2) and (d) {2} of the BCL have no dissenters rights if either substantially all the net proceeds of the sale were required to be distributed to the shareholders of 999 within one year after the date of the sale or if 999 were to be liquidated and dissolved}. and {f} distribute the net proceeds of the sale to the shareholders of 999 in accordance with their respective interests {the .Sale of Assets Alternative"}. 9. In addition to its failing to satisfy the intention of the Majority Group to eell stock and the important business conditions of the Buyer, the Sale of Assets Alternative, the Board of Directors of 999 has determined, is inadvisable from a t t t t A-3 1916 t EXHIBIT "8" .~~....... JUL-i6-199~ 14:30 FROM Buch.lngerso!-FAX A TO 12436441 P.10/17 , l) business point of view because under existing provisions of the Internal Revenue Code of 1986, as amended, and the regulations adopted thereunder (the "Code"), the proceeds of the sale of 999's assets would be subject to federal income taxation Once on 999 upon its sale of those assets to the Buyer, and again when the net proceeds, less such taxes realized by 999, would be distributed to the shareholders of 999 in liquidation or otherwise. , ) 'If! 10. Under the circumstances, without the consent or assistance of the Minority Group, the Majority Group could effect a share exchange with the Buyer whereby the Buyer would acquire all of the outstanding shares of 999. To do so, the Majority Group would cause 999 to adopt a plan of share exchange under S1931 of the BCL (relating to share exchanges), whereby Buyer would acquire by operation of law all of the outstanding shares of 999, including shares formerly owned by the Minority Group, in exchange for cash (the "Share Exchange Alternative"). In such a transaction the Minority Group would under n931(d) have dissenters rights exercisable against 999 after complete ownership of 999 passes to the Buyer under the plan of exchange. 11. The Share Exchange Alternative would meet the federal income tax objectives described in recital 7 above and the objective of the Majority Group to sell stock. However, the Board of Directors of 999 has determined that the Share Exchange Alternative is inadvLsable from a business point of view because the Buyer is unwilling to enter into a transaction in a form which results in the Minority Group having the right to maintain dissenters rights litigation against a corporation owned by the Buyer. . >> . . 12. The Board of Directors has determined that this Plan of Division achieves substantially the same result as either the Sale of Assets Alternative or the Share Exchange Alternative from a business point of view, but at a lower aggregate federal income tax cost to all of the Shareholders of 999 than the Sale of Assets Alternative, and unlike the Share Exchange Alternative, in a form which results in the Minority Group having the right to maintain dissenters rights litigation against a corporation not owned by the Buyer, and otherwise without any special adverse consequences for the Minority Group. 13. The Board of Directors has therefore adopted a resolution approving this Plan and directing that it shall be submitted to the Majority Group for their written consent as provided by S1766(b) of the BCL and the bylaws of 999 (the Majority Group being entitled to cast more than the minimum number of votes that would be necessary to approve this Plan at a meeting at which all shareholders of 999 entitled to vote thereon were present and voting), and that the Secretary of 999 give to the Minority Group the ten day statutory notice of the action t t A-4 WXi-mw ,,~, 19-17 . JUL-i6-1993 14:31 FROM Bu~h.lngersol-FAX A TO 12436441" P.11/17 " :tJ ~ :) taken by the Majority Group thereon. In addition, in contemplation of the adoption and completion of this Plan, the Board of Directors of 999 has declared a dividend (the "Nonbusiness Assets Dividend") to the holders of the Common Stock on the Record Date who comply with the terms of this Plan of the promissory note referred to in Section 1.03 below, and of the issued and outstanding stock of K&K and of D-E Distribution Corporation, a pennsylvania corporation to be formed as a result of this Plan to receive, inter alia, all of the 999 Nonbusiness Assets and 999 Nonbusiness Liabilities, payable on the Effective Date (as defined in Section 1.08 below) " 14. The formation of D-E Distribution Corporation as a result of this Plan of Division is intended to constitute a transfer by 999 of the 999 Nonbusiness Assets and 999 NOnbusiness Liabilities in exchange for the promissory note referred to in Section 1.03 below and the issued and outstanding stock of D-E Distribution COrporation pursuant to Sections 351(a) and (b) of the Code. in> , :J 15. The transactions resulting from and contemplated by this Plan, including but not limited to the Nonbusiness Assets Dividend, are intended to result in a complete redemption or termination of the interests of the Shareholders in 999. ) ARTICLE I General provisions and Transfera Effected , 1.01. 999 shall divide into 999 (hereinafter sometimes called, as such, the "Surviving Corporation") and D-E Distribution Corporation, a Pennsylvania corporation to be formed as a result of this Plan of Division (hereinafter sometimes called the "New Corporation"), subject to the terms and conditions of this Plan. The Surviving Corporation and New Corporation are sometimes hereafter collectively referred to as the "Resulting Corporations". . 1.02. upon the Effective Date, 999 shall be divided into the Surviving Corporation and the New Corporation with the effect specified by Section 1957 of the BCL. 999 will survive "the division. All of the assets and liabilities of 999 prior to the Effective Date, shall remain exclusively the assets and liabilities of 999 except as expressly set forth in this Plan, and New Corporation shall not have any interest therein or liability thereon after the Effective Date, it being the express purpose of this plan that the New Corporation be free of all such liabilities pursuant to Section 1957 of the BCL. 1.03. On the Effective Date, all of the assets and liabilities of 999 set forth on Schedule 1.03 hereto Shall be deemed without further act or deed, to be transferred to and vested in the New Corporation. On such date, the New Corporation It t A-S 1918 nHIBll "8" . '" ::.J 1) , I ) t >> . . . . . JUL-16-1993 14:32 FROM ;h.lngerso\-FAX A 12436441 P.12/17 TO shall issue to 999 the promissory note in the form attached as Exhibit A hereto (the "Note"). All of the assets. and liabilities transferred to and vested in the New Corporation pursuant to the provisions of this Plan, on the Effective Date shall become exclusively the assets and liabilities of the New Corporation, and 999 shall not have any interest therein or liability thereon after the Effective Date, it being the express purpose of this plan that 999 be free of all such liabilities pursuant to Section 1957 of the BCL. 1.04. On the Effective Date. 999 shall transfer to New Corporation, in cash or good funds, in accordance with the terms of this Plan, an amount equal to the total subscription price payable by Koelie to 999 under the 999 Subscription A~eement. upon such transfer, New Corporation shall be vested with all liabilities of 999 to the Shareholders arising under this plan or otherwise, and 999 shall be free of all such liabilities pursuant to Section 1957 of the BCL. Promptly upon its receipt of said funds from 999, New Corporation shall make the transfer, for the account of the Shareholders, as required by Section 2.05 of this Plan. New Corporation shall promptly pay to the Shareholders, upon satisfaction of their respective obligations under Article II hereof, the Nonbusiness ASsets Dividend and the cash and other property payable to such Shareholders pursuant to Article II.of this Plan. In addition, after the Effective Date, New Corporation shall be solely and exclusively responsible for any and all liabilities or obligations arising out of this plan in favor of any Shareholder, including but not limited to liabilities or obligations to defend and satisfy any judgment arising out of any appraisal proceeding instituted by any Shareholder pursuant to Chapter 15, Subchapter D of the BCL, and in order to effectuate this purpose New Corporation is designated the "successor corporation" for purposes of Section 1572 of the BCL. Furthermore, after the Effective Date, New Corporation .shall .be solely and exclusively responsible for any and all liability or obligation of 999 under the BCL, under 999's bylaws or otherwise, to indemnify, defend, hold harmless or advance expenses to, any person who served as a director or officer of 999 prior to the Effective Date, in connection with any direct or derivative shareholder action brought by any Shareholder at any time after this plan is adopted by the Board of Directors of 999. It is the express purpose of this plan that the obligations and liabilities transferred to New Corporation shall result in 999 being free from such liabilities in the future pursuant to Section 1957 of the BCL. ~.05. 999 shall at any time, or from time to time, as and when requested by the New Corporation, its successors or assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized officers, all such conveyances. assignments, transfers, deeds, or other instruments, and shall take or cause to be taken Such further or A-6 1949 th'~~~~~ ~ '~F/O . " _ _""".~~ W."'"''''"''~~'-''',:"~<:-'''~~~:i:'::';~'.'_~~. . , JUL-i5-1993 14:33 FROM b_~h.JngersoJ-FAX A 12435441 TO P. 13/1 7 other action as the New Corporation, or its successors or assigns, may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any properties, rights, privileges or franchises, or to vest or perfect in or confirm to the New Corporation, or its successors or assigns, title to and possession of the respective properties, rights, privileges, powers, immunities, franchises and interests referred to in, or identified pursuant to, this Plan as transferred to or vested in . the New Corporation, and otherwise to carry out the intent and purposes hereof. 1.06. New Corporation shall at any time, or from time to time, as and when requested by 999, its successors or assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized officers, all such conveyances, assignments, transfers, deeds or other instruments and shall take or cause to be taken suoh further or other actions as 999, Or its successors or assigns, may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any properties, rights, privileges or franchises, or to vest or perfect in or confirm to 999, or its sucoessors and assigns, title to and posseseion of the respective properties, rights, privileges, powers, immunities, franchises and interests referred to in, or identified pursuant to, this Plan as transferred to or vested in 999, and otherwise to carry out the intent and purposes hereof. J..07. ..Each of the Resulting Corporations shall at any time, or from time to time, as and when requested by the other Resulting Corporation, or by its successors and assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized officers, all such assumptions, acknowledgments or other instruments, and shall take or cause to be taken such further or other action as the other Resulting Corporation, or its successors and assigns, may deem necessary or desirable in order to evidence the apportioning of the debts and liabilities of 999 between the Resulting Corporations in the manner speoified in, or pursuant to, this Plan, and otherwise to carry out the intent and purposes hereof. J..08. Articles of Division incorporating this plan shall be executed to comply with the applicable filing require- ments of the BCL and shall be filed with the Department of State of the Commonwealth of Pennsylvania. This division shall become effective upon filing of Artioles of Division in the Department of State of the Commonwealth of Pennsylvania (which time is herein oalled the -Effective Date") . ARTICLE II Disbursement of Nonbusiness and Conversion of Assees Dividend Shares A-7 1950 EXHIBIT "8" JUL-16-199~ 14:33 FROM ,h. Ingerso!-FRX R TO 12436441 P.14/17 ) :) 2.0~. All of the capital stock of 999 issued and outstanding on the Record Date shall be converted automatically pursuant to this Plan of Division, on the Effective Date as follows: } (~) Each share of 8% Preferred shall be converted into the right to receive $1200.00 in cash; (2) Each share of Convertible Preferred shall be deemed converted, effective On the day immediately preceding the date of adoption of this Plan by the Board of Directors of 999 into one-half share of Common Stock of 999; and ) 'f! (3) Each share of the issued and outstanding Common Stock of 999 owned by the Shareholders (including the Common Stock resulting from the conversion of the Convertible Preferred pursuant to clause (2) above) shall be converted into the right to receive a proportional share of the cash and other property rights as set forth in Section 2.04 below. ) ) commencing on the Effective Date, the Shareholders shall be deemed to no longer hold any issued and outstanding capital stock of 999, their sole rights being to receive the cash and other property into which such shares have been converted by this Plan upon compliance with the terms of Article II of this Plan or to exercise dissenters rights under the BCL. it 2.02. The 1,000 shares of Common Stock of the Surviving Corporation to be issued to Kodie pursuant to the 999 Subscription Agreement shall not be adversely affected or converted as a result of this Plan, but rather, such shares shall be deemed issued on the Effective Date, provided however, Kodie has paid to 999 in cash the full subscription price set forth in the 999 Subscription Agreement. On and after the Effective Date, the 1,000 shares of Common Stock of 999 issued to Kodie shall constitute all of the issued and .outstanding capital stock of 999, each of which shall be owned of record and beneficially by Kodie. Upon the Effective Date, Kodie shall be the sole Shareholder of 999 as the Surviving Corporation. 2.03. On the Effective Date, the holders of the 8% Preferred, upon surrender to the New Corporation of the stock certificates representing the theretofore issued and outstanding shares of 8% Preferred, shall be entitled to receive from the New Corporation $1200.00 per share in cash. 2.04. on the Effective Date. each SharehOlder shall be entitled to receive from the New Corporation, subject to the further limitations and restrictions set forth in Section 2.07 of this Plan. .the following: . . t A-8 1951 ff'!("'H~f'i '>! t ) 1) 11 ~ '" :;1 ~ It it t t J J "~-, JUL-1'6-199~ 14:34 FROM b. .1'" Ingersol-FRX R TO 12436441 P.15/17 (1) A proportional share, in cash, of an amount equal to the full price payable by Kodie to 999 under the 999 Subscription Agreement minus the sum of (i) the Indemnification Escrow as defined in Section 2.05 below, (ii) $294,000 which is payable with respect to the shares of 8% Preferred which are issued and outstanding, and (iii) an amount reasonably necessary to pay all expenses of the transactions contemplated by this Plan and the Sale Agreement, (the "Initial Distribution"); and (2) A proportional interest in the Indemnification Escrow. For purposes of this Plan, "proportional" shall mean the interest of an individual Shareholder represented by a fraction, the numerator of which is the total number of shares of Common Stock owned by such Shareholder (including shares resulting. from the conversion of the Convertible Preferred owned by such Shareholder pursuant to this Plan) and the denominator of which is 2,667. The denominator shall be adjusted as reasonably necessary under the circumstances, in the event that any Shareholder exercises dissenters rights under the BCL and is fully paid in cash for his/her interest in 999. 2.05. Of the total cash proceeds payable by Kodie to 999 as a result of the cancellation pursuant to this Plan of the Common Stock owned by the Shareholders, $3,212,000 (the "Indemnification Bscrow.) shall be transferred for the account of the Shareholders, immediately on the Effective Date by the New Corporation to Mellon Bank, N.A., as Escrow Agent, to be held pursuant to the terms of the Sale Agreement as security for the indemnification obligations in favor of Buyer as set forth in the Sale Agreement. As provided in Section 2.04 above, pursuant to this Plan, each Shareholder shall receive and retain a proportional interest in the Indemnification Escrow, subject to the further terms and conditions of this Plan. To the extent that any claims or ~seB are payable from the Indemnification Escrow each Shareholder shall share in any resulting reduction in the Indemnification Bscrow in proportion to her/hie interest therein. 2.06. As a result of this Plan, all of the 8% Preferred, Convertible Preferred and Common Stock, issued and outstanding on the Record Date, shall be deemed automatically canceled on the Effective Date. As of the Effective Date, any and all options, warrants, preemptive rights, and rights to acquire from 999 any capital stock of 999 or security exchangeable for or convertible into capital stock of 999 (other than the rights of Kodie under the 999 Subsoription Agreement), if any, (and none are believed to exist) shall be canceled and void automatically without further action by any person, and any A-9 1952 :-;..'W,~".-.>:';}\;::-:- ~'~:";' ) ) ') It ) ~ ) . t . , , ,L,,_ ..~., JUL-i6-1993 14:35 FROM ~ .h,lngerso!-FAX A TO 12436441 P.16/17 and all liabilities or obligations to any 'person asserting any such rights arising out of events prior to the Effective Date are expressly allocated to and assumed by the New Corporation, it being the express purpose of this Plan that 999 be free of all such liabilities pursuant to Section 1957 of the BCL. 2.07. Notwithstanding anything in this Plan to the contrary, as a condition to the receipt of the disbursement to a Shareholder of her or his proportional interest in the Nonbusiness Assets Dividend and to the Initial Distribution, each shareholder shall deliver his or her certificates for Convertible Preferred and Common Stock to the New Corporation together with a duly executed Consent and Joinder, in the form attached hereto as Exhibit B, in duplicate. New Corporation shall deliver one executed original of each such Consent and Joinder to 999 promptly upon receipt thereof. If any Shareholder does not either (i) execute a Consent and Joinder within ninety (90) days of the date notice (as provided in Section 1766(b) of the BCL) of the adoption of the Plan by the Board of Directors of 999 and by the Majority Group as Shareholders of 999 is sent to the Minority Group or (ii) effectively exercise his or her dissenters rights under the BCL with respect to the Plan, then in each case, the Nonbusiness Assets Dividend and the cash and other property rights to which the Shareholder would be otherwise entitled upon conversion of her or his shares pursuant to this Plan shall be held by the New Corporation as additional security for the indemnification obligations of the Shareholders under the Sale Agreement. Alleaminge thereon shall be the property of the New Corporation and any shares of the New Corporation comprised therein shall be deemed issued but not outstanding shares of the New Corporation. Property unclaimed because of a failure to comply with the conditions set forth in this Section shall be so held by New Corporation until no further contingent liabilities on the part of the Shareholders to the Buyer exist under the Sale Agreement, and thereafter shall be subject to any applicable abandoned or unclaimed property law. 2 . 08 . When and. as funds are released from the Indemnification Escrow, the New Corporation shall distribute to the Shareholders who have executed and delivered the Consent and Joinder as required by Section 2.07 their respective proportional shares of the amounts released. ARTICLE III Survivina Coroor~tion 3.01. The Articles of Incorporation of the Surviving Corporation shall not be amended as a result of the Plan of Division. 1953 A-10 EXHIBIT "IJ" )' ;) ) i) >) , :I . ~ . . . ................... "-....,.~!H. JUL-f6-1993 14:36 FROM E \.Ingersol-FAX A TO 12436441 P.17/17 3.02. The bylaws of 999 shall continue to be the bylaws of the Surviving Corporation, until changed in the manner therein provided. 3.03. The directors and officers of 999 shall cease to hold any positions as the directors and officers of the Surviving Corporation commencing on the Effective Date. ARTICLE IV New Corporation 4.01. The Articles of Incorporation required by Section 1952 (b) (1) of the BCL of the New Corporation shall be as set forth in ~hibit C hereto. 4.02. The bylaws of New Corporation shall be the same as the bylaws of the Surviving Corporation as in effect on the date this Plan is adopted, and shall thereafter be the bylaws of the New Corporation, until changed in the manner therein provided. 4.03. The directors and officers of 999 immediately prior to the Effective Date, shall thereafter be the directors and officers of New Corporation after the Effective Date, until changed in the manner provided in the bylaws of New Corporation. 4.04. on the Effective Date, 1000 shares of the authorized common stock of the New Corporation shall be deemed to be issued and as a result of this Plan. Such shares shall become outstanding, fully paid and non-assessable, upon compliance by a Shareholder with the provisions of Section 2.07 of this Plan. ARTICLE V Effect of Division 5.01. Except as otherwise expressly provided in this Plan, all the property of 999, including all debts due on whatever account to it, and all liabilities of 999 shall upon the Effective Date be unaffected by the division and shall continue as the property and liabilities of the Surviving Corporation. 5.02. Except as otherwise expressly provided in this Plan, the New Corporation shall upon the Effective Date be free of all the debts, liabilities and obligations of 999. 5.03. After the Effective Date, the Resulting Corporations shall each thenceforth be responsible as separate and distinct corporations only for such debts. liabilities and Obligations allocated to each Resulting Corporation hereunder, and as each corporation may thereafter undertake or incur in its own name. 1954 A-ll '""'iU),,,,,,,, 'F' ~F,,, ,U~" i ,a, .,", "~.: "'"'-" ,~ ANNEX B 11) PLAN OF tlJ:V:Is:tON of HtJMIIBt.S'l'OWN QtrARRZSS, me. "'" ;!II This plan of Division (the "plan") is proposed to be adopted by HtJMMBLSTOWN QUARRIES, mc., a pennsylvania corporation ("HQI"), this 9th day of July, 1993, pursuant to the applicable provisions of the pennsylvania Business Corporation Law ("BCL"). ;;) RECITALS . 1. The authorized capital stock of HQI consists of 1,000 shares of Common Stock, par value $1.00 per share ("Common Stock"). The issued and outstanding capital stock of HQI consists of 627 shares of Common Stock, each share being entitled to one vote. The issued and outstanding stock of HQI is presently owned of record as set forth on Schedule 1 hereto. 2. All of the shareholders of record of HQI on July 8, 1993, the date (the "Record Date") fixed by the Board of Directors of HQI"for.the purposes of action by the shareholders of HQt on this P~anof Division, who are entitled to vote, except Robert M. Mumma II and Barbara M. McClure (collectively, with their successors in interest, the "Minority Group"), held of record on such Record oate 621 shares of Common Stock, then outstanding, representing in excess of 99\ of all of the votes entitled to be cast by shareholders of record of HOI on the Record Date. The shareholders of record of HOl entitled to vote on the Record Date other than the Minority Gro.up are sometimes referred to herein as the "Majority Group". The Minority Group and the Majority Group are sometimes referred to herein collectively as the "Shareholders", and individually as a "Shareholder" . it .Jf '''' ,., $\lI , 3. In order to facilitate the transactions contemplated by this Plan, certain of the Majority Group have caused to be incorporated as a pennsylvania corporation, Rodie Acquisition Corp. ("Xedie"). Pursuant to a Subscription Agreement dated the date of this Plan (the "HOl Subscription Agreement"), Kodie has agreed to purchase from HQI, 300 shares of the authorized but unissued shares of Common Stock of HQI for a total subscription price of $2,816,000. Such-shares shall be deemed automatically issued and outstanding on the Effective Date upon release to HOI from escrow of the subscription price payable under the HQI Subscription Agreement. . B-1 t 1955 <.,.~- [e~:~)~'~IT ~ ,-- J 'D ) ) J tl ) . ... .._ ____ _.. ~. ._~.~'.~ ."V--,..~".."",_\....."_,,,.~..,."","'_ JUL~16-1993 14:39 FROM ;n.lngersoI-FAX A 12435441 P.02/11 TO 4. Prior to the Effective Date, the Majority Group, Kodie, and CRH plc, a Republic of Ireland corporation ("Buyer"), will have entered into a Subscription Agreement For The Acquisition Of All Outstanding Stock Of Kodie Acquisition Corp. dated as of JUly 8, 1993 (the "Sale Agreement"), which Sale Agreement contemplates, inter~, (i) the acquisition by Buyer of all of the issued and outstanding stock of Kodie after redemption of the stock interest of the existing shareholders therein, and (ii) pursuant to the HOl Subscription Agreement, the acquisition by Kodie of 300 shares of Common Stock of HQI which will constitute all of the issued and outstanding Common Stock of HOl on the Effective Date. Upon consummation of these transactions, Buyer shall have indirectly acquired all of the assets of HOI, subject to all of the liabilities of HQI, except for certain assets and liabilities of HOI included within, but not necessarily comprising all of, the Nonbusiness Assets and Nonbusiness Liabilities as defined in the sale Agreement (the Nonbusiness Assets owned by HOl and the Nonbusiness Liabilities of HOt are referred to in this Plan as the "HQI Nonbusiness Assets" and the "HQr Nonbusiness Liabilities", respectively), and except for certain other liabilities as provided in this Plan. 5. In connection with its efforts to sell HQl, the Majority Group has consistently endeavored to sell the issued and outstanding stock of HQl because of the reduced costs and complexities of a stock sale as compared with a sale of the assets and the singl~ level of state and federal income taxes associated ,dth..a stock sale. From the outset of their negotiations with the Buyer, the Majority Group intended to effect a stock sale and negotiated accordingly with the Buyer. However, due to adverse legal positions taken by one of the Minority Group and the Buyer's insistence on a structure that would eliminate from the acquired businesses potential liability to the Minority Group for dissenters rights, a straight stock sale was not a viable option. This Plan of Division essentially accomplishes the intended stock sale, as well as the important business conditions of the Buyer. Notwithstanding prior adverse actions of one of the Minority Group, the Majority Group desires that the Minority Group join in the Sale Agreement, and has provided in this Plan and in the Sale Agreement such provisions as are reasonably necessary to facilitate their joining in the Sale Agreement. G. Had the Majority Group been willing to sell the asaets of BQI, it could do so. under the circumstances, without the consent or assistance of the Minority Group, the Majority Group could effect a sale to the Buyer of those assets of RQt desired by the Buyer, subject to the liabilities of HQl except for the HQl Nonbusiness Liabilities. To do so, the Majority Group could (a) cause HQl to organi-o:e a new SubSidiary corporation under the BCL ("Newco") and to transfer to Newco the HQr -Nonbusiness Assets subject to the HQl Nonbusiness B-2 1956 nHIBIT "8" JUL-t6-1993 14:39 FROM ,.Ingersol-FAX A TO 12436441 P.03/11 ) ) Liabilities, (b) declare a dividend of the Newco shares pro rata to the holders of record of the outstanding Common Stock, (c) under 51932 of the BCL (relating to voluntary transfer of corporate assets) cause HOI to sell its assets, subject to its liabilities, to the Buyer for cash (wherein the Minority Group would under 51932(0) (2) and (d) (2) of the BCL have no dissenters rights if either substantially all the net proceeds of the sale were required to be distributed to the shareholders of HOI within one year after the date of the sale or if HOl were to be liquidated and dissolved), and (d) distribute the net prooeeds of the sale to the shareholders of HOl in accordance with their respective interests (the -Sale 'of Assets Alternative") . ) J , 7. In addition to its failing to satisfy the intention of the Majority Group to sell stock and the important business conditions 'of the Buyer, the Sale of Assets Alternative, the Board of Pirectors of HOI bas dete:nnined, is inadvisable from a business point of view because under existing provisions of the Internal Revenue Code of 1986" as amended, and the regulations adopted thereunder (the,-Code"), the proceeds of the sale of HOI's assets would be subject to federal income taxation onoe on HOI upon its sale of those assets to the Buyer, and again when the net proceeds, less such taxes realized by HOt, would be distributed to the shareholders of HQI in liquidation or otherwise. ) ) a. Under the circumstances, without the consent or assistanoe of the Minority Group, the Majority Group could effect a share exchange with the ~uyer whereby the Buyer would acquire all of the outstanding shares of HOl. To do so, the Majority Group would cause HQI to adopt a plan of share exchange under 51931 of the BCL (relating to share exchanges), whereby Buyer would aoquire by operation of law all of the outstanding shares of HOI, including shares formerly owned by the Minority Group, in exchange for cash (the .Share Exchange Alternative-). In such a transaction the Minority Group would under 51931(d) have dissenters rights exercisable against HQI after complete ownership of HOI passes to the Buyer under the plan of exchange. 9. The Share Exchange Alternative would meet the federal income tax objectives described in recital 5 above and the objective of the Majority Group to sell stock. However, the Board of Directors of HQl has determined that the Share Exchange Alternative is inadvisable from a business point of view because the Buyer is unwilling to enter into a transaction in a form which results in the Minority Group having the right to maintain dissenters rights litigation against a corporation owned by the Buyer. ) . >> >> 10. The Board of Directors has determined that this Plan of Division achieves substantially the same result as either the sale of Assets Alternative Or the Share EXChange Alternative B-3 1957 , ~\'.m~r; "ll" JUL-16-1993 14:40 FROM I ,.lngerso(-FAX A TO . ' 12436441 P.04/11 ) ) ') 11 . 11 ) ) from a business point of view, but at a lower aggregate federal income tax cost to all of the Shareholders of nOl than the sale of Assets Alternative, and unlilee the Share .Exchange Alternative, in a form which results in the Minority Group having the right to maintain dissenters rights litigation against a corporation not owned by the Buyer, and otherwise without any special adverse consequences for the Minority Group. 11. The Board of Directors has therefore adopted a resolution approving this Plan and directing that it shall be submitted to the Majority Group for their written consent as provided by Sl766(b) of the BCL and the bylaws of HQl (the Majority Group being entitled to cast more than the minimum number of votes that would be necessary to approve this Plan at a meeting at which all shareholders of HQI entitled to vote thereon were present and voting), and that the Secretary of HQI give to the Minority Group tbe ten day statutory notice of the action taken by the Majorit.y Group thereon. In addition, in contemplation of the adoption and completion of this Plan, the Board of Directors of HQI has declared a dividend (the "Nonbusiness Assets Dividend") to the holders of the Common Stock on the Record Date who comply with the terms of this Plan of the promissory.note referred to in Section l.03 below, and of the issued and outstanding stocle of G-A-T Distribution Corporation, a Pennsylvania corporation to be formed as a result of this Plan to receive, inter alia, all of the HQI Nonbusiness Assets and HQI Nonbusiness Liabilities, payable on the Effective Date (as defi~ed in Sectiqn 1~08 below). 12. The formation of G-A-T Distribution Corporation as a result of this Plan of Division is intended to constitute a transfer by HQI of the HQl Nonbusiness Assets and HQI Nonbusiness Liabilities in exchange for the promissory note referred to in Section 1.03 below and the issued and outstanding stock of G-A-T Distribution Corporation pursuant to Sections 351(a) and (b) of the Code. 13. The transactions resulting from and contemplated by this Plan, including but not limited to the Nonbusiness Assets Dividend, are intended to result in a complete redemption or termination of the interests of the Shareholders in HOl. ARTICLE I General Provisions and Transfers Effected 1.01. HQI shall divide into HQI (hereinafter sometimes called, as such, the .Surviving Corporation") and G-A-T Distribution Corporation, a Pennsylvania corporation to be formed as a result of this Plan of Division (hereinafter sometimes called the "New Corporation"), subject to the terms and conditions of this Plan. The Surviving Corporation and New 8-4 1.958 EXHI81T "lJ" JUL-15-1993 14:41 FROM ~. lngerso!-FAX A TO 12435441 P.05/11 ) ) 'f1 Corporation are sometimes hereafter collectively referred to as the "Resulting Corporations". 1.02. upon the Effective Date, HQI shall be divided into the surviving Corporation and the New Corporation with the effect specified by Section 1957 of the BCL. HQI will survive the division. All of the assets and liabilities of HQI prior to the Effective Date, shall remain exclusively the assets and liabilities of HQl except as expressly set forth in this Plan, and New Corporation shall not have any interest therein or liability thereon after the Effective Date, it being the express purpose of this Plan that the New Corporation be free of all such liabilities pursuant to Section 1957 of the BCL. 1.03. On the Effective Date, all of the assets and liabilities of HQI set forth on Schedule 1.03 hereto shall be deemed without further act or deed, to be transferred to and vested in the New Corporation. On such date, the New Corporation shall issue to HQI the promissory note in the form attached as EJ<l1ibit A hereto (the "Note"). All of the assets and liabilities transferred to and vested in the New Corporation pursuant to the provisions of this Plan, on the Effective Date shall become exclusively the assets and liabilities of the New Corporation, and HOI shall not have any interest therein or liability thereon after the Effective Date, it being.the express purpose of this Plan that HOI be free of all such liabilities pursuant to SectiQn ~957 of the BCL. 1) ) :) . 1.04. On the Effective Date, HQI shall transfer to New Corporation, in cash or good funds, in accordance with the terms of this Plan, an amount equal to the total Subscription price payable by Kadie to HOI under the HOt Subscription Agreement. Upon such transfer, New Corporation shall be vested with all liabilities of HOl to the Shareholders arising under this Plan or othez:wise, and HQI shall be free of all such liabilities pursuant to Section 1957 of the BCL. Promptly upon its receipt of said funds from HOI, New Corporation shall make the transfer, for the account of the Shareholders, as required by Section 2.04 of this Plan. New Corporation shall promptly pay to the Shareholders, upon satisfaction of their respective obligations under Article II hereof, the Nonbusiness Assets Dividend and the cash and ocher property payable to such Shareholders pursuant to Article II of this Plan. In addition. after the Effective Dace, New . Corporation shall be solely and exclusively responsible for any and all liabilities or obligations arising out of this Plan in favor of any Shareholder, including but not limited to liabilities or obligations to defend and satisfy any judgment arising out of any appraisal proceeding instituted by any Shareholder pursuant to Chapter 15, Subchapter D of the BCL. and in order to effectuate this purpose New Corporation is designated the 'successor corporation" for purposes of Section 1572 of the BCL. Furthermore, after the Effective Date, New Corporation B-5 hi.m~'-r~iI:, 1.959 D JUL-16-1993 14:42 FROM b,_n,lngerso!-FAX A TO 12436441 P.06/11 1) !Ul ~ iJ ~ ). . >> . . t t t shall be solely and exclusively responsible for any and all liability or obligation of HOI under the BCL, under HOI's bylaws or otherwise, to indemnify, defend, hold harmless or advance expenses to, any person who served as a director or officer of HO! prior to the Effective Date, in connection with any direct or derivative shareholder action brought by any Shareholder at any time after this Plan is adopted by the Board of Directors of HOI. It is the express purpose of this Plan that the obligations and liabilities transferred to New Corporation shall result in HOI being free from such liabilities in the future pursuant to Section 19S7 of the BCL. LOS. HQI shall at any time, or from time to time, as and when requested by the New Corporation, its successors or assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized officers, all such conveyances, assignments, transfers, deeds, or other instruments, and shall take or cause to be taken such further or other action as the New Corporation, or its successors or assigns, may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any properties, rights, privileges or franchises, or to vest or perfect in or confirm to the New Corporation, or its successors or assigns, title to and possession of the respective properties, rights, privileges, powers, immunities, franchises and interests referred to in, or identified pursuant to, this Plan as transferred to or vested in the New Corporation,.. and otherwise to carry out the intent and purposes hereof.. . 1.06. New Corporation shall at any time, or from time to time, as and when requested by HQI, its successors or assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized officers, all such conveyances, assignments, transfers, deeds or other instruments and shall take or cause to be taken such further or other actions as HQI, or its successors or assigns, may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any properties, rights, privileges or franchises, or to vest or perfect in or confirm to HQl, or its successors and assigns, title to and possession of the respective properties, rights, privileges, powers, immunities, franchises and interests referred to in, or identified pursuant to, this Plan as transferred to or vested in HOI, and otherwise to carry out the intent and pUr.pQses hereof. 1.07. Each of the Resulting Corporations shall at any time, or from time to time, as and when requested by the other Resulting Corporation, or by its successors and assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized officers, all such assumptions, acknowledgments or other instruments, and shall take or cause to be taken such further or other action as the other Resulting B-6 :1.960 :}$";1\;':{:' ~" :) JUL-i6-1993 14:42 FROM . ~h.lngersol-FAX A TO 12436441 '.""""~ P.07/11 ") ") " 7\ ::J ,,,," ," f) ) ~ . :) II . Corporation, or its successors and assigns, may deem necessary or desirable in order to evidence the apportioning of the debts and liabilities of KQI between the Resulting Corporations in the manner specified in, or pursuant to, this Plan, and otherwise to carry out the intent and purposes hereof. 1.OB. Articles of Division incorporating this Plan shall be executed to comply with the applicable filing require- ments of the BCL and shall be filed with the Department of State of the Commonwealth of Pennsylvania. This division shall become effective upon filing of Articles of Division in the Department of State of the COmmonwealth of Pennsylvania (which time is herein called the "Effective Date"). ARTICLE II Diebur.Ament. of Nonbusiness Assets niyidend and conversion of Shares 2.01. All of the capital stock of HOl issued and outstanding On the Record Date shall be converted automatioally pursuant to this Plan of Division, on the Effective Date, into the right to receive a proportional share of the cash and other property rights as set forth in Section 2.03 below. Commencing on the Effective Date, the Shareholders shall be deemed to no longer hold any issued and outstanding capital stock of KQI, their sole rights being to receive the cash and other property into which such snu::es have been converted by this Plan, upon compliance with the terms of Article II of this Plan or to exercise dissenters rights under the BCL. 2.02. The 300 shares of Common Stock of the Surviving Corporation to be issued to Radie pursuant to the HOl Subscription Agreement shall not be adversely affected or converted as a result of this Plan, but rather, such shares shall be deemed issued on the Effective Date, provided however, Kodie has paid to HQl in cash the full subscription price set forth in the HQI Subscription Agreement. On and after the Effective Date, the 300 shares of Common Stock of HOl issued to Kadie shall constitute all of the issued and outstanding capital stock of HOI, each of which shall be owned of record and beneficially by Kodie. Upon the Effective Date, Redie shall be the sole Shareholder of HQI as the Surviving Corporation. 2.03. On the Bffective Date, each Shareholder shall be entitled to receive from the New Corporation, subject to the further limitations and restrictions set forth in Section 2.06 of this Plan, the following: (1) A proportional share, in cash, of an amount equal to the full price payable by Kodie to HQI under the HQt Subscription Agreement minus the sum of (i) the Indemnification Escrow as defined in Section 2.04 below B-7 1~61 txHI81T "It<< JUL-16-1993 14:43 FROM :h, I ngerso I-FAX A TO 12436441' P,08/11 ') ,'"' ;:J and (ii) an amount reasonably necessary to pay all e~enses of the transactions contemplated by this Plan and the Sale Agreement, (the "Initial Distribution"); and ) (2) A proportional interest in the Indemnification Escrow. For purposes of this Plan, "proportional" shall mean the interest of an individual Shareholder represented by a fraction, the numerator of which is the total number of shares of Common Stock owned by such Shareholder and the denominator of which is 627. The denominator shall be adjusted as reasonably necessary under the circumstances, in the event that any Shareholder exercises dissenters rights under the BCL and is fully paid in cash for his/her interest in H01. 2.04. Of the total cash proceeds payable by Kodie to HQI as a result of the cancellation pursuant to this Plan of the Common Stock owned by the SharehOlders, $352,000 (the "Indemnification Bscrow") shall be transferred for the account of the Shareholders, immediately on the Effective Date by the New Corporation to Mellon Bank, N.A., as Escrow Agent, to be held pursuant to the terms of the sale Agreement as security for the indemnification obligations in favor of Buyer as set forth in the Sale Agreement. As provided in Section 2.03 above, pursuant to this Plan, each Shareholder shall receive and retain a proportional interest in the Indemnification Escrow, subject to the further terms and conditions of this Plan. To the extent that any claims or expenses are payable from the Indemnification Escrow each Shareholder Shall share in any resulting reduction in the Indemnification Escrow in proportion to her/his interest therein. ,'" .:" ~ ~ , ') . 2.05. As a result of this Plan, all of the Common Stock issued and outstanding on the Record Date, shall be deemed automatically canceled on the Effective Date. As of the Effective Date, anr and all options, warrants, preemptive rights, and rights to acqu re from HQl any capital stock of HOl or security exchangeable for or convertible into capital stock of HQl (other than the rights of Kociie under the HQl Subscription Agreement), if any, (and none are believed to exist) shall be canceled and void automatically without further action by any person, and any and all liabilities or obligations to any person asserting any such rights arising out of events prior to the Effective Date are expressly allocated to and assumed by the New Corporation, it being the express purpose of this plan that HQI be free of all such liabilities pursuant to Section 1957 of the BCL. t . 2.06. Notwithstanding anything in this Plan to the contrary, as a condition to the receipt of the disbursement to a B-8 1962 . tE:1(~'mm "~' .. - ~-.:lll.. ] Il!!'!:-' JUL-16-1993 14:44 FROM Bu~h.lngersol-FAX A TO 12436441 P.09/11 :) ) , Shareholder of her or his proportional interest in the Initial Distribution, each shareholder shall deliver his or her certificates for Common Stock to the New Corporation together with a duly executed Consent and Joinder, in the form attached hereto as Exhibit B, in duplicate. New Corporation shall deliver one executed original of each such Consent and Joinder to HQI promptly upon receipt thereof. If any Shareholder does not either (i) execute a Consent and Joinder within ninety (90) days of the date notice (as provided in Section 1766{b) of the BCL) of the adoption of the Plan by the Board of Directors of RQI and by the Majority Group as Shareholders of RQI is sent to the Minority Group or (ii) effectively exercise his or her dissenters rights under the BCL with respect to the Plan, then in each case, the NOnbusiness Assets Dividend and the cash and other property rights to which the Shareholder would be otherwise entitled upon conversion of her or his shares pursuant to this Plan, shall be held by the New Corporation as additional security for the indemnification obligations of the Shareholders under the Sale Agreement. All earnings thereon shall be the property of the New Corporation and any shares of the New Corporation comprised therein shall be deemed issued but not outstanding shares of the New Corporation. Property unclaimed because of a failure to comply with the conditions set forth in this Section shall be so held by New Corporation until no further contingent liabilities on the part of the Shareholders to the Buyer exist under the Sale Agreement, and thereafter shall be subject to any applicable abandoned or unclaimed property law. 2.07. When and as funds are released from the Indemnification Escrow, the New Corporation shall distribute to the Shareholders who have executed and delivered the Consent and Joinder as required by Section 2.06 their respective proportional shares of the amounts released. :) ) ~ } i.) I ARTICLE III Survivina Cornoration 3.01. The Articles of Inco~ration of the Surviving Corporation shall not be amended as a result of the Plan of Division. t 3.02. The bylaws of HQI shall continue to be the bylaws of the surviving Corporation, until changed in the manner therein provided. 3.03. The directors and officers of HQI shall cease to hold any positions as the directors and officers of the Surviving Corporation commencing on the Effective Date. . ARTICLE IV B-9 1363 .).~~:"'u:j~;;~ u. ~'.jtr',.' It ",".~"~~.,,.,_;~~,)~~.l{r . . JUL-16-1993 14:45 FROM o,_n.lngerso!-FRX R TO 12436441 P.10/11 ) New Corooration ) 4.01. The Articles of Incorporation required by Section 19S2(b) (ll of the BCL of the New Corporation shall be as set forth in Exhibit c hereto. ) 4.02. The bylaws of New Corporation shall be the same as the bylaws of the Surviving Corporation as in effect on the date this Plan ia adopted, and shall thereafter be the bylaws of the New Corporation, until changed in the manner therein provided. ) ~ 4.03. The directors and officers of HQI immediately prior to the Effective Date, shall thereafter be the direetors and officers of New Corporation after the Effective Date, until changed in the manner provided in the bylaws of New Corporation. 4.04 On the Effective Date, 1,000 shares of the authorized common stock of the New Corporation shall be deemed to be issued as a result of this Plan. Such shares shall become outstanding, fully paid and nonassessable, upon compliance by a Shareholder with the provisions of Section 2.06 of this Plan. ARTICLE V Effect of Division '" :J ~ 5.01. Except as otherwise expressly provided in this Plan, all the property of HQI, including all debts due on whatever account to it, and all liabilities of HQI ahall upon the Effective Date be ~ffected by the division and shall continue as the property and liabilities of the Surviving Corporation. 5.02. Except as otherwise expressly provided in this Plan, the New Corporation shall upon the Effective Date be free of all the debts, liabilities and obligations of HQI. S.03. After the Effective Date, the Resulting Corporations shall each thenceforth be responsible as separate and distinct corporations only for such debts, liabilities and obligations allocated to each Resulting Corporation hereunder, and as each corporation may thereafter undertake or incur in its own name. o ) ~ . 196/1 8-10 . EXHIBIT "B" ~ ,,~,- --, . ,'- .'~ ,', JUL-16-1993 14:48 FROM bwch.lngersol-FAX A TO 12436441 P.02/29 ) ANNEX F ) NmB HDmTY-NI:NE, mc. HUMllELSTOWN Q'O'AlUUES, mc. INJ'ORMA'1'10N STATEMENT ') NOTBl '.1'be information set fo~th below represents a SUDllll&ry of the several Plans of t11v1sioD and other doouments aaaompanying tlUs :tDfoZ'Jllat1on Stat_ent, and this Information Statement is qualified in its entirety by referenae to the aotual text of those doouments. D I. I'AC'l'tJAL BACltGRomm .tJ A. The p."'~lv-OwZ1ed Businesses. Prcn:>ertv and Assets ) 1. Bcders Quarry and Lebanon Rook, Ina. ) Robert M. Mumma, Sr. ("Mr. Mumma, Sr.") died testate on April 12, 1986, leaving a widow, Barbara McK. Mumma C"Mrs. Mumma"), and foUr children, Lisa M. Morgan ("Lisa"), Linda M. Roth ("Linda"), Robert M. Mumma, II ("Bob") and Barbara M. McClure ("Barbara"). Mrs. MWlIlI'Ia and Lisa are executrices of Mr. Mumma, Sr.'s Estate (the "Estate") and trustees of a marital trust (the "Marital Trust") and a residuary trust (the "Residuary Trust") under Mr. MWlIlI'Ia, Sr.'s Will, dated May 19, 1982 and the first Codicil thereto dated October 12, 1984 (collectively the .Will"). The Marital Trust is the owner of, inter alia, real estate and other assets known as Benders Quarry, and the Estate is the owner of sot of the outstanding and issued stock of ) I>> '.. " Lebanon Rock, Inc. ("LRI").V t 1./ The remaining sot of LRI is owned by Bob. 1965 F-I I/'QI,-"",,\,, "'. ~Ji\l!(l~.,,~ _ . . JUL-16-1993 14:49 FROM c.fI.lngerso!-FRX R TO 12436441 P.03/29 2. Nine Ninety-Nine, !ne. Mrs. Mumma and Lisa, in their ind.ividual and ) representative capacities, control the majority (65.68%) of the voting power of Nine Ninety-Nine, Inc. ("999"), a non-operating holding company. Mrs. Mumma, Lisa and Linda together control more than 77% of the voting power of 999. The present ownership of the stock of 999 is as follows: ) !? 8% lOt Total and Common Pref'd ~ref'd Ownerghin Marital Trust 349.74 0.00 576.97' 984.7J. (28.44%) Mrs. Mumma 370.27 142.00 336.54 790.81 (22.84%) Lisa 348.72 103.00 46.59 498.31 (14.39%) Bob 350.82 0.00 46.72 397.54 (11.48%) Linda 348.72 0.00 46.59 395.31 (11.42%) Barbara 348.72 0.00 46.59 395.31 (11.42%) . ) Mrs. Mumma and Lisa are the officers of 999, and Mrs. Mumma, Lisa. and Linda are its'directors. 3. Pezmsy Supply, IDe. and Subsidiaries Jl :,. :~ Penney Supply, Inc. (.pennsy Supply.) is a wholly owned subsidiary of 999. Penney Supply operates several quarries and is a supplier of ready-mix concrete, asphalt, crushed stone and other building products to the construction industry, primarily in Dauphin, CUmberland and Perry Counties. Elco Concrete Products, Inc. ("Eleo.) is, in turn, a whollywowned subsidiary of Penney Supply, and is a supplier of crushed stone, ready-mix concrete and concrete block in the Lebanon County area. Smith Quarries, Inc. is also a wholly-owned subsidiary of Penney ;) >> ; \ F-2 ~ EXHIBIT "8" 1966 J~_.:_ JUL-16-1993 14:49 FROM Buch.lngersol-FAX A TO 12436441 P.04/29 Supply, and is a supplier of crushed stone in the Lebanon County area.Y 4. BwIIalelstcnm Quarries, Ine. Mrs. Mumma, Lisa, Linda, Barbara, Bob and the Marital Trust also are the only shareholders of Hummelstown Quarries, Inc. ("HQl"), a closely-held corporation which owns three quarries and other real property. The present ownership of the stock of HQI is as follows; ~ Marital Trust Mrs. Mumma Lisa Linda Barbara Bob 500 (79.74\") US (18.3H) 3 ( 0.48%) 3 ( 0.48%) 3 ( 0.48%) 3 ( 0.48%) ) ) Thus, Mrs;- Mumma and Lisa, in their individual and representative capacitiee, cont~l more than 98% of the voting power of HQI; and Mrs. Mumma, Lisa and Linda control more than 99% of that- power. Mrs. Mumma and Lisa are the officers of HQI, and Mrs. Mumma, Lisa and Linda are its directors. ) 5. The PaxtOl1 Street Yards ) In addition, Mrs. Mumma. Lisa, Linda, Barbara and Bob also are owners, under an agreement among tenants-in-common executed on December 19, 1986 (the "MRA-I Agreement") of certain ) 2/ Robert M. Mumma, Inc. is also a wholly-owned subsidiary of pennsy Supply. The Estate also owns a 50% equity interest in Union Quarries, Inc. ("Union Quarries"), a corporation engaged in the supply of crushed stone and concrete in CUmberland County. union Quarries is not involved in any of the transactions disclosed in this Information Statement. I F-3 iiiXNQ~i1 .';po. 1967 "'"., ,," "~~~-!-~--;c~~-"};' '....,.,.~~""" JUL-1b-1993 14:50 FROM E ,.Ingersol-FAX A TO 12436441 P.05/29 real estate and oth~r assets located throughout central Pennsylvania. The holdings of the tenants-in-common under the MRA-I Agreement includes real estate comprising part of a large tract of property located on Paxton Street in Harrisburg (the "Paxton Street Yards").V The respective ownership shares of the tenants under the MRA-I Agreement are as follows: Estate Bob Lisa Linda Barbara Mrs. Mumma ~ a= MRA-I Agreement, at p. 19. Section 4 of the MRA-I Agreement provides that: 81.82507% 4.24708% 4.23555% 4.23555% 4.23555% 1.22120% [gleneral, overall management of the Premises and of all matters'arising out of or in connection with the Premises, including a sale or mortgage of the entire Premises"o~ any part thereof, shall be vested in the Owners"';jointly and each Owner shall abide by the policies and decisions in respect thereof. Any agreement, approval, decision, consent, request or otber action of the Owners hereunder shall be by majority (in interest) vote and in writing unless otherwise indicated. ~. at p. 12. .In order to facilitate transfers approved by a majority-in-interest of the tenants-in-common under section 4, the MRA-I Agreement further provides that: each Owner hereby names each of the other Owners, with full power of substitution, as his, her or its attorney-in-fact ccupled with an interest to execute any such deed or other instrument to carry out any of the purposes of this agreement or to effectuate a decision of the Owners thereunder, in the name of and on behalf of such refusing or otherwise failing Owner. To facilitate the recording of any such deed or other instrument, each of the OWners has executed and ~/ The balance of the Paxton Street Yards is owned by 999. F-4 ~~"~~~l:'i ~ ~ 1968 <"""""!Sf"''ll'J\",,~'',h JUL-16-1993 14:50 FROM E ,. Ingerso!-FAX A TO 12436441 P.06/29 ) delivered to the Manager, as escrow agent, a power of attorney in recordable form with respect to the Premises conveyed into the names of the OWners and contemplated by this Agreement. Id., Section 14, at pp. 17-18.Y Because Mrs. Mumma and Lisa, in their individual ) ) fj capacities and as executrices of the Estate, and Linda represent a majority-in-interest of the MRA-I tenants. in-common, they have the power pursuant to section 4 of the MRA-I Agreement to transfer properties owned by the tenancy. In the event one or more of the remaining tenants objects to such a transfer and refuses to sign any transfer documents, Mrs. MUlIIIlIa, Lisa and Linda nonetheless may proceed under section 14 with such transfer on behalf of all tenants-in-common. ) ) B. Past Att~t. to S.11 the Penu~ Supply Busin..... aqd the (!,...."'.rJ...... Countv Eauitv Litiaat:l.on Article NrNTH of the Will broadly authorizes the ~ Executrices and Trustees to retain "for such time as in their ) judgment may seem advisable," manage or dispose of "at such price or prices and on such terms and conditions as [they] ... may consider advisable" property in their care, including the Estate's or Trust's interest in the family-owned businesses. Article THIRTEENTH of the Will provides: "THIRTEENTH: Notwithstanding the powers herein otherwise given, I direct that my stock in privately held c04pOrations, supervised and administered by me as the Executive or operating officer prior to my decease ~ t J./ Bob signed a power of attorney in accordance with section 14 of the MRA I Agreement on December 19, 1986. F-S 1969 EXHIBIT "B" ,""-,,-'" >, ""'. ,- JUL-16-1993 14:51 FROM b~~h.lngersol-FRX R TO 12436441 P.07/,29 .' or my stock in privately held corporations which otherwise is owned by me at my decease be not sold unless all of my trustees, and particularly my individual trustee or trustees, shall agree in writing that such stock be sold. It is my desire that if expedient and possible, the businesses which I have personally directed during my lifetime and of which I have had an interest be continued for the benefit of and under the management and control of my immediate family. " By order of March 8, 1989 in In re Estate of Mumma, No. 21-86- 398, the Court of Common Pleas of CUmberland County ruled: ~ "under Article THIRTEENTH of decedent'S Will, the [executrices] may sell Mumma family company stock to non-family members once. the [executrices] unanimously agree in writing. Therefore, the language of Article THIRTEENTH is precatory and not mandatory.. No appeal was taken by Bob from that order, and it has now become final. ~ ) ) During 1988, Mrs. Mumma and Lisa entered into negotiations with CRH plc, a large and financially well- established Irish corporation ("CRH"), regarding a possible sale of the family-owned businesses and certain related assets and real property. In the oourse of negotiation~, CRH .offered $43.5 million in cash and the absorption of $8 million in debt, for a total purchase price of approximately $51 million, for the stock of 999 and HQl and certain real estate assets. However, in letters dated November 2, 1988 and addressed to Mrs. Mumma, Lisa, Linda and Barbara, Bob asserted a right of first refusal as to Penney SUpply which he allegedly was granted at a meeting of the family members in June 1987. At no time prior to ehe November 2, 1988 letters had Bob asserted that he had been given a right of :) ) t , :t F-6 19'70 i ~Hmii' "'if' '-----~-< . . JUL-16-1993 14:52 FROM In. Ingerso!-FAX A TO 12436441 P.08/29 ) ) first refusal as to Pennsy Supply at the June i987 family meeting. ) " on December 27, 1988, Mrs. Mumma and Lisa filed an equity action against Bob in the Court of Common Pleas of cumberland county (No. 66 Equity 1988) in order to remove Bob's objections to the sale of the businesses. In their complaint, Mrs. MUllU1la and Lisa sought a declaratory judgment that: (1) Bob possessed no right of first refusal as to Pennsy SUpply or any other related business arising out of the June 1987 family meeting; (2) Bob did not possess, under the MRA-I Agreement, any right of first refusal triggered by transfers of individual p<ttcels of tenancy-owned property approved by a majority-in- interest of the tenants; and (3) the MRA power of attorney signed by Bob in December 1986 could be used to transfer tenancy-owned ) :i) ) l property without his approval, as expressly provided in section 14 of the MRA-I Agreement. Thereafter a second amended complaint was filed adding Linda as a plaintiff and Barbara as a defendant. Bob never filed a aounterclaim requesting enforcement of his alleged rights against Mrs. MUlIU1Ia and Lisa, in their various ) capacities, and Barbara and Linda. ) After the commencement of the CUmberland County equity litigation, Bob persisted in his opposition to the proposed sale of the family businesses and other assets. On June 30, 1989, Bob wrote directly to CRH. In his letter Bob claimed that he it possessed alleged first refusal rights as to Pennsy Supply and the individual properties owned by the MRA tenants-in-common. He F-7 1.971 t f~~!4~-;<::.j ,..~. JUL-16-1993 14:52 FROM Buch.lngersol-FAX A ._'--.,...~,.., . . - .-. , '.,"-.".,.,.,'....-.-....,...,,".., TO 12436441 P.09/29 iJ I). also threatened litigation against CRH if it proceeded to purchase any of those assets. At the end of September 1999, CRH advised Mrs. Mumma and Lisa that, as a result of Bob's letter, and his persistent refusal to disoontinue his assertion of a claimed right of first refusal, it had decided to withdraw from negotiations to purohase the businesses. At various times during the course of the negotiations with CRH, Bob claimed that he Was prepared to purchase the businesses on the same terms proposed by CRH. However, despite repeated opportunities, Bob failed to offer any oredible proof that he was willing or financially able to match the amount and quality of the cash purchase price offered by CRH. In particular, Bob did not provide information ) ~ " ;) ;) ') concerning the degrea to which his proposed financing to raise the cash purchase price for the businesses would be predicated upon a pledge or lien upon the assets to be purchased. This was an important omission, particularly to the Martial Trust, since Mrs. Mumma, Lisa and Linda had been advised by counsel that if they engaged in a sale transaction with an underfinanced buyer who subsequently defaulted on such purchase-money debt, the truat-ee in bankruptcy of the buyer might be able to require the sellers ~o refund all or a substantial portion of the purchase price to the bankrupt estate. Thus it became clear that, while Bob claimed be desired to purcbase the businesses on competitive terms, he was without the financial wherewithal so to do, and that he was intent solely upon Obstructing any sale to any buyer 'iP :) ;) . F-8 1972 :.1 ~~ txHIBIT "B" . . JUL-15-1993 14:53 FROM L ,h.lngersol-FAX A TO 12436441 P.10/29 on any terms. ~ In Re Petitioner's Motion for Entrv of Default Judament or ~otion to Comoel Discoverv,. No. 21-86-398, Opinion and Order (O.C. CUmbo March 6, 1992) (Sheely, P.J.) ("Mrs. Mumma and [Lisa] were unable to consummate the [sale of Estate-owned] businesses and assets for cash to [a large and financially well- established] Irish company because of the legal position taken by [Bob] .) .iI t! Following a three and one-half day bench trial in March 1991, President JUdge Sheely on March 24, 1992 entered an Order in the CUmberland County equity litigation granting the relief sought by Mrs. Mumma and Lisa. on Noveniber 5, 1992, the trial court issued an opinion denying Bob's motion for post-trial relief and reaffirming its earlier decision and entering a final decree ("the November. 5 Opinion"). Bob's appeal from Judge Sheely's November 5 Opinion presently is pending before the Superior Court (No. 00056HBG93). c. Nectotiation and Aareement wi th CRH FOllowing the trial in the Equity No. 66 action in March 1991, Mrs. Mumma and Lisa commenced discussions with a number of potential buyers regarding a sale of the family-owned businesses. In May 1993 Mrs. Mumma and Lisa, in their individual 2J In addition. Bob has been found to have repeatedly disrupted and harassed Mrs. Mumma and Lisa in their administration of the Estate and the Trusts under the Will of Mr. Mumma. Sr. ~ In Re Petition to Acooint a Temoorarv Fiduciarv, No. 31- 86-398. Opinion and Order (O.C. Cumb. March 6, 1992) (Sheely. P.J.) ("if anyone is hampering (the administration of the Estate] or endangering the estate, it is [Bob]"). F-9 1973 ~iI'l~~i7 "?^' and representative capacities and as directors and officers of 999, and Linda individually.and as director of 999, executed a letter of intent (subject to the negotiation of a definitive agreement) to sell to CRH: (1) all of the issued and outstanding stock of 999; (2) all of the issued and outstanding stock of HQI; (3) the Paxton Street Yards; (4) Benders Quarry; and (5) an option to purchase the Estate's interest in LRI {the "Lebanon Rock Option")U. The purchase price for the stock, real property and other assets to be sold to CRH (sometimes referred to collectively herein as the "pennsy Supply Businesses") is $32 millionV, with that purchase price to be allocated among the ;~t;,l(<,'d!t.~i";;rJ>~~~'~h:;;-", JUL-16-1993 i) ij) '" ;lj/ ;) ;) ~ various components as follows: 999 Stock HQl Stock Paxto.n. Street YardsJl Benders Quarry Lebanon Rock Option 1) $25,696,000 2,816,000 1,760,000 1,568,000 160,000 The foregoing allocation of the purchase price is based upon calculations performed and conclusions reached by Legg Mason Wood Walker Inc., a financial consultant retained by 999 and the ,<'> :w i) w 21 ) !if ia The option extends for 12-0 days and provides a purchase price of $ 2 million for the Estate's interest in LRI. plus interest from July 9, 1993, the date on which the purchase funds were deposited in to the Initial Escrow at the Stage I Closing. This figure does not include the debt of the Pennsy SUpply Businesses, all of which is to be assumed by CRH. This figure represents the portion of the total purchase price allocated to those portions of the Paxton Street Yards owned by MRA-I. The remaining portions of the Paxton street Yards are allocated as part of the price for the stock of 999. F-10 J:)~~~~~~7;i1,' t.'T" 197i1 -'y';,,;, JUL-i6-199~ 14:54 FROM ~n.lngersol-FAX A TO 12436441 P.12/29 Marital Trust, pursuant to a review of the books, records and ) operations of tbe various components of the Penney Supply Businesses. ;) D. Potential Porms of ~e Transaction :) . In negotiations regarding a potential sale, the goal of Mrs. Mumma, Lisa and Linda was at all times to sell the entirety of the pennsy Supply Businesses, essentially in the form of a sale of stock, in order to maximize the total value received. Certain of the shares of stock and interests in real estate iD ," :)If constituting the pennsy SUpply Businesses are owned directly by Bob. As described above, Bob repeatedly has disrupted any attempt to complete such a sale. In light of these considerations, several potential forms of the proposed sale were considered and rejected prior to the adoption of the present plan. ,) Initially, Mrs. Mumma, Lisa and Linda considered a direct sale of the stock of 999 and HQI and the other assets to CRH (WStock Sale AlternativeW). This approach was not possible because Bob would not agree to sell bis stock in 999 and HQI. iD Second, Mrs. Mumma, Lisa and Linda considered the ) adoption, as the holders in their various capacities of tbe majority of the voting power of 999, HQI and MRA-I, of a plan to cause 999 and HQI to sell all of their assets included in the ,J l I I 1 I pennsy Supply Businesses, to CRH, followed by pro rata distribution of the resulting proceeds to the Shareholders of 999 F-ll 1-975. EXHIBIT "~" ~ . . .~~~~.~ .. - : '., ,~",.... .~. .. .. JUL-16-1993 14:55 FROM 8uch.lngersol-FAX A TO 12436441 P.13/29 r ) and HQI (the "Sale of Assets Alternative"). The Sale of Assets Alternative, however, would have triggered a double taxation on the proceeds of the sale of assets by 999 and HQI. A federal income tax first would have been paid by. the corporations on the difference between the value received and the current tax basis of the corporations in the assets sold. In addition, the distribution of the proceeds to the shareholders of 999 and HQI would have resulted in a second federal income tax. This double taxation can be avoided, however, by structuring the transaction 'fJ in the preferred manner as a stock sale, i.e., by selling the stock of 999 and HQI. Because the net federal and state tax ) ) savings to the shareholders from a transaction structured as a stock sale amounts to millions of dollars, the possibility of. making an asset sa.le..at the 999 and HQI level was rejected by Mrs. Mumma, Lisa and Linda all being imprudent.1I A third option .considered was for Mrs. Mumma, Lisa and Linda to use their majority voting power to setl to CRH all of the stock of 999 and HQI, including stock owned by dissenting family members, by means of a "share exchange" under 15 Pa.C.S. !i 1931 (the "Share Exchange Alternative"). This technique was added to the pennsylvania Business Corporation Law of 1988 ("BCL") effective October 1, 1989, after CRH withdrew its initial 1l ) ) v Had this option been selected, objecting shareholders of 999 and HQI would not have had a right to dissenters' rights appraisal proceedings in the Court of Common pleas of Cumberland County because the respective sales would have been immediately followed by distributions of the proceeds to shareholders. See lS Pa.C.S. ~ 1932(c) (2). t .' { i F-12 ltXHliliY IP~A 1976 ) ) ) ) ) fJ ) ) ) . .. 'V.. ". . "~ ."' ." '; :..f!'~:'"'7': . . JUL-15-1993 14:55 FROM bv~h.lngersol-FAX A 12435441 TO P. 14/29 offer. However, use of the Share Exchange Alternative would have resulted in any dissenting shareholders. i.e., Barbara or Bob, or both, having dissenters' rights against 999 and HOl as subsidiaries of CRH. ~ Pa.C.S. S 1931(d). CRH made clear in its 1993 negotiations with Mrs. Mumma, Lisa and Linda that it was not willing to incur the risk of valuation litigation with Bob in the event that he dissented from a transaction canceling his shares in 999 and HQI. As ,a result, Mrs. Mumma, Linda and Lisa concluded that a sale of all of the stock of 999 and HQI to CRH by means of the Share Exchange Alternative, while satisfactory from a tax point of view. was impracticable as a business matter. In order to 0'> avoid the unfavorable tax consequences of an asset sale at the 999 and HOI level. (2) protect CRH from the risk of dissenters' rights litigation with Bob, and (3) ensure the fair and equal treatment of all shareholders of 999 and HOI, a fourth alternative approach to the sale was developed to accomplish a transaction in the best interests of all utilizing plans of division. Under this approach, the Mumma family members are engaging in intra. family corporate transactions. under 15 Pa.C.S. S 1951 ~ ~., to be completed immediately prior to the transfer of the Pennsy Supply Businesses to CRH. which operate to fasten the 999 and HOl dissenters' rights litigation liabilities on two Dew corporations to be retained by the family (the "Corporate Division Alternative"). As part of those family transactions all of the stock of 999 and HQI and other assets constituting the 1977 F-B ::~:'f"l7~~?9 ~f1G''''' . '" >~",,'" ,.,~, ".~ JUL-16-1993 14:56 FROM Buch.lngersol-FRX R TO 12436441 P.15/29 ) pennsy Supply Businesses will be transferred to Kodie Acquisition ') .' corp. ( " Kodie ") . Immediately thereafter CRH will acquire lOOt ) stock ownership of Kodie. Kodie was formed and all of its stock at all times has been owned by Mrs. Mumma and Lisa in their individual capacities, and by Linda.MV CRH, pursuant to a subscription agreement with Kodie (the .Subscription Agreement"), will acquire all of the stock of Kodie in exchange for the total purchase price to be paid for the pennsy Supply Businesses. The purchase price will be distributed , to Mulllllla family members in a manner more fully described below. "- :i~ i) S. The Sea~e I C1asina of the Transaeeian i) A two-step closing is contemplated for the sale of the Penney Supply Businesses to CRH. At the Stage I Closing, which occurred on July 8 and 9, 1993, CRH and Mrs. Mumma, Lisa and Linda signed a subscription agreement pursuant to which CRH will purchase 1000 shares of the stock of Kodie. Also at that closing, Mrs. Mumma, Lisa and Linda placed into escrow (1) all of their stock in Kodie, 999 and HQI, (2) the deeds to the Paxton Street Yards and the Benders Quarry and (3) the Lebanon Rock Option: Also, Kodie entered into subscription agreements for 1,000 shares of 999 stook, 300 shares of HQI stock, an agreement of sale with MRA-I for the purchase of the portions of the Paxton Street Yards owned by the tenants-in-common, an agreement of sale } ~ ." " :; ~ t Il .~ i .J.Q./ Kodie was incorporated in Pennsylvania on May 21, 1993. F-14 EXHIBIT "8" 1978 " '~"Y""t..,..;. 1;,' ''''':' .,.!l.~'~~~;" JUL-16-1993" 14:57 FROM E...lnsersol-FAX A TO 12436441 P.16/29 with the Marital Trust for Benders Quarry and the Lebanon Rock Option executed by the Estate. At the Stage I Closing, CRH, in turn, placed into escrow $ 32,000,000, representing the total cash purchase price for the pennsy Supply Businesses. P. 'l'he Plans of Division of 999 and HOl: In order to facilitate the completion of the proposed sale, and in accordance with the Corporate Division Alternative form of the transaotion, the board of directors of 999 on July 8 and 9, 1993 adopted a plan of division pursuant to 15 Pa.C.S. 5S 1951 ~ sea. (the W999 Plan of DivisionW). Under the 999 Plan of Division, 999 will be divided into two resulting corporations, 999 and D-E Distribution" Corporation, a Pennsylvania corporation having its registered office in CUmberland County, pennsylvania. (nD-En). Those assets and liabilities of 999 which are to be sold to CRH will be retained by surviving 999. D-E will receive those asaeta and liabilities of 999 which are not included in ~he sale to CRH.~ In addition, under the 999 Plan of Division, D-E is the successor to 999 for purposes of, and therefore will be responsible for all of 999 liabilities under, the dissenters' rights provisions of the BCL. See 15 Pa.C.S. 5S 1571 ~ sea.~ 11/ Those assets are described in Schedule 1.03 to the 999 Plan of Division. ~I Section 1572 of the BCL provides that (continued. . .) F-15 ~rRFT HI">" 1979 " "~.'-"-.. ~".'--:-"'.~"'1"'.' .~"- ,..~.....,.~, JUL-1G;-1993. 14:58 FROM r ..lngersol-FRX R TO 12436441' P.17/29 " A virtually identical plan of division has been adopted at the same time by the board of directors of HQI (the "HQI Plan of Division"} (the 999 Plan of Division and the HQI Plan of Division are referred to collectively as the "Plans of Division) . HQI will divide into HQI as the surviving corporation and G.A-T Distribution Corporation, a Pennsylvania corporation having its registered office in CUmberland County, Pennsylvania ("G-A-T"). Under the HQI Plan of Division, HQI will retain those assets and liabilities of HQI to be sold to CRH. G-A-T will receive and be responsible for the remaining assets and liabilities of HQI, including any liabilities to dissenting shareholders. As indicated in the "Notice of Shareholder Actions - Right to Exercise Dissenters Rights and Call of Special Meetings of Shareholders. lthe "Shareholder Notice") to which this Information Statement is attached, on the same date as the Plans of Division were approved by the respective boards of directors of the corporations, Mrs. Mumma, Lisa and Linda, in their respective capacities as majority shareholders of 999 and HQI, consented in writing to the adoption of the Plana of Oivision by the corporations. In addition, at the same time as they approved ~(...continued) [a] plan of division may designate which of the resulting corporations is the successor corporation for the purposes [dissenters' rights]. The successor corporation in a division shall have sole responsibility for payments to dissenters and other liabilities under this subchapter, except as otherwise provided in the plan of division. F-16 1980 ~_/;'..ffJ"!r:~~t;f''7'''.r '!J JUL-16~1993' 14:58 FROM B. . Ingerso!-FAX A 12436441 P. 18/29 TO the Plans of Division,~ the respective boards of directors of 999 and HOI declared dividends (the "Nonbusiness Asset Dividends") to the present holders of the common stock of each company of all of the stock of D-E and G.A.T and all of the promissory notes issued by D-E and G-A-T pursuant to the Plans of Division. The stock of Kim and Kin, Inc. will also be distributed to the present shareholders of 999 by a Nonbusiness Asset Dividend. G. The Staae II Closina The Stage II Closing at which the sale of the pennsy Supply Businesses to CRH will be concluded will be held at a time to be agreed upon by CRH and Mrs. Mumma and Lisa. It is anticipated that iewill take place as soon as permitted under applicable law. See 15 Pa.e.s. S 1766(0). At the Stage II Closing the few shares of Kodie temporarily owned by Mrs. Mumma, Lisa and Linda will be canceled, CRH will purchase newly-issued stock of Kedie pursuant-to the -Subscription Agreement (thereby becoming the sole shareholder of Kodie), and the purchase funds escrowed by CRH will be released for distribution as contemplated by the Subscription Agreement and the Plans of Division, discussed below. ~ The Plans of Division and related Nonbusiness Asset Dividend resolutions were adopted on July 8, 1993, and the Plans of Division were amended on July 9. 1993. The Majority Shareholders approved the Plans of Division by written consent on July 8. 1993, and reapproved the amended Plans of Division by written consent on July 9. 1993. F-17 EXHIBIT liB" 1981 . ) I' f i ~ -"_.!-:'"._1 JUL-16-1993 14:59 FROM L-~h.lngersol-FAX R As of the Stage II Closing date, the divisions of 999 and HQl will be completed, all of the existing outstanding shares of 999 and HQI will be canceled,~ and those corporations will retain only those assets desired by CRH. Kodie will purchase newly-issued stock of 999 and HQl pursuant to the subscription agreements entered into with those entities at the Stage I Closing and under the Plans of Division will become the sole shareholder of both 999 and HQI. Concurrently, Kodie also will purchase the Paxton Street Yards from MRA~l, the Benders Quarry from tbe Marital Trust and the Lebanon Rock Option from the Estate. Thus, at the conclusion of tbe Stage II Closing, Kodie will be a wholly-owned subsidiary.of CRH and will own the entirety of the Pennsy Supply Businesses, except for LRl, and will have a 120~day period witbin which to decide whether to elect to purchase the Estate's 50% interest in LRI. Simultaneously with the issuance of new 999 and HQI stock to Kodie pursuant to the subscription agreements and the Plans of Division, 999 and HQl will pay Nonbusiness Asset Dividends of all of the outstanding stock in D-E and G-A-T, respectively and the promissory notes issued by each corporation under the Plans of Division, to the Mumma family (including Barbara and Bob if either or both of them elect to waive their right to dissent from the Plans of Division) as the former ~/ This action will trigger dissenters' rights in any shareholder objecting to the 999 Plan of Pivision or the HQI Plan of Division. See 15 Pa.C.S. ~~ ~S7~ and 1952(dl (11. F-~8 ~HI~r" "fj 1982 > ~. "" . . JUL-16-1993 15:00 FROM " holders of the cOI'lIllIOn stock of. 999 and HQl. Thus nondissenting Mumma family members after the Stage II Closing will own D-E and G-A-T in the same proportions, respectively, as they owned 999 and HQI common stock prior to the transactions with CRH. In addition, the balance of the cash received from Kodie as the subscription for new 999 and HQl stock will be transferred to D-E and G-A-T, respectively.~ Those portions of the total purchase price allocated to the Benders Quarry and the Lebanon Rock Option and to those portions of the paxton Street Yards owned by MRA-I will transferred by.Kedie to the Marital Trust, the Estate and MRA-I, respectively. MRA-l may be obligated to leave all or a portion of the purchase price allocable to it in escrow with the title insurance company insuring the title to this property for some period of time after the Stage II Closing. B. The :tnitial Diatr1bution of the Bulk of the Purcl1ase Price to HoDCliaalMltiDq V......her. of the Nt......... .lIm41v Most of the cash paid by Kodie for the Pennsy Supply Businesses will be distributable, directly or indirectly, to Mumma family members at the Stage II Closing. Fully $28 million (before adjustment for expenses of the sale an~ temporary title insurance escrows), or 87.5% of the total cash received by 999. HQI, MRA-I, the Marital Trust and the Estate, will be la/ Interest on the $ 32 million initial escrow deposit will be used to pay a part of the expenses of the transaction, e.g., rea1 estate transfer taxes, title insurance company charges and other expenses. F-J.9 ):)~!-'':i1~~7 "_?J;_r- 10""" JO",_)' .1 ';.,.,. "'- 1'"" ~ '-'-:I: .'jfd.';>-"'lW"~;~.l-:';;'~F;-~""'M/"~:~.~~'1,ot<,-:~,- ..<<;"~~,:.. '-__;.~"'''iP,'::.k~~1~~~ TO 12436441 P.2V29 JUL-16-1993 15:00 FROM Buch.lngersol-FAX A distributable at that time to family members who elect to receive ) such distribution. In order to assure that all of the family members are, as nearly as possible, treated equally, the Plana of Division establish a special procedure for payment of the Nonbusiness Asset Dividends and disbursement of the initial cash distributions on account of the CRH sale (the "Initial D . Distribution") to the family members. Under that procedure, each former shareholder of 999 and HQI need only submit her or his stock certificates to the appropriate corporation (D-E in the case of 999 certificates and G-A-T in the case of HQI certificates) for oancellation, together with a signed letter of transmittal referred to as a .COnsent and Joinder" in the form :l!\' '"' ) iJ) attached as Exhibit B to each of the Plana of Division. By signing the consent and joinder, a shareholder agrees to be bound by the covenants of the sale arrangement with CRH,W including, inter alia, those which operate to reduce the purchase price in the event that certain representations made regarding the nature and amount of the Penney Supply Businesses or their constituent assets prove to be untrue. If and when Barbara or i) Ii) J:: ill There is one exception to the rule of equality of treatment among the family members. In recognition of the fact that Bob owns and operates one or more businesses operating in competition with the Pennsy Supply Businesses, ~ In ReI Transcriot of proceedinas, No. 21-86-398 (O.C. cumbo May 11, 1992) (before Sheely, P.J.) (nI can certainly see that there . . . is competition from (Bob'S] businesses. . .n), he is excused from agreeing not to compete with CRH following its acquisition of the Penney Supply Businesses. See Section 15.21 of the Subscription Agreement. :) :~: ~ .~ F-20 198,1 nHlBIT "B" ) ~ ) ) ;) ) " J " ~ ,~ JUL-16-1993 15:01 FROM Bucn.lngersol-FAX A TO 12436441 P.22/29 SOb, or both, claim their Nonbusiness Asset Dividends and Initial Distributions, they will have joined in the CRH sale on essentially a pro rata basis. upon receipt from a shareholder of the required documentation. D-E and G-A-T will pay the full Nonbusiness Asset Dividends and the Initial Distributions to the shareholder. :1:. The Xndemnification Escrows and v1Dal nistribution of t:he a_:l.nder of the Purchase Price for the Pezmsy Suna1v Ru.~...88 The remaining portion of the cash paid by Kodie to D-E and G-A-T, rather than being distributed directly to the former shareholders'of 999 and HQI in the Initial Distribution, will instead be escrowed for a period of two years or more pursuant to the Subscription bgreement. Comparable portions of the purchase price receivedd1rectly by the Marital Trust for the Benders Quarry, by MRA-I for the tenancy's interest in the paxton Street Yards and by the Estate for the Lebanon Rock Option, also will be escrowed. The escrows total $ 4 million and the money will be available to secure obligations in the Subscription Agreement whereby Mrs. Mumma, Lisa, Linda and any other nondissenting sellers in their respective capacities agree to indemnify CRH as to: (aJ any breach of representations or warranties; (bJ claims against eRR's subsidiaries as prior owners arising out of the assets of 999 and HQI not purchased by CRH; and (oj claims brought by dissenting Mumma family members in existing or future litigation arising out of matters occurring prior to the Stage II F-21 :an.mlJBV "~" 1985 . . JUL-16-1993 15:02 FROM , n.lngersol-FRX R TO 12436441 P.23/29 Closing date..v At the end of the escrow periods, any unused funds will be released to one or more of the Estate, the Marital ) Trust, MRA-I, D-E and G-A-T, as their interests may appear. The funds released from escrow to D-E and G-A-T will augment the assets available to satisfy any liabilities of those corporations to dissenting shareholders or other persons arising from the sale and any costs and expenses of such entities subsequent to the sale. Once such liabilities have been satisfied, the remaining money received by D-E and G-A-T will be distributed by them to the nondisaenting former shareholders of 999 and HQl. ) ) 11 J. Provision for Protection of the Interests of Minority Shareholders of 999 ...'" HOl ) Mrs. Mumma, Lisa and Linda have made provision in the Plans of Division and the other transaction documents to protect and secure the interests of Barbara and Bob as minority shareholders 999 and HQl. Those shareholders have two options. First, Barbara and Bob may, as set forth above, simply join in the Subscription Agreement and become, in effect, participating sellers. In the event that Barbara or Bob or both elect this course, their rights vis-a-vis CRH with respect to the sale of the Pennsy Supply Businesses will be governed by the Subscription Agreement itself, and they will be treated no differently than Mrs. Mumma, Lisa and Linda, except, of course, ) } ) i t j ~ The Subscription Agreement provides for two escrows, a Regular and Non-Business Indemnification Escrow and a Litigation Indemnification Escrow. F-22 '.r~~"ti~tf_::f1t ;C~?y 1986 ) ) ) ~ ') ;il) "..,. ";J ,l ,1 "iJ l, JUL-16-1993' 15:02 FROM E ,.Ingerso!-FAX A . ~.. -, - ~'~.N;j),~-.' TO 12436441 P.24/29 that Bob will not be bound by any agreement not to compete with the Pennsy supply Businesses. The most significant effect will be to subject them to the limited and unlimited personal indemnification liabilities undertaken by Mrs. MUIIlII1a, Lisa and Linda in their various capacities in the Subscription Agreement. They will also receive the Nonbusiness Asset Dividends. Second, Barbara or Bob or both may choose to dissent from the plans of DiviSion, and the cancellation of their shares of the stock in 999 and HOl (these cancellations will take effect whether or not they exercise their dissenters rights under the BCL). In the event that Barbara or Bob select this option, their rights will be governed by the dissenters' rights provisions of the BCL. Any amounts WhiQh Bob and Barbara may be awarded pursuant to a Common Pleas court statutory appraisal will be secured by: (1) their proportional shares of the purchase price allocated to 999 and HOl received from caR and paid to D~E and G-A-T; (2) any unused escrow funds at the time those monies are returned to D-E and G-A-T (prior to distribution to the nondissenting former shareholders of 999 and HOI); and (3) the nonbusiness assets of 999 and HOI not acquired by CRH but instead retained by D-E and G-A-T. D-E and G-A-T will defer payment of any part of the appraised value of the 999 and HQX shares canceled in the division transaction until final judgment in the appraisal F-23 EXHIBIT "8" :t387 ;.',;e; proceedinge.~ Therefore, if Barbara or Bob or both elect this option.they will no longer have any interest in the nonbusineas asaets of the Mumma family owned by 999 and HQI, and probably will not receive any caah with respect to their interest in the nonbusiness assets of the Mumma family and the major portion of their investment in the Pennsy Supply Businesses for an undetermined number of years, but when payment is finally made, will be entitled to such amount of interest thereon as the court may determine to be appropriate in the circumstancee. See 15 I 'fJ Pa.C.S.!iS 1572 and 1579 (d) . In the event that Barbara or Bob does not dissent or properly tender her or his 999 and HQI stock certificates, her or his part of the Nonbusiness Asset Dividends and allocated shares of the purchase price paid by CRH for the pennsy SUpply Businesses will ultimately be paid over to their state of residence (the Commonwealth of Pennsylvania) as abandoned or unclaimed property.~ ) ~ ) ~ In any dissenters rights proceedings D-E and G-A-T expect to take the position that the "stand-alone" values of the equity of each of 999 and HQI at the effective date of the Plans of Division (and unaffected by the eRR eale) would be substantially less than their allocable values as oomponents of an integrated pennsy Supply Businesses enterprise and that they should therefore be valued only on an independent or "etand-alone" basis. I \ >> ~ Prior to this payment, the sharee of Barbara or Bob, or both. would be held by D.E and G-A-T as security for CRH and other sale claims in lieu of joinder in the Subscription Agreement. F-24 ~II>lJ'l"","' 1988 It '<.'- . JUL-16~1993 .15:03 FROM BL 'Ingersol-FAX A TO 12436441 K. Reauired :tndu(l.........~s bv Buyer AQ'ains~ LitiQ'a~ion bv Bob Due in large part to Bob's repeated interference with and frustration of past attempts to sell the family businesses, CRH required that provision be made in the Subscription Agreement for the possibility that Bob might again attempt to block a proposed sale to CRH. The Subscription Agreement provides that a terminati~n payment of $1 millio~ will be made by 999 to CRH in the event that, inter AliA, Bob succeeds in obtaining " (Subscription Agreement 5 13.1.1) : an injunction or other legal process which has the effect of preventing Owners from completing any of their obligations hereunder or of preventing any Transferor from transferring Assets, or of preventing [Kedie] from issuing the Shares in accordance with the provisions of this Agreement, which injunction or other process has not been vacated prior to August 4, 1993. Under Subscription Agreement S 13.2.2, 999 also becomes obligated to make, in the event of a termination of the Subscription Agreement: [a] payment equal to 90% of all legal fees in excess of US $25,000 incurred by [CRH] after May 6, 1993 in 201 The $1 million figure is intended (Subscription Agreement 5 U.2.1): to compensate [CRH] for all risks and costs, excluding legal fees, associated with entering into this Agreement and not being able to consummate it, including, but not limited to, fCRH]'s lost opportunity costs, and prior costs [CRH] has incurred in attempting to consummate a purchase of the pennsy Supply Businesses. The foregoing payment reflects a reasonable forecast as to the amount of compensation necessary to fUlly compensate [CRH] for all risks incurred heretofore described, such risks and costs being otherwise difficult to estimate at the time of entering into this Agreement. F-25 ~ :i :~~'tl'ii~I:n,:rv 'if,,"" 198~) ~ ) ) 1) :D , ) , .;~~ __._.-"-,:o,..i(.. -- - '.-:.'''''' ..~.,~':~-"~" - . ~ . -",;"- JUL-16-1993 15:04 FROM Buch.lngersol-FRX R 12436441 P.27/29 connection with the preparation and negotiation of, and the updating and completion of, this Agreement and all exhibits, schedules, agreements, instruments or documents attached hereto or contemplated hereby. Pursuant to the Subscription Agreement, 999 was required to and has delivered an irrevocable letter of credit to CRH. One purpose of the letter of credit is to provide a standby source of funda in the event that 999 becomes obligated, by virtue of legal action, to make the $1 million and other termination payments to CRH. L. Financial tnformation Attached as Annex G to the Shareholder Notice is a copy of the unaudited pro forma financial results of the pennsy Supply Businesses for the Fiscal Year ended June 30, 1992. In conformity with..past practices financial statements for HQI and 999 will be transmitted to shareholders as they become available, which is expected to be by August 1, 1993 in the case of HOl and September 1, 1993 in the case of 999. K. Federa1 Income Tax Matters THE FEDERAL AND STATE INCOME TAX CONSEQUENCES DISCUSSED BELOW DEPEND UPON BACH SHAREHOLDER'S PARTICULAR TAX STATUS AND DOMICILE, AND DEPEND FORTHER UPON FEDERAL INCOME TAX LAWS, REGULATIONS, RULINGS AND DECISIONS WHICH ARE SUBJECT TO CHANGE (WHICH CHANGES MA~ BE RETROACTIVE IN EFFECT). EACH SHAREHOLDER SHOULD CONSULT HER OR HIS OWN TAX ADVISOR FOR A COMPLETE DESCRIPTION OF THE TAX CONSEQUENCES OF THESE TRANSACTIONS. F-26 ~"HrlJrT '1J" 1990 . . JUL-16-1993 15:05 FROM h ,l. Ingerso!-FRX R TO --.._._-_.~,- ", 0"_, "'$)'11,,),-' 12436441 P.28/29 ) The discussion below is a summary of the united States federal income tax consequences which an individual shareholder may incur in connection with the transactions described in the Subscription Agreement and the Plans of Division. The discussion is baaed on the Internal Revenue Code of 1986, as amended, and ) ) the related regulations, rulings and decisions currently in effect (the .Code"). The conversion of each shareholder's shares in 999 and ) fJ HQI into the right to receive the payments described in the plans of Division will be a taxable transaction for federal income tax purposes and may also be a taxable transaction under applicable state, local and foreign laws. For federal income tax purposes, ') gain or loss will be recognized by each shareholder in an amount equal to the difference between (1) the sum of the cash received for the shares canceled, plus the fair market value of the property and other rights received by the shareholder by means of the Nonbusiness Asset Dividends of D-E common stock, G-A-T common stock, Kim & Kin, Inc. common stock and the promissory notea issued by D-E and G-A-T pursuant to the Plans of Division, and (2) the shareholder'S adjusted tax basis in the shares canceled. Assuming that each shareholder holds her or his shares as a capital asset at the time the Plans of Division take effect, gain or loss in respect of the shares converted will be entitled to capital gain treatment. Each shareholder should consult her or his tax advisor with respect to the applicable rules for a determination of whether or not the shares have been held for a ) :) ;) * I~ :~ ~ F-27 " i\ l~~' ,I (tXl11IiBH "'1<" 1991 JUL-16-199~ 15:05 FROM h. I ngerso I-FAX A TO 12436441 P.29/29 ) period sufficient to qualify for long-term capital gain treatment and with respect to the potential for application of rules regarding installment sale method of reporting gain due to the fact that a portion of the consideration may be held in escrow for two years or more. The provisions of the Code applicable to alternative minimum tax will also be applicable to any shareholder recognizing net capital gain in connection with these transactions. N. Dig.en~erg Rioh~. Procedures ) 'IJ Information concerning the procedures for exercising dissenters rights as shareholders of 999 or HQI, or both, is set forth in the Shareholder Notice to which this Information Statement ia attached as Annex F. and in the BCL text attached to the Shareholder Notice as Annex D. ) ) Date: July 9, 1993 ]) ) / l F-28 :1992 i't}t!:'-ht.(:',., "I;" r CERTIFICATE OF SERVICE I, Robert G. Frey, do hereby certify that I am this day serving a true and correct copy of the foregoing Petition for Preliminary Injunction and Rule to Show Cause upon the Parties herein by frrst class United States mail, postage prepaid,to the counsel of record addressed as follows: COUNSEL PARTY REPRESENTED Charles E. Shields, ill, Esquire National Bank Building 2 West Main Street Mechanicsburg, Pennsylvania 17055 Mare J. Sonnenfeld, Esquire Brady L. Green, Esquire Morgan, Lewis & Bockius 2000 One Logan Square Philadelphia, Pennsylvania 19103-6993 Robert M. Mumma, IT Barbara McK Mumma and Lisa M. Morgan, individually and as Executrices of the Estate of Robert M. Mumma, Deceased !IIi ~ Ivo V. Otto, ill, Esquire Martson Deardorff, Williams & Otto 10 East High Street Carlisle, Pennsylvania 17013 Barbara McK Mumma and Lisa M. Morgan, individually and as of the Estate of Robert M. Mumma, Deceased Richard W. Stevenson, Esquire P. O. Box 1166 Harrisburg, Pennsylvania 17108 Barbara M. McClure John H. Young, Esquire Porter, Wright, Morris & Arthur 1233 20th Street, NW Washington, D. C. 20036-2395 Linda M. Roth Gerald K. Morrison, Esquire Buchanan Ingersol Vartan Pare 30 North Third Street Harrisburg, Pennsylvania 17101 Robert M. Mumma, IT July 19, 1993 r Robert G. Frey 5 South Hanover Street Carlisle, Pennsylvania 17013 (717) 243-5838 1993 .... "')> !!. -\ ma(J)-\"11 -g.~go:a o=::;:Dm ~*":I:Z< __ j:l) m ::t\Jg -<AD ..;:::! )> < (IJ -I _ m . ~ -.,J ..... )> - (.oJ 0 U'J .....( r" tn W ~ ~ m en .~):to-< ~ -:E ~ n.... ~::3 ~o z~z ""'o~ ~"'~ qgg~ ....r-'r-' ~~~ ;;gs ><0 ~ ~ - 0... $:i ~ II. , l:l l"1 n t>l > 00 t>l l:l ~ I;l: ~ ~ a == == 1- z .... ~ l"1 ~ > ;d o "'l n",2 or-'.... c:t>l~ z~~n o~~o ;""'n~ ';"~c:.... ~z==o ,:"ool;l:"'l ~><t>ln Ql)r-'~o <r-'~ ~~~ >l:l0 Z IN THE ESTATE OF ROBERT M. MUMMA, Deceased IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION . . NO. 21-86-398 IN RE: PRELIMINARY INJUNCTION BEFORE SHEELY. P.J. ORDER OF COURT AND NOW, July 22, 1993, the request for an ex parte preliminary injunction is REFUSED. I set a hearing on the preliminary injunction for Monday, July 26, 1993, at 9:00 a.m., in Courtroom No.1. The court does not intend to rehash any prior disputes in which a decision was previously rendered. By the Court, ~/t=b Hiro dE. [Sheely, P.J. Charles E. Shields, III, Esquire C. 4QjL~ '][ "7 _ -u-'l3 For Robert M. Mumma, II Marc J. Sonnenfeld, Esquire (Y)~~O - 'l-;;l,;;!Q3 Brady L. Green, Esquire For Barbara McK Mumma and Lisa M. Morgan Ivo V. Otto, III, Esquire~(J~ 1/daN3- For Barbara McK Mumma and Lisa M. ~organ Richard W. Stevenson, Esquire- fl1Q~~ ~d -I-J~ "13 For Barbara M. McClure John H. Young, EsquirefY)~rA.<>" 7-;ld,-r13 For Linda M. Roth -7-0 Gerald K. Morrison, Esquire ma.~<9 ~ - ')-d.=< "1-3 For Robert M. Mumma, II Robert M. Frey, Esquire Guardian ad litem ,. culled b J fLt..1..J - ~ 'l/1/Z('l3 V :pbf 1994 L ~- V> 2 ~ ~ ~ IN THE ESTATE OF ROBERT M. MUMMA, DECEASED . . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION . . . . : NO. 21-86-398 IN RE: EXCEPTIONS OF GUARDIAN AD LITEM TO ENTER OF ORPHANS' COURT BEFORE SHEELY, P.J. ORDER OF COURT AND NOW, July 21, 1993, having previously considered the exceptions raised by the guardian ad litem in our previous opinions, we hereby DENY the exceptions of the guardian ad litem dated April 2, 1991. ~ The delay in issuing this order on the exceptions is the=-ault of this office in that we had forgotten further action wasttequired on this issue. ii!: VI ~ By the Court, ---- Charles E. Shields, III, Esquire C, ~tid 1!f 7 -7 '>--'i3 For Robert M. Mumma, II Marc J. Sonnenfeld, Esquire ~l ~ ')-:<;;1.-'13 Brady L. Green, Esquire For Barbara McK Mumma and Lisa M. Morgan Ivo V. Otto, III, Esquire~oe~ rr/ac1f'!'3 For Barbara McK Mumma and Lisa M. Morgan Richard W. Stevenson, Esquire -j)Jc4.Q,,J ~ 7-;;'"';,</3 For Barbara M. McClure John H. Young, Esquire -mQ&J C"fii ? -;;.~r;i3 For Linda M. Roth 0 Gerald K. Morrison, Esquire m~ ~ - 1-;;';;l.-Cf'3 For Robert M. Mumma, II Robert M. Frey, Esquire, Guardian ad litem ~uUv,j b 0/2 Z/"ls 7 ~ ~'1cr 1995 ~ .L