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Home My WebLink About12-06-06 (2) REV..WI EX' ~ f J r *' REV-1500 INHERITANCE TAX RETURN RESIDENT DECEDENT OFFIC;';L uSE ONL Y COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE DEPT.2S0e0l HARRISBURG, PA 171211-0801 FILE NUMBER 21 06 COUNTY CODE YEAR SOCIAL SECURITY NUMBER 020-07 -2899 ~ III ~ III Q III .... :.:oC~ O~:': IIIlL8 :z:~-' OlLlIl lL oC DECEDENTS NAME (LAST, FIRST, AND MIDDLE INITIAL) Woods, Charles J. 0472 NUMBER 03/14/2006 04/24/1924 THIS RETURN MUST BE FILED IN DUPLICATE WITH THE REGISTER OF WILLS DATE OF DEATH (MM-DD-YEAR) DATE OF BIRTH (MM-DD-YEAR) (IF APPLICABLE) SURVIVING SPOUSE'S NAME ( LAST, FIRST AND MIDDLE INITIAL) Woods, Eleanor M ~ 1. Original Retum 0 o 4. Limited Estate ~ ~ 6. Decedent Died Testate (Attach copy 1&1 of Will) o 9. Litigation Proceeds Received 0 029-16-5749 o 3. Remainder Retum (date of death prior to 12-13-82) 1&1 5. Federal Estate Tax Retum Required o 8. Total Number of Safe Deposit Boxes o 11. Election to tax under Sec. 9113(A) (Attach Sch 0) E I Susan E. Lederer ~IRM NAME (If applicable) ~ Law Offices of Susan E. Lederer ELEPHONE NUMBER 717/652-7323 1. Real Estate (Schedule A) 2. Stocks and Bonds (Schedule B) 4811 Jonestown Rd. Suite 226 Harrisburg, PA 17109 (1 ) None (2) None (3) None (4) None (5) 403,178.36 (6) None (7) 2,590,538.88 (9) 35,418.47 (10) 4,800.58 2. Supplemental Retum 4a. Future Interest Compromise (date of death after 12-12-82) 7. Decedent Maintained a Living Trust (Attach copy of Trust) 10. Spousal Poverty Credit (date of death between 12-31-91 ..... mz ~~ OZ u2 3. Closely Held Corporation, Partnership or Sole-Proprietorship z o ~ 5 ::) .... ~ Iii a:: 4. Mortgages & Notes Receivable (Schedule D) 5. Cash, Bank Deposits & Miscellaneous Personal Property (Schedule E) 6. Jointly Owned Property (Schedule F) o Separate Billing Requested 7. Inter-Vivos Transfers & Miscellaneous Non-Probate Property (Schedule G or L) 8. Total Gross Assets (total Lines 1-7) 9. Funeral Expenses & Administrative Costs (Schedule H) 10. Debts of Decedent, Mortgage Liabilities, & Liens (Schedule I) 11. Total Deductions (total Lines 9 & 10) 12. Net Value of Estate (Line 8 minus Line 11) 13. Charitable and Governmental Bequests/Sec 9113 Trusts for which an election to tax has not been made (Schedule J) 14. Net Value Subject to Tax (Line 12 minus Line 13) (") ~O :D:O ~j-O"-",, --::r:..." .~~~ --)(")0 -_-) C> ., ;:::J C : ::0 :p --(8) (11 ) (12) (13) (14) SEE INSTRUCTIONS ON REVERSE SIDE FOR APPLICABLE RATES 15.Amount of Line 14 taxable at the spousal tax rate, 479,208.13 x .00 (15) or transfers under Sec. 9116(a)(1.2) z 1,106,407.96 .045 (16) 0 16.Amount of Line 14 taxable at lineal rate x ~ ~ ::) lL 17. Amount of Line 14 taxable at sibling rate x .12 (17) :2 0 0 ~ 18. Amount of Line 14 taxable at collateral rate x .15 (18) 19. Tax Due (19) CHECK HERE IF YOU ARE REQUESTING A REFUND OF AN OVERPAYMENT Copyright 2000 form software only The Lackner Group, Inc. OFFiCIAL USE ONLY ,......, c::::l c::t ~ o rrt (""') I O'l .:-J:i) .:orTl '_':"~1 C,' '-> ) c.-:> 0-:;;::.9 ._-- i -.....:;J [Tl fTl ...00 5:"20 . , :-R C-~ f--' ~993{,fm24 ------ 40,219.05 2,953,498.19 1,367,882.10 1,585,616.09 0.00 49,788.36 49,788.36 Form REV-1500 EX (Rev. 6-00) Decedent's Complete Address: , STREET ADDRESS 5225 Wilson lane, Apt. 4100 CITY Mechanicsburg Tax Payments and Credits: 1. Tax Due (Page 1 Line 19) 2. Credits/Payments A. Spousal Poverty Credit 8. Prior Payments C. Discount I STATE PA , I ZIP 17055 ----- (1) 49,788.36 45,000.00 2,368.42 Total Credits (A + 8 + C) (2) 47,368.42 3. Interest/Penalty if applicable D. Interest E. Penalty TotallnteresUPenalty (0 + E) 4. If Line 2 is greater than Line 1 + Line 3, enter the difference. This is thEOVERPA YMENT. Check box on Page 1 Line 20 to request a refund 5. If Line 1 + Line 3 is greater than Line 2, enter the difference. This is theTAX DUE A. Enter the interest on the tax due. 8. Enter the total of Line 5 + 5A. This is theBALANCE DUE (3) (4) (5) (5A) (58) 0.00 2,419.94 2,419.94 Make Check Payable to: REGISTER OF WILLS, AGENT PLEASE ANSWER THE FOLLOWING QUESTIONS BY PLACING AN "X" IN THE APPROPRIATE BLOCKS 1. Did decedent make a transfer and: Yes No a. retain the use or income ofthe property transferred;............................................................................ ~ ~ ~: .~::::~ ~h;e:;~i~~:~s:~:=s~~~. ~~~~~ .~.~.~. ~.~~. :.~~:.~.~ .~~~~.~:~~.~~~. .~.~ .i~~. ~~~~~:""".'''.'''''''''''''''''''~~::::::::::: ~~.'.'. d. receive the promise for life of either payments, benefits or care?.......................................................... 2. If death occurred after December 12, 1982, did decedent transfer property within one year of death without receiving adequate consideration?.. ................ ..... ..................... .............. .............. ..... ............ n.... ............ ..... 0 ~ 3. Did decedent own an "in trust for" or payable upon death bank account or security at his or her death?......... ~ 0 4. Did decedent own an Individual Retirement Account, annuity, or other non-probate property which contains a beneficiary designation?............................ .................................................................................... ~ 0 IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHEDULE G AND FILE IT AS PART OF THE RETURN. ADDRESS 1 Carothers Circle Mechanicsburg, PA 17050 DATE 1.1.1/1 e b ---~-_._- -------~------- ----..-----DATE- I)..JJJD~ 17055 DATE 4811 Jonestown Rd. Suite 226 Harrisburg, PA 17109 I'L I <Db For dates of death on or after July 1, 1994 and before January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 3% [72 P.S. ~9116 (a) (1.1) (i)). For dates of death on or after January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 0% [72 P.S. ~9116 (a) (1.1) (ii)). The statutedoes not exemot a transfer to a surviving spouse from tax, and the statutory requirements for disclosure of assets and filing a tax return are still applicable even if the surviving spouse is the only beneficiary. For dates of death on or after July 1, 2000: The tax rate imposed on the net value of transfers from a deceased child twenty-one years of age or younger at death to or for the use of a natural parent, an adoptive parent, or a stepparent of the child is 0% [72 P.S. ~9116 (a) (1.2)]. The tax rate imposed on the net value of transfers to or for the use of the decedent's lineal beneficiaries is 4.5%, except as noted in 72 P.S. ~9116 1.2) [72 P.S. ~9116 (a) (1)). The tax rate imposed on the net value of transfers to or for the use of the decedent's siblings is 12% [72 P.S. ~9116 (a) (1.3)]. A sibling is defined, under Section 9102, as an individual who has at least one parent in common with the decedent, whether by blood or adoption. * SCHEDULE E CASH, BANK DEPOSITS, & MISC. PERSONAL PROPERTY COMMONWEALTH OF PENNSYlVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Woods, Charles J. FILE NUMBER 21 - 06 - 0472 Include the proceeds of litigation and the date the proceeds were received by the estate. All property jointly-owned with the right of survivorship must be disclosed on schedule F. ITEM DESCRIPTION VALUE AT DATE 0 NUMBER DEATH 1 U.S. Savings Bonds titled to Charles J. Woods (inventory attached) 31,728.00 2 U.S. Savings Bonds, titled to Charles J. Woods or Eleanor M. Woods (inventory attached) 58,376.00 (disclaimed by Eleanor M. Woods) 3 U.S. Savings Bonds, titled to Charles J. Woods POD Eleanor M. Woods (inventory attached) 83,100.00 (disclaimed by Eleanor M. Woods) 4 Checking Account No. 6100701212, held at Citizens Bank, titled to Charles J. Woods 11,067.52 5 Bethany Village (refund check credited to Eleanor M. Woods) 1,117.18 6 Capital Blue Cross (refund of health insurance premium) 628.38 7 Malpezzi Funeral Home (refund check) 100.00 8 GMAC Demand Note, titled to Charles J. Woods 66.53 9 19,169.181 shares of Vanguard Pennsylvania Long-Term Tax-Exempt Fund Admiral Shares, 216,994.75 CUSIP No. 92204L 104, Account No. 9882959244, held at The Vanguard Group, Inc., titled to Charles J. Woods, owner, Eleanor M. Woods, beneficiary (disclaimed by Eleanor M. Woods) (accrued dividend $383.00) ($11.30/sh) TOTAL (Also enter on Line 5, Recapitulation) 403,178.36 F '* SCHEDULE G INTER-VIVOS TRANSFERS & MISC. NON-PROBATE PROPERTY COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Woods, Charles J. i FILE NUMBER- 21 - 06 - 0472 I This schedule must be completed and filed if the answer to any of questions 1 through 4 on page 2 is yes. ITEM DESCRIPTION OF PROPERTY DATE OF DEATH %OF EXCLUSION TAXABLE VALUE NUMBER Include the name of the transferee, their relationship to decedent VALUE OF ASSET DECD'S (IF APPLICABLE) and the date of transfer. Attach a copy of the deed for real estate. INTEREST _.~- 1 Treasury Bill, CUSIP No. 912795XB2, held at Legacy 1,000,000.00 100% 1,000,000.00 Treasury Direct, Account No. 1300-088-9339, titled to Charles J. Woods and Eleanor M. Woods, Trustees of the Charles J. Woods Living Trust dated November 22,2005 2 Treasury Note, CUSIP No. 912828CDO, held at Legac~ 500,000.00 100% 500,000.00 Treasury Direct, Account No. 1300-088-9339, titled to Charles J. Woods and Eleanor M. Woods, Trustees of the Charles J. Woods Living Trust dated November 22,2005 3 Treasury Note, CUSIP No. 912828AZ3, held at Legacy 100,000.00 100% 100,000.00 Treasury Direct, Account No. 1300-088-9339, titled to i Charles J. Woods and Eleanor M. Woods, Trustees of the Charles J. Woods Living Trust dated November 22,2005 i 4 2,899.666 shares of Vanguard International Value 110,100.32 100% 110,100.32 Fund, CUSIP No. 921939203, Account No. 9882959244, held at The Vanguard Group, Inc., Charles J. Woods, owner, Eleanor M. Woods, I beneficiary ($37.97/sh) 5 366.071 shares of Vanguard Health Care Fund 52,966.81 100% 52,966.81 Investor Shares, CUSIP No. 921908885, Account No. 9882959244, held at The Vanguard Group, Inc., Charles J. Woods, owner, Eleanor M. Woods, beneficiary ($144.69/sh) 6 3,663.523 shares of Vanguard Asset Allocation Fund Investor Shares, CUSIP No. 922020102, Account No. 9882959244, held at The Vanguard Group, Inc., Charles J. Woods, owner, Eleanor M. Woods, beneficiary ($26.42/sh) 96,790.28 100% 96,790.28 Total of Continuation Schedule(s) TOTAL (Also enter on line 7, Recapitulation) 827,471. 75 2,590,538.88 'W SCHEDULE G INTER-VIVOS TRANSFERS & MISC. NON-PROBATE PROPERTY continued Woods, Charles J. --.j FILE NUMBER ESTATE OF ~. 21 _ 06 - 0472 This schedule must be completed and filed if the answer to any of questions 1 through 4 on page 2 is yes. COMMONWEAlTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ITEM NUMBER DESCRIPTION OF PROPERTY Include the name of the transferee. their relationship to decedent and the date of transfer. Attach a copy of the deed for real estate. DATE OF DEATH VALUE OF ASSET %OF DECO'S INTEREST EXCLUSION (IF APPLICABLE) TAXABLE VALUE 7 2,540.949 shares of Vanguard U.S. Growth Fund Admiral Shares, CUSIP No. 921910105, Account No. 9882959244, held at The Vanguard Group, Inc., Charles J. Woods, owner, Eleanor M. Woods, beneficiary ($47.42/sh) 120,491.80 100% 120,491.80 8 4,990.001 shares of Vanguard LifeStrategy Moderate 95,358.92 100% 95.358.92 Growth Fund, CUSIP # 921909404, Account No. 9882959244, held at The Vanguard Group, Inc., I Charles J. Woods, owner, Eleanor M. Woods, beneficiary ($19.11/sh) 9 Private Mortgage held by the Charles J. Woods and 458.830.75 100% 458,830.75 Eleanor M. Woods, Trustees of the Charles J. Woods ! Living Trust, Kevin J. Woods, mortgagor I 10 cash gift to Marc E. Sable 10,000.00 100% 3,000.001 7,000.00 11 cash gift to Diane E. Sable 10,000.00 100% 3,000.00 7.000.00 I I 12 cash gift to Kevin J. Woods 10.000.00 100% 3.000.001 7.000.00 13 cash gift to Gail C. Woods 10.000.00 100% 3,000.00 7,000.00 14 cash gift to Lauren E. Sable 10,000.001 100% 3.000.00 7.000.00 I I ! Page 2 of Schedule G 'W SCHEDULE G INTER-VIVOS TRANSFERS & MISC. NON-PROBATE PROPERTY continued COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Woods, Charles J. FILE NUMBER 21 - 06 - 0472 ITEM NUMBER This schedule must be completed and filed if the answer to any of questions 1 through 4 on page 2 is yes. I Include and the DESCRIPTION OF PROPERTY DATE OF DEATH %OF EXCLUSION DECO'S the name of the transferee, their relationship to decedent VALUE OF ASSET INTEREST (IF APPLICABLE) TAXABLE VALUE date of transfer. Attach a copy of the deed for real estate. Brian D. Sable 10,000.00 100% 3,000.00 7,000.00 Brent S. Woods 10,000.00 100% 3,000.00 7,000.00 i I I Erika B. Woods 10,000.00 100% 3,000.00 7,000.00 I I ! I 15 cash gift to 16 cash gift to 17 cash gift to L _ Page 3 of Schedule G w SCI-EDl1..E H FlN:RAI..EXPENses& AaVINS1RAllVE COSTS COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT FILE NUMBER 21 - 06 - 0472 ESTATE OF Woods, Charles J. Debts of decedent must be reported on Schedule I. ITEM NUMBER FUNERAL EXPENSES: A. 1 Malpezzi Funeral Home B. DESCRIPTION AMOUNT 9,977.30 2 Funeral Dinner 443.17 1. ADMINISTRA liVE COSTS: Personal Representative's Commissions Social Security Number(s) I EIN Number of Personal Representative(s): Street Address City State Zip 2. 3. Year(s) Commission paid Attorney's Fees Law Offices of Susan E. Lederer Family Exemption: (If decedent's address is not the same as claimant's, attach explanation) Claimant Eleanor M. Woods Street Address City Relationship of Claimant to Decedent Spouse Probate Fees Cumberland County Register of Wills 134.00 20,000.00 3,500.00 4. 5. Accountant's Fees 6. Tax Return Preparer's Fees 7. Other Administrative Costs 1 Schwartz, Lason, Harris (accountant) 1,060.00 Total of Continuation Schedule(s) 304.00 35,418.47 TOTAL (Also enter on line 9, Recapitulation) '* SchecUe H Fu1eraI Expenses & Pd.1i dd611eCos'ls conIhJed COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Woods, Charles J. FILE NUMBER 21 - 06 - 0472 2 Filing Fee for Pennsylvania Inheritance Tax Return and Inventory 3 Register of Wills (additional probate fees) 4 Regsiter of Wills (short certificate) 30.00 270.00 4.00 Page 2 of Schedule H *' SCHEDULE I DEBTS OF DECEDENT, MORTGAGE LIABILITIES, & LIENS COMMONWEAlTH OF PENNSYlVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Woods, Charles J. FILE NUMBER 21 - 06 - 0472 Include unreimbursed medical expenses. --------- - ___".___n____ ITEM DESCRIPTION NUMBER AMOUNT 1 Kelly Home Care Services (Nursing Assistance) 589.05 2 Bethany Village (Skilled Nursing Care) 3.261.53 3 Holy Spirit Hospital (medical bill) 950.00 TOTAL (Also enter on Line 10, Recapitulation) 4,800.58 REV-4S13 EX+ (9-10) w SCHEDULE J BENEFICIARIES I I I I I FILE NUMBER i 21 - 06 - 0472 COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Woods, Charles J. --.--- RELATIONSHIP TO AMOUNT OR SHARE NUMBER NAME AND ADDRESS OF PERSON(S) RECEIVING PROPERTY DECEDENT OF ESTATE Do Not List Trustee(s) I. TAXABLE DISTRIBUTIONS (include outright spousal distributions) 1 Marc E. Sable Son-in-Law $7,000.00 1 Carothers Circle Mechanicsburg, PA 17050 2 Diane E. Sable Daughter $7,000.00 1 Carothers Circle Mechanicsburg, PA 17050 3 Kevin J. Woods Son $7,000.00 5125 Kylock Road Mechanicsburg, PA 17055 See Continuation Schedule(s) attached Enter dollar amounts for distributions shown above on lines 15 through 18, as appropria e, on Rev 1500 cover sheet II. NON-TAXABLE DISTRIBUTIONS: I A. SPOUSAL DISTRIBUTIONS UNDER SECTION 9113 FOR WHICH AN ELECTION TO TAX IS NOT BEING MADE 1 Life estate interest of Eleanor M. Woods in Family (Credit Shelter) Trust under Article Ten 485,096.60 of the Charles J. Woods Living Trust dated November 22, 2005 2 Charles J. Woods Marital Exempt Trust 423,954.75 3 Charles J. Woods Non-Exempt Marital Trust 458,830.75 I B. CHARITABLE AND GOVERNMENTAL DISTRIBUTIONS TOTAL OF PART 11- ENTER TOTAL NON-TAXABLE DISTRIBUTIONS ON LINE 13 OF REV-1500 COVER SHEE 1,367,882.10 * COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE J BENEFICIARIES continued ESTATE OF Woods, Charles J. NUMBER NAME AND ADDRESS OF PERSON(S) RECEIVING PROPERTY I 'A V ABLE DISTRIBUTIONS [include outright spousal distributions, and transfers under . '"'^'"' Sec. 9116(a)(1.2)] 4 Gail C. Woods 5125 Kylock Road Mechanicsburg, PA 17055 5 Lauren E. Sable One Irving Place Apt. U-8J New York, NY 10003 6 Brian D. Sable 914 Heritage Hills UnitB Somers, NY 10589 7 Brent S. Woods 8281/2 N. Swettzer Los Angeles, CA 90069 8 Erika B. Woods 7 Bartlett Place Unit # 3 Boston, MA 02113 9 Eleanor M. Woods 5225 Wilson Lane, Apt. 4100 Mechanicsburg, PA 17055 Page 2 of Schedule J J I FILE NUMBER 21 - 06 - 0472 RELATIONSHIP TO AMOUNT OR SHARE Do ~~~i;~~~t~.) OF ESTATE Daughter-in-Law Granddaughter Grandson Grandson Granddaughter Wife $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 Vanguard IRA ($479,208.13) & Family Exemption REV-1514 EX+ (9-00) '* SCI-EDlI..E K LFE ESTA1E, AtHJTY & 1ERM CERTAt-J (Check Box 4 on Rev-1500CcNerSheet) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT I FILE NUMBER 21 - 06 - 0472 ESTATE OF Woods, Charles J. This schedule is to be used for all single life, joint or successive life estate and term certain calculations. For dates of death prior to 5-1-89, actuarial factors for single life calculations can be obtained from the Department of Revenue, Specialty Tax Unit. Actuarial factors can be found in IRS Publication 1457, Actuarial Values, Alpha Volume for dates of death on or after 5-1-89. Indicate the type of instrument which created the future interest below and attach a copy to the tax return. o Will I8J Intervivos Deed of Trust 0 Other I NEAREST AGE AT DATE OF BIRTH DATE OF DEATH I 08124/1925 81 IllI L~fe or o Life or o Life or o Life or TERM OF YEARS LIFE ESTATE IS PAYABLE NAME(S) OF LIFE TENANT(S) o Term of Years o Term of Years o Term of Years o Term of Years Eleanor Woods 1. Value of fund from which life estate is payable $ 1,535,504.56 2. Actuarial factor per appropriate table Interest table rate - 03 1/2% 06% 0 10% I8J Variable Rate 3. Value of life estate (Line 1 multiplied by Line 2) .31592 5.4% $ 485.096.60 H NEAREST AGE AT DATE OF BIRTH DATE OF DEATH o Life or I . 1 o Life or o Life or o Life or TERM OF YEARS ANNUITY IS PAYABLE o Term of Years o Term of Years o Term of Years o Term of Years NAME(S) OF ANNUITANTS 1. Value of fund from which annuity is payable $ 2. Check appropriate block below and enter corresponding (number) Frequency of payout - 0 Weekly (52) 0 Hi-weekly (26) o Semi-annually (2) 0 Annually (1) 3. Amount of payout per period 4. Aggregate annual payment. Line 2 multiplied by Line 3 o Monthly (12) 0 Quarterly (4) o Other 0.00 5. Annuity Factor (see instructions) Interest table rate - 03 1/2% 06% 0 10% 0 Variable Rate 6. Adjustment Factor (see instructions) 7. Value of annuity - If using 3 1/2%, 6%, 10% or if variable rate and period payout is at end of period, calculation is: Line 4 x Line 5 x Line 6 If using variable rate and period payout is at beginning of period, calculation is: (Line 4 x Line 5 x Line 6) + Line 3 NOTE: The values of the funds which create the above future interests must be reported as part of the estate assets on Schedules A through G of this tax retum. The resulting life or annuity interest(s) should be reported at the appropriate tax rate on Lines 13, 15, 16, 17 and 18. REV-1647 EX+ (9-00) *' SCH3JlI.E M FlJTl.R t.1 ~T CXJ\FRONISE (CheckBox4a 00 RaY-1500 QNerSheet) . COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESI[)ENT DECEDENT This schedule Is appropriate only for Estates of decedents dying after December 12,1982. This schedule is to be used for all future interests where the rate of tax which will be applicable when the future interest vests in possession and enjoyment cannot be established with certainty. Indicate below the type of instrument which created the future interest and attach a copy to the tax return D Will 181 Trust 0 Other I FILE NUMBER 21 - 06 - 0472 ESTATE OF Woods, Charles J. I. Beneficiaries NAME OF BENEFICIARY RELATIONSHIP DATE OF BIRTH N:S:1O tEARESTBRJK)\y 1. Kevin J. Woods Son 07/12/1949 57 Diane E. Sable Daughter 04/27/1952 54 "~ 2. ---~- 3. 14. 5. i II. For decedents dying on or after July 1, 1994. if a surviving spouse exercised or intends to exercise a right of withdrawal within 9 months of the decedent's death. check the appropriate block and attach a copy of the document in which the surviving spouse exercises such withdrawal r~t. Unlimited right of withdrawal D L~mited right of withdrawal III. Explanation of Compromise Offer: The Estate anticipates that the surviving spouse, Eleanor M. Woods, will not need to invade the Trust principal durin her lifetime. g Eleanor M. Woods is currently living at Bethany Village, an independent living facility. Her monthly income is approximately $15,000.00. At the present time, her income is adequate to meet her monthly expenses. It is not anticipated that she will need to invade the principal of the Trust for her benefit. Since there are.no extraordinary facts or circumstances involved in this case, an actuarial approach should be used. Therefore, the Estate elects to pay tax on the remainder interest of the Family (Credit Shelter) Trust at a lineal rate of 4.5%. I I I I IV. I Summary of Compromise Offer: I 1. Amount of Future Interest: I 2. Value of Line 1 exempt from tax as amount passing to charities, etc. (also include as part of total shown on Line 13 of Cover Sheet) 3. Value of Line 1 passing to spouse at appropriate tax rate Check One 0 6% 0 3% 0 0% (also include as part of total shown on Line 15 of Cover Sheet) 4. Value of Line 1 taxable at lineal rate o 6% I1a 4.5% (also include as part of total shown on Line 16 of Cover Sheet) 5. Value of Line 1 taxable at sibling rate (12%) (also include as part of total shown on Line 17 of Cover Sheet) 6. Value of Line 1 taxable at collateral rate (15%) (also include as part oftotal shown on Line 18 of Cover Sheet) 7. Total value of Future Interest (sum of Lines 2 thru 6 must equal Line 1) 1,050,407.96 1,050,407.96 1,050,407.96 . *' SCtEU.EO aECT10N lHlERSEC. 9113(A) (SPOUSAL DS1RIlJT1ONS) COMMOMNEAL TH OF PENNSYlVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF I FILE NUMBER 21 - 06 - 0472 Do not complete this schedule unless the estate is making the election to tax assets under Section 9113(A) of the Inheritance & Estate Tax Act. If the election applies to more than one trust or similar arrangement, a separate form must be filed for each trust. This election applies to the Family (Credit Shelter) Trust (marital, residual A, B, By-pass, Unified Credit, etc.). Woods, Charles J. If a trust or similar arrangement meets the requirements of Section 9113(A), and: a. The trust or similar arrangement is listed on Schedule 0, and b. The value of the trust or similar arrangement is entered in whole or in part as an asset on Schedule 0, then the transferor's personal representative may specifically identify the trust (all or a fractional portion or percentage) to be included in the election to have such trust or similar property treated as a taxable transfer in this estate. If less than the entire value of the trust or similar property is included as a taxable transfer on Schedule 0, the personal representative shall be considered to have made the election only as to a fraction of the trust or similar arrangement. The numerator of this fraction is equal to the amount of the trust or similar arrangement included as a taxable asset on Schedule O. The denominator is equal to the total value of the trust or similar arrangement. Part A: Enter the description and value of all interests, both taxable and non-taxable, regardless of location, which pass to the decedent's surviving spouse under a Section 9113 (A) trust or similar arrangement. 1 DESCRIPTION Family (Credit Shelter Trust) under Article Nine of the Charles J. Woods Living Trust dated November 22, 2005 and any amendments thereto VALUE 485,096.60 Part A Total 485,096.60 Part B: Enter the description and value of all interests included in Part A for which the Section 9113 (A) election to tax is being made. DESCRIPTION I VALUE 1 ! Remainder interest in Family (Credit Shelter) Trust under Article Nine of the I 1,050,407.96 Charles J. Woods Living Trust dated November 22, 2005 , I I I I I Part B T alai I (If more space is needed, insert additional sheets of the same size) 1,050,407.96 SC}",-d:v~ ~ J -r~~ J en :...;.. Q 0)" ::J en ::; c.. 3 S' ~ o - o c.. en lIJ~ 0< w::s(t) Cola en 0 -.os .~3: .. CJI )> I I erC"C" C"ooo o::l::l:J ::lQ.o.o. C1 0. 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JC-O~arl4-:ilT-t:_2:1,-....E[ , . .' ~~!~:,~~~~";~1:~;~;J7i2'~'~_' o 0 0 0 ~ 3 . 7 2 2 7 f11 Sc ~d v ~ bJ -:t~ VV"\. L( >>-c .(. . -t. .... B k ".~ .......I....lzens ............"an...... Account Number 6100701212 Account Title CHARLES J WOODS Date Opened 11/24/1971 Account Type Checking Principal Balance as of DOD $11067.52 Interest from Last Posting to DOD $.00 Account Balance as of DOD $11067.52 I i YTD Interest to DOD $11.50 1 {13~ ~ Bethany Village T 325 Wesley Drive Mechanicsburg. PA 17055 ~'Jl uV Sc..kJv~ -E J APR 0 5 2006 rr.~ L-'"\ 5' Statement Date Due Date 04/04/2006 Upon Receipt ACCOUNT NUMBER 282 $(1,117.18 AMOUNT PAID $ If"!'-) dl-tfd ''10 /iYH',/ir{)ci Please make check payable to BETHANY WEST APARTMENTS CtC(\f{C/'vr, CHARLES J WOODS FRANKLlN/4100/A Remit To: BETHANY VILLAGE 325 WESLEY DRIVE MECHANICSBURG, PA 17055 Please detach and return this portion with your remittance to the address above. Comments a1e\~i:'::I~:S~~ft~~--\;j!. $1,951.00 Balance Forward 03/07/06 - 03/07/06 Payment Check # 1025 03/14/06 - 03/31/06 Monthly Fee $1,951.00 (18) $(1,117.18) TOTAL BALANCE DUE: $(1,117.18) APR 0 5 2006 FACILITY NAME BETHANY WEST APARTMENTS RESIDENT NAME CHARLES J WOODS ACCOUNT NUMBER 282 . - + Capital BlueCross rL~ ~ j 03/21/06 CHARLESJ WOODS ClOTHE ESTATEOFCHARLESJWOODS 5225 WILSON LN APT 41 00 MECHANICSBURG, PA 17055-6670 u" Explanation Of Refund...... Refund Reason: Subscriber Deceased-CharlesJ Woods-800334884 ~cLv0.., G-J -1:-\e-. ~ " \ \ \ MAR 2 4 2J06 CHECK NUMBER: 30008855 GROUP I SUBGROUP ID: 00900001 - ,\.., )f \\ ~~ ~. I .~ , , \' ,..... ("U~ \ ~I~J" ~, ( '\ IV "I \V \LX \ ~ ',I i I~ "\, ~0 OQ ~ ~1'1S \ tfJ r .'} \ t/ 1 7 ~ Total Refund Amount: $628.38 Heallh care benelil programs ISSUed or administered by Capital BlueCross and/or its subsidiaries, Capital Advantage Insurance Cump"IlY' "i.d KeY":K".e r"''''lh 1",i11 . :enlral 'lldep"l.uenl h.c..nsees 011118 Blue Cross and Slue Shield Association. Communications Issued by Capital BlueCross In its capacity as administrator 01 programs and oroviclw . elallon~ lor ai, ." .,'" . ; Nf' ..9 tS:2005, 5(:. ~~l v~ C-J ~. '-\-, /II 0 1 0 L. . 8uI I: 0 3 1 3 0 2 L. L. ? I: " :;'- ':" _ ,~>~::':~~~j.~:;t 1. t--, t~_3_L '.n}i~~;::~:~~ J-.. . . .. .-' ~;,~~,..ri'~. <.:_i..';_.c-"'~',:~';.i , _ . ,";.,'::- . PENNSYLVANIA STATE BANK ~. . CUMBERlAND PARKWAY.. 313 . o..l:'d'!fj\~L6}?i;:::~:~ '~:.~l,,~:~::~)q,:.{l~~~~(~~ :... ;.: . he.... ;f/:~ . ';,~,. ~." < -,. 1 5 L. 0 0 1 9 5 III .. ':::;:;::"_::'?::;.~, ":;.'~, ":0;.,.:, , ::'::::~. 2':',:'; ":.',; .:.~; ';:;.;:.:::" . ":. .:...... ...:....;.. ...:.:..::.:..... ..~;~t}};!r~~fi::.{~: ;:~~':.,: ;:~i~ :::~ ~. .~.-~.., .ff ;::'1'..;.-, "...'..:....,..;:..'.} " ,',..", '.~ '~~LLr -.. .;f'~:~.\:~::,':.~~J . . '.,';.:8/:~:~~~" ! -. ':~tI~11 . .~_:_';-'.W~~~~tf;:1~~;;r;/-~' . ,'. '. . . '~.E . ~'"~ ~ ~1f;~ ~) ~"{ .~ ), ~ \~~ ~ ~ ~~ ~I~ '\ ~ 2i~~~ ~ l".~ ~ ~. ~ ~ ~' H ~ ~.. ~~ 6i 5~C~6-,~..~<b DeIUandNotes O'y ~.f Demand Notes Operations Suite 154-0510 500 Ross Street Pittsburgh PA 15262 MAR 3 1 2006 CHARLES J WOODS 1370 0276 5225 WILSON LANE HPT 4100 MECHANICSBURG, PA 17055 PAGE: 1 PAYMENT SUMMARY DEMAND NOTES NUMBER: 90009012975217 CHECK NUMBER: 0000024089 CHECK DATE: 03/27/06 ..~.................................................................................................................................. (Detach Here) .............................................................................................................................................. Dem.andNotes by~ Demand Notes Operations Suite 154-0510 500 Ross Street Pittsburgh.PA 15262 I I 60-160/433 t-~..~I 03/27/2006 ~~l~l 0000024089 TO THE ORDER OF: CHARLES J WOODS 5225 WILSON LANE HPT 4100 MECHANICSBURG, PA 17055 VALID FOR 180 DAYS I $********66.531 MELLON BANK N.A. PITTSBURGH ,PENNSYLVANIA ~1~t;Jt~b-- Ifl 0 0 0 0 0 2 L, 0 a q III I: 0 L, :1 :1 0 ~ b 0 . I : 00 :illl 57 g gill 5~.C;~--:!,~ 9 S~cLv~G d:.'ft-vYlS y-~ -> .&:c,. ~ Vanguard" June 15, 2006 Vanguard@) Voyager Service@ Susan E. Lederer 4811 Jonestown Rd. Suite 226 Harrisburg, PA 17109 'PO. Box 1120 Valley Forge. PA 19482-1120 www.vanguard.com Re: Estate of Charles Woods Dear Ms. Lederer: We are responding to your letter requesting the values of the following accounts. Please convey our sincere condolences to the family of Charles Woods for their loss. As of March 14, 2006, the number of shares, the price per share, and the value of each account were as follows: Charles J. Woods-Individual Account 9882959244 Fund Name Shares Price Value Accrued Dividends Vanguard Pennsylvania Long-Term Tax-Exempt 19,169.181 $11 .30 $216,611.75 $383.00 Fund Admiral Shares Charles J. Woods. Rollover IRA 9882959244 Name Shares Price Value Accrued Dividends Vanguard International 2,899.666 $37.97 $110,100.32 - Value Fund lianguard Health Care Fund 366.071 $144.69 $52,966.81 - Investor Shares N'anguard Asset Allocation 3,663.523 $26.42 $96,790.28 - Fund Investor Shares Vanguard U.S. Growth Fund 2,540.949 $47.42 $120,491.80 - ~dmiral Shares rvanguard LifeStrategy 4,990.001 $19.11 $95,358.92 - Moderate Growth Fund The individual account was opened on October 29, 1992. The IRA was opened on November 19,1999. There were no changes of ownership to either account within one year of the date of death. VSLH 122005 The beneficiary listed on both the individual account and IRA is as follows: Name P . Eleanor M. Woods nmary . Per Stir es Birth I Trust Date Relationshi 08/24/1925 Spouse 100.00% When sending in the transfer papelWork, please reference that you have previously supplied Vanguard with the certified court document naming the executor. To process the transfer of the individual account, we need the beneficiary of the account to complete the enclosed Change of Ownership of Nonretirement Shares form. The change of ownership form will provide us with the new registration and Social Security number. It also will let you choose options for your new account. If the beneficiary will be adding an additional tenant, we will need her to have her signature guaranteed in section #4. All new account owners should sign the form in section #12. You can obtain a signature guarantee from an officer of a bank or trust company, or a member firm of a United States Stock Exchange. A notary public cannot provide a signature guarantee. 10 order for a signature guarantee to be valid, it must state the words "Signature Guaranteed", be signed by the guarantor, and indicate his or her position and title. It must also indicate the name of the institution issuing the guarantee. We also need you to submit an inheritance tax waiver. This document must list the Fund name(s) and the number of shares held as of the date of death. The agency to contact to obtain the waiver varies from state to state. Common agency names inciude the Department of Revenue, Comptroller of Public Accounts, and State Tax Commissioner. If you are not sure where to obtain the waiver, you should contact the Registrar of Wills in your county. To change ownership of the IRA account, please send a letter requesting the transfer and a completed Vanguard IRA Change of Registration and Adoption Agreement form. Our records indicate that Mr. Woods died after the required beginning date (RBD). The RBD is April 1 of the year after an IRA owner turns 70 % years of age. As the spouse, she may choose one of the options listed below. Ootion One: Treat the IRA as her own by transferring the balance to an IRA in her own name. If she has an existing Vanguard IRA, she may combine these assets. If she does not have an existing IRA, or would like to move these assets to a separate plan, the Vanguard IRA Change of Registration and Adoption Agreement form will allow her to establish a new account. This new account will be treated as if she were the original owner. She will be able to name beneficiaries, contribute the lesser of $4,000 ($5,000 age 50 and older) or 100% of her earned income, and defer distributions until age 70%. Ootion Two: As an alternative to option one, she could choose to transfer these assets to an inherited IRA in her name and Social Security number as the beneficiary of Mr. Wood's IRA. With an inherited IRA she may not make additional deposits. Any redemption will be reported on Internal Revenue Service Form 1099-R and will be taxable to her in the year of receipt. The 10% premature withdrawal penalty for individuals under the age of 59% will not apply to distributions from an inherited IRA. When we receive the requested documentation, the accounts will be transferred and confirmation will be forwarded to the address on record. If you have any questions, please contact your Voyager Service Team at 800-284-7245. Voyager's business hours are Monday through Friday from 8 a.m. to 10 p.m. and on Saturday from 9 a.m. to 4 p.m., Eastern time. One of our dedicated Voyager associates will be pleased to assist you. Sincerely, ~~ E. Brian Bonanni Registered Representative Enclosure(s): IRA Change of Registration Change of Ownership Form Correspondence Number 20047372 ru ~IH (NovambQr 2005) S cJ'\SL"\ 0~ &) <'t. ~~.5 \ -. 3 Malllll~ Numbar: (J~lOUI880 FEB 1 7 2006 Legacy Treasury Direc~ wwwtreasurydirect.gov 1-800- 722-2678 ,.304-480-6464 (Outside the U.S.) CHARLES J WOODS AND ELEANOR M WOODS TRUSTEES OF THE CHARLES J WOODS LIVING TRUST U/A DTD 11/22/05 5225 WILSON LANE APT 4100 MECHANICSBURG PA 17055 ITelepboDe:J~~l.l1l1ber:1 (717) 697-1310 lIu:p~y~iId~ntific:ltio:n:No ;:; . i __.-J Confidential ITaI.Withho!iling.st~t!ls:1 No withholding ... . . '" .ega~f:~~~~~;\~i~~t~;~~;:".:::j:j!~,'i:W.:',!,;::~~~:\\....:. 1300-088-9339 .. ". -.... ......: . ..,. ..:' . .n. .." _,' .,_... _..:~.. i:::>:)~nr:~;:\~ljfe~;:~n:: ;:'. ;;:::;:;;~:;::i!;:;i;:::i.;;;:: ,_ ..'. . ..... . :..:" ::.:> TREASURY RETAIL SECURITIES SITE P.O. BOX 567 PITTSBURGH PA 15230-0567 PHONE: (800) 722-2678 ~~y~~il~sIJ.j{Q~m:~g.P.~m1j:;;i:1ji~i::)::i\~t:it:\~)i\::~,~jH:m:::::it~:\j:i:'m~;::~:;:m\~;;:i.:;m\:ji;(ilj\:i; Payments made by direct deposit to: PNC BANK N A Routing Number: 031312738 I Name on Account: CHA....lU,bS J W0uu3 SAVINGS Account Number: Confidential \ .,. ..... .'..... ...,. :...... ",..,." ..... ............... . '" ..;:.:;:i~\~~::o#~iji2.:. '.' ..... .. ....... .. ..0<.. ACCOUNT HOLDINGS . 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CDCDCDCX)CX)CX) >>>>>> ~~~~~~ wwwwww 1-'0.....01-'0 I-'Ul.....lJII-'O'l ............,.................. ...............1-'1-'1-' O101Ul l1IlJ1 0'1 ............,.................. tvl'Vl'Vtvtvl\) 000000 000000 tntn.c::..c::.ww I-' o ....1-'.....1-'1-'1\.) WWWWWO'l ....1-'1-'1-'1-'0'1 I'Vl'Vl'VtvtvlJl tntnUl lJIlJI I\) 000000'1 HHHHHt' ~ ::l ::l ~ ~ CD rtrtrtrtrtC" ID ID ID ID ID .... 11 11 Ii 11 11 rt ID ID ID ID ID en en f/.I f/J en >(') rtrtrtrtrt ::c rtrtrtlTlT 000001'0 c: HHHHHIi ::l ~ ::s ::s ::s Q <:<:<:<:<:::r ID (I) (I) ID tD III en CD en f/J f/.I en lTlTrtrtrtm o 0 0 0 0 Ii Ii Ii Ii Ii 10 I-' I'V CD tv Q) ~ o o 0\ , W o ...... I'V o o .c::. ..... ~ W ...:J tn o H ::s IT ID 11 ID f/.I rt rt o H ::s <: ID f/.I IT o 11 I Sc.~c9-~ G.- ~ ~ L1 J . Assignment of Note CHARLES 1. WOODS does transfer and assign, without consideration, all right, title and interest which he now has in that Note executed by KEVIN 1. WOODS on May 11, 2001, to CHARLES J. WOODS, Trustee, or his successors in trust, under the CHARLES J. WOODS LIVING TRUST, dated November 22, 2005, and any amendments thereto. This assignment was executed on November 22,2005. '~//J //;?<<~~eY'a ~RLES 1. WO COMMONWEALTH OF PENNSYLVANIA ) SS DAUPHIN COUNTY ) On November 22, 2005, before me, ~~ N. r1~ '" ., a Notary Public in and for said State, personally appeared CHARLES J. W ODS, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity . upon behalf of which the person acted, executed the instrwnent. Witness my hand and official seal. ~f~~/I1r Noary P lic ' COMMONWEALTH OF i.nNNS~(i..,;.r NiE.:.. Notarial Sev! I Amy M. Moya. Notary~u~li{;. ; Lower P~o!1 T~p:::. .D~uphlt! eco~nty, [ My CommISSion ~Xt'lre., J~ 2.... ~~.. Member, P€H'1n~~vh'~~",;fr: ,L..1~....,(.~:;t:.::-~ ~r N~r~8"~::J~_~ . DATE: TO: KEVIN J. WOODS 5125 Kylock Road Mechanicsburg~ P A 17055 FROM: CHARLES 1. WOODS 5225 Wilson Lane~ Apt. 4100 Mechanicsburg~PA 17055 RE: TRANSFER OF BENEFICIAL INTEREST IN PROMISSORY NOTE Dear Kevin J. Woods: I have established a Revocable Living Trust and have assigned my interest in the unpaid note owed by you from my name to the name of my Living Trust. Please make all future payments under the Note to the: CHARLES J. WOODS LIVING TRUST, dated November 22,2005 I am the Trustee of my Trust, so you can continue to send your payments to the same address you have used in the past. The only difference will be that future payments are to be made payable to the CHARLES J. WOODS LIVING TRUST. If you have any questions regarding this change, please contact me right away at the above address or by telephone at 717-697-1310. Sincerely, - .. . Compound Period Nominal Annual Rate .... : Effective Annual Rate ... : Periodic Rate ..................: Daily Rate ........................: CASH FLOW DATA Event 1 Loan 2 Payment )( Start Date 05/15/2003 06/15/2003 \ i 5c~G-/ T-\-e~q .r , \{. "7'.\'. '::., o' f' ... /' -~ 05/05/2003 Page 1 ~ \~p~ Amount Number Period 485,000.00 2,539.71 ,.~Jv10RT!ZA TION SCHEDULE - Normal Amortization __._l2~_t~_ "__ ______ _ _._____...E. ~ L~ ~ ~~__ ._.u Loan 05/15/2003 1 06/15/2003 2 07/1 5/2003 3 08/15/2003 4 09/15/2003 5 10/1 5/2003 6 11/15/2003 7 12/15/2003 2003 Totals 8 01/15/2004 9 02/15/2004 10 03/15/2004 11 04/15/2004 12 05/15/2004 13 06/15/2004 14 07/15/2004 15 08/15/2004 16 09/1 5/2004 17 10/15/2004 18 11/15/2004 19 12/15/2'J04 2004 Totals 20 01/15/2005 21 02/15/2005 22 03/15/2005 23 04/'15/2005 24 05/'l5/2005 25 06/15/20C5 26 07 Ii 5/20(:5 27 08/: 5/20C'5 28 09/15l20C5 2,539.71 2,539.71 2,539,71 2,539.71 2,539.71 2,539.71 2,539.71 17,777.97 2,539.71 2,539.71 2,539.71 2,539.71 2,539,71 2,539.71 2,539,71 2,539.71 2,539.71 2,539.71 2,539.71 2,539.71 30,476.52 2,539.71 2,539.71 2,539.71 2,539.71 2,539.71 2,539.71 2.539.71 2,539.71 2,539.71 Interest 1,849.51 1,787.30 1,844.01 1,841 .36 1,779.38 1,835.79 1,773.98 12,711.33 1,830.19 1,827.48 1,707.04 1,821.59 1,760.1.8 1,815.88 1,754.63 1,810.13 1,807.35 1,746.34 1,801.53 1,740.69 21,423.03 1,795.66 1,792.83 1,616.76 1,786.46 1,726.05 1,780.48 1,720.25 1,774.46 1,771.55 1 336 Monthly Principal 690.20 752.41 695.70 698.35 760.33 703.92 765.73 5,066.64 709.52 712.23 832.67 718.12 779.53 723.83 785.08 729.58 732.36 793.37 738.18 799.02 9,053.49 744.05 746.88 922.95 753.25 813.66 7'59.23 819.46 765.25 768.16 End Date 05/15/2031 Balance 485.000.00 484.309.80 483.557.39 482.861.69 482.163.34 481,403.01 480.699.09 479,933.36 479,223.84 478,511.61 477,678.94 476,960.82 476.,181.29 475,457.46 474,672.38 473,942.80 473.210.44 472,417.07 471,678.89 470,879.87 470,135.82 469,388.94 468.465.99 467,712.74 466,899.08 466,139.85 465,320.39 464,555.14 463,786.98 ./ "!.jvV \ "e'.' v I \ I ..' ~ ,''''. v (~pj ,ff! ~lU t &uJJ oJI. . :;.' 05/05/2003 Page 2 'J I ,% I Date P_ay~~nt_ ... Interest Principal Balance ':....If "..-.-- _._._ -...__ ._n__.*._ _._._ f/ ~~ ~ ~~~ ;~~gg; 2,539.71 1,711.56 828.15 462,958.83 2,539.71 1,765.46 774.25 462,184.58 ,; 31 12/15/2005 2,539.71 1,705.65 834.06 461,350.52 ( 2005 Totals 30,4 76.52 20,947.17 9,529.35 32 01/15/2006 2,539.71 1,759.33 780.38 460,570.14 33 02/15/2006 2,539.71 1 ;756.35 783.36 459,786.78 34 03/15/2006 2.539.71 1,583.68 956.03 458,830.75 35 04/15/2006 2,539.71 1,749.72 789.99 458,040.76 36 05/15/2006 2,539.71 1,690.36 849.35 457.191.41 37 06/15/2006 ~ vP 2,539.71 1,743.46 796.25 456,395.16 38 07/15/2006 2,539.71 1,684.29 855.42 455,539.74 39 08/15/2006 2,'539.71 1,737.17 802.54 454,737.20 40 09/15/2006 2,539.71 ",734. 11 805.60 453.931.60 41 1 0/15/2006 2,539.71 1 ,675.19 864.52 453,067 08 42 11/15/2006 2,539.71 1,727.74 811.97 452,255.1'1 43 12/15/2006 2,539.71 1,669.01 870.70 451,38441 2006 Totals 30,476.52 20,510.41 9,966.11 44 01/15/2007 2,539.71 1,721.32 818.39 450,566.02 45 02/15/2007 2,539.71 1,718.20 821.51 449,7 44.51 46 03/15/2007 2,539.71 1,549.09 990.62 448,753.89 47 04/15/2007 2,539.71 1,711.29 828.42 447,925.47 48 05/15/2007 2,539.71 1,653.03 886.68 447,038.79 49 06/15i2007 2,539.71 1,704.75 834.96 446,203.83 50 07/15/2007 2,539.71 1,646.68 893.03 445,310.80 51 08/15/200,' 2,539.71 1,698.16 841.55 444,469.25 52 09/15/2007 2,539.71 1,694.95 844.76 443,624.49 53 10/15/2007 2,539.71 1,637.16 902.55 442.721.94 54 11/15/2007 2,539.71 1,688.29 851.42 441.870.52 55 12/15/2007 2,539.71 1,630.68 909.03 440.96'1.49 2007 Totals 30,476.52 20,053.60 10,422.92 56 01/15/200c 2,539.71 1,681.57 858.14 L2.-W. 'I 03.35 57 02/15/2002- 2,539.71 1,678.30 861 .41 439,24'1.94 58 03/15/2008 2,539.71 1,566.95 972.76 438,269.18 59 04/15/2002. 2,539.71 1,671.31 868.40 437,400.78 60 05/15/2008 2,539.71 1,614.19 925.52 436,475.26 61 06/15/2008 2,539.71 1,664.47 875.24 435,600.02 62 07/15/2008 2,539.71 1,607.54 932.17 434,667.85 63 08/15/2008 2,539.71 1.657.57 882.14 42,3,785.71 64 09/15/2008 2,539.71 1,654.21 885.50 432,900.21 65 10/15/2008 2,539.71 1,597.58 942.13 431,958.08 66 11/15/200E 2,539.71 1,647.24 892.47 431,065.61 67 12/15/2006 2,539.71 1,590.81 948.90 430,116.71 2008 Totals 30,476.52 19,631.74 10,844.78 68 01/15i:200~1 2,539.71 1,640.22 899.49 4:'9,2'1/.22 69 02/15/~OO~1 2,53~1.71 1,636.79 902.92 428,:314.30 lI(t!' / t / bC//L/ " , . 05/05/2003 Page 9 ~---- Payment Interest __. _ __ ___PrJnci2~1_ _ Balance .... -.--.--- - --- - -1 6/2030 2,539.71 127.39 2,412.32 34.571.46 6/2030 2,539.71 131.84 2,407.87 i 32,163.59 r -1 6/2030 2,539.71 118.70 2,421.01 2Sl,742.58 / ~ 6/2030 2,539.71 113.42 2,426.29 27,316.29 / --1 6/2030 2,539.71 100.81 2,438.90 24,877.39 . / '1 6/2030 2,539.71 94.87 2,444.84 22,432.55 ~ / 5/2030 2,539.71 85.54 2,454.17 19,978.38 :3 ~ ~ 5/2030 2,539.71 73.73 2,465.98 17,512.40 J / '1 5/2030 2,539.71 66.78 2,472.93 15,039.47 -"\ J"1 5/2030 2,539.71 55.50 2,484.21 12,555.26 Z 15 30,476.52 1,277.96 29,198.56 -ot8 .... ;1 5/2031 2,539.71 47.88 2,491.83 10,063.43 ) ~J 1 5/2031 2,539.71 38.38 2.501.33 7 562.10 ::::> 11 512031 2,539.71 26.05 2,513.66 5.048.44 03 2,539.71 19.25 2,520.46 2,527.98 4/1 5/2031 ~5/1 5/2031 2,539.71 11.73 2,527.98 0.00 -rotal5 12,698.55 143.29 12,555.26 j -rotalS 853,342.56 368,342.56 485,000.00 j .~ " ... ~~\ -' '" . .~j "\'v7 u THE CHARLES J. WOODS LIVING TRUST November 22, 2005 LAW OFFICES OF SUSAN E. LEDERER 4811 JONESTOWN ROAD SUITE 226 HARRISBURG, PENNSYLVANIA 17109 A .. The Charles J. Woods Living Trust Table of Contents Section 1.03 Section 1.04 Section 1.05 Establishing My Trust ............................................... 1-1 Identifying My Trust.......... .... .... ... ... ........ ..... ........... .............. 1-1 Reliance by Third Parties on Affidavit or Certification of Trust................................................................................... 1-1 Transferring Property to My Trust......................................... 1-2 Powers Reserved by Me as Grantor....................................... 1-2 Grantor Trust Status ............................. ......... ...... ................... 1-3 Article One Section 1.01 Section 1.02 Article Two Family Information ....... ................. ....... ...................... 2-1 Article Three Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3.07 Section 3.08 Trustee Succession Provisions................................ 3-1 Resignation of a Trustee ..... ............ ............. ........ .... .............. 3-1 Trustee Succession During My Lifetime ............................... 3-1 Trustee Succession After My Death ...................................... 3-2 Notice of Removal and Appointment .................................... 3-3 Corporate Fiduciaries. .......... ...................... ............................ 3-3 Incapacity of a Trustee....................... ............... ....... .............. 3-3 Appointment of Independent Special Trustee........................ 3-3 Rights and Obligations of Successor Trustees....................... 3-4 Section 4.01 Section 4.02 Section 4.03 Administration of My Trust During My Incapacity. ............. ..................................................... 4-1 Definition of My Incapacity..... ....... ............... ............. ........... 4-1 Determination of 1vIy Incapacity.. ...................... ........... ......... 4-1 Trust Distributions During My Incapacity............................. 4-2 Article Four Article Five Section 5.01 Section 5.02 Section 5.03 Section 5.04 Section 5.05 Section 5.06 Administration of My Trust Upon My Death ............ 5-1 My Trust Shall Become Irrevocable ...................................... 5-1 Administrative Trust..................... .................. ....................... 5-1 Payment of My Expenses and Taxes .....................................5-1 Payment of Death Taxes................. ......................... .............. 5-2 Coordination with My Personal Representative .................... 5-3 Authority to Make Tax Elections.................. ......................... 5-4 ~ Section 6.05 Disposition of Tangible Personal Property ............. 6-1 Distribution of Tangible Personal Property by Memoranda...... ...... ........................ ................. ............. .......... 6-1 Distribution of Remaining Tangible Personal Property......... 6-1 Defmition of Tangible Personal Property.............................. 6-2 Encumbrances and Incidental Expenses of Tangible Personal Property... .......................... .......... ....... ..................... 6-2 Residuary Distribution.............. ............. ...... .................. ........ 6-2 Article Six Section 6.01 Section 6.02 Section 6.03 Section 6.04 Article Seven Section 7.01 Section 7.02 Section 7.03 Section 7.04 Section 7.05 Creation of Trust Shares Upon My Death ................ 7-1 Division of My Trust (No Federal Estate Tax)...................... 7-1 Division of My Trust (Federal Estate Tax Exists) ................. 7-2 Further Division of the Marital Share .......... ..... ..... ........ ........ 7-4 Disposition of Property Upon Disclaimer by My Wife......... 7-5 Division of My Trust if My Wife has Predeceased Me......... 7-5 Article Eight Section 8.01 Section 8.02 Section 8.03 Section 8.04 Section 8.05 Section 8.06 Section 8.07 The Exempt Marital Trust.......................................... 8-1 Distributions of Net Income......... ......... .......... ...... ................. 8-1 Distributions of Principal.......... .......................................... .,. 8-1 Unproductive Property........................................................... 8-1 Limited Power of Appointment ............................................. 8-1 Separate. Share for Disclaimed Property................................ 8-1 Qualified Terminable Interest Property................................. 8-2 Administration of the Exempt Marital Trust at My Wife's Death.............................. ......... ................................... 8-2 Article Nine Section 9.01 Section 9.02 Section 9.03 Section 9.04 Section 9.05 Section 9.06 Section 9.07 The Nonexempt Marital Trust ................................... 9-1 Distributions of Net Income................................................... 9-1 Distributions of Principal......... ........ ..... .............. ................... 9-1 Unproductive Property............... .......... .............. ......... ........... 9-1 Limited Power of Appointment...... ......... .............................. 9-1 Separate Share for Disclaimed Property................................ 9-1 Qualified Terminable Interest Property................................. 9-2 Administration of the Nonexempt Marital Trust at My Wife's Death..................................... ............... ...... ................ 9-2 Article Ten Section 10.01 Section 10.02 Section 10.03 Section 10.04 Section 10.05 Section 10.06 Section 10.07 The Family Trust ............................10........................ 10-1 Division of Family Trust.......... ............... .................... ......... 10-1 Family Trust Beneficiary... ........... ....................................... 10-2 Separate Share for Disclaimed Property.............................. 10-2 Distribution of Income ......................................................... 10-2 Distribution of Principal .............. ........... ............................. 10-2 Guidelines to My Trustee..................................................... 10-2 Testamentary Limited Power of Appointment .................... 10-3 11 ~ Section 10.08 Article Eleven Section 11.01 Section 11.02 Section 11.03 Article Twelve Section 12.01 Section 12.02 Section 12.03 Article Thirteen Article Fourteen Section 14.01 Section 14.02 Section 14.03 Article Fifteen Section 15.01 Section 15.02 Section 15.03 Section 15.04 Section 15.05 Section 15.06 Section 15.07 Section 15.08 Section 15.09 Section 15.10 Section 15.11 Section 15.12 Section 15.13 Section 15.14 Section 15.15 Section 15.16 Section 15.17 Section 15.18 Section 15.19 Section 15.20 Section 15.21 Termination of the Family Trust ................... ......... ......... ..... 10-3 My Exempt Property ................................................ 11-1 Division of My Exempt Property......................................... 11-1 Distribution of the Exempt Share for Kevin J. Woods ........ 11-1 Distribution of the Exempt Share for Diane E. Sable.......... 11-2 My Nonexempt Property .........................................~ 12-1 Division of My Nonexempt Trust Property......................... 12-1 Distribution of the Share for Kevin J. Woods...................... 12-1 Distribution of the Share for Diane E. Sable ....................... 12-2 Remote Contingent Distribution............................. 13-1 Administration of Trusts for Underage and Incapacitated Beneficiaries..................................... 14-1 Distributions for Underage and Incapacitated Beneficiaries............... ............................... .......................... 14-1 Methods of Distribution.................... .......... ................. ........ 14-1 Application of Article ........................ ......... ......... ................ 14-2 Trust Administration ............................................... 15-1 Distributions to Beneficiaries .............................................. 15-1 No Court Proceedings.......................................................... 15-1 No Bond............. ......... .... ..................................................... 15-1 Exoneration of My Trustee ........... .............. ........ .......... ....... 15-1 Trustee Compensation .........................................................15-2 Employment of Professionals .............................................. 15-2 Exercise of Testamentary Power of Appointment............... 15-3 Determination of Principal and Income ............................... 15-3 Trust Accounting .................. .................... ........................... 15-3 Action of Trustees; Disclaimer...................... ........... ........... 15-4 Delegation of Trustee Authority; Power of Attorney.......... 15-5 Additions to Separate Trusts.......................... ........... ........... 15-5 Authority to Merge or Sever Trusts ..................................... 15-5 Authority to Terminate Trusts .............................................15-6 Discretionary Distribution to Fully Utilize Basis Increase Upon Death of Beneficiary .................................... 15-6 Merger of Corporate Fiduciary ............................................ 15-7 Beneficiary's Status ....................................................... ...... 15-7 Discharge of Third Persons.................................. ................ 15-7 Certificate by Trustee................................. .......................... 15-7 Funeral and Other Expenses of Beneficiary ........................ 15-8 Marital Deduction Qualification .......................................... 15-8 111 Section 15.22 Article Sixteen Section 16.01 Section 16.02 Section 16.03 Section 16.04 Section 16.05 Section 16.06 Section 16.07 Section 16.08 Section 16.09 Section 16.10 Section 16.11 Section 16.12 Section 16.13 Section 16.14 Section 16.15 Section 16.16 Section 16.17 Section 16.18 Article Seventeen Section 17.01 Section 17.02 Section 17.03 Section 17.04 Section 17.05 Section 17.06 Generation-Skipping Transfer Tax Provisions .................... 15-8 My Trustee's Powers ............................................... 16-1 Introduction to Trustee's Powers ....................... ......... ......... 16-1 Execution of Documents by My Trustee ............................. 16-1 Investment Powers in General............................................. 16-1 Banking Powers...... .................. .................................... ....... 16-2 Contract Powers ..... ............... ..... ............. ......... ............... ..... 16-2 Common Investments .......................................................... 16-2 Environmental Powers ............ ............................................. 16-3 InsuraIlce Powers ............. ........ ............................ .......... ...... 16-3 LOaIlS and Borrowing Powers.............................................. 16-4 Nominee Powers...... ............... ..... .......... ............... ............... 16-4 Payment of Taxes aIld Expenses.......................................... 16-5 Qualified Real Property Valuation....................................... 16-5 Real Estate Powers ................ ...................... ....... .............. .... 16-5 Residences aIld TaIlgible Personal Property........................ 16-5 Retention and Abandonment of Trust Property................... 16-6 Securities, Brokerage and Margin Powers........................... 16-7 Settlement Powers..... ............ ............. ........... ............ ........... 16-7 Limitation on My Trustee's Powers .................................... 16-7 General Provisions .................................................. 17-1 Maximum Term for Trusts.... ...... ............. .............. ....... ....... 17-1 Spendthrift Provision........................................................... 17-1 Survivorship Presumption........... ...... .............. ..................... 17-1 Changing the Situs of Administration.................................. 17-1 Definitions...... .............. ...................... .............. ............... ..... 17-2 General Provisions and Rules of Construction .................... 17-7 iv The Charles J. Woods Living Trust Article One Establishing My Trust The date of this trust agreement is November 22,2005. The parties to this agreement are Charles J. Woods (the "Grantor") and Charles 1. Woods and Eleanor M. Woods (collectively, the "Trustee"). Section 1.01 Identifying My Trust My trust may be referred to as "Charles J. Woods and Eleanor M. Woods, Trustees of the Charles J. Woods Living Trust dated November 22,2005, and any amendments thereto." For the purpose of transferring property to my trust, or identifying my trust in any beneficiary or pay-on-death designation, any description referring to my trust shall be effective if it reasonably identifies my trust and indicates that the trust property is held in a fiduciary capacity. Section 1.02 Reliance by Third Parties on Affidavit or Certification of Trust From time to time, third parties may require documentation to verify the existence of this agreement, or particular provisions of it, such as the name or names of my Trustee or the powers held by my Trustee. To protect the confidentiality of this agreement, my Trustee may use an affidavit or a certification of trust that identifies my Trustee and sets forth the authority of my Trustee to transact business on behalf of my trust. The affidavit or certification may include pertinent pages from this agreement, such as title or signature pages. A third party may rely upon an affidavit or certification of trust that is signed by my Trustee with respect to the representations contained in the affidavit or certification of trust. A third party relying upon an affidavit or certification of trust shall be exonerated from any liability for actions the third party takes or fails to take in reliance upon the representations contained in the affidavit or certification of trust. A third party dealing with my Trustee shall not be required to inquire into the terms of this agreement or the authority of my Trustee, or to see to the application that my Trustee makes of funds or other property received by my Trustee. 1-1 .. Section 1.03 Transferring Property to My Trust Any person or entity may transfer property of any kind, nature and description to my trust in any manner authorized by law. (a) Initial Funding of My Trust By execution of this agreement, I transfer, convey and assign to my Trustee the trust property described on Schedule A, attached to this agreement. (b) Acceptance by My Trustee By execution of this agreement, my Trustee accepts and agrees to hold the trust property described on Schedule A. All property transferred to my trust after the date of this agreement must be acceptable to my Trustee. My Trustee may refuse to accept any property. My Trustee shall hold, administer and dispose of all trust property accepted by my Trustee for my benefit and the benefit of my beneficiaries in accordance with the terms of this agreement. (c) Community Property Any community property conveyed to my trust, including the income from such property and the proceeds from the sale of such property, shall retain its character as community property during my life and the life of my wife to the same extent as if it had not been conveyed to my trust. Section 1.04 Powers Reserved by Me as Grantor During my lifetime, I shall retain the powers set forth in this Section in addition to any powers that I reserve in other provisions of this agreement. (a) Action on Behalf of My Trust During any period that I am serving as a Trustee of my trust, I may act for and conduct business on behalf of my trust without the consent of any other Trustee. (b) Amendment, Restatement or Revocation I have the absolute right, at any time and from time to time, to amend, restate, or revoke any term or provision of this agreement in whole or in part. Any amendment, restatement, or revocation must be in a written instrument signed by me. 1-2 .:,: . (c) Addition or Removal of Trust Property I have the absolute right, at any time and from time to time, to add to the trust property and to remove any property from my trust. (d) Control of Income and Principal Distributions I have the absolute right to control the distribution of income and principal from my trust. My Trustee shall distribute to me, or to such persons or entities as I may direct, as much of the net income and principal of the trust property as I deem advisable. My Trustee may distribute trust income and principal to me or for my unrestricted use and benefit, even to the exhaustion of all trust property. Any undistributed income shall be added to the principal of my trust. (e) Approval of Investment Decisions I have the absolute right to approve my Trustee's investment decisions. My approval of investment decisions shall be binding on all other beneficiaries of this agreement. Section 1.05 Grantor Trust Status By reserving the broad rights and powers set forth in Section 1.04 of this Article, I intend to qualify my trust as a "Grantor Trust" under Sections 671 to 677 of the Internal Revenue Code so that, for federal income tax purposes, I will be treated as the owner during my lifetime of all the assets held in my trust as though I held them in my individual capacity. During any period that my trust is a Grantor Trust, the taxpayer identification number of my trust shall be my social security number, in accordance with Treasury Regulation Section 301.6109-1 (a)(2). 1-3 .. Article Two Family Information I am married to Eleanor M. Woods. Any reference in this agreement to "my wife" is a reference to Eleanor M. Woods. I have two children. Their names and dates of birth are: Kevin J. Woods, born on July 12, 1949 and Diane E. Sable, born on April 27, 1952 All references in this agreement to "my children" are references to these children. References to "my descendants" are to my children and their descendants. 2-1 Article Three Trustee Succession Provisions Section 3.01 Resignation of a Trustee A Trustee may resign by giving notice to me. If I am deceased, a resigning Trustee shall give notice to the income beneficiaries of the trust and to any other Trustee then serving. Section 3.02 Trustee Succession During My Lifetime During my lifetime, this Section shall govern the removal and replacement of my Trustees. (a) Removal and Replacement by Me I may remove any Trustee with or without cause at any time. If a Trustee is removed, resigns or cannot continue to serve for any reason, I may serve as sole Trustee, appoint a Trustee to serve with me or appoint a successor Trustee. (b) During My Incapacity During any time that I am incapacitated, Eleanor M. Woods, Kevin J. Woods, Diane E. Sable, and Lauren E. Sable shall replace any then serving Trustee. If I am incapacitated, my wife, or if she is also incapacitated or deceased, a majority of my children may remove any Trustee with or without cause. If I am incapacitated and there is no named successor Trustee, my wife shall appoint an individual or corporate fiduciary to serve as my successor Trustee. If my wife is incapacitated or deceased, a majority of my children shall appoint my successor Trustee. All appointments, removals and revocations shall be by signed written instrument. Notice of removal shall be delivered to the Trustee being removed and shall be effective in accordance with the provisions of the notice. Notice of appointment shall be delivered to and accepted by the successor Trustee and shall become effective at that time. A copy of the notice shall be attached to this agreement. 3-1 Section 3.03 Trustee Succession After My Death After my death, this Section shall govern the removal and replacement of my Trustees. (a) Administrative Trustee I appoint Eleanor M. Woods, Kevin J . Woods, Diane E. Sable, and Lauren E. Sable to serve as successor Trustee during the administration of my Trust. (b) Trustee of Kevin J. Woods Trust I appoint Kevin J. Woods, Diane E. Sable, Gail C. Woods & Lauren E. Sable to serve as Trustee of the Kevin J. Woods Trust upon creation of the Kevin J. Woods Trust. (c) Trustee of the Diane E. Sable Trust I appoint Diane E. Sable, Kevin J. Woods, Marc E. Sable & Lauren E. Sable to serve as Trustee of the Diane E. Sable Trust upon creation of the Diane E. Sable Trust. (d) Removal of a Trustee My wife may remove a Trustee of any trust created under this agreement, with or without cause at any time. If my wife is unable to act, a Trustee of any trust created under this agreement may be removed, with or without cause, by the unanimous decision of my children. A Trustee may be removed under this subsection only if, on or before the effective date of removal, the person or persons having the right of removal appoint an individual or a corporate fiduciary that simultaneously commences service as Trustee. The Trustee so appointed may not be related or subordinate to the person or persons having the right of removal within the meaning of Section 672( c) of the Internal Revenue Code. The right to remove a Trustee under this subsection shall not be deemed to grant to the person holding that right any of the powers of that Trustee. If a beneficiary is a minor or is incapacitated, the parent or legal representative of the beneficiary may act on behalf of the beneficiary. (e) Default of Designation If the office of Trustee of a trust created under this agreement is vacant and no designated successor Trustee is able and willing to act as Trustee, 3-2 my wife shall appoint an individual or corporate fiduciary as successor Trustee. If my wife is unable or unwilling to act, a majority of my children shall appoint an individual or corporate fiduciary as successor Trustee. Any beneficiary may petition a court of competent jurisdiction to appoint a successor Trustee to fill any vacancy remaining unfilled after a period of 30 days. By making such appointment, the court shall not thereby acquire any jurisdiction over the trust, except to the extent necessary for making the appointment. If a beneficiary is a minor or is incapacitated, the parent or legal representative of the beneficiary may act on behalf of the beneficiary. Section 3.04 Notice of Removal and Appointment Notice of removal shall be in writing and shall be delivered to the Trustee being removed, along with any other Trustees then serving. The notice of removal shall be effective in accordance with its provisions. Notice of appointment shall be in writing and shall be delivered to the successor Trustee and any other Trustees then serving. The appointment shall become effective at the time of acceptance by the successor Trustee. A copy of the notice shall be attached to this agreement. Section 3.05 Corporate Fiduciaries Any corporate fiduciary serving under this agreement as a Trustee must be a bank, trust company, or public charity that is qualified to act as a fiduciary under applicable federal and state law and that is not related or subordinate to any beneficiary within the meaning of Section 672( c) of the Internal Revenue Code. Section 3.06 Incapacity of a Trustee If any individual Trustee becomes incapacitated, it shall not be necessary for the incapacitated Trustee to resign as Trustee. For Trustees other than me, a written declaration of incapacity by the Cotrustee, if any, or, if none, by the party designated to succeed the incapacitated Trustee, if made in good faith, will terminate the trusteeship. Section 3.07 Appointment of Independent Special Trustee If for any reason the Trustee of any trust created under this agreement is unwilling or unable to act with respect to any trust property or any provision of this agreement, the Trustee shall appoint, in writing, a corporate fiduciary or an individual to serve as an Independent Special Trustee as to such property or with respect to such provision. The 3-3 Independent Special Trustee appointed shall not be related or subordinate to any beneficiary of the trust within the meaning of Section 672( c) of the Internal Revenue Code. The Trustee may revoke any such appointment at will. An Independent Special Trustee shall exercise all fiduciary powers granted by this agreement unless expressly limited elsewhere in this agreement or by the Trustee in the instrument appointing the Independent Special Trustee. An Independent Special Trustee may resign at any time by delivering written notice of resignation to the Trustee. Notice of resignation shall be effective in accordance with the terms of the notice. Section 3.08 Rights and Obligations of Successor Trustees Each successor Trustee serving under this agreement, whether corporate or individual, shall have all of the title, rights, powers and privileges granted to the initial Trustees named under this agreement. In addition, each successor Trustee shall be subject to all of the restrictions imposed upon, as well as all obligations and duties, both discretionary and ministerial, given to the initial Trustees named under this agreement. 3-4 Article Four Administration of My Trust During My Incapacity Section 4.01 Definition of My Incapacity I shall be considered incapacitated during any time that, because of age, illness, mental disorders, dependence on prescription medications or other substances, or any other cause, I am unable to effectively manage my property or financial affairs. Section 4.02 Determination of My Incapacity F or purposes of this agreement, I am incapacitated if I am determined to be so under any one of the following subsections. (a) Determination by Attending Physician I shall be deemed incapacitated if in the opinion of my attending physician my then existing circumstances fall within the definition of incapacity as provided in Section 4.01. I shall be deemed restored to capacity if my personal or attending physician signs a written opinion that I can manage my property and financial affairs. (b) Court Determination I shall be deemed incapacitated if a court of competent jurisdiction determines that I am legally incapacitated, incompetent, or otherwise unable to effectively manage my property or financial affairs. (c) Detention or Disappearance I shall be deemed incapacitated if I cannot effectively manage my property or financial affairs due to my unexplained disappearance or absence for more than 30 days, or if I am detained under duress. My disappearance, absence, or detention under duress may be established by an affidavit of my Trustee, or, if no Trustee is serving under this agreement, by the affidavit of any beneficiary under this agreement. The affidavit shall describe the circumstances of my disappearance, absence, or detention under duress. A third party dealing with my Trustee in good faith may always rely on the representations contained in the affidavit. 4-1 I shall be deemed restored to capacity upon my written notice to the successor Trustee that I can manage my property and financial affairs. Section 4.03 Trust Distributions During My Incapacity During any period of time that I am incapacitated, my Trustee shall administer my trust and distribute its net income and principal as provided in this Section. (a) Distributions for My Benefit My Trustee shall regularly and conscientiously make appropriate distributions of trust income and principal for my general welfare and comfort under the circumstances existing at the time such distributions are made. Distributions under this subsection shall include payments for any of my enforceable legal obligations. My Trustee may also make distributions for the payment of insurance premiums for insurance policies owned by me or by my trust, including but not limited to, life, medical, disability, property and casualty, errors and omissions and long-term health care insurance policies. My Trustee is authorized to honor pledges and continue to make gifts to charitable organizations that I have regularly supported in the amounts I have customarily given. The examples included in this subsection are for purposes of illustration only and are not intended to limit the authority of my Trustee to make distributions for my benefit that my Trustee determines to be appropriate. (b) Manner of Making Distributions My Trustee may make distributions for my benefit in anyone or more of the following ways: To me, but only to the extent I am able to manage such distributions; To other persons and entities for my use and benefit; To my agent or attorney-in-fact authorized to act for me under a legally valid durable power of attorney executed by me prior to my incapacity; To my guardian who has assumed responsibility for me under any court order, decree or judgment issued by a court of competent jurisdiction. 4-2 (c) Distributions for the Benefit of My Wife My Trustee may distribute as much of the net income and principal of my trust as my Trustee deems necessary for the health, education, maintenance or support of my wife. (d) Guidance for My Trustee Regarding Distributions In making distributions under subsections (a) and (c), my Trustee shall give consideration first to my needs and the needs of my wife. (e) Distributions to Agents under General Durable Power of Attorney My Trustee may make distributions to any agent under a valid power of attorney executed by me for the purpose of making gifts as authorized in the power of attorney, or to assist my agent in carrying out my estate planning objectives. 4-3 Article Five Administration of My Trust Upon My Death Section 5.01 My Trust Shall Become Irrevocable Upon my death, my trust shall become irrevocable and my social security number may no longer be used to identify my trust. My Trustee shall apply for a separate taxpayer identification number for my trust. Section 5.02 Administrative Trust After my death and prior to the distribution of trust property as provided in the subsequent Articles of this agreement, my trust shall be an administrative trust but may continue to be known as the Charles 1. Woods Living Trust. My administrative trust shall exist for a reasonable period of time necessary to complete the administrative tasks set forth in this Article. Section 5.03 Payment of My Expenses and Taxes My Trustee is authorized but not directed to pay from the administrative trust: Expenses of my last illness, funeral and burial or cremation, including expenses of memorials and memorial services; Legally enforceable claims against me or my estate; Expenses of administering my trust and my estate; and Court ordered allowances for those dependent upon me. These authorized payments are discretionary with my Trustee. My Trustee may make decisions on these payments without regard to any limitation on payment of such expenses imposed by law and may make payments without obtaining the approval of any court. No third party may enforce any claim or right to payment against my trust by virtue of this discretionary authority. My Trustee shall not pay any administrative expenses from assets passing to an organization that qualifies for the federal estate tax charitable deduction or to a split-interest charitable trust or from the net income of property qualifying for the estate tax marital deduction, if such payment would result in a reduction in the estate tax marital deduction available to my estate under Section 2056(b) of the Internal Revenue Code or violate the provisions of Treasury Regulation Section 20.2056(b)-4(d). 5-1 My Trustee shall pay death taxes out of the principal of the trust property as provided in Section 5.04. If, however, a probate estate is opened within six months from the date of my death, my Personal Representative shall pay claims, expenses and death taxes from my probate estate to the extent that the cash and readily marketable assets included in my probate estate are sufficient to pay such items unless my Trustee has already paid them. Section 5.04 Payment of Death Taxes For the purposes of this Article, the term "death taxes" shall refer to any taxes imposed by reason of my death by federal, state or local authorities, including but not limited to estate, inheritance, gift, and direct-skip generation-skipping transfer taxes. For purposes of this Section, death taxes shall not include any additional estate tax imposed by Section 2031(c)(5)(C), Section 2032A(c) or Section 2057(f) of the Internal Revenue Code or any other comparable recapture tax imposed by any taxing authority. Nor shall death taxes include any generation-skipping transfer tax, other than a direct skip generation-skipping transfer tax. Except as otherwise provided in this Section or elsewhere in this agreement, my Trustee shall provide for payment of all death taxes from the administrative trust without apportionment. My Trustee shall not seek contribution toward or recovery of any such payments from any individual. (a) Protection of Exempt Property In no event shall death taxes be allocated to or paid from any assets that are not included in my gross estate for federal estate tax purposes. (b) Protection of the Marital Deduction No death taxes shall be paid from or allocated to any property qualifying for the federal estate tax marital deduction. (c) Protection of the Charitable Deduction No death taxes shall be allocated to or paid from any assets passing to an organization that qualifies for the federal estate tax charitable deduction, or from any assets passing to a split-interest charitable trust, unless my Trustee has fITst used all other assets available to my Trustee to pay the taxes. (d) Property Passing Outside of My Trust Except as to qualified retirement benefits, death taxes imposed with respect to property included in my gross estate for death tax purposes but passing outside of my trust shall be apportioned among the persons and entities benefited in the proportion that the taxable value of the property or interest bears to the total taxable value of all property and interests 5-2 included in my gross estate for death tax purposes. The values to be used for the apportionment shall be the values as fmally determined under federal, state or local law as the case may be. I direct that no death taxes be apportioned to any property included in my gross estate under Section 2044 of the Internal Revenue Code to the extent that my Trustee or my Personal Representative waives any right of recovery granted by Section 2207 A and corresponding provisions of applicable state law. Section 5.05 Coordination with My Personal Representative The following provisions are intended to help facilitate the coordination between my Personal Representative, if any, and my Trustee. These provisions apply even if my Personal Representative and my Trustee are the same person or entity. (a) Reliance on My Personal Representative My Trustee may rely upon the written request of my Personal Representative for payments authorized under this Article and the amounts included in such payments without computing the sums involved. If a payment is made under this Article to my Personal Representative, my Trustee shall not have any duty to inquire into the application of the payment. (b) Receipt of Probate Property My Trustee may accept or decline any distributions of property tendered to my Trustee by my Personal Representative. As to property deemed acceptable by my Trustee, my Trustee may accept the property without audit and without obligation to review the records of my Personal Representative. (c) Purchase of Assets from and Loans to My Probate Estate My Trustee is authorized to purchase and retain, as an investment for my trust estate, any property that forms a part of my probate estate. My Trustee may make loans, with or without security, to my probate estate. My Trustee shall not be liable for any loss suffered by my trust as a result of the exercise of the powers granted to my Trustee in this subsection. (d) Discretionary Distributions to My Personal Representative My Trustee is authorized to distribute to my probate estate, as a beneficiary of this trust, cash or other trust property, including accrued 5-3 income, to whatever extent my Trustee determines it to be in the best interests of the beneficiaries of my trust. Section 5.06 Authority to Make Tax Elections Following my death, I authorize my Trustee to make tax elections as provided in this Section. If, however, a Personal Representative is appointed for my probate estate and as my Personal Representative is the recipient of specific statutorily delegated authority relative to any tax election, the discretionary authority granted my Trustee relative to the tax election shall be subordinate to the statutorily delegated authority. (a) Tax Elections My Trustee's authority to make tax elections shall include, but shall not be limited to, the right to choose the alte:rnate valuation date, the right to elect whether to take administration expenses as estate tax deductions or income tax deductions, the right to allocate my unused generation-skipping exemption to all or any portion of the trust property, the right to make special use valuation elections, and the right to defer payment of all or any portion of any taxes. My Trustee may elect to treat my administrative trust as part of my estate for federal or state income tax purposes or both. My Trustee may elect to have trust property qualify for the "family owned business deduction" authorized under Section 2057 of the Internal Revenue Code. My Trustee may enter into any agreement on behalf of my trust that is necessary to validly make such election under the Internal Revenue Code. My Trustee, in its sole discretion, may elect to waive, in whole or in part, my right to have my estate be reimbursed for any tax paid as a result of the inclusion in my taxable estate of property held in a qualified terminable interest property (QTIP) trust created for me by my wife. My Trustee may make equitable adjustments between income and principal on account of any tax elections made by my Trustee. (b) Qualified Terminable Interest Property My Trustee may elect to have any trust property qualify for the federal estate tax marital deduction as qualified terminable interest property under Section 2056(b )(7) of the Internal Revenue Code (the "QTIP Election") and for any state death tax marital deduction under the law of any state (the "state QTIP Election"). My Trustee is not required to make the same election for both federal estate tax purposes and for state death tax purposes. If my Trustee makes a partial QTIP election, my Trustee shall 5-4 . divide the trust on the basis of the fair market value of the assets of the trust at the time of the division. My Trustee shall be indemnified and held harmless from any loss, claim or damage incurred by it as a result of any action taken by a beneficiary against my Trustee arising out of my Trustee's decision to make or not make the QTIP election with respect to any portion of the trust property. My Trustee is expressly authorized to use my trust property to pay directly or reimburse itself for any costs or expenses incurred by my Trustee in defending against any legal action, whether threatened or actual, arising under this provision. My Trustee may make the special election under Section 2652(a)(3) of the Internal Revenue Code to treat all of the trust property of a trust created under this Agreement as to which the QTIP election is made as if the . QTIP election with respect to the property had not been made, making me the transferor of such property for purposes of the generation-skipping transfer tax. It is my desire that my Trustee set apart the property to which such election has been made as a separate trust so that the inclusion ratio, as defined in the Internal Revenue Code, of the separate qualified trust is zero. (c) Allocation of GST Exemption My Trustee may elect to allocate or not allocate any portion of the available GST exemption under Section 2631 of the Internal Revenue Code, or a counterpart exemption under any applicable state law, to any property of which I am the transferor or deemed transferor for generation- skipping transfer tax purposes, including any property transferred by me during my life as to which I did not make an allocation prior to death. The exercise of such discretion shall be based on the transfers, gift tax returns and other information known to my Trustee, with no requirement that allocations benefit the various transferees or beneficiaries equally, proportionally, or in any other particular manner. (d) Qualified Conservation Easements My Trustee may create a qualified conservation easement, as defined in Section 2031(c)(8)(A) of the Internal Revenue Code in any land held by my trust and make the necessary election provided by Section 2031 (c)( 6). 5-5 . Article Six Disposition of Tangible Personal Property Section 6.01 Distribution of Tangible Personal Property by Memoranda I reserve the right to make dispositions of items of tangible personal property by a signed written memorandum executed after I sign this agreement that refers to my trust and lists items of tangible personal property and designates the beneficiary of each item. If I execute a memorandum, the memorandum is to be incorporated by reference into this agreement to the extent permitted by law. I direct that upon my death, my Trustee distribute the items of tangible personal property listed in the memorandum, together with any insurance policies covering such property and claims under such policies, as provided in the memorandum. Should I leave multiple written memoranda that conflict as to the disposition of any item of tangible personal property, the memorandum with the most recent date shall control as to those items that are in conflict. If the memorandum can not legally be incorporated by reference, the memorandum shall then be treated as an amendment to my trust and I request that my Trustee follow my wishes and distribute the items of tangible personal property listed in the memorandum according to its terms. Section 6.02 Distribution of Remaining Tangible Personal Property My Trustee shall distribute any tangible personal property not disposed of by a written memorandum to my wife, if she survives me. If she does not survive me, my Trustee shall distribute such property to my children, in shares of substantially equal value, to be divided among my children as my children shall agree. In the event that my Trustee determines that a child is incapable of acting in the child's best interest, my Trustee shall appoint a person to represent the child in the division. If my children are unable to agree upon the division of the property within 6 months after my death, my Trustee shall make the division. My Trustee may use a lottery or rotation system or any other method of allocation to determine the order of selection and distribution of the property. Alternatively, my Trustee may sell all or any portion of the property and distribute the net proceeds equally among my living children. My Trustee shall incur no liability to any party for any decision made by my Trustee with respect to either the division or sale of my tangible personal property, and any decision made by my Trustee shall be final and binding on all of my beneficiaries. 6-1 . Section 6.03 Definition of Tangible Personal Property For purposes of this Article, my tangible personal property shall include but not be limited to my household furnishings, appliances and fixtures, works of art, motor vehicles, pictures, collectibles, personal wearing apparel and jewelry, books, sporting goods, and hobby paraphernalia. If my Trustee receives property to be distributed under this Article from my probate estate or in any other manner after my death, my Trustee shall distribute the property, free of trust, in accordance with this Article. The fact that an item of tangible personal property was not received by my trust until after my death shall not affect the validity of the gift. If property to be distributed under this Article is not part of the trust property upon my death and is not subsequently transferred to my Trustee from my probate estate or in any other manner after my death, then the specific distribution of property made in this Article shall be considered null and void, without any legal or binding effect. Section 6.04 Encumbrances and Incidental Expenses of Tangible Personal Property My Trustee shall distribute property under this Article subject to any liens, security interests or other encumbrances on the property. My Trustee shall pay, as an administration expense, the reasonable expenses of storing, insuring, packing, transporting and. otherwise caring for my tangible personal property until each item of property is actually delivered to the appropriate beneficiary. Section 6.05 Residuary Distribution Any tangible personal property not distributed under this or prior Articles of this agreement shall be distributed as provided in the Articles that follow. 6-2 't Article Seven Creation of Trust Shares Upon My Death If my wife survives me, my Trustee shall divide the remaining trust property into two separate shares as provided in Section 7.01 and Section 7.02. One share shall be designated the "Marital Share" and the other share shall be designated the "Non-Marital Share." If my wife has predeceased me, my Trustee shall administer the remaining trust property as provided in Section 7.05. Section 7.01 Division of My Trust (No Federal Estate Tax) If there is no federal estate tax in effect at my death and Section 1022 of the Internal Revenue Code is in effect, my Trustee shall allocate to the Non-Marital Share assets from the remaining trust property selected by my Trustee that shall collectively have a sufficient amount of appreciation to fully utilize the entire aggregate basis increase allowed under Section 1 022(b) of the Internal Revenue Code. From the remaining trust property, my Trustee shall allocate to the Marital Share trust property selected by my Trustee that, taking into account any other property passing to my wife by reason of my death (whether under or outside of this agreement) shall collectively have a sufficient amount of appreciation to fully utilize the spousal property basis increase available to my estate under Section 1 022( c) of the Internal Revenue Code. My Trustee shall then allocate the remaining trust property to the Non-Marital Share. My Trustee shall administer the Non-Marital Share as provided in Article Ten. (a) Allocation of Assets My Trustee shall satisfy the gifts to the Non-Marital Share and the Marital Share with trust property having the lowest fair market value necessary to utilize the basis increase allowed under Sections 1 022(b) and (c) of the Internal Revenue Code, except I specifically authorize my Trustee, other than an interested Trustee to depart from this direction if my Trustee determines that there is good reason to do so. My Trustee may consider whether an asset is more likely to be sold in the near future than another asset and whether to preserve certain assets of the trust for future generations. A Trustee, acting in good faith, shall not be liable to any beneficiary for exercising or failing to exercise its discretion in making allocations under this Section. 7-1 .. (b) My Wife's Interest in Community Property Any interest my wife has in community property that is or becomes trust property at my death shall be allocated to the Marital Share. My wife shall have the absolute and unrestricted right to withdraw all of the net income and trust principal consisting of her community property. Section 7.02 Division of My Trust (Federal Estate Tax Exists) If the federal estate tax is in effect at my death, my Trustee shall divide the remaining trust property into the Marital Share and the Non-Marital Share as provided in this Section. (a) Creation of the Marital Share My Trustee shall allocate to the Marital Share a fractional share of the remaining trust property calculated as follows: (1) The Numerator The numerator of the fraction shall equal the minimum value, assuming the value qualifies for the marital deduction, sufficient to reduce the federal estate tax to the lowest possible amount. In computing the numerator, my Trustee shall take into account my gifts (including gifts treated as made by me) and all deductions, exclusions, credits and reductions in value allowed in computing such tax; provided, however, that any state death tax credit shall be taken into account for this purpose only to the extent that it does not increase the amount of state death taxes payable. (2) The Denominator The denominator shall consist of the value of the remaining trust property as finally determined for federal estate tax purposes. The Marital Share shall carry its pro rata share of the income, provided that in no event shall the Marital Share receive less income than that required to be paid to my wife under applicable state law. (b) Creation of the Non-Marital Share My Trustee shall allocate the balance of the trust property to the Non- Marital Share. My Trustee shall administer the Non-Marital Share as provided in Article Ten. 7-2 '. (c) Funding the Fractional Share My Trustee shall have complete authority and discretion to satisfy the fractional gift in cash or in kind, or partly in cash and partly in kind, or in undivided interests in property. To the extent that there are insufficient assets qualifying for the federal estate tax marital deduction to fully fund the Marital Share, the amount of the funding to the Marital Share shall be reduced accordingly, and I acknowledge that the amount of funding may be affected by actions of my Trustee and my Personal Representative in making certain tax elections. The fraction, once calculated as set forth above, shall be fixed and shall not vary with changes in the value of the property subsequent to the valuation date used for federal estate tax purposes. Since the fractional gift is not intended to be a gift of a specified dollar amount or pecuniary in nature, my Trustee shall apply the fraction to the assets of the trust at their actual value on the effective date or dates of allocation so that the actual value of the fractional share of the trust property resulting from the application of such fraction will reflect fluctuations in the value of the trust property. Allocations of assets by my Trustee shall be limited as set forth below. (1) Ineligible Assets My Trustee shall not allocate property or the proceeds of any property to the Marital Share that does not qualify for the federal estate tax marital deduction. (2) Tax Consequences of Certain Allocations I request that my Trustee always consider the tax consequences of allocating or distributing to the Marital Share any policy of insurance that insures the life of my wife, property subject to the foreign death credit, property on which a tax credit is available, or property that is income in respect of a decedent under the Internal Revenue Code. (3) My Wife's Interest in Community Property Any interest my wife has in community property that is or becomes trust property at my death, even though not included in my gross estate for federal estate tax purposes and not included in the computation for the fractional share, shall be allocated to the Marital Share. My wife shall have the absolute and unrestricted right to withdraw all of the net income and trust principal consisting of her community property. 7-3 Section 7.03 Further Division of the Marital Share My Trustee shall divide the Marital Share into two shares, to be designated the Exempt Marital Share and the Nonexempt Marital Share by applying a fractional pick-and-choose formula as provided in this Section. Such designations shall be effective as of the date of my death. (a) Creation of the Exempt Marital Share The Exempt Marital Share shall be a fractional share of the Marital Share calculated as follows: (1) Numerator The numerator of the fraction shall be equal to the amount, if any, of my available GST Exemption less the value of the Non-Marital Share. (2) Denominator The denominator is the value of the total Marital Share. If the value of the Non-Marital Share is equal to or greater than my available GST Exemption, there shall be no Exempt Marital Share. In the event there is no federal generation-skipping transfer tax in effect, my Trustee shall allocate all of the Marital Share to the Exempt Marital Share. My Trustee shall administer the Exempt Marital Share as provided in Article Eight. (b) Creation of the Nonexempt Marital Share My Trustee shall allocate the balance of the Marital Share to the Nonexempt Marital Share. My Trustee shall administer the Nonexempt Marital Share as provided in Article Nine. (e) Funding the Exempt Marital Share My Trustee shall have complete authority and discretion to allocate property to the Exempt Marital Share to satisfy the Exempt Marital Fraction in cash or in kind, or partly in cash and partly in kind, or in undivided interests in property. In making the computations necessary to determine the fractional share, my Trustee shall use those values as finally determined for federal estate tax purposes. Once determined the fractional share shall be fixed and 7-4 shall not vary with changes in the value of the trust property subsequent to the valuation date used for federal estate tax purposes. However, since the fractional share is not intended to be a gift of a specified dollar amount or pecuniary in nature, my Trustee shall apply the fraction to the assets at their actual value on the effective date or dates of distribution so that the actual value of the fractional share resulting from the application of the fraction will include fluctuations in the value of the trust property. Section 7.04 Disposition of Property Upon Disclaimer by My Wife My wife shall have the right within the time and in the manner provided by law to disclaim any portion or all of the property passing to or for her benefit under this agreement. If my wife disclaims any portion of the property that would otherwise be allocated to the Marital Share, my Trustee shall add the disclaimed property to the Non- Marital Share. Ifmy wife disclaims the interest she has in any portion of the Non-Marital Share, my Trustee shall dispose of the disclaimed interest under the provisions of this agreement as though she had predeceased me. My wife's right to disclaim any portion or all of the property passing to or for her benefit under this agreement shall either be exercised by my wife personally, or by any fiduciary or agent appointed by my wife who is specifically empowered to exercise her right to disclaim by the terms of the appointment, or under applicable law. Section 7.05 Division of My Trust if My Wife has Predeceased Me If my wife has predeceased me, my Trustee shall divide the rem~ning trust property into Exempt and Nonexempt Shares as provided in this Section. (a) Creation of the Exempt Share The Exempt Share shall be a fractional share of the trust property calculated as follows: (1) Numerator The numerator of the fractional share shall be equal to the amount, if any, of my available GST Exemption (as defined in Section 17.05(c)). (2) Denominator The denominator shall consist of the aggregate value for federal estate tax purposes of the remaining trust property. If there is no federal generation-skipping transfer tax in effect, my Trustee shall allocate all of the remaining trust property to the Exempt Share. 7-5 My Trustee shall administer the Exempt Share as provided in Article Eleven. (b) Creation of the Nonexempt Share My Trustee shall allocate the balance of the trust property to the Nonexempt Share. My Trustee shall administer the Nonexempt Share as provided in Article Twelve. (c) Funding the Exempt Share My Trustee shall have complete authority and discretion to allocate property to the Exempt Share in satisfaction of the fractional share in cash or in kind, or partly in cash and partly in kind, or in undivided interests in property. The fractional share shall be fixed and shall not vary with changes in the value of the trust property subsequent to the valuation date used for federal estate tax purposes. However, since the fractional share is not intended to be a gift of a specified dollar amount or pecuniary in nature, my Trustee shall apply the fraction to the assets at their actual value on the effective date or dates of distribution so that the actual value of the fractional share resulting from the application of the fraction will include fluctuations in the value of the trust property. (d) Allocation of GST Exemption I recommend, but do not require, that my Personal Representative or my Trustee allocate my available GST Exemption to the Exempt Share. 7-6 Article Eight The Exempt Marital Trust My Trustee shall hold and administer the Exempt Marital Share in trust as provided in this Article. The trust will be referred to as the "Exempt Marital Trust." Section 8.01 Distributions of Net Income My Trustee shall distribute all of the net income of the Exempt Marital Trust to my wife at least monthly during her lifetime. Nothing contained in this agreement shall limit the right of my wife to receive the entire net income of the Exempt Marital Trust. Section 8.02 Distributions of Principal My Trustee shall distribute to my wife as much of the principal of the Exempt Marital Trust as my Trustee determines is necessary or advisable for her health, education, maintenance and support. My Trustee may consider the needs of my wife and other income and resources available to her. Section 8.03 Unproductive Property Upon written request of my wife, my Trustee shall convert any nonproductive property held in the Exempt Marital Trust to productive property. Section 8.04 Limited Power of Appointment My wife shall have the testamentary limited power to appoint all or any portion of the principal and undistributed income remaining in the Exempt Marital Trust among my descendants, their spouses and their issue. My wife may not exercise this power to appoint trust property to herself, her estate, her creditors, or the creditors of her estate. I intend that this testamentary power of appointment be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Section 8.05 Separate Share for Disclaimed Property My Trustee shall hold any property that has become property of the Exempt Marital Trust as a consequence of a disclaimer by my wife as a separate share with provisions identical 8-1 to those contained in the other sections of this Article, except that with respect to the property of the separate share my wife shall not have the limited power of appointment that is held by my wife under Section 8.04. Section 8.06 Qualified Terminable Interest Property I intend that the property of the Exempt Marital Trust constitute qualified terminable interest property for federal and state death tax purposes if and to the extent my Trustee or Personal Representative makes the necessary election. This agreement shall be interpreted to accomplish this intent. If my Trustee or Personal Representative elects to have some but not all of the property in the Exempt Marital Trust qualify as qualified terminable interest property for federal or state death tax purposes, the qualified property and the non-qualified property shall be separated into separate shares, but each share shall be held upon identical terms and conditions as if there had been no division. The separate shares may be invested in a common fund with each share owning a proportionate fractional share of the fund. Section 8.07 Administration of the Exempt Marital Trust at My Wife's Death The Exempt Marital Trust shall terminate upon the death of my wife. To the extent that estate taxes are due because the assets of the Exempt Marital Trust are included in the estate of my wife and are not paid from her estate, the taxes shall be paid first from the Nonexempt Marital Trust and then, if necessary, from the Exempt Marital Trust. If my wife has not fully exercised her testamentary limited power of appointment over the property remaining at her death, my Trustee shall administer the unappointed balance or remainder of the Exempt Marital Trust as provided in Article Eleven. 8-2 Article Nine The Nonexempt Marital Trust My Trustee shall hold and administer the Nonexempt Marital Share in trust as provided in this Article. The trust will be referred to as the "Nonexempt Marital Trust." Section 9.01 Distributions of Net Income My Trustee shall distribute all of the net income of the Nonexempt Marital Trust to my wife at least monthly during her lifetime. Nothing contained in this agreement shall limit the right of my wife to receive the entire net income of the Nonexempt Marital Trust. Section 9.02 Distributions of Principal My Trustee shall distribute to my wife as much of the principal of the Nonexempt Marital Trust as my Trustee determines is necessary or advisable for her health, education, maintenance and support. My Trustee may consider the needs of my wife and other income and resources available to my wife. Section 9.03 Unproductive Property Upon written request of my wife, my Trustee shall convert any nonproductive property held in the Nonexempt Marital Trust to productive property. Section 9.04 Limited Power of Appointment My wife shall have the testamentary limited power to appoint all or any portion of the principal and undistributed income remaining in the Nonexempt Marital Trust among my descendants, their spouses and their issue. My wife may not exercise this power of appointment to appoint trust property to herself, her estate, her creditors, or the creditors of her estate. I intend that this testamentary power of appointment be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Section 9.05 Separate Share for Disclaimed Property My Trustee shall hold any property that has become property of the Nonexempt Marital Trust as a consequence of a disclaimer by my wife as a separate share with provisions 9-1 identical to those contained in the other sections of this Article, except that with respect to the property of the separate share my wife shall not have the limited power of appointment that is held by my wife under Section 9.04. Section 9.06 Qualified Terminable Interest Property I intend that the property of the Nonexempt Marital Trust constitute qualified terminable interest property for federal and state death tax purposes if and to the extent my Trustee or Personal Representative makes the necessary election. This agreement shall be interpreted to accomplish this intent. If my Trustee or Personal Representative elects to have some but not all of the property in the Nonexempt Marital Trust qualify as qualified terminable interest property for federal or state death tax purposes, the qualified property and the non-qualified property shall be separated into separate shares, but each share shall be held upon identical terms and conditions as if there had been no division. The separate shares may be invested in a common fund with each share owning a proportionate fractional share of the fund. Section 9.07 Administration of the Nonexempt Marital Trust at My Wife's Death The Nonexempt Marital Trust shall terminate upon the death of my wife. I If my wife has not fully exercised her testamentary limited power of appointment over the trust property remaining at her death, my Trustee shall divide the unappointed balance or remainder of the Nonexempt Marital Trust into an Exempt Share and a Nonexempt Share as follows: (a) Creation of the Exempt Share My Trustee shall allocate to the Exempt Share a fraction of the remaining Nonexempt Marital Trust property the numerator of which is equal to the amount, if any, of my wife's available GST Exemption and the denominator of which is the value, for federal estate tax purposes, of the balance or remainder of the Nonexempt Marital Trust. My Trustee may rely conclusively on the certification of my wife's Personal Representative or the trustee of her revocable living trust as to the amount of her remaining GST Exemption. My Trustee shall administer the Exempt Share as provided in Article Eleven. (b) Creation of the Nonexempt Share My Trustee shall allocate the balance of the Nonexempt Marital Trust to the Nonexempt Share. My Trustee shall administer the Nonexempt Share as provided in Article Twelve. 9-2 (c) Funding the Exempt Share My Trustee shall have complete authority and discretion to allocate property to the Exempt Share in satisfaction of the fractional share in cash or in kind, partly in cash and partly in kind, or in undivided interests in property. The fractional share shall be fixed and shall not vary with changes in the value of the trust property subsequent to the valuation date used for federal estate tax purposes. However, since the fractional share is not intended to be a gift of a specified dollar amount or pecuniary in nature, my Trustee shall apply the fraction to the assets at their actual value on the effective date or dates of distribution so that the actual value of the fractional share resulting from the application of the fraction will include fluctuations in the value of the trust property. (d) Allocation of GST Exemption I recommend that my wife's Personal Representative or the trustee of her living trust allocate my wife's remaining GST Exemption to the Exempt Share. (e) Payment of Estate Taxes To the extent that estate taxes are due because the assets of the Nonexempt Marital Trust are included in the estate of my wife and are not paid from her estate, the taxes shall be paid fIrst from the Nonexempt Share of the Nonexempt Marital Trust, then if necessary from the Exempt Share of the Nonexempt Marital Trust and then, if necessary, from the Exempt Marital Trust. 9-3 Article Ten The Family Trust My Trustee shall hold and administer the Non-Marital Share in trust as provided in this Article. The trust will be referred to as the "Family Trust." Section 10.01 Division of Family Trust My Trustee shall divide the Family Trust into two separate shares. The first share shall be designated the "Exempt Share." The second share shall be designated the "Nonexempt Share." (a) The Exempt Share My Trustee shall allocate to the Exempt Share a fraction of the Family Trust property the numerator of which is equal to the amount, if any, of my available GST exemption and the denominator of which is the value, for federal estate tax purposes, of the property of the Family Trust. If the numerator of such fraction is zero, no property shall be distributed to the Exempt Share. I recommend, but do not require, that my Personal Representative or my Trustee will allocate my available GST exemption to the property constituting the Exempt Share. If there is no federal generation-skipping transfer tax in effect, my Trustee shall allocate all of the remaining trust property to the Exempt Share. (b) The Nonexempt Share My Trustee shall allocate the balance, if any, of the Family Trust to the Nonexempt Share. If the numerator is equal to or greater than the denominator, no property shall be allocated to the Nonexempt Share. My Trustee shall have complete authority to make allocations between the Exempt and the Nonexempt Shares. My Trustee may make allocations in cash or in kind, in undivided interests,'or in any proportion thereof between the two shares. The fraction so determined shall be fixed and shall not vary with changes in the value of the assets subsequent to the valuation date used for federal estate tax purposes. Since such fraction is not intended to be a gift of a specified dollar amount or pecuniary in nature, my Trustee shall apply the fraction to the assets at their actual value on the effective date or dates of distribution so that the actual value of the fractional share 10-1 resulting from the application of such fraction will include fluctuations in the value of the trust property. Both shares shall collectively constitute the Family Trust. My Trustee shall maintain separate accounts for the Exempt Share and the Nonexempt Share and shall administer each share as a separate and distinct trust according to the terms set forth in this Article. If any allocation under this Article results in the funding of only one Family Trust Share, my Trustee shall administer this agreement as if the Family Trust Share not funded did not exist. Section 10.02 Family Trust Beneficiary My wife shall be the only beneficiary of the Family Trust during her lifetime. Section 10.03 Separate Share for Disclaimed Property To the extent that any property is added to the Family Trust as the result ofa qualified disclaimer by my wife, the property shall be held in a separate share of the Family Trust during the lifetime of my wife, and shall be separately administered in accordance with all of the provisions of this Article except that Section 10.07, which grants my wife a limited power of appointment, shall not apply to the separate share. The sole purpose of maintaining the separate share is to keep the disclaimed property, together with all income from the property that is accumulated in the trust, separate from the other property of the Family Trust over which my wife has a power of appointment and avoid the possible disqualification of an otherwise qualified disclaimer under Section 2518 of the Internal Revenue Code. Section 10.04 Distribution of Income My Trustee shall distribute all of the net income of the Family Trust to my wife at least monthly during her lifetime. Section 10.05 Distribution of Principal My Trustee shall distribute to my wife as much principal of the Family Trust as my Trustee determines is necessary or advisable for her health, education, maintenance and support. Section 10.06 Guidelines to My Trustee My wife is the primary beneficiary of the Family Trust. In making discretionary distributions under this Article, my Trustee should bear in mind that my primary concern and objective is to provide for the well-being of my wife and the preservation of principal is not as important as the accomplishment of this objective. 10-2 Section 10.07 Testamentary Limited Power of Appointment My wife shall have the testamentary limited power to appoint all or any portion of the principal and undistributed income remaining in the Family Trust among my descendants, th~ir spouses and their issue. My wife may not exercise this testamentary limited power of appointment to appoint to herself, her estate, her creditors, or the creditors of her estate. My wife may not exercise this testamentary limited power of appointment to create another power of appointment that, under the applicable local law, can be validly exercised so as to postpone the vesting of any estate or interest in such property for a period ascertainable without regard to the date of the creation of the first power; furthermore, my wife is prohibited from exercising the power to suspend the absolute ownership or power of alienation of the property for a period ascertainable without regard to the date of the creation of the first power. I intend that this testamentary power of appointment be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Section 10.08 Termination of the Family Trust The Family Trust shall terminate upon the death of my wife and my Trustee shall administer the unappointed balance or remainder of the Exempt Share of the Family Trust as provided in Article Eleven and the unappointed balance or remainder of the Nonexempt Share of the Family Trust as provided in Article Twelve. 10-3 . Article Eleven My Exempt Property Upon the death of the survivor of my wife and me, my Trustee shall administer my remaining exempt trust property as provided in this Article. Section 11.01 Division of My Exempt Property My Trustee shall divide my exempt property into shares as follows: Name Relationship Share Kevin J . Woods son 50% Diane E. Sable daughter 50% My Trustee shall administer the exempt share of each beneficiary in an exempt trust as provided in the Sections that follow. Section 11.02 Distribution of the Exempt Share for Kevin J. Woods My Trustee shall hold and administer the exempt share set aside for Kevin J; Woods under the provisions of this Section. (a) Distributions of Income and Principal My Trustee shall distribute to Kevin J. Woods as much of the income and principal of his exempt trust as my Trustee determines is necessary or advisable for his health, education, maintenance and support. Any undistributed net income shall be accumulated and added to principal. (b) Guidelines for Discretionary Distributions In making discretionary distributions to Kevin J. Woods, it is my desire to provide for his well-being and happiness. Although I request that my Trustee consider the other known resources available to Kevin 1. Woods before making distributions, I also request that my Trustee be liberal in making any distributions to, or for his benefit. I acknowledge that the principal of the trust established for Kevin J. Woods may be exhausted in making such distributions. 11-1 . (c) Distributions on the Death of Kevin J. Woods Kevin J . Woods shall have the testamentary limited power to appoint all or any portion of the principal and undistributed income remaining in his exempt trust at his death among his spouse and descendants. Kevin J. Woods may not exercise this limited power of appointment to appoint to himself, his estate, his creditors or the creditors of his estate. Kevin J. Woods shall have the sole and exclusive right to exercise this limited power of appointment. This power of appointment is intended to be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Insofar as any part of Kevin J. Woods's exempt trust shall not be effectively appointed, my Trustee shall distribute the remaining unappointed balance per stirpes to his descendants. If he has no living descendants, my Trustee shall distribute the balance of the trust property per stirpes to my descendants. If I have no living descendants, my Trustee shall distribute the balance of the trust property as provided in Article Thirteen. (d) Distribution if Kevin J. Woods is Deceased If Kevin J . Woods should die before the establishment of his trust, my Trustee shall distribute the trust property to his descendants, per stirpes. If he has no living descendants, my Trustee shall distribute Kevin J. Woods's share pro rata to the other beneficiaries named in this Article. If there are no other named beneficiaries my Trustee shall distribute the remaining property as provided in Article Thirteen. Section 11.03 Distribution of the Exempt Share for Diane E. Sable My Trustee shall hold and administer the exempt share set aside for Diane E. Sable under the provisions of this Section. (a) Distributions of Income and Principal My Trustee shall distribute to Diane E. Sable as much of the income and principal of her exempt trust as my Trustee determines is necessary or advisable for her health, education, maintenance and support. Any undistributed net income shall be accumulated and added to principal. 11-2 (b) Guidelines for Discretionary Distributions In making discretionary distributions to Diane E. Sable, it is my desire to provide for her well-being and happiness. Although I request that my Trustee consider the other known resources available to Diane E. Sable before making distributions, I also request that my Trustee be liberal in making any distributions to, or for her benefit. I acknowledge that the principal of the trust established for Diane E. Sable may be exhausted in making such distributions. (c) Distributions on the Death of Diane E. Sable Diane E. Sable shall have the testamentary limited power to appoint all or any portion of the principal and undistributed income remaining in her exempt trust at her death among her spouse and descendants. Diane E. Sable may not exercise this limited power of appointment to appoint to herself, her estate, her creditors or the creditors of her estate. Diane E. Sable shall have the sole and exclusive right to exercise this limited power of appointment. This power of appointment is intended to be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Insofar as any part of Diane E. Sable's exempt trust shall not be effectively appointed, my Trustee shall distribute the remaining unappointed balance per stirpes to her descendants. If she has no living descendants, my Trustee shall distribute the balance of the trust property per stirpes to my descendants. If I have no living descendants, my Trustee shall distribute the balance of the trust property as provided in Article Thirteen. (d) Distribution if Diane E. Sable is Deceased If Diane E. Sable should die before the establishment of her trust, my Trustee shall distribute the trust property to her descendants, per stirpes. If she has no living descendants, my Trustee shall distribute Diane E. Sable's share pro rata to the other beneficiaries named in this Article. If there are no other named beneficiaries my Trustee shall distribute the remaining property as provided in Article Thirteen. 11-3 Article Twelve My Nonexempt Property Upon the death of the survivor of my wife and me, my Trustee shall administer my nonexempt property as provided in this Article. Section 12.01 Division of My Nonexempt Trust Property My Trustee shall divide my nonexempt into shares as follows: Name Relationship Share Kevin J . Woods son 50% Diane E. Sable daughter 50% My Trustee shall administer the share of each beneficiary as provided in the Sections that follow. Section 12.02 Distribution of the Share for Kevin J. Woods My Trustee shall administer the nonexempt share set aside for Kevin J. Woods in trust as provided in this Section. (a) Distributions of Income and Principal My Trustee shall distribute to Kevin J. Woods as much of the income and principal of his nonexempt trust as my Trustee determines is necessary or advisable for his health, education, maintenance and support. Any undistributed net income shall be accumulated and added to principal. (b) Guidelines for Discretionary Distributions In making discretionary distributions to Kevin J . Woods, it is my desire to provide for his well-being and happiness. Although I request that my Trustee consider the other known resources available to Kevin 1. Woods before making distributions, I also request that my Trustee be liberal in making any distributions to, or for his benefit. I acknowledge that the principal of the nonexempt trust established for Kevin J . Woods may be exhausted in making such distributions. 12-1 (c) Distribution Upon the Death of Kevin J. Woods Kevin J. Woods shall have the testamentary limited power to appoint any property remaining in his nonexempt trust at his death among his spouse and descendants. However, Kevin J. Woods may not exercise this limited power of appointment to appoint to himself, his estate, his creditors or the creditors of his estate. Kevin J. Woods shall have the sole and exclusive right to exercise this limited power of appointment. I intend this power of appointment to be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Insofar as any part of Kevin 1. Woods's nonexempt trust shall not be effectively appointed, my Trustee shall distribute the remaining unappointed balance per stirpes to the descendants of Kevin J . Woods. If Kevin J. Woods has no living descendants, my Trustee shall distribute the balance of the trust property per stirpes to my descendants. If I have no living descendants, my Trustee shall distribute the balance of the trust property as provided in Article Thirteen. (d) Distribution if Kevin J. Woods is Deceased If Kevin J. Woods should die before the establishment of his trust, my Trustee shall distribute Kevin J. Woods's share to Kevin 1. Woods's descendants, per stirpes. If Kevin J. Woods has no living descendants, my Trustee shall distribute Kevin J. Woods's share pro rata to the other beneficiaries named in this Article. If there are no other named beneficiaries my Trustee. shall distribute the remaining property under the terms of Article Thirteen. Section 12.03 Distribution of the Share for Diane E. Sable My Trustee shall administer the nonexempt share set aside for Diane E. Sable in trust as provided in this Section. (a) Distributions of Income and Principal My Trustee shall distribute to Diane E. Sable as much of the income and principal of her nonexempt trust as my Trustee determines is necessary or advisable for her health, education, maintenance and support. Any undistributed net income shall be accumulated and added to principal. 12-2 (b) Guidelines for Discretionary Distributions In making discretionary distributions to Diane E. Sable, it is my desire to provide for her well-being and happiness. Although I request that my Trustee consider the other known resources available to Diane E. Sable before making distributions, I also request that my Trustee be liberal in making any distributions to, or for her benefit. I acknowledge that the principal of the nonexempt trust established for Diane E. Sable may be exhausted in making such distributions. (c) Distribution Upon the Death of Diane E. Sable Diane E. Sable shall have the testamentary limited power to appoint any property remaining in her nonexempt trust at her death among her spouse and descendants. However, Diane E. Sable may not exercise this limited power of appointment to appoint to herself, her estate, her creditors or the creditors of her estate. Diane E. Sable shall have the sole and exclusive right to exercise this limited power of appointment. I intend this power of appointment to be a limited power of appointment and not a general power of appointment as defined in Section 2041 of the Internal Revenue Code. Insofar as any part of Diane E. Sable's nonexempt trust shall not be effectively appointed, my Trustee shall distribute the remaining unappointed balance per stirpes to the descendants of Diane E. Sable. If Diane E. Sable has no living descendants, my Trustee shall distribute the balance of the trust property per stirpes to my descendants. If I have no living descendants, my Trustee shall distribute the balance of the trust property as provided in Article Thirteen. (d) Distribution if Diane E. Sable is Deceased If Diane E. Sable should die before the establishment of her trust, my Trustee shall distribute Diane E. Sable's share to Diane E. Sable's descendants, per stirpes. If Diane E. Sable has no living descendants, my Trustee shall distribute Diane E. Sable's share pro rata to the other beneficiaries named in this Article. If there are no other named beneficiaries my Trustee shall distribute the remaining property under the terms of Article Thirteen. 12-3 Article Thirteen Remote Contingent Distribution If, at any time, there is no individual beneficiary qualified to receive final distribution of my trust estate or any part of it, then my Trustee shall distribute the portion of my trust estate with respect to which the failure of qualified recipients has occurred one-half to those persons who would inherit it had I then died intestate owning such property, and one-half to those persons who would inherit it had my wife then died intestate owning such property, all as determined and in the proportions provided by the laws of Pennsylvania then in effect. 13-1 Article Fourteen Administration of Trusts for Underage and Incapacitated Beneficiaries Section 14.01 Distributions for Underage and Incapacitated Beneficiaries If under another provision of this agreement any part of the trust property becomes distributable outright, or if a distribution is required to be made, to a person when that person has not yet attained the age of 25 years, or at a time when that person is incapacitated and in the opinion of my Trustee is unable to manage the distribution properly, my Trustee may distribute or retain the trust property in anyone or more of the following methods described in this Article. I request, but do not require, that before making a distribution to a beneficiary, my Trustee, to the extent that it is both reasonable and possible, consider the ability the beneficiary demonstrated in managing prior distributions of trust property. Section 14.02 Methods of Distribution My Trustee may distribute or retain trust property in anyone or more of the following methods for the benefit of any beneficiary subject to the provisions of this Article: (a) Distribution to Bene.ficiary My Trustee may distribute trust property directly to the beneficiary. (b) Distribution to Guardian or Family Member My Trustee may distribute trust property to the beneficiary's guardian, parent or a family member or other person who has assumed the responsibility of caring for the beneficiary. (c) Distribution to Custodian My Trustee may distribute trust property to any person or entity, including my Trustee, as custodian for the beneficiary under the Uniform Transfers to Minors Act, or similar statute. (d) Distribution to Other Persons or Entities My Trustee may distribute trust property to other persons and entities for the use and benefit of the beneficiary. 14-1 (e) Distribution to Agent under Durable Power of Attorney My Trustee may distribute trust property to an agent or attorney-in-fact authorized to act for the beneficiary under a legally valid durable power of attorney executed by the beneficiary prior to the incapacity. (f) Retention in Trust My Trustee may retain trust property in a separate trust for the benefit of the beneficiary until the beneficiary attains 25 years of age or, in the opinion of my Trustee, is no longer incapacitated (as the case may be). My Trustee shall distribute as much of the net income and principal of any trust created under this subsection that my Trustee deems necessary or advisable for the health, education, maintenance and support of the beneficiary for whom the trust was created. My Trustee shall accumulate any undistributed net income and add such income to principal. When the beneficiary for whom a trust is created under this subsection attains 25 years of age or is no longer incapacitated (as the case may be), the beneficiary may withdraw from the trust at any time or times any portion or all of the accumulated trust income and principal. The beneficiary for whom a trust is created under this subsection shall have the testamentary general power to appoint all or any portion of the principal and undistributed income remaining in the beneficiary's trust at his or her death among one or more persons or entities, including the creditors of the beneficiary's estate. The beneficiary shall have the sole and exclusive right to exercise this general power of appointment. I intend that this testamentary power of appointment be a general power of appointment as defined in Section 2041 of the Internal Revenue Code. If the beneficiary fails to survive the complete distribution of his or her trust property, my Trustee shall distribute the balance of his or her trust property to the then living descendants of the beneficiary, per stirpes. If the beneficiary has no then living descendants, my Trustee shall distribute the beneficiary's remaining trust property to my then living descendants, per stirpes. If I have no then living descendants, my Trustee shall distribute the remaining trust property as provided in Article Thirteen. Section 14.03 Application of Article Any decision made by my Trustee under this Article shall be final, controlling and binding upon all beneficiaries subject to the provisions of this Article. 14-2 The provisions of this Article shall not apply to distributions to me or to my wife from any trust established under this agreement. 14-3 Article Fifteen Trust Administration Section 15.01 Distributions to Beneficiaries Whenever this agreement authorizes or directs a Trustee to make a distribution of net income or principal to a beneficiary, the Trustee may apply for the benefit of the beneficiary any property that otherwise could be distributed directly to the beneficiary. The Trustee shall have no responsibility to inquire into the beneficiary's ultimate disposition of the distributed property unless specifically directed otherwise by this agreement. The Trustee may make distributions in cash or in kind, or partly in each, in proportions and at values determined by the Trustee. The Trustee may allocate undivided interests in specific assets to a beneficiary or trust in any proportion or manner that the Trustee determines, even though the property allocated to one beneficiary may be different from that allocated to another beneficiary. The Trustee may make these determinations without regard to the income tax attributes of the property and without the consent of any beneficiary. Section 15.02 No Court Proceedings This trust shall be administered expeditiously, consistent with the provisions of this agreement, free of judicial intervention, and without order, approval or action of any court. The trust shall be subject to the jurisdiction of a court only if my Trustee or another interested party institutes a legal proceeding. A proceeding to seek instructions or a court determination shall be initiated in the court having original jurisdiction over matters relating to the construction and administration of trusts. Seeking instructions or a court determination shall not subject this trust to the continuing jurisdiction of the court. Section 15.03 No Bond My Trustee shall not be required to furnish any bond for the faithful performance of my Trustee's duties, unless required by a court of competent jurisdiction and only if the court finds that a bond is needed to protect the interests of the beneficiaries. No surety shall be required on any bond required by any law or rule of court, unless the court specifies that a surety is necessary. Section 15.04 Exoneration of My Trustee No successor Trustee is obligated to examine the accounts, records or actions of any previous Trustee or of the Personal Representative of my estate. No successor Trustee 15-1 shall be in any way or manner responsible for any act or omission to act on the part of any previous Trustee or the Personal Representative of my estate. Unless a Trustee has received notice of removal, the Trustee shall not be liable to me or to any beneficiary for the consequences of any action taken by the Trustee that would have been, but for the prior removal of the Trustee, a proper exercise by the Trustee of the authority granted to the Trustee under this agreement. Any Trustee may request and obtain from the beneficiaries or from their legal representatives, agreements in writing releasing the Trustee from any liability that may have arisen from the Trustee's acts or omissions to act and indemnifying the Trustee from liability for the acts or omissions. An agreement described in this paragraph, if acquired from all the living beneficiaries of the trust or from their legal representatives, shall be conclusive and binding upon all parties, born or unborn, who may have, or may in the future acquire, an interest in the trust. The Trustee may require a refunding agreement before making any distribution or allocation of trust income or principal and may withhold distribution or allocation pending determination or release of a tax lien or other lien. This refunding agreement provision shall not apply to any distribution that qualifies for the federal estate tax unlimited marital deduction or the federal estate tax charitable deduction. Section 15.05 Trustee Compensation An individual serving as Trustee, other than my wife or me, shall be entitled to fair and reasonable compensation for the services rendered as a fiduciary. A corporate fiduciary serving as Trustee shall be compensated by agreement with an individual Trustee or, in the absence of an individual Trustee or in the absence of an agreement, in accordance with the corporate fiduciary's published schedule of fees in effect at the time the services are rendered. A Trustee may charge additional fees for services it provides that are not comprised within its duties as Trustee such as fees for legal services, tax return preparation and corporate finance or investment banking services. In addition to receiving compensation, a Trustee may be reimbursed for reasonable costs and expenses incurred in carrying out its duties under this agreement. Section 15.06 Employment of Professionals My Trustee may appoint, employ and remove, at any time and from time to time, investment advisors, accountants, auditors, depositories, custodians, brokers, consultants, attorneys, expert advisers, agents, and employees to advise or assist the Trustee in the performance of its duties. My Trustee may act upon the recommendations of the persons or entities employed with or without independent investigation. 15-2 My Trustee may reasonably compensate an individual or entity employed to assist or advise my Trustee regardless of whether the person or entity shall be a Trustee of a trust established under this agreement or a corporate affiliate of a Trustee and regardless of whether the entity shall be one in which a Trustee of a trust created under this agreement is a partner, member, stockholder, officer, director or corporate affiliate or has any other interest. My Trustee may pay the usual compensation for services contracted for under this Section out of principal or income of the trust as my Trustee may deem advisable. My Trustee may pay compensation to an individual or entity employed to assist or advise my Trustee without diminution of or charging the same against the compensation to which the Trustee is entitled under this agreement. Any Trustee who shall be a partner, stockholder, officer, director or corporate affiliate in any entity employed to assist or advise my Trustee shall nonetheless receive the Trustee's share of the compensation paid to the entity. Section 15.07 Exercise of Testamentary Power of Appointment A testamentary power of appointment granted under this agreement may be exercised by valid will or valid living revocable trust that specifically refers to this power of appointment. The holder of a testamentary power of appointment may exercise the power to appoint property among the permissible appointees in equal or unequal proportions, and on such terms and conditions, whether outright or in trust, as the holder of the power designates. Except where this agreement specifically provides otherwise, the holder of a testamentary power of appointment may grant further powers of appointment to any person to whom principal may be appointed, including a presently exercisable limited or general power of appointment. My Trustee may conclusively presume that any power of appointment granted to any beneficiary of a trust created under this agreement has not been exercised by the beneficiary if my Trustee has no knowledge of the existence of a valid will or valid living revocable trust exercising the power within 3 months after the beneficiary's death. Section 15.08 Determination of Principal and Income The Pennsylvania Uniform Principal and Income Act shall govern beneficiaries' rights among themselves in matters concerning principal and income. If the Pennsylvania Uniform Principal and Income Act contains no provision concerning a particular item, my Trustee shall determine in a fair, equitable and practical manner what shall be credited, charged, and apportioned between principal and income. Section 15.09 Trust Accounting Except to the extent required by law, my Trustees shall not be required to file annual accounts with any court or court official in any jurisdiction. 15-3 Upon the written request of a beneficiary, my Trustee shall render an accounting at least annually to the income beneficiaries of the trust during the accounting period that includes the date of the written request. The accounting shall include the receipts, disbursements, and distributions occurring during the accounting period and a balance sheet of the trust property if no tax return is filed, or may consist just of the tax return for the accounting period if a tax return is filed for the trust. In the absence of fraud or manifest error, the assent by all income beneficiaries to an accounting of an Independent Trustee shall make the matters disclosed in the accounting binding and conclusive upon all persons, both those in existence on the date of this agreement and those to be born in the future who have, or will in the future have, a vested or contingent interest in the trust property. In the case of a minor or incapacitated beneficiary, that beneficiary's natural guardian or legal representative shall give the assent required under this Section. The failure of any person to object to any accounting by giving written notice to my Trustee within 60 days of the person's receipt of a copy of the accounting shall be deemed to be an assent by such person. The trust's financial records and documentation shall be available at reasonable times and upon reasonable notice for inspection by trust beneficiaries and their representatives. My Trustee shall not be required to furnish trust information regarding my trust to any individual, corporation, or other entity that is not a beneficiary or the representative of a beneficiary, and is not requesting the information pursuant to a valid court order. Section 15.10 Action of Trustees; Disclaimer Unless otherwise provided in this agreement, whenever I am serving as Trustee, I may make all decisions and exercise all powers and discretions granted to my Trustee under this agreement without the consent of any other Trustee. When I am not serving as a Trustee, if two Trustees are eligible to act with respect to a given matter, the concurrence of both shall be required for action to be taken; if more than two Trustees are eligible to act with respect to a given matter, the concurrence of a majority of my Trustees shall be required for action to be taken. A nonconcurring Trustee may dissent or abstain from a decision of the majority. A Trustee shall be absolved from personal liability by registering its dissent or abstention in the records of the trust. After doing so, the dissenting Trustee shall then act with my other Trustees in any way necessary or appropriate to effectuate the decision of the majority. Notwithstanding any prOVISIon of this agreement to the contrary, any Trustee may disclaim or release, in whole or in part, by an instrument in writing, any power it holds as Trustee, irrevocably or for any period of time that the Trustee may specify. The Trustee may make the relinquishment of a power personal to the Trustee or may relinquish the power for all subsequent Trustees. 15-4 " Section 15.11 Delegation of Trustee Authority; Power of Attorney Subject to the limitations set forth in Section 16.18, any Trustee may, by an instrument in writing, delegate to any other Trustee the right to exercise any power (including a discretionary power) granted my Trustee in this agreement. During the time a delegation under this Section is in effect, the Trustee to whom the delegation was made may exercise the power to the same extent as if the delegating Trustee had personally joined in the exercise of the power. The delegating Trustee may revoke the delegation at any time by giving written notice of revocation to the Trustee to whom the power was delegated. Unless a Trustee elects otherwise in a written instrument delivered to the other Trustees, whenever I am not serving as a Trustee, if two or more Trustees are serving, anyone Trustee may sign any checks, agreements or other documents on behalf of the trust with the same force and effect as if all Trustees had signed. Persons dealing with the signing Trustee in good faith may rely upon the signing Trustee's authority to act on behalf of the trust without inquiry as to the other Trustees' acquiescence to such action. My Trustee may execute and deliver a revocable or irrevocable power of attorney granting any individual or entity the power to transact any and all business on behalf of my trust or any other trust created under this agreement. The power of attorney may grant to the attorney-in-fact all of the rights, powers, and discretion that my Trustee is entitled to exercise under this agreement. Section 15.12 Additions to Separate Trusts If upon the termination of any trust created under this agreement a final distribution is to be made to a person who is the only beneficiary of another trust created under this agreement, my Trustee shall make the distribution to the second trust instead of distributing the property to the beneficiary outright. F or purposes of administration, my Trustee shall treat the distribution as though it had been an original part of the second trust. Section 15.13 Authority to Merge or Sever Trusts My Trustee may merge and consolidate a trust created under this agreement with any other trust, if the two trusts contain substantially the same terms for the same beneficiaries and at least one Trustee in common. My Trustee may administer the merged and consolidated trust as a single trust or unit. If, however, a merger or consolidation does not appear feasible, my Trustee may consolidate the assets of the trusts for purposes of investment and trust administration while retaining separate records and accounts for each respective trust. My Trustee may sever any trust on a fractional basis into two or more separate and identical trusts or may segregate a specific amount or asset from the trust property by allocation to a separate account or trust. The separate trusts may be funded on a non pro rata basis provided that funding is based on the total fair market value of the assets on the 15-5 date of funding. Income earned on a segregated amount or specific asset after the segregation passes with the amount or asset segregated. My Trustee shall hold and administer each separate trust upon terms and conditions substantially identical to those of the trust from which it was severed. Subject to the terms of the trust, my Trustee may consider differences in federal tax attributes and other pertinent factors in administering the trust property of any separate account or trust, in making applicable tax elections, and in making distributions. A separate trust created by severance must be treated as a separate trust for all purposes from the date on which the severance is effective; however, the effective date of severance may be retroactive to a date before the date on which my Trustee exercises the power. Section 15.14 Authority to Terminate Trusts If, at any time, my Trustee, other than an Interested Trustee, in its sole discretion, determines that a trust created under this agreement is no longer economical or is otherwise inadvisable to administer as a trust, or if my Trustee, other than an Interested Trustee, deems it to be in the best interest of my beneficiaries, my Trustee, without further responsibility, may terminate the trust and distribute the trust property, including any undistributed net income, in the following order of priority: To me, if I am then living; If I am not then living, to my wife, if then a beneficiary of the trust; If I am not then living and my wife is not then a beneficiary of the trust, to the beneficiaries then entitled to mandatory distributions of net income of the trust and in the same proportions; and If none of the beneficiaries are entitled to mandatory distributions of net income, to the beneficiaries then eligible to receive discretionary distributions of net income of the trust, in such amounts and shares as my Trustee, other than an Interested Trustee, may determine. Section 15.15 Discretionary Distribution to Fully Utilize Basis Increase Upon Death of Beneficiary This Section shall apply during any time there is no federal estate tax in effect and Section 1022 of the Internal Revenue Code is in effect. If I have given my Trustee the authority to make distributions of principal to the beneficiary of a trust, my Trustee, other than an Interested Trustee, may, from time to time, distribute to the beneficiary as much of the principal of the trust as such Trustee may determine is advisable so that upon the death of the beneficiary the estate of the beneficiary will have sufficient appreciated assets to fully utilize the aggregate basis 15-6 increase allowed under Section 1022, excluding the additional basis increase for property acquired by a surviving spouse under Section 1 022( c). Before making a distribution of property under this Section, I request, but do not require that the Trustee determine whether there is a good reason to retain the property in trust such as whether or not the asset may be sold in the near future, the need for creditor protection by the beneficiary, protection of the beneficiary from failed marriages and protection of the asset for future generations. My Trustee shall not be liable to any beneficiary for the exercising or failing to exercise its discretion to make a distribution under this Section. Section 15.16 Merger of Corporate Fiduciary If any corporate fiduciary acting as my Trustee under this agreement is merged with or transfers substantially all of its trust assets to another corporation or if a corporate fiduciary changes its name, the successor shall automatically succeed to the trusteeship as if originally named a Trustee. No document of acceptance of trusteeship shall be required. Section 15.17 Beneficiary's Status Until a Trustee receives notice of the incapacity, birth, marriage, death or other event upon which a beneficiary's right to receive payments may depend, the Trustee shall not be liable for acting or failing to act with respect to the event or for disbursements made in good faith to persons whose interest may have been affected by such event. Unless otherwise provided in this agreement, the parent or legal representative may act on behalf of a beneficiary who is a minor or is incapacitated. A Trustee may rely on any information provided by a beneficiary with respect to the beneficiary's assets and income. A Trustee shall have no independent duty to investigate the status of any beneficiary and shall not incur any liability for failure to do so. Section 15.18 Discharge of Third Persons Persons dealing in good faith with my Trustee shall not be required to see to the proper application of money paid or property delivered to my Trustee, or to inquire into the authority of my Trustee as to any transaction. The receipt from my Trustee for any money or property paid, transferred or delivered to my Trustee shall be a sufficient discharge to the person or persons paying, transferring or delivering the money or property from all liability in connection with its application. Section 15.19 Certificate by Trustee A written statement of my Trustee may always be relied upon by, and shall always be conclusive evidence in favor of, any transfer agent or any other person dealing in good faith with my Trustee in reliance upon the statement. 15-7 Section 15.20 Funeral and Other Expenses of Beneficiary Upon the death of an income beneficiary, my Trustee may pay the funeral expenses, burial or cremation expenses, enforceable debts and other expenses incurred due to the death of the beneficiary from trust property. This Section shall only apply to the extent the income beneficiary has not exercised any testamentary power of appointment granted to him under this agreement. My Trustee may rely upon any request by the Personal Representative or members of the family of the deceased beneficiary for payment without verifying the validity or the amounts and without being required to see to the application of the amounts so paid. My Trustee may make decisions under this Section without regard to any limitation on paYment of expenses imposed by statute or rule of court and may be made without obtaining the approval of any court having jurisdiction over the administration of the deceased beneficiary's estate. Section 15.21 Marital Deduction Qualification I intend that the marital gift as described in Article Seven of this agreement qualify for the federal estate tax marital deduction, and the provisions of this agreement shall be construed to reflect this intent. To the extent that giving effect to a provision of this agreement would result in the marital gift not qualifying for the federal estate tax unlimited marital deduction, that provision shall be ineffective except to the extent my Trustee or Personal Representative elects that all or a portion of the marital gift not qualify for the unlimited marital deduction. Section 15.22 Generation-Skipping Transfer Tax Provisions Notwithstanding any other provision of this agreement to the contrary, if a trust created under this agreement would be partially exempt from generation-skipping transfer tax after the intended allocation of GST exemption as defined in Section 2631 of the Internal Revenue Code to the trust then: (a) Division into Exempt and Nonexempt Trusts My Trustee may divide the property of the trust into two separate trusts so that the allocation of GST exemption can be made to a trust that will be entirely exempt from generation-skipping transfer tax (the "exempt trust"). The exempt trust shall consist of the largest fractional share of the total trust assets that will permit the exempt trust to be entirely exempt from generation-skipping transfer tax. The "nonexempt trust" shall consist of the balance of the total trust assets. F or purposes of computing the fractional share, asset values as finally determined for federal estate tax purposes shall be used. The fraction shall be applied to the assets at their actual value on the effective date or dates of distribution so that the actual value of the fractional share resulting from the application of such fraction will include fluctuations in the value of the trust property. 15-8 (b) Administration of the Trusts The trusts created under this Section shall have the same terms as the original trust. To the extent possible, distributions to a non-skip person as defined by Section 2613 of the Internal Revenue Code shall be made from a nonexempt trust and distributions to a skip person as defined by Section 2613 shall be made from an exempt trust. My Trustee shall administer each exempt and nonexempt trust as a separate and independent trust. Any exempt or nonexempt trust established under this agreement may be referred to by the name designated by my Trustee. If an exempt trust and a nonexempt trust are further divided under the terms of this agreement, my Trustee may allocate property from the exempt trust first to the trust from which a generation skipping transfer is more likely to occur. (c) My Intent; Trust Additions My intent is to minimize the application of the generation-skipping transfer tax to the trust property but not to affect the total amount of trust property to which any beneficiary may be entitled under this agreement. This agreement shall be so construed and interpreted to give effect to this intent. If at any time any property that has an inclusion ratio greater than zero for generation-skipping transfer tax purposes would be added to a trust with property that has an inclusion ratio of zero, then my Trustee shall instead hold such property in a separate trust on the same terms and conditions as the original trust. (d) Independent Trustee May Confer Testamentary Power of Appointment In the event a trust has an inclusion ratio of greater than zero for generation-skipping transfer tax purposes, my Trustee, excluding any Interested Trustee, may during the lifetime of the beneficiary of the trust, grant the beneficiary a testamentary power to appoint all or part of such beneficiary's trust or trust share to the creditors of the beneficiary's estate. The Trustee granting the power of appointment may require, as a condition for the beneficiary's exercise of such power, that the beneficiary obtain the consent of such Trustee. Any testamentary power of appointment granted by the Trustee shall be in writing and may be revoked at any time during the lifetime of the beneficiary to whom the power was given. 15-9 Article Sixteen My Trustee's Powers Section 16.01 Introduction to Trustee's Powers Except as otherwise specifically provided in this agreement, my Trustee may exercise, without prior approval from any court, all the powers conferred by this agreement and any powers conferred by law, including, without limitation, those powers set forth under the common law or statutory law of the Commonwealth of Pennsylvania or any other jurisdiction whose law applies to this trust. The powers set forth in Pennsylvania Probate, Estates and Fiduciaries Act are specifically incorporated into this trust agreement. The powers conferred upon my Trustee by law, including those powers conferred by Pennsylvania Probate, Estates and Fiduciaries Act, shall be subject to any express limitations or contrary directions contained in this agreement. My Trustee shall exercise these powers in the manner my Trustee determines to be in the best interests of the beneficiaries. My Trustee shall not exercise any of its powers in a manner that is inconsistent with the right of the beneficiaries to the beneficial enjoYment of the trust property in accordance with the general principles of the law of trusts. The Trustee of a trust may have duties and responsibilities in addition to those described in this agreement. I encourage my Trustee to obtain appropriate legal advice if my Trustee has any questions concerning its duties and responsibilities as Trustee. Section 16.02 Execution of Documents by My Trustee My Trustee may execute and deliver any and all instruments in writing that my Trustee considers necessary to carry out any of the powers granted in this agreement. Section 16.03 Investment Powers in General My Trustee may invest in any type of investment that my Trustee determines is consistent with the investment goals of my trust, whether inside or outside the geographic borders of the United States of America and its possessions or territories, taking into account my trust's overall investment portfolio. Without limiting my Trustee's investment authority in any way, I request that my Trustee exercise reasonable care and skill in selecting and retaining trust investments. I also request that my Trustee take into account the following factors in choosing investments for my trust: The potential return from the investment, both in the form of income and appreciation; 16-1 The potential income tax consequences of the investment; The investment's potential for volatility; and The role the investment will play in the trust's portfolio. I request that my Trustee, in arranging the investment portfolio of the trust, also consider the possible effects of inflation or deflation, changes in global and U.S. economic conditions, transaction expenses, and the trust's need for liquidity. My Trustee may delegate its discretion to manage trust investments to any registered investment adviser or corporate fiduciary. Section 16.04 Banking Powers My Trustee may establish bank. accounts of any type in one or more banking institutions that my Trustee may choose. My Trustee may open accounts in the name of my Trustee (with or without disclosing fiduciary capacity) or in the name of the trust. When an account is in the name of the trust, checks on that account and authorized signatures need not disclose the fiduciary nature of the account or refer to any trust or Trustee. An account from which my Trustee makes frequent disbursements need not be an interest bearing account. My Trustee may authorize withdrawals from an account by check, draft or other instrument or in any other manner. Section 16.05 Contract Powers My Trustee may sell at public or private sale, transfer, exchange for other property, and otherwise dispose of trust property for consideration and upon terms and conditions that my Trustee deems advisable. My Trustee may grant options of any duration for any such sales, exchanges, or transfers of trust property. My Trustee may enter into contracts, and may deliver deeds or other instruments, that my Trustee deems appropriate. Section 16.06 Common Investments F or purposes of convenience with regard to the administration and investment of the trust property, my Trustee may invest part or all of the trust property jointly with trust property of other trusts for which my Trustee is also serving as a Trustee. For this purpose, a corporate fiduciary acting as my Trustee may use common funds for investment. When trust property is managed and invested in this manner, my Trustee shall maintain records that sufficiently identify that portion of the jointly invested assets that constitute the trust property of this trust. 16-2 Section 16.07 Environmental Powers My Trustee shall have the right to inspect trust property to determine compliance with or to respond to any environmental law affecting the trust property. "Environmental law" shall mean any federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment or of human health. My Trustee may refuse to accept property if my Trustee determines that the property is or may be contaminated by any hazardous substance or is or was used for any purpose involving hazardous substances that could create liability to the trust or to my Trustee. My Trustee may use and expend trust property to (i) conduct environmental assessments, audits or site monitoring; (ii) take remedial action to contain, clean up or remove any hazardous substance including a spill, discharge or contamination; (iii) institute, contest or settle legal proceedings brought by a private litigant or any local, state, or federal agency concerned with environmental compliance; (iv) comply with any order issued by any court or by any local, state, or federal agency directing an assessment, abatement or clean-up of any hazardous substance; and (v) employ agents, consultants and legal counsel to assist my Trustee in these actions. My Trustee shall not be liable for any loss or reduction in value sustained by my trust as a result of my Trustee's retention of property on which hazardous materials or substances requiring remedial action are discovered unless my Trustee contributed to the resulting loss or reduction in value through willful misconduct or gross negligence. My Trustee shall not be liable to any beneficiary or to any other party for any decrease in the value of trust property as a result of my Trustee's compliance with any environmental law, including any reporting requirement. My Trustee may release, relinquish or disclaim any power held by my Trustee that my Trustee determines may cause my Trustee to incur individual liability under any environmental law. Section 16.08 Insurance Powers My Trustee may purchase, accept, hold, and deal with as owner, policies of insurance on my life, the life of any beneficiary, or on the life of any person in whom any beneficiary has an insurable interest. My Trustee may purchase disability, medical, liability, long-term health care and other insurance on behalf of and for the benefit of any beneficiary. My Trustee may purchase annuities and similar investments for any beneficiary. My Trustee shall have the power to execute or cancel any automatic premium loan agreement with respect to any policy, and shall have the power to elect or cancel any automatic premium loan provision in a life insurance policy. My Trustee may borrow money to pay premiums due on any policy, either by borrowing from the company 16-3 issuing the policy or from another source. My Trustee may assign the policy as security for the loan. My Trustee shall have the power to exercise any option contained in a policy with regard to any dividend or share of surplus apportioned to the policy, to reduce the amount of a policy or convert or exchange the policy, or to surrender a policy at any time for its cash value. My Trustee may elect any paid-up insurance or extended term insurance nonforfeiture option contained in a policy. My Trustee shall have the power to sell any policy at its fair market value to anyone having an insurable interest in the policies including the insured. My Trustee shall have the right to exercise any other right, option, or benefit contained in a policy or permitted by the insurance company issuing the policy. Upon termination of the trust, my Trustee shall have the power to transfer and assign the policies held by the trust as a distribution of trust property. Section 16.09 Loans and Borrowing Powers My Trustee may make secured or unsecured loans to any person (including a beneficiary), entity, trust or estate, for any term or payable on demand, with or without interest. My Trustee may enter into or modify the terms of any mortgage or security agreement granted in connection with any loan and may release or foreclose on the mortgage or security. My Trustee may borrow money at interest rates and on other terms that it deems advisable from any person, institution or other source including, in the case of a corporate fiduciary, its own banking or commercial lending department. My Trustee may encumber trust property by mortgages, pledges and other hypothecation and shall have the power to enter into any mortgage, whether as a mortgagee or mortgagor even though the term may extend beyond the termination of the trust and beyond the period that is required for an interest created under this agreement to vest in order to be valid under the rule against perpetuities. My Trustee may purchase, sell at public or private sale, trade, renew, modify, and extend mortgages. My Trustee may accept deeds in lieu of foreclosure. Section 16.10 Nominee Powers My Trustee may hold real estate, securities and any other trust property in the name of a nominee or in any other form without disclosing the existence of any trust or fiduciary capacity . 16-4 Section 16.11 Payment of Taxes and Expenses Except as otherwise provided in this agreement, my Trustee is authorized to pay all property taxes, assessments, fees, charges, and other expenses incurred in the administration or protection of the trust. All payments shall be a charge against the trust property and shall be paid by my Trustee out of the income, or to the extent that the income is insufficient, then out of the principal of the trust property. The determination of my Trustee with respect to the payment of expenses shall be conclusive upon the beneficiaries. Section 16.12 Qualified Real Property Valuation My Trustee, other than an Interested Trustee, shall have the power to amend the terms of a trust holding "qualified real property" as defined in Section 2032A of the Internal Revenue Code, in order to permit the qualified real property to qualify or continue to qualify for special use valuation permitted under Section 2032A, even if the amendment changes beneficial interests and that directs the segregation of trust property into more than one trust. Section 16.13 Real Estate Powers My Trustee may sell at public or private sale, convey, purchase, exchange, lease for any period, mortgage, manage, alter, improve and in general deal in and with real property in such manner and on such terms and conditions as my Trustee deems appropriate. My Trustee may grant or release easements in or over, subdivide, partition, develop, raze improvements, and abandon, any real property. My Trustee may manage real estate in any manner that my Trustee deems best and shall have all other real estate powers necessary for this purpose. My Trustee may enter into contracts to sell real estate. My Trustee may enter into leases and grant options to lease trust property even though the term of the agreement extends beyond the termination of the trust and beyond the period that is required for an interest created under this agreement to vest in order to be valid under the rule against perpetuities. For such purposes, my Trustee may enter into any contracts, covenants and warranty agreements that my Trustee deems appropriate. Section 16.14 Residences and Tangible Personal Property My Trustee may acquire, maintain and invest in any residence for the use and benefit of the beneficiaries, whether or not the residence is income producing and without regard to the proportion that the value of the residence may bear to the total value of the trust property and even if retaining the residence involves financial risks that trustees would not ordinarily incur. My Trustee may payor make arrangements for others to pay all carrying costs of the residence, including, but not limited to, taxes, assessments, 16-5 insurance, expenses of maintaining the residence in suitable repair, and other expenses relating to the operation of the residence for the benefit of the beneficiaries. My Trustee may acquire, maintain and invest in articles of tangible personal property, whether or not the property is income producing, and may pay the expenses of the repair and maintenance of the property. My Trustee shall have no duty to convert the property referred to in this Section to productive property except as required by other provisions of this agreement. My Trustee may permit any income beneficiary of the trust to occupy any real property or use any personal property owned by the trust on terms or arrangements that my Trustee may determine, including rent free or in consideration for the payment of taxes, insurance, maintenance, repairs, or other charges. My Trustee shall have no liability for any depreciation or loss as a result of the retention of any property retained or acquired under the authority of this Section. Section 16.15 Retention and Abandonment of Trust Property My Trustee may retain, without liability for depreciation or loss resulting from retention, any property constituting the trust at the time of its creation, at the time of my death or as the result of the exercise of a stock option. My Trustee may retain property, notwithstanding the fact that the property may not be of the character prescribed by law for the investment of assets held by a fiduciary, and notwithstanding the fact that retention may result in inadequate diversification under any applicable Prudent Investor Act or other applicable law. My Trustee may hold property that is non-income producing or is otherwise nonproductive if holding the property is, in the sole and absolute discretion of my Trustee, in the best interests of the beneficiaries. On the other hand, except when I am serving as a Trustee, my Trustee shall invest contributions of cash and cash equivalents as soon as reasonably practical after the assets have been acquired by the trust. My Trustee is permitted to retain a reasonable amount in cash or money market accounts in order to pay anticipated expenses and other costs and to provide for anticipated distributions to or for the benefit of a beneficiary. But my Trustee shall convert any nonproductive property held in any trust qualifying for the federal estate tax marital deduction as qualified terminable interest property under Section 2056(b )(7) of the Internal Revenue Code and for any state death tax marital deduction under the law of any state to productive property upon the written request of my wife. My Trustee may abandon any trust property that my Trustee deems to be of insignificant value. 16-6 Section 16.16 Securities, Brokerage and Margin Powers My Trustee may buy, sell, trade and otherwise deal in stocks, bonds, investment companies, mutual funds, common trust funds, commodities, options and other securities of any kind and in any amount, including short sales. My Trustee may write and purchase call or put options, and other derivative securities. My Trustee may maintain margin accounts with brokerage firms and may pledge securities to secure loans and advances made to my Trustee or to or for the benefit of a beneficiary. My Trustee may place all or any part of the securities held by the trust in the custody of a bank or trust company. My Trustee may have all securities registered in the name of the bank or trust company or in the name of its nominee. My Trustee may appoint the bank or trust company as the agent or attorney in fact to collect, receive, receipt for and disburse any income and generally to perform the duties and services incident to a custodian of accounts. My Trustee may employ a broker-dealer as a custodian for securities held by the trust and may register the securities in the name of the broker-dealer or in the name of a nominee with or without the addition of words indicating that the securities are held in a fiduciary capacity. My Trustee may hold securities in bearer or uncertificated form and may use a central depository, clearing agency or book-entry system, such as The Depository Trust Company, Euroclear or the Federal Reserve Bank of New York. My Trustee may participate in any reorganization, recapitalization, merger or similar transaction. My Trustee may exercise or sell conversion or subscription rights for securities of all kinds and description. My Trustee may give proxies or powers of attorney that may be discretionary and with or without powers of substitution. My Trustee may vote or refrain from voting as to any matter. Section 16.17 Settlement Powers My Trustee may settle, by compromise, adjustment, arbitration or otherwise any and all claims and demands in favor of or against the trust. My Trustee may release or abandon any claim in favor of the trust. Section 16.18 Limitation on My Trustee's Powers All powers granted to my Trustee under this agreement or by applicable law shall be limited as set forth in this Section, unless explicitly excepted by reference to this Section. The limitations set forth in this Section shall not apply to me. An Interested Trustee may not exercise or participate in the exercise of discretion with respect to the distribution of income or principal, or the termination of the trust to or for the benefit of a beneficiary, to the extent that the exercise of such discretion is other than 16-7 for the health, education, maintenance or support of a beneficiary as described under Sections 2041 and 2514 of the Internal Revenue Code. 16-8 Article Seventeen General Provisions Section 17.01 Maximum Term for Trusts Notwithstanding any other provision of this agreement to the contrary, unless terminated earlier under other provisions of this agreement, each trust created under this agreement shall terminate 21 years after the last to die of the descendants of my maternal and paternal grandparents and the descendants of my wife's maternal and paternal grandparents who are living at the time of my death. At that time, the remaining trust property shall vest in and be distributed to the persons entitled to receive mandatory distributions of net income of the trust and in the same proportions. If no beneficiary is entitled to mandatory distributions of net income, the remaining trust property shall vest in and be distributed to the beneficiaries entitled to receive discretionary distributions of net income of the trust, in equal shares per stirpes. Section 17.02 Spendthrift Provision Neither the income nor the principal of the trust property may be assigned, anticipated or alienated in any manner by any beneficiary, nor shall it be subject to attachment, bankruptcy proceedings or any other legal process, or to the interference or control of creditors or others. Nothing contained in this Section shall restrict in any way the exercise of any power of appointment granted in this agreement. Section 17.03 Survivorship Presumption If my wife and I die under circumstances in which the order of our deaths cannot be established, my wife will be deemed to have survived me. If any other beneficiary is living at my death, but dies within 30 days after my death, then the beneficiary will be deemed to have predeceased me for purposes of this agreement. Section 17.04 Changing the Situs of Administration My Trustee may, at any time, remove all or any part of the property or the situs of administration of the trust from one jurisdiction to another. My Trustee may elect, by filing an instrument with the trust records, that the trust shall thereafter be construed, regulated and governed as to administration by the laws of the new jurisdiction. My Trustee may take action under this Section for any purpose my Trustee deems 17-1 appropriate, including the minimization of any taxes in respect of the trust or any beneficiary of such trust. If necessary, the beneficiaries entitled to receive distributions of net income under the trust may, by majority consent, appoint a corporate fiduciary in the new situs. If a beneficiary is a minor or is incapacitated, the parent or legal representative of the beneficiary may act on behalf of the beneficiary. Section 17.05 Definitions F or purposes of this agreement, the following terms have the following meanings: (a) Adopted and Afterborn Persons A legally adopted person in any generation and his or her descendants, including adopted descend~ts, has the same rights and shall be treated in the same manner under this agreement as natural children of the adopting parent, provided such person is legally adopted prior to attaining the age of 18 years. A person is deemed to be legally adopted if the adoption was legal in the jurisdiction in which it occurred at the time that it occurred. (b) Agreement The term "this agreement" means this trust agreement and includes all trusts created under the terms of this agreement. (c) Available GST Exemption "My available GST Exemption" means the GST Exemption provided in Section 2631 of the Internal Revenue Code in effect at the time of my death; reduced by the aggregate of (1) the amount, if any, of GST Exemption allocated to my lifetime transfers, including those allocations made at the time of my death by my Personal Representative, by my Trustee, or by operation of law and (2) the amount, if any, allocated to direct skips as defined in Section 2612(c)(I) of the Internal Revenue Code that do not qualify for an exclusion from the generation-skipping transfer tax occurring at my death to or for the benefit of my descendants. If, at the time of my death, I have made a lifetime transfer to a trust with an inclusion ratio of greater than zero but have not filed a gift tax return and the due date for the gift tax return has not yet passed, my available GST Exemption shall also be reduced to the extent necessary and possible to reduce the trust inclusion ratio to zero, thereby exempting the transfer from generation-skipping transfer tax. "My wife's available GST Exemption" means the GST Exemption in effect at the time of her death; reduced by the aggregate of (1) the amount, 17-2 if any, of GST Exemption allocated to her lifetime transfers, including those allocations made at the time of her death by her Personal Representative, by her Trustee, or by operation of law and (2) the amount, if any, allocated to direct skips that do not qualify for an exclusion from the generation-skipping transfer tax occurring at her death to or for the benefit of my descendants. If, at the time of her death, she has made a lifetime transfer to a trust with an inclusion ratio of greater than zero but has not filed a gift tax return and the due date for the gift tax return has not yet passed, my wife's available GST Exemption shall also be reduced to the extent necessary and possible to exempt the transfer from generation-skipping transfer tax. (d) Descendants The term "descendants" shall include a person's lineal descendants of all generations. (e) Education The term "education" is intended to be. an ascertainable standard in accordance with Section 2041 and Section 2514 of the Internal Revenue Code and shall include, but not be limited to: Enrollment at private elementary, junior and senior high school including boarding school; Undergraduate and graduate study in any field at a college or university; Specialized, vocational or professional tralmng or instruction at any institution, including private instruction; and Any other curriculum or activity that my Trustee may deem useful for developing the abilities and interests of a beneficiary including, without limitation, athletic training, musical instruction, theatrical training, the arts and travel. The term "education" shall also include distributions made by my Trustee for expenses such as tuition, room and board, fees, books and supplies, tutoring and transportation and a reasonable allowance for living expenses. (f) Grantor The term "Grantor" has the same legal meaning as "Settlor," "Trustor" or any other term referring to the maker of a trust. 17-3 (g) Incapacity Except as otherwise provided in this agreement, a person IS deemed incapacitated in anyone of the following circumstances. (1) The Opinion of Two Licensed Physicians An individual is deemed incapacitated whenever, in the opinion of two licensed physicians, the individual is unable to effectively manage his or her property or financial affairs, whether as a result of age, illness, use of prescription medications, drugs or other substances, or any other cause. An individual is deemed restored to capacity whenever the individual's personal or attending physician provides a written opinion that the individual is able to effectively manage his or her property and financial affairs. (2) Court Determination An individual is deemed incapacitated if a court of competent jurisdiction has declared the individual to be disabled, incompetent or legally incapacitated. (3) Detention, Disappearance or Absence An individual is deemed incapacitated whenever he or she cannot effectively manage his or her property or fmancial affairs due to the individual's unexplained disappearance or absence for more than 30 days, or whenever he or she is detained under duress. An individual's disappearance or absence or detention under duress may be established by an affidavit of my Trustee, or, if no Trustee is serving, by the affidavit of any beneficiary. The affidavit shall describe the circumstances of the individual's disappearance, absence or detention and may be relied upon by any third party dealing in good faith with my Trustee in reliance upon the affidavit. (h) Income Beneficiary The term "income beneficiary" means any beneficiary who is then entitled to receive distributions of the net income of the trust, whether mandatory or discretionary. 17-4 Unless otherwise provided in this agreement, the phrase "majority of the income beneficiaries" means any combination of income beneficiaries who, if all accrued net income were distributed on the day of a vote by the beneficiaries, would receive more than 50% of the accrued net income. For purposes of this calculation, beneficiaries who are eligible to receive discretionary distributions of net income are deemed to receive the income in equal shares. References to a "majority" refer to a majority of the entire trust collectively until my Trustee allocates property to separate trusts or trust shares. After the allocation of property to separate trusts or trust shares, references to a "majority" refer to a majority of each separate trust or trust share. (i) Independent Trustee The term "Independent Trustee" means a Trustee who is not an Interested Trustee as defined in subsection G) and includes an Independent Special Trustee appointed under the provisions of Section 3.07. Only an Independent Trustee may exercise those powers granted exclusively to an Independent Trustee and when the phrase "other than an Interested Trustee" is used. Whenever this agreement specifically prohibits an Interested Trustee from exercising discretion or performing an act, then only an Independent Trustee may exercise that discretion or perform that act. An Independent Trustee shall not be liable to any person for any good faith exercise or nonexercise of its discretion under this agreement. (j) Interested Trustee The term "Interested Trustee" means (1) a Trustee who is a transferor of property to the trust (including a person whose qualified disclaimer resulted in property passing to the trust); (2) a Trustee who is a beneficiary of the trust; or (3) a Trustee whom a beneficiary of the trust can remove and replace by appointing a Trustee that is related or subordinate to the beneficiary within the meaning of Section 672( c) of the Internal Revenue Code. F or purposes of this subsection "a beneficiary of the trust" means a person who is or in the future may be eligible to receive income or principal from the trust pursuant to the terms of the trust. A person shall be considered a beneficiary of a trust even if he or she has only a remote contingent remainder interest in the trust; however, a person shall not be considered a beneficiary of a trust if the person's only interest is as a potential appointee under a testamentary power of appointment. 17-5 (k) Internal Revenue Code and Treasury Regulations References to the "Internal Revenue Code" or to its provisions are to the Internal Revenue Code of 1986, as amended from time to time, and the corresponding Treasury Regulations, if any. References to the "Treasury Regulations," are to the Treasury Regulations under the Internal Revenue Code in effect from time to time. If a particular provision of the Internal Revenue Code is renumbered, or the Internal Revenue Code is superseded by a subsequent federal tax law, any reference is deemed to be made to the renumbered provision or to the corresponding provision of the subsequent law, unless to do so would clearly be contrary to my intent as expressed in this agreement. The same rule shall apply to references to the Treasury Regulations. (I) Legal Representative or Personal Representative As used in this agreement, the term "legal representative" or "Personal Representative" means a person's guardian, conservator, executor, administrator, Trustee, or any other person or entity personally representing a person or the person's estate. (m) Per Stirpes Whenever a distribution is to be made to a person's descendants "per stirpes," the distribution shall be divided into as many shares as there are then living children of the person and deceased children of the person who left then living descendants. Each then living child shall receive one share and the share of each deceased child shall be divided among the child's then living descendants in the same manner. (n) Qualified Retirement Plan The term "qualified retirement plan" means a plan qualified under Section 401 of the Internal Revenue Code, an individual retirement arrangement under Section 408 or Section 408A or a tax-sheltered annuity under Section 403. The term "qualified retirement benefits" means the amounts held in or distributed pursuant to a plan qualified under Section 401, an individual retirement arrangement under Section 408 or Section 408A, a tax-sheltered annuity under Section 403 or any other benefit subject to the distribution rules of Section 401 (a)(9). (0) Shall and May Unless otherwise specifically provided in this agreement or by the context in which used, I use the word "shall" in this agreement to command, direct or require, and the word "may" to allow or permit, but not require. In the context of my Trustee, when I use the word "may" I intend that my 17-6 . Trustee may act in its sole and absolute discretion unless otherwise stated in this agreement. (p) Trust The terms "this trust" or "this trust agreement" shall refer to this agreement and all trusts created under the terms of this agreement. (q) Trustee The term "my Trustee" or "Trustee" refers to the Trustee named in Article One and to any successor, substitute, replacement or additional person, corporation or other entity that is from time to time acting as the Trustee of any trust created under the terms of this agreement. The term "Trustee" refers to singular or plural as the context may require. (r) Trust Property The phrase "trust property" shall be construed to mean all property held by my Trustee under this agreement, including all property that my Trustee may acquire from any source. Section 17.06 General Provisions and Rules of Construction The following general provisions and rules of construction shall apply to this agreement: (a) Duplicate Originals This agreement may be executed in any number of counterparts, each of which is deemed to be an original. Any person may rely upon a copy of this agreement certified under oath by my Trustee to be a true copy, to the same effect as if it were an original. (b) Singular and Plural; Gender Unless the context requires otherwise, words denoting the singular may be construed as plural and words of the plural may be construed as denoting the singular. Words of one gender may be construed as denoting another gender as is appropriate within the context. The word "or" when used in a list of more than two items may function as both a conjunction and a disjunction as the context requires or permits. (c) Headings of Articles, Sections, and Subsections The headings of Articles, Sections, and subsections used within this agreement are included solely for the convenience and reference of the reader. They have no significance in the interpretation or construction of this agreement. 17-7 I .. (d) Governing State Law This agreement is governed, construed and administered according to the laws of the Commonwealth of Pennsylvania as from time to time amended, except as to trust property required by law to be governed by the laws of another jurisdiction and unless the Situs of Administration is changed as provided in Section 17.04. (e) Notices Unless otherwise stated, whenever this agreement calls for notice, the notice must be in writing and must be personally delivered with proof of delivery, or mailed postage prepaid by certified mail, return receipt requested, to the last known address of the party requiring notice. Notice is effective on the date personally delivered or on the date of the return receipt. If a party giving notice does not receive the return receipt but has proof that he or she mailed the notice, notice is effective on the date it would normally have been received via certified mail. If notice is required . to be given to a minor or incapacitated individual, notice must be given to the parent or legal representative of the minor or incapacitated individual. (f) Plans Not Reciprocal The fact that my wife and I are executing our estate plans concurrently shall not be construed to create any contractual or reciprocal obligations between us. (9) Severability The invalidity or unenforceability of any provision of this agreement shall not affect the validity or enforceability of any other provision of this agreement. If a court of competent jurisdiction determines that any provision is invalid, the remaining provisions of this agreement are to be interpreted and construed as if the invalid provision had never been included in this agreement. 17-8 . I have executed this agreement on the day and year first above written. This agreement shall be effective when signed by me, whether or not now signed by a Trustee. I certify to the officer taking my acknowledgment that I have read this trust agreement, that I understand it, and that it correctly states the provisions under which my trust property is to be administered and distributed by my Trustee. ~d-j;/J Charles 1. ~ds, Grantor and Trustee (l" ~ ~ >>// ur/7 ././ ../.' / _ (~../1;/i-4t1f1/:--'" L ;;<1~//!t'k~-. ~--1;leanor M. Woods, Trustee COMMONWEALTH OF PENNSYLVANIA ) ) ss. COUNTY OF DAUPHIN ) On this day, November 22, 2005, before me personally appeared Charles J. Woods, as Grantor and as Trustee, personally known to me (or proved to me on the basis of satisfactory evidence) to be the individual whose name is subscribed to the foregoing instrument, and acknowledged that he executed the same as his voluntary act and deed for the purposes therein contained. Witness my hand and official seal. [Seal] ,- I 1/ My commission expires: COMMONWEALTH OF PENNSYLVANIA I Notarial Seal !\ Am M. Moya. NotaTy Public Lower ~axton Twp., Dauphin County My Commission Expires Jan. 29. 2008 Member, oennsy!v:J',i", pst;odatbr! of NotarieE 17-9 . COMMONWEALTH OF PENNSYLVANIA ) ) ss. COUNTY OF DAUPHIN ) On this day, November 22, 2005, before me personally appeared Charles J Woods, as Trustee, personally known to me (or proved to me on the basis of satisfactory evidence) to be the individual whose name is subscribed to the foregoing instrument, and acknowledged that he executed the same as his voluntary act and deed for the purposes therein contained. Witness my hand and official seal. [Seal] i~ J ~ / ,}.:1 ~ \/lAA A'}'/ I '/11 1 . ~r l7( p I It'; I /~,r Not~ Public J My commission expires: COMMONWEALTH O'f PENNSYLVANIA. NomriffiS~l :\' Amy M. Moya, Notary ~ub}ic . Lower Paxton Twp., Dauphm County i My Commission Expires Jan. 29, 2008 [: Member, PennsI/IV1:ll"\t3 ,i),;::..,o::::at!o!", of Notaries 17-10 .. Schedule A Ten Dollars cash Wachovia High Performance Monev Market Treasury Direct Account No. 1300-088-9339 Promissory Note (Kevin J. Woods) December 4,2006 SlIsa II E. Ll'lIl'l'l'l' !tAIIFlunll Register of Wills Cumberland County Courthouse 1 Courthouse Square Carlisle, PAl 70 13 RE: Charles J. Woods Social Security Number: 020-07-2899 To Whom It May Concern: Enclosed for filing with your office is one (1) completed Form REV-1500 with date of death valuations, in duplicate, together with the following attachments for the above decedent: 1. Check for Filing Fee ($30.00); 2. Check for additional Pennsylvania Inheritance Tax ($2,419.00); 3. Check for additional probate ($270.00) 4. Two (2) copies of the Charles J. Woods Living Trust; ~o 5. One (1~ copy of the Last Will and Testament ofCharle:~o Woods,"'-:. "g;:F;; 6. One (1) copy ofa Disclaimer and Renunciation signed~~ Eleanor M. Woods; .:~) 8 ~ 7. One (1) copy of the Federal Estate Tax Return for the ~St~; :-0""'; )> One (1) additional photocopy of the front-page of the completed REV-1500 form has been provided. Please time/date stamp these copies as received and return them to me in the envelope provided. If there are any questions or further requirements regarding this return, please do not hesitate to contact me. Sincerely, ~~ Susan E. Lederer, Esquire Enclosures t-...) c:;:::) c:;:::) c::r- o rrt c-> t (1'\ "'0 :::E r .. :0 f~~ ~:Ij (7)0 "";':, :J:J :"~CJ rti fTl :x:; 0 C)C) "r"\-n --n c-=S __..m rn ~~J ':- C) -rl o 4811 Jonestown Road · Suite 226 · Harrisburg, PA 17109 · Phone 717.652.7323 · Fax 717.652.7340 · susan@\edererlaw.com www.\edererlaw.com