I N D E N T U R E made the 27th day of March, 2002, by and between
XXXXXX X. XXXXXXXXX, having an office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
(sometimes hereinafter referred to as the "Grantor"), XXXX XXXXXXXXX, residing
at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx, XXXX XXXXXXXXX, residing at 00
Xxxxxxxxx Xxxxxx, Xxxxxxxxx XX 16 East, White Plains, New York, and XXXXXX
XXXXXXXX, residing at 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx, (sometimes
hereinafter referred to as the "Trustees").
W I T N E S S E T H :
WHEREAS, the Grantor desires to create a trust of the property and for the
purposes hereinafter mentioned,
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Grantor hereby transfers to the Trustees the property
listed in Schedule A annexed hereto, the receipt of which is hereby acknowledged
by the Trustees, and the Trustees agree to hold such property, IN TRUST,
NEVERTHELESS, for the uses and purposes, for the term, and subject to the
provisions, conditions, powers and agreements hereinafter set forth:
FIRST: From the date of this Indenture until the second
anniversary of this Indenture (the "trust term"), the Trustees shall pay the
Annuity Amount (as hereinafter defined) to the Grantor, or if the
Grantor is not living, to the legal representatives of the Grantor's estate. The
Annuity Amount shall be paid annually on the day preceding the month and day on
which this Indenture is executed for each year during the trust term and on the
last day of the trust term. The Annuity Amount for each year shall be the
following percentages of the initial fair market value, as of the date of this
Indenture, of the assets contributed to fund the trust as finally determined for
federal gift tax purposes.
Year in Which Percentage of Initial
Anniversary Date Falls Fair Market Value
---------------------- ---------------------
2003 49.28780%
2004 59.14536%
In any event, the Annuity Amount for any year shall be paid not later than
105 days after the scheduled payment date for such year as hereinabove provided.
The Annuity Amount shall be paid from income and, to the extent income is not
sufficient, from principal. Any income not so paid shall be added to principal.
Payments of the Annuity Amount for a period of less than a full year shall be
prorated on a daily basis.
The Trustees are authorized from time to time to pay to the Grantor or
the legal representatives of the Grantor's estate such amounts as the Grantor or
such legal representatives shall certify
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as being required to discharge the Grantor's tax liability (whether federal,
state or otherwise) in respect of income realized by the trust and not
distributed to the Grantor which is taxable to the Grantor, provided that this
authority shall not be exercised pursuant to this paragraph or applicable state
law if it conflicts with the intent of the Grantor as stated in the last
paragraph of this Article.
No additional contributions shall be made to the trust. The interest of
the Grantor shall not be subject to commutation. During the trust term, no
payment shall be made to any person other than the Grantor (or the Grantor's
estate). The Trustees shall not issue a note, other debt instrument, option or
other similar financial arrangement in satisfaction of the annuity payment
obligation. If an incorrect payment of the Annuity Amount is made, the Trustees
shall, promptly after the error is discovered, pay to the Grantor or the
Grantor's estate in the case of an underpayment or collect from the Grantor or
the Grantor's estate in the case of an overpayment, an amount equal to the
difference between the amount which the Trustees should have paid the Grantor or
the Grantor's estate and the amount which the Trustees paid the Grantor or the
Grantor's estate. The fiscal year of the trust shall be the calendar year.
The Grantor intends to create a trust in which the Grantor retains the
right to receive a "qualified interest," as defined in
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section 2702(b)(1) of the Internal Revenue Code and the Regulations thereunder,
and this Indenture shall be so interpreted and may be so amended by the Trustees
in order to so qualify.
Upon the expiration of the trust term, the Trustees shall distribute
all property then belonging to the income and principal of the trust (other than
any amount distributable to the Grantor or the Grantor's estate pursuant to the
preceding paragraphs of this Article) as follows:
A. If the Grantor is then living,
then the Trustees shall hold and administer the income and
principal of the trust as hereinafter provided in Article
"SECOND" hereof.
B. If the Grantor is not then living,
then the Trustees shall distribute:
1. To the Grantor's legal
representatives, to be disposed of as part of the
Grantor's estate, a fractional share of such property
having a numerator equal to the amount of such property
includible in the Grantor's gross estate for federal
estate tax purposes and a denominator equal to the
value of the trust property as determined in the
Grantor's federal estate tax proceeding;
2. The balance, if any, of
such property shall be distributed as follows:
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a. If the Grantor's
wife, XXXXXXXX XXXXXXXXX, is then living, then the
balance thereof shall be held and administered as
hereinafter provided in Article "SECOND" hereof.
b. If the Grantor's
wife, XXXXXXXX XXXXXXXXX, is not then living, then the
balance thereof shall be distributed to the Grantor's
son, XXXX XXXXXXXXX, and daughters, XXXX XXXXXXXXX and
XXXXXX XXXXXXXX, who are then living, in equal shares,
provided, however, that if XXXX XXXXXXXXX or XXXXXX
XXXXXXXX is not then living but has issue then living,
then her share hereof shall be distributed to her issue
then living, in equal shares, per stirpes.
SECOND: Property directed to be held and administered as
provided in this Article "SECOND" shall be held and administered as follows:
A. The Trustees shall hold and invest
the principal thereof and shall collect the income therefrom,
and shall pay over the net income arising therefrom to XXXX
XXXXXXXXX, XXXX XXXXXXXXX and XXXXXX XXXXXXXX, in equal
shares, until the death of the survivor of the Grantor and
his wife, XXXXXXXX XXXXXXXXX.
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B. Upon the death of the survivor of
the Grantor and his wife, XXXXXXXX XXXXXXXXX, the trust shall
be distributed to XXXX XXXXXXXXX, XXXX XXXXXXXXX and XXXXXX
XXXXXXXX, who are then living, in equal shares, provided,
however, that if XXXX XXXXXXXXX or XXXXXX XXXXXXXX is not
then living but has issue then living, then her share hereof
shall be distributed to her issue then living, in equal
shares, per stirpes.
THIRD: With respect to any property distributable absolutely
to an infant remainderman, the Trustees in their sole and absolute discretion
are authorized to retain possession of and manage the same during such infant's
minority, with all the rights, powers and compensation of the Trustees
hereunder, and from time to time to apply so much of the income and principal
thereof to the use of said infant as they deem advisable, accumulating any
balance of the income and adding the same to principal at convenient intervals;
upon said infant's attaining majority (or upon his sooner death), the then
principal and any accumulated income shall be distributed to said infant (or his
or her estate); this power shall not affect the vesting of said property in said
infant.
In determining the amount of income or principal applicable
to the use of an infant, the Trustees are authorized to
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disregard the ability of the parent or parents of said infant to support said
infant and to make payment of any income or principal applicable to the use of
or payable to an infant: (1) to the Guardian (qualified in any jurisdiction) of
the person or property of such infant; (2) to the parent or parents of such
infant (whether or not legally appointed his or her Guardian); (3) to the extent
permitted by law, to a Custodian for such infant under a Uniform Gifts to Minors
Act or a Uniform Transfers to Minors Act; or (4) to apply the same for his or
her benefit. The receipt of such Guardian, parent or Custodian, or the evidence
of the application of such income or principal, shall be a full discharge to the
Trustees for such payment.
FOURTH: The Trustees shall have the following power and
authority, which shall be deemed supplemental to and not exclusive of the
general powers and authority of trustees pursuant to law and which may be
exercised by them at any time and from time to time as they in their absolute
discretion deem advisable:
A. To hold and retain all or any part
of the trust created hereby in the form in which the same may
be at the time of receipt by the Trustees as long as they may
deem advisable, without liability for any loss resulting from
lack of diversification. The Trustees shall be absolved and
exonerated from any individual
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responsibility for any loss which may result to the trust in connection with
their retention of any stock of Sequa Corporation.
B. To invest and reinvest any funds
in the trust created hereby in any property, real or personal, of any
kind or nature, including, without limitation, stocks, whether common
or preferred, or otherwise, bonds, secured or unsecured obligations,
mortgages, other securities, and interests in any of the foregoing,
improved or unimproved real property or tangible personal property that
they may, in their absolute discretion, deem advisable, without regard
to any duty to diversify or to make such property productive of income,
and in any manner, including by direct purchase, entry into a joint
venture, creation of or purchase of an interest in any form of
partnership or corporation or through any other form of participation
or ownership, without being limited or restricted to investments
prescribed or authorized for trustees by the laws of New York or any
other state.
C. To sell, exchange, partition or
otherwise dispose of, any property, real or personal, which may at any
time form part of the trust created hereby.
D. To borrow money in connection with
the administration of the trust created hereby; to execute promissory
notes or other obligations for amounts so borrowed or for the
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purchase of any property acquired by them, and to secure payment of any
such amounts by mortgage or pledge of any real or personal property
which may at any time form part of the trust created hereby.
E. To make loans in such amounts, upon
such terms, secured or unsecured, at such rates of interest, and to
such persons, firms or corporations as they may deem advisable.
F. To renew or extend the time of
payment of any obligation, secured or unsecured, payable to the trust
created hereby for as long a period or periods of time and on such
terms as they may determine; and to adjust, settle, compromise and
arbitrate claims or demands in favor of or against the trust created
hereby.
G. In respect of any securities forming
a part of the trust created hereby, including but not limited to the
stock of Sequa Corporation which is contributed to the trust, to vote
upon any proposition or election at any meeting, and to grant proxies
to vote at any such meetings; to join in or become a party to any
reorganization, readjustment, merger, voting trust, consolidation or
exchange, and to deposit any such securities with any committee,
depositary, trustee or otherwise, and to pay out of the trust any fees,
expenses and assessments incurred in connection
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therewith, and to charge the same to principal; to exercise conversion,
subscription or other rights, or to sell or abandon such rights, and to
hold any new securities issued as a result of any such readjustment,
merger, voting trust, consolidation, exchange or exercise of
conversion, subscription or other rights.
H. Whenever they are required or
permitted to divide or distribute the trust created hereby, to make
such division or distribution in kind or in money, or in part kind and
in part money, without the consent of any beneficiary.
The powers herein granted to the Trustees
are granted with the knowledge that conflicts of interest may arise with respect
to one or more Trustees. Nevertheless, the Grantor intends that the Trustees in
all respects exercise the powers and discretion herein conferred as fully and
unrestrictedly as if there were no such conflicting interests. The Grantor
therefore expressly exempts the Trustees from the adverse operation of any rule
of law that might otherwise apply to them in the performance of their fiduciary
duties by reason of conflict of interest and specifically directs that they
shall not have any greater burden to justify their acts as Trustees by reason of
conflict of interest than they would have in the absence of any conflict.
FIFTH: Any Trustee hereunder at any time may resign as Trustee
without the permission of any court and without first
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accounting for his proceedings as such Trustee, by executing an instrument in
writing to that effect and delivering the same to the other Trustee or Trustees,
if any; to any person who shall be successor to the Trustee so resigning; and to
the person or persons who are then entitled or eligible to receive the income of
such trust or to the guardian or guardians of any such person or persons who may
then be under disability, but such resignation shall not operate to relieve such
Trustee of his obligation ultimately to account for his proceedings as such
Trustee.
If any Trustee is under legal disability or by reason of
illness or mental or physical disability is, in the written opinion of two
physicians then practicing medicine, unable to properly manage his or her
affairs, he or she shall be deemed incapacitated for the purposes of this
Indenture. Any Trustee deemed incapacitated under the previous sentence shall be
deemed rehabilitated when he or she is no longer under a legal disability or
when, in the written opinion of two physicians then practicing medicine, he or
she is able to properly manage his or her affairs. Upon rehabilitation, the
individual shall resume the duties and powers he or she had prior to incapacity
and his or her successor or substitute Trustee shall relinquish all powers and
be relieved of all duties.
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SIXTH: The persons acting as Trustees hereunder, by a written
instrument signed and acknowledged by all Trustees then acting, are authorized
at any time to designate an individual or a series of individuals to act as
substitute or successor to any Trustee who shall die, resign, or cease to act as
Trustee for any reason. In the event there is a single Trustee acting hereunder
at any time, such Trustee shall appoint, by a duly signed and acknowledged
written instrument, a co-Trustee to act with him or her so that there are at
least two Trustees acting hereunder at all times. Any substitute or successor
Trustee appointed pursuant to this Article shall be a descendant of the Grantor
but shall not be the Grantor's daughter, XXXXXX XXXXXXXXX, or a descendant of
hers. Additionally, any substitute or successor Trustee appointed by a single
Trustee acting hereunder shall not be a descendant of such Trustee. Any
appointment of a successor or substitute Trustee pursuant to this Article may be
revoked or changed prior to its becoming effective. No bond or other security
shall be required of any Trustee or successor or substitute Trustee. The Grantor
and his wife, XXXXXXXX XXXXXXXXX, shall not serve as Trustees hereunder.
No Trustee acting hereunder shall be entitled to compensation
for services as Trustee, but each Trustee shall be entitled to reimbursement for
expenses incurred in performing those services.
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When more than one Trustee is acting hereunder, any Trustee
may, by a signed and acknowledged written instrument filed with the trust
records and delivered to the other Trustee or Trustees, delegate to any other
Trustee from time to time the exercise of all or any of the powers conferred by
this agreement, and during any period while such delegation is in effect, such
delegating Trustee shall have no further responsibility with respect to the
exercise of such powers. Any such delegation may be revoked by such delegating
Trustee by a signed and acknowledged written instrument so filed and delivered.
When more than one Trustee is acting hereunder, any
instrument to be executed on behalf of the Trustees, including any check issued
by or to the order of the Trustees, may be made, executed, signed, endorsed or
delivered by one of the Trustees, and any person, firm or corporation, including
any bank, may rely upon and shall be protected in relying upon the signature of
any Trustee so signing with the same force and effect as though all Trustees had
signed.
All persons dealing with the Trustees, and all other persons
relying upon or claiming under any instrument executed by the Trustees with
respect to any trust property, shall be entitled to rely conclusively upon a
Trustee's representations that the Trustee has the power to perform any act and
to execute any instrument and to
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consummate any transaction, that the trust is in full force and effect, and that
any instrument is executed in accordance with the provisions of this trust and
is binding upon all Trustees and beneficiaries hereunder. No person dealing with
the Trustees shall be obligated to see to the application of any property paid
or otherwise transferred to the Trustees, to see that the terms of the trust
have been complied with, to inquire into the necessity or advisability of any
act of the Trustees, or to inquire, or be privileged to inquire, into any other
matter.
The Trustees in carrying out their powers and performing
their duties may act in their discretion and shall be personally liable only for
fraud or acts or omissions in bad faith. The Trustees, however, shall never have
personal liability for making or failing to make any discretionary distributions
to any beneficiary or any election under any tax law. The Trustees shall not
personally be liable for any act or omission of any agent or employee of the
Trustees unless the Trustees have acted in bad faith in the selection and
retention of such agent or employee. Any action undertaken by the Trustees shall
be conclusive and binding upon all beneficiaries hereunder, whether present or
future. No Trustee shall be liable for the acts or defaults of a co-Trustee.
Any successor or substitute Trustee at any time acting shall
have all of the rights, powers, duties and obligations of the
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original Trustees. No bond or other security shall be required of any Trustee or
successor or substitute Trustee.
SEVENTH: The Grantor declares that the trust hereby created is
irrevocable and that this Indenture may not be altered, amended or modified. The
Grantor shall have the right and power at any time (including during the term of
the trust under Article "SECOND-A" hereof) to reacquire any asset of the trust
if he shall simultaneously substitute therefor other property having an
equivalent value. This power shall be exercisable by the Grantor in a
nonfiduciary capacity and without the consent of any person in a fiduciary
capacity.
EIGHTH: The trust created herein shall be governed by and
construed in all respects in accordance with the laws of the State of New York.
The Trustees shall not be required to account in any court outside of New York
State.
NINTH: This instrument may be executed in two or more
counterparts, all of which, when taken together, shall constitute a single
instrument.
TENTH: The Trustees, by joining in the execution of this
instrument, signify their acceptance of the said trust and agree to execute the
same in accordance with the terms of this Indenture.
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IN WITNESS WHEREOF, the parties hereto have set their
respective hands as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXXX, Grantor
/s/ Xxxx Xxxxxxxxx
---------------------------------
XXXX XXXXXXXXX, Trustee
/s/ Xxxx Xxxxxxxxx
---------------------------------
XXXX XXXXXXXXX, Trustee
/s/ Xxxxxx Xxxxxxxx
---------------------------------
XXXXXX XXXXXXXX, Trustee
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XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
On the 27th day of March, in the year 2002, before me, the
undersigned, personally appeared XXXXXX X. XXXXXXXXX, known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
/s/ Xxxxxxxxx Xxxxxxxxx
--------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 27th day of March, in the year 2002, before me, the
undersigned, personally appeared XXXX XXXXXXXXX, known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that she executed the same in
her capacity, and that by her signature on the instrument, the individual, or
the person upon behalf of which the individual acted, executed the instrument.
/s/ Xxxxxxxxx Xxxxxxxxx
-----------------------------
Notary Public
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 27th day of March, in the year 2002, before me, the
undersigned, personally appeared XXXX XXXXXXXXX, known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
/s/ Xxxxxxxxx Xxxxxxxxx
-----------------------------
Notary Public
-00-
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF WESTCHESTER )
On the 25th day of March, in the year 2002, before me, the
undersigned, personally appeared XXXXXX XXXXXXXX, known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that she executed the same in
her capacity, and that by her signature on the instrument, the individual, or
the person upon behalf of which the individual acted, executed the instrument.
/s/ Xxxxx Xxxxxx
-----------------------------
Notary Public
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SCHEDULE A
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Property Contributed to Trust
-----------------------------
125,385 shares of Sequa Corporation Class A Common Stock
347,438 shares of Sequa Corporation Class B Common Stock
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