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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Sunrise Resources, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
86769K-10-5
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(CUSIP Number)
Peter J. King, The King Management Corporation
2500 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101
(612) 228-9042
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 1, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box. [_]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1 (a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP No. 86769K-10-5
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Peter J. King
###-##-####
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2 (D) OR 2 (E) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7. SOLE VOTING POWER
NUMBER OF 2,843,051
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 2,000
WITH
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,843,051
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.6%
14. TYPE OF REPORTING PERSON*
IN
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Pursuant to Rule 13d-2(c), this Amendment No. 1 restates and amends Mr.
King's Schedule 13D dated February 13, 1995.
Item 1. Security and Issuer.
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The securities to which this statement relates are the common stock, par
value $.01 per share ("Common Stock"), of Sunrise Resources, Inc., a Minnesota
corporation formerly known as Sunrise Leasing Corporation ("Sunrise"), whose
principal executive offices are located at 5500 Wayzata Boulevard, Suite 725,
Minneapolis, Minnesota 55416.
Item 2. Identity and Background.
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This statement is filed by Peter J. King, whose business address is 2500
Minnesota World Trade Center, 30 East Seventh Street, St. Paul, Minnesota 55101-
4901. Mr. King's principal employment is as President of The King Management
Corporation, a corporation principally engaged in the sale and leasing of
reverse vending machines, the sale of software and operating coin operated
copiers. The King Management Corporation's principal business address is 2500
Minnesota World Trade Center, 30 East Seventh Street, St. Paul, Minnesota 55101-
4901.
During the last five years, Mr. King has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or been a
party or otherwise subject to a proceeding involving a judgment or other order
prohibiting or mandating activities subject to United States federal or state
securities laws.
Mr. King is a United States citizen.
Item 3. Source and Amount of Funds or Other Considerations.
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Not applicable. Beneficial ownership of the shares of Common Stock reported
herein were acquired under the following circumstances:
An aggregate of 431,999 shares of Common Stock were acquired by Mr. King on
February 13, 1995 in exchange for shares of common stock of The P.J. King
Companies, Inc., a Minnesota corporation d/b/a/ International Leasing
Corporation ("ILC") held by Mr. King pursuant to the merger (the "Merger") of
ILC with and into Sunrise and an additional 2,000 shares of Common Stock were
acquired by The King Management Corporation and are deemed beneficially owned by
Mr. King. An aggregate of 431,999 shares of Common Stock were transferred by Mr.
King to the 1996 Grantor Retained Annuity Trust (the "PJK Annuity Trust")
created under the Irrevocable Trust Agreement dated May 28, 1996 (the "PJK
Annuity Trust Agreement") between Mr. King and Steven D. Higgins, as Trustee.
Pursuant to the PJK Annuity Trust Agreement, Mr. King retains an annuity
interest in the PJK Annuity Trust.
On May 1, 1996 Mr. King, the William B. King Stock Trust dated November 21,
1989 for the benefit of William B. King (the "WBK Trust") and the Russell S.
King Stock Trust dated November 11, 1989 for the benefit of Russell S. King
<PAGE>
("RSK Trust") entered into a Shareholder Voting Agreement ("Voting Agreement")
for the purpose of asserting claims arising in connection with the Merger. Each
shareholder agreed to vote all Common Stock owned by it and to take such other
actions as were reasonable necessary to ensure that their claims are resolved
consistent with the judgment and direction of Mr. King and appointed Mr. King
their agent in connection with such claims.
An aggregate of 2,541,051 shares of Common Stock are subject to the Voting
Trust Agreement dated September 26, 1996 (the "Voting Trust Agreement"), among
the PJK Annuity Trust, WBK Trust, RSK Trust and Mr. King, as the Voting Trustee
(the "Voting Trustee").
An aggregate of 300,000 shares of Common Stock are subject to the
Appointment of Proxy of the WBK Trust, dated September 26, 1996 (the "Proxy"),
appointing Mr. King with the power to represent the WBK Trust and to vote such
shares to the extent set forth in the Proxy.
The PJK Annuity Trust, the WBK Trust, the RSK Trust and Mr. King constitute
a group with respect to the shares of Common Stock referred to in Item 3 within
the meaning of Rule 13d-5(b) (1).
Item 4. Purpose of Transaction.
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An aggregate of 433,999 shares of Common Stock were acquired by Mr. King
and The King Management Corporation pursuant to the Merger. Mr. King
subsequently transferred 431,999 shares to the PJK Annuity Trust. See Item 3
above.
Mr. King may from time to time purchase additional shares of Common Stock,
either in brokerage transactions, in the over-the-counter market or in privately
negotiated transactions. Any decisions to increase the holdings in Sunrise will
depend, however, on numerous factors, including, without limitation, the price
of the shares of Common Stock, the terms and conditions relating to their
purchase and sale, and the prospects and profitability of Sunrise. At any time,
Mr. King may also determine to dispose of some or all of the Common Stock
depending on various similar considerations. Disposition of the Common Stock by
Mr. King is restricted under certain agreements entered into among Mr. King,
Sunrise and certain other persons, and is subject to the agreements and
negotiations described in Item 6 below.
The trustees of the WBK Trust, the RSK Trust and the PJK Annuity Trust have
authorized Mr. King to proceed with the arbitration of claims against Sunrise
and to seek rescission of the Merger wherein all of the assets and liabilities
which were transferred to Sunrise as of the merger date, all subsequent profits
and cash flow generated by all the original vendor programs since the Merger and
any new vendor programs that have been generated by Sunrise's use of ILC's
proprietary vendor programs, documentation and software will revert to The King
Management Corporation, Mr. King and the original ILC shareholders. In addition
to the rescission, Mr. King will also seek additional damages which resulted
from the Merger.
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If rescission is not granted, Mr. King will seek in excess of $7,900,000 in
damages which the former ILC shareholders incurred as a result of the Merger and
additional damages including but not limited to legal and professional fees
incurred by the failure of Sunrise to meet certain requirements of the Merger.
Separately and in either instance, Mr. King will seek substantial damages
for being prohibited from participating in the vendor program leasing business
due to the non-compete agreement that he executed as a requirement of the
Merger. If there is an award of monetary damages by the arbitrator, Mr. King is
authorized to request that such damages take the form of additional shares of
Common Stock equivalent in value to the amount of cash damages which are
awarded.
The King Management Corporation informally agreed with the WBK Trust, the
RSK Trust and the PJK Annuity Trust that under certain conditions it may provide
interim funding to Sunrise for vendor programs, extend its current loan to
Sunrise and waive the existing default under such loan. The King Management
Corporation also agreed that in the event of a rescission it may consider
providing certain short-term interim financing to Sunrise to assist Sunrise in
continuing to finance its traditional business.
Mr. King resigned as a director of Sunrise on August 16, 1996.
Mr. King intends to nominate a slate of directors experienced in the vendor
leasing business at Sunrise's next annual meeting. Sunrise has agreed with Mr.
King to postpone its annual meeting of shareholders scheduled for November 18,
1996, until the arbitration described above is concluded.
Item 5. Interest in Securities of the Issuer.
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The 2,843,051 shares of Common Stock constitute 39.6% of Sunrise's
outstanding Common Stock based upon Sunrise's Form 10-Q for the Quarter ended
June 30, 1996.
Pursuant to the Voting Trust Agreement Mr. King has sole power to vote
Common Stock held by the PJK Annuity Trust, the WBK Trust and the RSK Trust
aggregating 2,541,051 shares. Mr. King also has sole power to vote 300,000
shares of Common Stock subject to the Proxy to the extent set forth in the
Proxy. Mr. King, through his control of The King Management Corporation, has
the power to vote the 2,000 shares of Common Stock owned by it.
Except as disclosed herein, during the past 60 days Mr. King has not
purchased or otherwise acquired any shares of the Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
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to Securities of the Issuer.
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Merger Agreement
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In connection with the Merger, Mr. King entered into an Agreement and Plan
of Reorganization, dated as of October 14, 1994 (the "Merger Agreement") among
Mr. King, Sunrise, ILC and certain other persons. Under the Merger Agreement,
Mr. King and certain other shareholders of ILC, subject to certain time and
dollar limitations, are obligated to indemnify Sunrise, on a joint and several
basis, against costs and expenses incurred by Sunrise as a result of (i) the
breach of any representation, warranty or covenant of ILC, King Holding
Corporation or certain ILC shareholders contained in the Merger Agreement and
the other agreements contemplated thereby, (ii) certain liabilities of ILC which
were distributed to its former parent, King Holding Corporation, prior to the
Merger, (iii) certain taxes relating to pre-Merger periods, and (iv) certain
other contingent tax liabilities. The Merger Agreement provides that any claim
for indemnity is required to be satisfied by the transfer to Sunrise of shares
of Common Stock, valued at $5.50 per share. The foregoing summary of certain
provisions of the Merger Agreement is qualified by the copy of the Merger
Agreement filed as Exhibit A to Mr. King's Schedule 13D dated February 13, 1995
and which is incorporated herein in its entirety by this reference.
Shareholder's Agreement
In connection with the Merger, Mr. King entered into a Shareholders'
Agreement, dated as of the date of the Merger (the "Shareholders' Agreement"),
among Mr. King, Sunrise and the other pre-Merger shareholders of ILC. Under the
Shareholders' Agreement, any transfer of 500,000 or more shares of the Common
Stock by Mr. King, or by Mr. King taken together with certain other ILC
shareholders, made prior to the third anniversary of the Merger is subject to a
right of first refusal on the part of Sunrise. In addition, Sunrise's prior
consent is required for any transfer by Mr. King prior to such third anniversary
to any person who would, after giving effect to such transfer, own 20% or more
of the outstanding Common Stock. The foregoing restrictions are not applicable
to any transfer of Common Stock (i) in a registered public offering, (ii) in a
market transaction in a bona fide public market, either pursuant to a
registration statement filed under the Securities Act of 1933 or Rule 144
promulgated thereunder, or (iii) to an immediately family member or a trust for
the benefit of one or more immediate family members (provided the transferee
agrees to be bound by the provisions of the Shareholders' Agreement). The
Shareholders' Agreement also provides that Mr. King will not, prior to the next
regular Sunrise shareholder meeting following the Merger, seek to call a
special meeting of the Sunrise shareholders for the purpose of electing
directors. In the event such a meeting is called by other persons during this
period, Mr. King has agreed to vote in favor of re-election of the then current
Sunrise board of directors. Under the Shareholders' Agreements, Mr. King and
the other pre-Merger ILC shareholders have certain registration rights with
respect to the Common Stock received in the Merger which is not otherwise sold
pursuant to a registration statement or Rule 144 under the Securities Act of
1933 (the "Registrable Shares"). Collectively, Mr. King and the other
pre-Merger ILC shareholders have the right to request four registrations of
their shares (two at Sunrise's expense and two at the expense of the holders of
Registrable Shares), exercisable at least two years and not more than ten years
after the Merger by any holder or holders of at least 15% of the Registrable
Shares. Upon receipt of such request, Sunrise shall promptly give notice to all
holders of Registrable Shares, each of whom has the right to include their
Registrable Shares in such registration. The
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number or Registrable Shares that may be registered is subject to certain
limitations, including underwriter approval of the number of shares to be sold
in any underwritten registration. The holders of Registrable Shares also have
under the Shareholders' Agreement an unlimited number of "piggy-back"
registration rights pursuant to which such holders may request that their
Registrable Shares be registered in any proposed registration statement that
Sunrise may file from time to time, other than a registration statement
inapplicable to such sales. The number of Registrable Shares that may be
included in such registration is subject to certain limitations, including
underwriter approval of the number of shares to be sold in any underwritten
registration, subject to the right of holders of Registrable Shares to include a
number of shares equal to not less than 20% of the shares to be sold by Sunrise
in such registration. Mr. King has agreed not to exercise such piggyback
registration rights prior to the second anniversary of the Merger. Sunrise has
agreed not to effect any registration of its Common Stock (other than of Forms
S-4 or S-8) prior to the second anniversary of the Merger without the prior
written consent to Mr. King and certain other holders of Registrable Shares. The
foregoing summary of certain provisions of the Shareholders' Agreement is
qualified by the copy of the Shareholders' Agreement incorporated by reference
as Exhibit B to Mr. King's Schedule 13D dated February 13, 1995, and which is
incorporated herein in its entirety by this reference.
Voting Agreement
On May 1, 1996 Mr. King, the WBK Stock Trust and the RSK Stock Trust
entered into the Voting Agreement for the purpose of asserting claims arising in
connection with the Merger. Each shareholder agreed to vote all Common Stock
owned by it and to take such other actions as were reasonably necessary to
ensure that their claims are resolved consistent with the judgment and direction
of Mr. King and appointed Mr. King their agent in connection with such claims.
Except for those matters upon which Mr. King was granted sole discretion, each
shareholder retained the right to vote such shareholder's Common Stock in that
shareholder's Common Stock if the shareholder failed to comply with the
provisions of the Voting Agreement. The Voting Agreement is intended to be
binding on transferees of the Common Stock owned by the shareholders. The
Voting Agreement expires on the earliest of (i) May 1, 1998, (ii) the final
resolution of the claims, (iii) the death of Mr. King or (iv) a determination of
Mr. King's incompetence or incapacity by the shareholders (other than Mr. King).
The foregoing summary of certain provisions of the Voting Agreement is qualified
by the copy of the Voting Agreement filed as Exhibit C hereto and which is
incorporated herein in its entirety by this reference.
PJK Annuity Trust Agreement
Mr. King transferred 431,999 shares of the Common Stock to the PJK Annuity
Trust and retained an annuity interest in the trust property, pursuant to the
PJK Annuity Trust Agreement. See Item 3 above. The foregoing summary of
certain provisions of the PJK Annuity Trust Agreement is qualified by the copy
of the PJK Annuity Trust Agreement filed as Exhibit D hereto and which is
incorporated herein in its entirety by this reference.
<PAGE>
Voting Trust Agreement
The PJK Annuity Trust, the WBK Trust and the RSK Trust entered into the
Voting Trust Agreement with respect to an aggregate of 2,541,051 shares of the
Common Stock. See Item 3 above. The record ownership of the shares of Common
Stock deposited with the Voting Trustee shall be transferred into the name of
the Voting Trustee on the books of Sunrise. The Voting Trustee shall issue
voting trust certificates. The Voting Trustee shall be entitled to exercise all
shareholders' rights except as such right has been given under the Voting
Agreement or is specifically limited by the Voting Trust Agreement. The Voting
Trustee shall vote on matters which shall become before any shareholders'
meeting and shall exercise his best judgment from time to time to select
suitable directors to the end that the affairs of Sunrise shall be properly
managed. The holder of each voting trust certificate shall be entitled to
receive, from time to time, dividends or distributions payable in cash or
property (other than shares of any class of Sunrise). The majority of the
interest of the holders of the voting trust certificates may approve amendments
to the Voting Trust Agreement. The Voting Trust Agreement shall extend through
December 31, 2007, but shall automatically terminate if the Voting Trustee so
elects, the Voting Trustee resigns, dies or is determined to be incompetent or
incapacitated by the unanimous consent of the holders of voting trust
certificates or Sunrise is dissolved and liquidated. The foregoing summary of
certain provisions of the Voting Trust Agreement is qualified by the copy of the
Voting Trust Agreement filed as Exhibit E hereto and which is incorporated
herein in its entirety by this reference.
Proxy
The WBK Trust granted an appointment of proxy to Mr. King in connection
with 300,000 shares of the Common Stock pursuant to the Proxy. See Item 3 above.
Pursuant to the Proxy, Mr. King may vote the shares subject thereto on any
matter at any shareholders' meeting except any amendment to the articles of
incorporation that materially and adversely affects the rights or preferences of
the shares subject to the Proxy, any disposition of all or substantially all of
the property and assets of Sunrise or a plan of exchange to which Sunrise is a
party pursuant to which the shares subject to the Proxy will be acquired. The
appointment of Mr. King shall terminate on December 31, 2007 or at such earlier
time as he shall have resigned or died or the appointment is revoked pursuant to
the Proxy. The appointment of Mr. King is terminable at will. The foregoing
summary of certain provisions of the Proxy is qualified by the copy of the Proxy
filed as Exhibit F hereto and which is incorporated herein in its entirety by
this reference.
Item 7. Material to Be Filed as Exhibits.
Exhibit Letter Description of Exhibit
A* Agreement and Plan of Reorganization dated as of October 14,
1994 among Sunrise Leasing Corporation. The P.J. King
Companies, Inc., d/b/a/ International Leasing Corporation, King
Holding Corporation, Peter J. King, Stephen D. Higgins, as
Trustee under the William B. King Stock Trust dated
<PAGE>
November 21, 1989 for the benefit of William B. King, and Stephen
D. Higgins, as Trustee under the Russell S. King Stock Trust
dated November 11, 1989 for the benefit of Russell S. King.
B * Shareholders' Agreement dated as of February 13, 1995 among
Sunrise Leasing Corporation, Peter J. King, Stephen D. Higgins,
as Trustee under the William B. King Stock Trust dated November
21, 1989 for the benefit of William B. King, Stephen D. Higgins,
as Trustee under the Russell S. King Stock Trust dated November
11, 1989 for the benefit of Russell S. King and each of the other
ILC shareholders listed on Schedule 1 thereto.
C Shareholder Voting Agreement dated May 1, 1996 among Peter J.
King, the William B. King Stock Trust and the Russell S. King
Stock Trust.
D Irrevocable Trust Agreement dated May 28, 1996 for the benefit of
Peter J. King, between Peter J. King, as Donor, and Stephen D.
Higgins, as Trustee.
E Voting Trust Agreement dated September 26, 1996, among Stephen D.
Higgins, as Trustee under the Peter J. King 1996 Grantor Retained
Annuity Trust, Russell S. King and Stephen D. Higgins, as
Trustees under the Russell S. King Stock Trust dated November 11,
1989 for the benefit of Russell S. King, William B. King and
Stephen D. Higgins, as Trustees under the William B. King Stock
Trust dated November 21, 1989 for the benefit of William B. King
and Peter J. King as the Voting Trustee
F Appointment of Proxy dated September 26, 1996, by William B. King
and Stephen D. Higgins, as Trustees under the William B. King
Stock Trust dated November 21, 1989 for the benefit of William B.
King.
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* Previously filed on a paper format as an exhibit to Mr. King's Schedule 13D
dated February 13, 1995 and not required to be restated herein pursuant to
Rule 13d-2(c).
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ Peter J. King
-----------------
Peter J. King
Dated: October 29, 1996
<PAGE>
EXHIBIT INDEX
Exhibit Letter Description of Exhibit
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C Shareholder Voting Agreement dated May 1, 1996 among Peter J.
King, the William B. King Stock Trust and the Russell S. King
Stock Trust.
D Irrevocable Trust Agreement dated May 28, 1996 for the benefit
of Peter J. King, between Peter J. King, as Donor, and Stephen
D. Higgins, as Trustee.
E Voting Trust Agreement dated September 26, 1996, among Stephen
D. Higgins, as Trustee under the Peter J. King 1996 Grantor
Retained Annuity Trust, Russell S. King and Stephen D. Higgins,
as Trustees under the Russell S. King Stock Trust dated
November 11, 1989 for the benefit of Russell S. King, William
B. King and Stephen D. Higgins, as Trustees under the William
B. King Stock Trust dated November 21, 1989 for the benefit of
William B. King and Peter J. King, as the Voting Trustee.
F Appointment of Proxy dated September 26, 1996, by William B.
King and Stephen D. Higgins, as Trustees under the William B.
King Stock Trust dated November 21, 1989 for the benefit of
William B. King.
<PAGE>
Exhibit C
SHAREHOLDER VOTING AGREEMENT
AGREEMENT, made and entered into as of the 1st day of May, 1996, by
and between each of the record owners of shares of common stock of Sunrise
Resources, Inc., a Minnesota corporation (the "Company"), identified on the
signature page(s) to this agreement (the "Shareholders") for the mutual benefit
of such Shareholders.
WHEREAS, the Shareholders received shares of the common stock of the
Company in exchange for the transfer of certain assets to the Company in
connection with the merger of the P.J. King Companies, Inc., a Minnesota
corporation d/b/a/ International Leasing Corporation ("ILC"), with and into the
Company (the "Merger") pursuant to the Agreement and Plan of Reorganization by
and among the Company, ILC, and the Shareholders dated October 14, 1994 (the
"Merger Agreement"); and
WHEREAS, the Shareholders believe that certain misrepresentations were
made in connection with the Merger and desire to prosecute claims for additional
compensation against the Company, its independent auditors and others in order
to obtain adequate compensation for the value of the assets transferred to the
Company pursuant to the Merger (the "Claims"); and
WHEREAS, the Shareholders own in the aggregate approximately thirty-
nine and six-tenths percent (39.6%) of the outstanding shares of the common
stock of the Company; and
WHEREAS, the Shareholders deem it to be in their mutual best interest
to act together in matters concerning prosecution of the Claims through
concentrating their power and rights with respect to their Shares in the manner
hereinafter set forth; and
WHEREAS, the Shareholders desire to appoint Peter J. King, an
individual resident of the state of Minnesota ("Mr. King"), as their agent with
full powers of attorney in connection with any negotiation, settlement or
litigation of the Claims.
NOW THEREFORE, in consideration of the premises, the respective
commitments and undertakings of the Shareholders set forth in this agreement,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Shareholders agree as follows:
1. Voting Agreement. Each Shareholder hereby agrees, on behalf of
----------------
such Shareholder and any person to whom such Shareholder transfers any shares of
the Company's stock owned by such Shareholder, to vote all shares of Company
stock now or hereafter owned by such Shareholder and take such other actions as
are reasonably necessary to ensure that the Claims are resolved consistent with
the
<PAGE>
judgment and direction of Mr. King, and to that end to vote or take such other
actions as Mr. King may from time to time direct with respect to the
negotiation, settlement, litigation or other resolution of the Claims.
2. Appointment of Agent. Each Shareholder, on behalf of such
--------------------
Shareholder and any person to whom such Shareholder transfers any shares of the
Company's stock owned by such Shareholder, hereby appoints as his agent and
grants power of attorney to Mr. King with respect to all rights and powers of
such Shareholder arising in connection with the Claims. Such power of attorney
and agency shall include:
(i) entering into and/or terminating settlement discussions with such
parties as Mr. King may deem appropriate;
(ii) prosecuting a resolution of the Claims through mediation, arbitration,
litigation or such other means as Mr. King may deem appropriate;
(iii) preparing or seeking assistance in preparing such documents and
materials as Mr. King may deem appropriate in support of any settlement
discussions or other attempted resolution of the Claims;
(iv) making the sole decision as to the fairness, form and content of any
settlement or other resolution of the Claims;
(v) binding the Shareholders to the terms of any agreement to settle or
other resolution of the Claims;
(vi) distributing the proceeds of any settlement or other resolution of the
Claims, regardless of form, to the Shareholders in proportion to their
respective interests in the stock of the Company acquired pursuant to the
Merger.
3. Limitation. Each Shareholder shall retain at all times the right
----------
to vote such person's shares of the Company's stock, in that Shareholder's sole
discretion, on all matters except those upon which Mr. King has been granted
sole discretion under this Agreement to direct the voting of such shares.
4. Conditional Irrevocable Proxies. To secure each Shareholder's
-------------------------------
obligation to vote that Shareholder's shares of Company stock in accordance with
the provisions of this agreement, each Shareholder hereby appoints Mr. King as
his true and lawful proxy, with full power of substitution, to vote all of that
Shareholder's shares of Company stock, in such proxy's sole discretion, for all
matters described in section 1 (if and only if) such Shareholder fails to comply
with the provisions of section 1. The proxies and powers granted by each
Shareholder pursuant to this section 4 are coupled with an interest and are
given to secure the
-2-
<PAGE>
performance of such Shareholder's duties under this agreement. Such proxies
will be irrevocable for the term of this agreement and will survive the death,
incompetency and disability of any Shareholder or other holder of such
Shareholder's shares of Company stock and the merger and dissolution of any
Shareholder that is a trust, corporation or other entity.
5. Transfer of Shares. No shares of Company stock owned by any
------------------
Shareholder shall be transferred unless and until the transferee executes an
instrument acknowledging and agreeing that the shares being acquired are subject
to the restrictions and/or irrevocable proxies set forth in this agreement.
6. Legend. Each certificate evidencing shares of Company stock
------
owned by any Shareholder and subject to the provisions of sections 1, 2 and 4 of
this agreement and each certificate issued in exchange for or upon the transfer
of any such shares during the term of this agreement will be stamped or
otherwise imprinted with a legend (the "Legend") in substantially the following
form or to the following effect:
"The securities represented by this certificate are subject to a
Shareholder Voting Agreement dated as of May 1, 1996, by and among the
original holder of such securities and other shareholders of the issuer of
such securities and to a conditional irrevocable proxy granted pursuant to
such agreement. A copy of such agreement will be furnished without charge
by Mr. Peter J. King, an individual resident of the state of Minnesota,
upon such holder's written request."
7. Term. This agreement shall terminate and cease to be effective,
----
and the Legend will be removed from all certificates at the earliest of
(a) May 1, 1998;
(b) the final resolution of all of the Claims, as determined by Mr.
King, in his sole discretion;
(c) the death of Mr. King; or
(d) the determination that Mr. King is incompetent or incapacitated
made by the unanimous consent of the Shareholders, other than Mr. King,
after consultation with a licensed physician who has examined Mr. King.
-3-
<PAGE>
8. Miscellaneous Provisions
------------------------
(a) Binding Effect. This agreement shall constitute a valid and
--------------
binding agreement among the Shareholders, any subsequent holders of shares
of Company stock now or hereafter owned by the Shareholders and their
respective successors and assigns.
(b) Remedies. The Shareholders shall be entitled to specific
--------
enforcement of their rights under this agreement, to recover damages by
reason of any breach of any provision hereof and to exercise all other
rights existing in their favor. The Shareholders agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this agreement and that any Shareholder may, in his sole
discretion, apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce or
prevent any violations of the provisions of this agreement.
(c) Severability. Whenever possible, each provision of this agreement
------------
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this agreement.
(d) Entire Agreement. This agreement embodies the complete agreement
----------------
and understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings,
agreements or representations, by or among the parties, written or oral,
which may have related to the subject matter hereof in any way.
(e) Counterparts. This agreement may be executed on separate
------------
counterparts, each of which will be an original and all of which taken
together will constitute one and the same agreement.
(f) Governing Law. All questions concerning this agreement will be
-------------
governed by and interpreted in accordance with the internal law, not the
law of conflicts, of the state of Minnesota.
[The remainder of this page has been left blank intentionally.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date set forth in the first paragraph.
/s/ Peter J. King
---------------------------------------
Peter J. King
WILLIAM B. KING STOCK TRUST:
/s/William B. King
---------------------------------------
William B. King, Trustee
/s/Stephen D. Higgins
--------------------------------------
Stephen D. Higgins, Trustee
RUSSELL S. KING STOCK TRUST:
/s/Russell S. King
--------------------------------------
Russell S. King, Trustee
/s/Stephen D. Higgins
--------------------------------------
Stephen D. Higgins, Trustee
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<PAGE>
Exhibit D
IRREVOCABLE TRUST AGREEMENT
OF
PETER J. KING
I, PETER J. KING, a resident of Ramsey County, Minnesota, as Donor, and STEPHEN
D. HIGGINS, as original Trustee, agree, this 28th day of May, 1996, as follows:
ARTICLE 1. CREATION OF TRUST.
--------- -----------------
I transfer and assign the assets described on the Schedule attached to this
agreement to the trustee to constitute the original assets of the Grantor
Retained Annuity Trust created by this agreement. The trustee agrees, and any
cotrustees and successors by accepting their trusteeships also agree, to
administer such assets and all future assets of any trust in accordance with the
terms of this agreement. References in the singular to a trustee include all
trustees empowered to act. The Grantor Retained Annuity Trust may be referred
to as the "1996 GRANTOR RETAINED ANNUITY TRUST."
ARTICLE 2. LIMITATIONS.
--------- -----------
Despite any other provisions of this agreement to the contrary:
2.01. Irrevocability. This agreement and each trust created under this
- ---------------------
agreement shall be in all respects irrevocable, and neither I nor any other
person shall have any power to modify, amend or revoke any trust or this
agreement in any respect; provided that the trustee other than me or any other
contributor shall have the power to amend the Grantor Retained Annuity Trust in
any manner required for the sole purpose of ensuring that the annuity amounts
payable to me from the Grantor Retained Annuity Trust constitute a "qualified
interest" within the meaning of Section 2702 of the Internal Revenue Code and
the Treasury Regulations thereunder. However, I or any other person shall have
the right to make contributions from time to time to any trust under Article 4.
2.02. Limitations On Powers. The trustee shall exercise all trustee powers
- ----------------------------
only in a fiduciary capacity and subject to all limitations imposed by this
agreement. The following limitations shall apply with respect to each of the
trusts under Article 4 during the lifetime of any Contributor to the Grantor
Retained Annuity Trust or to any other trust under this Agreement. None of the
powers conferred on the trustee of any trust under Article 4 or conferred on
other persons shall (1) enable any person to purchase, exchange or otherwise
deal with or dispose of the corpus or the income of any such trust for less than
an adequate consideration in money or money's worth; or (2) enable any
contributor or the spouse of any contributor to borrow the corpus or income of
any such trust directly or indirectly without adequate interest or adequate
security; or (3) enable an agent, servant, or other person in a nonfiduciary
<PAGE>
capacity, without the approval or consent of the trustee, to exercise any power
of administration over any such trust, including the powers to vote or direct
the voting of any stocks or other securities, to control investment or
reinvestment of the trust funds or to reacquire the trust corpus by substituting
other property of an equivalent value; or (4) allow any of the corpus or the
income of any such trust to be applied to the payment of premiums on policies of
insurance on the life of any contributor or the life of the spouse of any
contributor, whether such policies are irrevocably assigned or made payable to
the trust or otherwise; or (5) allow any of the corpus or the income of any such
trust to be distributed to any contributor or the spouse of any contributor or
to be held or accumulated for future distribution to any contributor or the
spouse of any contributor; or (6) allow any of the corpus or the income of any
such trust to be distributed in such a manner as to discharge any legal
obligation of any contributor or of the spouse of any contributor.
ARTICLE 3. GRANTOR RETAINED ANNUITY TRUST.
--------- ------------------------------
The Grantor Retained Annuity Trust shall be administered as follows:
3.01. Payments. For each taxable year of the trust, the trustee shall pay to
- ---------------
me annually an amount (the "annuity amount") equal to 55.768% of the initial net
fair market value of the assets of the trust, determined as of the date the
assets were contributed to the trust (the "valuation date"). For this purpose,
the initial net fair market value shall be the value as finally determined for
federal gift tax purposes. Unless the Grantor Retained Annuity Trust sooner
terminates, the first annuity amount shall be paid to me upon the expiration of
1 year after the valuation date and the last annuity payment shall be paid upon
the termination of the Grantor Retained Annuity Trust (at which time, the fixed
amount or a pro-rata portion thereof shall be paid to me for the final short
period of the annuity interest pursuant to Treasury Regulation (S) 25.2702-
3(b)(3)). The annuity amount shall be paid from the net income of the trust
and, to the extent the net income is insufficient, from the principal of the
trust. Any net income in excess of the annuity amount not paid to me shall be
added to principal.
3.02. Termination. The trust shall terminate upon (a) the expiration of 2
- ------------------
years after the valuation date (this shall be referred to as the "normal term"
of the trust) or (b) the date of my death, whichever occurs first. Upon
termination, the remaining trust assets (except any accrued or unpaid annuity
amount or portion thereof, which shall be paid to me or to my estate, as the
case may be) shall be distributed as follows (except to the extent that any son
of mine has directed a different distribution by exercising the contingent
general power of appointment conferred on that son under Paragraph 3.03):
3.02(1). Provision for Issue. The balance of the remaining trust assets
-----------------------------
shall be distributed to my natural born issue who survive the termination
of the
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<PAGE>
trust, per stirpes; provided that any assets distributable to a son of mine
before January 1, 2008, shall constitute a Separate Trust for such son's
primary benefit pursuant to Paragraph 4.01; and provided that any assets
distributable to a grandchild of mine who is under the age of 45 years at
the termination of the trust shall constitute a Separate Trust for such
grandchild's primary benefit pursuant to Paragraph 4.02.
3.02(2). Others. If none of my natural born issue survives the
----------------
termination of the trust, the remaining trust assets shall be distributed
to me if I survive the termination of the trust and, if I do not survive
the termination of the trust, to the persons who would have been my heirs
had I died intestate, under the statues of intestate succession of the
State of Minnesota in force at the execution of this agreement and in the
shares prescribed by those statutes.
3.03. Contingent General Power of Appointment. I give to any son of mine who
- ----------------------------------------------
does not survive the termination of the trust but who has any natural born issue
who survives the termination of the trust a general testamentary power of
appointment over all the assets that are otherwise distributable to or in trust
for the issue of that son under Section 3.02(1). My son may exercise this power
in favor of any one or more of my natural born issue in any amounts or
proportions, outright or in trust, my son's creditors or the creditors of my
son's estate. This power may not be exercised, however, in favor of my son or
my son's estate. My son must expressly refer to and exercise this power in my
son's valid will or codicil for the appointment to be effective.
ARTICLE 4. ADMINISTRATION OF OTHER TRUSTS.
--------- ------------------------------
4.01. Separate Trusts for Sons. Each Separate Trust for the primary benefit of
- -------------------------------
a son of mine shall be administered as follows:
4.01(1). Income. The net income shall be paid to my son; provided that if
----------------
the trustee determines that it is in the best interest of my son, the
trustee may withhold all or any part of the net income. Any net income
withheld shall be accumulated and added to principal.
4.01(2). Principal. The trustee shall pay to my son such sums of
-------------------
principal (including all thereof) as the trustee deems advisable.
4.01(3). Distributions. On January 1, 2008, the trust shall terminate and
-----------------------
the remaining assets of the trust shall be distributed to my son.
4.01(4). Distribution at Death. If any trust assets remain at my son's
-------------------------------
death, the trust shall terminate and the remaining trust assets (including
any unpaid income and accrued income) shall be distributed as follows
(except to the
-3-
<PAGE>
extent that my son directs a different distribution by exercising a power of
appointment conferred on my son under Section 4.01(5)):
4.01(4)(i). Son's Issue. To the natural born issue of my son who
------------------------
survive my son, per stirpes; or
4.01(4)(ii). My Other Issue. If no natural born issue of my son
----------------------------
survives my son, to my other natural born issue who survive my son,
per stirpes; or
4.01(4)(iii). Others. If none of my natural born issue survives my
---------------------
son, the remaining trust assets shall be disposed of in the manner
provided for the remaining assets of the Grantor Retained Annuity
Trust under Section 3.02(2) as though the Grantor Retained Annuity
Trust had terminated immediately after my son's death.
4.01(5). Powers of Appointment. I give my son the following powers of
-------------------------------
appointment:
4.01(5)(i). General Power If Issue Survives. If any natural born
--------------------------------------------
issue of my son survives my son, I give my son a general testamentary
power of appointment over all the assets otherwise distributable under
Section 4.01(4).
4.01(5)(ii). General Power If No Issue Survives. If none of my son's
------------------------------------------------
natural born issue survives my son, I give my son a general
testamentary power of appointment over any assets otherwise
distributable under Section 4.01(4) to a person who is assigned to a
generation younger than that of my son for purposes of the federal
generation-skipping tax.
4.01(5)(iii). Limited Power. With respect to any assets otherwise
----------------------------
distributable under Section 4.01(4) over which I have given my son no
general power of appointment, I give my son a limited testamentary
power of appointment.
My son may exercise any general power of appointment conferred by the
preceding provisions in favor of any one or more of my natural born issue
in any amounts or proportions, outright or in trust, my son's creditors or
the creditors of my son's estate. No general power may be exercised,
however, in favor of my son or my son's estate. My son may exercise any
limited power of appointment conferred by the preceding provisions in any
valid manner, outright or in trust in favor of any one or more of my
natural born issue, in any amounts or proportions. The limited power may
not be exercised,
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<PAGE>
however, in favor of my son, my son's estate, my son's creditors or the
creditors of my son's estate or in the manner described in Section
2041(a)(3) of the Internal Revenue Code. My son must expressly refer to
and exercise any power conferred by the preceding provisions in my son's
valid will or codicil for the appointment to be effective.
4.02. Separate Trusts for Grandchildren. Each Separate Trust for the primary
- ----------------------------------------
benefit of a grandchild of mine shall be administered as follows:
4.02(1). Income. The net income shall be paid to my grandchild; provided
----------------
that if the trustee determines that it is in the best interest of my
grandchild, the trustee may withhold all or any part of the net income.
Any net income withheld shall be accumulated and added to principal.
4.02(2). Principal. The trustee shall pay to my grandchild such sums of
-------------------
principal (including all thereof) as the trustee deems advisable.
4.02(3). Distributions. When my grandchild attains the age of 45 years,
-----------------------
the trust shall terminate and the remaining assets of the trust shall be
distributed to my grandchild.
4.02(4). Distribution at Death. If any trust assets remain at my
-------------------------------
grandchild's death, the trust shall terminate and the remaining trust
assets (including any unpaid income and accrued income) shall be
distributed as follows (except to the extent that my grandchild directs a
different distribution by exercising a power of appointment conferred on my
grandchild under Section 4.02(5)):
4.02(4)(i). Grandchild's Issue. To the issue of my grandchild who
-------------------------------
survive my grandchild, per stirpes; or
4.02(4)(ii). Grandchild's Siblings and Their Issue. If no issue of
---------------------------------------------------
my grandchild survives my grandchild, to the issue who survive my
grandchild of the son of mine who was my grandchild's father, per
stirpes; or
4.02(4)(iii). My Other Issue. If no issue of such father survives my
-----------------------------
grandchild, to my other issue who survive my grandchild, per stirpes;
or
4.02(4)(iv). Others. If none of my issue survives my grandchild, the
--------------------
remaining trust assets shall be disposed of in the manner provided for
the remaining assets of the Grantor Retained Annuity Trust under
Section 3.02(2) as though the Grantor Retained Annuity Trust had
terminated immediately after my grandchild's death.
-5-
<PAGE>
4.02(5). Powers of Appointment. I give my grandchild the following powers
-------------------------------
of appointment:
4.02(5)(i). General Power If Issue Survives. If any issue of my
--------------------------------------------
grandchild survives my grandchild, I give my grandchild a general
testamentary power of appointment over all the assets otherwise
distributable under Section 4.02(4).
4.02(5)(ii). General Power If No Issue Survives. If none of my
------------------------------------------------
grandchild's issue survives my grandchild, I give my grandchild a
general testamentary power of appointment over any assets otherwise
distributable under Section 4.02(4) to a person who is assigned to a
generation younger than that of my grandchild for purposes of the
federal generation-skipping tax.
4.02(5)(iii). Limited Power. With respect to any assets otherwise
----------------------------
distributable under Section 4.02(4) over which I have given my
grandchild no general power of appointment, I give my grandchild a
limited testamentary power of appointment.
My grandchild may exercise any general power of appointment conferred by
the preceding provisions in favor of anyone, including my grandchild's
estate, outright or in trust. My grandchild may exercise any limited power
of appointment conferred by the preceding provisions in any valid manner,
outright or in trust. The limited power may not be exercised, however, in
favor of my grandchild, my grandchild's estate, my grandchild's creditors
or the creditors of my grandchild's estate or in the manner described in
Section 2041(a)(3) of the Internal Revenue Code. My grandchild must
expressly refer to and exercise any power conferred by the preceding
provisions in my grandchild's valid will or codicil for the appointment to
be effective.
ARTICLE 5. GENERAL TRUST PROVISIONS.
--------- ------------------------
Despite any other provisions of this agreement to the contrary:
5.01. Grantor Retained Annuity Trust Qualification. All provisions of this
- ---------------------------------------------------
agreement (including any other provision of this Article 5) shall be construed
and applied so that the annuity amounts payable from the Grantor Retained
Annuity Trust shall constitute a "qualified interest" under Section 2702 of the
Internal Revenue Code and the Treasury Regulations thereunder, and any provision
of this agreement incapable of being so construed or applied shall be
inapplicable to the Grantor Retained Annuity Trust. The trustee shall not
exercise any power under
-6-
<PAGE>
this agreement in a manner that would disqualify all or any portion of the
annuity amounts from constituting such a "qualified interest."
5.02. Valuation Correction. If the initial net fair market value of the
- ---------------------------
Grantor Retained Annuity Trust is incorrectly determined, then within a
reasonable period after the correct value is finally determined, the trustee
shall pay to me, in the case of an undervaluation, or shall recover from me, in
the case of an overvaluation, an amount equal to the difference between the
annuity amounts properly payable and the annuity amounts actually paid.
5.03. Taxable Year of Grantor Retained Annuity Trust. The taxable year of the
- -----------------------------------------------------
Grantor Retained Annuity Trust shall be the calendar year; provided that the
first taxable year of the Grantor Retained Annuity Trust shall begin with the
valuation date and end on the last day of the first taxable year of the Grantor
Retained Annuity Trust.
5.04. Prohibition of Certain Payments. During the term of the Grantor Retained
- --------------------------------------
Annuity Trust, the trustee shall not make any distributions to or for the
benefit of any person other than me. The trustee shall not at any time commute
or prepay all or any portion of my interest in the Grantor Retained Annuity
Trust.
5.05. Contributions. Neither I nor any other person may make additional
- --------------------
contributions to the Grantor Retained Annuity Trust after the initial
contribution of assets to the Grantor Retained Annuity Trust.
5.06. Nonfiduciary Powers. During the term of the Grantor Retained Annuity
- --------------------------
Trust, I shall have the power, at any time, exercisable solely in a nonfiduciary
capacity and without the approval or consent of any trustee, to reacquire the
entire corpus of the Grantor Retained Annuity Trust by substituting other
property of equivalent value.
5.07. Perpetuities Termination Clause. Each trust under Article 4, if not
- --------------------------------------
sooner terminated pursuant to other provisions of this agreement, shall continue
as long as permitted under the laws of the state that is the situs of the trust
from time to time. In the case of any trust that cannot continue in perpetuity
under the laws of the state that is the situs of the trust from time to time,
the assets of such trust, if not sooner distributed pursuant to other provisions
of this agreement, shall be distributed on the last date on which such assets
can validly remain in trust (and if measuring lives are required to be
identified for this purpose, the measuring lives shall be all current and
contingent trust beneficiaries under this agreement who are living on the date
of execution of this agreement). If any trust terminates in whole or in part
under this Paragraph, distribution of assets shall be made to the primary
beneficiary of the trust.
-7-
<PAGE>
5.08. Disclaimers. Any trustee, beneficiary (other than me) or other person,
- ------------------
or an agent, guardian or personal representative on such person's behalf, shall
have the power to disclaim, in whole or in any part, any interest in property
under this agreement (including any right, power or discretion), by written
instrument filed with any trustee. The following provisions shall govern such
disclaimers:
5.08(1). Fiduciary Interests. If a trustee disclaims a right, power or
-----------------------------
discretion, the right, power or discretion so disclaimed shall be
extinguished as to the disclaiming trustee only.
5.08(2). Other Interests. If an interest in property under this agreement
-------------------------
other than an interest described in the preceding provisions of this
Paragraph is disclaimed, the disclaimed interest in property shall be
distributed in the manner provided by this agreement as though the trust in
which the disclaimed interest existed had been created on the effective
date of the disclaimer and as though the person disclaiming had died
immediately after the creation of such trust.
5.09. Transfers. Neither trust income or principal nor any beneficiary's
- ----------------
interest therein shall be subject to alienation, assignment, encumbrance or
anticipation by the beneficiary; to garnishment, attachment, execution or
bankruptcy proceedings; to claims for spousal maintenance, child support or an
equitable division of property incident to the dissolution of marriage; to any
other claims of any creditor or other person against the beneficiary; or to any
other transfer, voluntary or involuntary, by or from any beneficiary.
5.10. Continuation in Trust. Whenever a Separate Trust terminates and assets
- ----------------------------
become distributable directly to a person, the assets instead shall constitute a
Separate Trust for that person's primary benefit under the applicable provisions
of Article 4, or, if that person is the primary beneficiary of an existing
Separate Trust under Article 4, shall be added to the existing Separate Trust
under Article 4, whichever the trustee selects; provided that no assets shall be
withheld from and constitute a trust for any person unless such a trust would
have been created for that person's primary benefit under Article 3 if the
Grantor Retained Annuity Trust had terminated immediately after the assets
became distributable to that person.
5.11. Payments and Distributions. All payments of income or principal to a
- ---------------------------------
beneficiary under Article 4 may be expended for the beneficiary's benefit. All
payments and all distributions to any beneficiary who is incompetent, under
other legal disability or under the age of 21 years may be made directly to the
beneficiary despite the disability, to a custodian (other than any contributor
or the spouse of any contributor) designated by the trustee under the applicable
Uniform Gifts or Transfers to Minors Act or to a legal guardian or conservator
(other than any contributor or the spouse of any contributor).
-8-
<PAGE>
5.12. Nature of Discretionary Payments. Except as may be limited by other
- ---------------------------------------
provisions of this agreement, discretionary payments authorized for a child or
grandchild of mine may include (but shall not be limited to) payments for
education; graduate, vocational and professional study; health and medical care;
assistance in connection with marriage, acquisition and furnishing of a home and
commencing or continuing a desirable business.
5.13. Other Tax Effects. This agreement shall in all respects be construed in
- ------------------------
such a manner that: (1) no income or capital gains of any trust under Article 4
shall be deemed taxable to any contributor or to any trustee for income tax
purposes (unless received by such trustee as a beneficiary or attributed to such
trustee by reason of such trustee's possession of a right of withdrawal); and
(2) no principal of any trust under Article 4 shall be includible for death tax
purposes in the estate of any contributor or of any trustee (except to the
extent any trustee who is a beneficiary possesses a right of withdrawal at such
beneficiary's death). Any provision of this agreement incapable of being so
construed or applied shall be inapplicable.
5.14. S Corporation Qualification. All provisions of this agreement shall be
- ----------------------------------
construed and applied so that each trust under Article 4 is capable of
qualifying as a "qualified subchapter S trust," as defined in Section 1361(d)(3)
of the Internal Revenue Code and the Grantor Retained Annuity Trust is eligible
to hold stock of an "S corporation" under Section 1361(c)(3)(A)(i) of the
Internal Revenue Code. Any provision of this agreement incapable of being so
construed or applied shall be inapplicable to those trusts. Whenever any of the
trusts under Article 4 holds stock of an "S corporation," as defined in Section
1361(a) of the Internal Revenue Code, I direct the trustee to distribute
currently all net income of the trust to the primary beneficiary of the trust.
ARTICLE 6. TRUSTEES.
--------- --------
6.01. Succession of Trustees. At any time before the Grantor Retained Annuity
- -----------------------------
Trust terminates, I shall have the power to appoint cotrustees or successors;
and the individual trustee or trustees (as distinguished from any corporate
trustee) acting from time to time shall also have the power to appoint
cotrustees or successors; provided, that (1) in no event shall any contributor
or the spouse of any contributor ever become a cotrustee or successor trustee
under this agreement; and (2) the appointment of any cotrustee or successor by
the acting individual trustee or trustees shall be effective only if no
cotrustee or successor trustee appointed by me qualifies to serve. If at any
time there is no trustee acting under this agreement having the power to make
discretionary distributions of income or principal, the trustees then acting
shall have the duty immediately to appoint one or more trustees capable of
making such distribution. If at any time there is no trustee acting or
designated to act, or if the designated trustee fails to qualify, I appoint each
of my
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<PAGE>
sons as trustee and if neither of my sons is willing and able to serve, I
appoint the oldest issue of mine who is willing and able to serve as trustee.
6.02. Administration. The following provisions apply to the exercise of all
- ---------------------
trustee functions under this agreement:
6.02(1). Administration. I waive any requirement that any trustee qualify
------------------------
in court but if such qualification occurs, I direct that no bond be
required of any trustee.
6.02(2). Special Powers and Duties. In exercising all powers conferred by
-----------------------------------
law or by this agreement, the trustees empowered to act shall do so
unanimously except as otherwise provided by law and except that:
6.02(2)(i). Delegation and Control. The trustees empowered to
-----------------------------------
perform a particular ministerial or discretionary act may delegate
authority to perform such act to any one or more of them. Whenever
such authority has not been so delegated as to a particular act and
there are three or more trustees acting under this agreement who are
empowered to perform such act, the same may be performed, on behalf of
all, by a majority of those empowered, with or without the concurrence
of the minority. No trustee who failed to join or concur in such act
shall be held liable for the consequences thereof.
6.02(2)(ii). Resignation. Any trustee shall have the power to resign
-------------------------
by written instrument without the approval of any court.
6.02(2)(iii). Custody and Safekeeping. Whenever acting, the
--------------------------------------
corporate trustee alone shall have custody of all trust assets and
shall maintain all trust books, records and accounts.
6.02(2)(iv). Removal of Corporate Trustee. If a corporate trustee is
------------------------------------------
acting at any time the individual trustee other than any of my issue
shall have the power to remove the corporate trustee then acting or
designated to act without appointing a successor corporate fiduciary.
6.02(3). Non-exercise of Discretion by Interested Trustees. Despite any
-----------------------------------------------------------
other provision of this agreement to the contrary, the following provisions
shall apply to any trust under Article 4: (i) no beneficiary who is also a
trustee may participate, as a trustee, in any discretionary decision to
withhold or distribute income or principal to such beneficiary, (ii) no
trustee may participate, as a trustee, in any discretionary decision to
distribute income or principal in a manner that would satisfy a legal
obligation of that trustee and (iii) no trustee who is a "related or
subordinate party", within the meaning of Section 672(c)
-10-
<PAGE>
of the Internal Revenue Code, with respect to any contributor, if such
contributor is then living, may participate, as a trustee, in any
discretionary decisions to withhold or distribute income or principal;
provided that, if the possession or exercise of such discretionary powers
by a trustee (other than the spouse of any contributor) who is such a
"related or subordinate party" would not cause more than half the trustees
then acting and possessing such powers to be such related or subordinate
parties, then such trustee may possess and exercise such powers if not
otherwise disqualified under the provisions of this Section; and provided
further that if at any time more than one trustee who is such a related or
subordinate party is acting under this agreement, the immediately preceding
proviso shall apply to as many of the trustees as may qualify under such
proviso, in order of length of service, beginning with the trustee who has
served the longest or, if the length of service is the same, who is eldest
in age.
6.03. General Powers. Except as otherwise limited by this agreement, the
- ---------------------
trustees shall have the following powers or, where so provided, duties,
exercisable without approval, order or license of any court:
6.03(1). Disposition. To sell, exchange, mortgage, lease, pledge or
---------------------
otherwise encumber or dispose of any asset upon any terms and conditions to
any person, corporation or entity, whether or not a beneficiary, trustee or
agent under this agreement;
6.03(2). Investment. To invest in any asset or retain any asset,
--------------------
including any interest in King Holding Corporation, Sunrise Resources,
Inc., or their respective affiliates or successors, notwithstanding any
statute, rule of law or regulation limiting the investments by trustees in
or to certain kinds of investments, requiring diversification or
prohibiting trustees from being interested in sales or purchases,
delegating investment functions or commingling assets;
6.03(3). Dealing With Assets. To hold any assets in their own names
-----------------------------
without disclosure of fiduciary capacity or in the name of a nominee and to
exercise all rights and powers respecting any assets that could be
exercised by a competent adult owning the same;
6.03(4). Deposits: Borrowing. To deposit cash in any depository and to
-----------------------------
borrow money from any source, notwithstanding personal interest in the
depository or source;
6.03(5). Principal and Income. To allocate receipts and disbursements
------------------------------
between principal and income in their discretion;
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<PAGE>
6.03(6). Tax Options. To make tax-related elections or decisions without
---------------------
reimbursement or adjustment between income and principal or in favor of any
beneficiary, notwithstanding that the election or decision may directly
affect the value of the beneficiary's share or the amount of any tax
payable;
6.03(7). Distributions. To determine values, distribute like and unlike
-----------------------
assets to different beneficiaries or trusts, make distributions in cash or
kind at any time and cause the administration of any trust to be commenced
whenever they deem advisable;
6.03(8). Agents Delegation. To employ agents, lawyers, investment
---------------------------
counsel, accountants, banks or trust companies and others and to delegate
both ministerial and discretionary powers to them, with liability only for
reasonable care in their selection and without regard to any prohibition
regarding self-dealing or conflict of interest by fiduciaries;
6.03(9). Merger. To merge the assets of any trust under Article 4 with
----------------
those of any other trust maintained for the same beneficiary upon
substantially the same terms (and if the merged trusts are governed by
different perpetuities rules or perpetuities rule savings clauses, the rule
or savings clause providing for the shorter perpetuities period shall
govern the merged trusts);
6.03(10). Business Powers. To exercise every power not specifically
--------------------------
granted by this agreement that may be necessary to enable them to create,
continue, operate, expand and change the form of any individual
proprietorship, general or limited partnership, joint venture, corporation
or other business;
6.03(11). Change of Situs. To transfer the situs of any trust from the
--------------------------
State of Minnesota (or such other jurisdiction that is then the situs of
such trust) to any other jurisdiction, as the trustee other than any issue
of mine deems advisable; and
6.03(12). Other Powers. To exercise all other powers conferred on
-----------------------
fiduciaries generally by law, including Minnesota Statutes Section 501B.81,
which I incorporate in this agreement by reference, to the extent they are
not inconsistent with other provisions of this agreement, and to perform
all other acts necessary or advisable to administer the trust.
ARTICLE 7. INTERPRETATIONS AND CONSTRUCTIONS.
--------- ---------------------------------
7.01. Definitions. The following words and phrases have the following
- ------------------
meanings:
7.01(1). My Sons. My sons' names are William B. King and Russell S. King,
-----------------
and all references to my sons are to them only.
-12-
<PAGE>
7.01(2). Issue. "Issue" means all persons who are lineal descendants of
---------------
the person whose issue are referred to in this agreement, subject to the
following:
7.01(2)(i). Adoption Into Family. A legally adopted child and the
---------------------------------
adopted child's lineal descendants always shall be lineal descendants
of each adoptive parent (and of each adoptive parent's lineal
ancestors).
7.01(2)(ii). Adoption Out Of Family. A legally adopted child and the
------------------------------------
adopted child's lineal descendants never shall be lineal descendants
of any former parent whose parental rights were terminated by the
adoption (or of that former parent's lineal ancestors); except that
if, after a child's parent has died, the child is legally adopted by a
stepparent who is the spouse of the child's surviving parent, the
child and the child's lineal descendants shall remain lineal
descendants of the deceased parent (and the deceased parent's lineal
ancestors).
7.01(2)(iii). Parent Who Has Not Openly Received Child Into Home. If
-----------------------------------------------------------------
the person (or a lineal descendant of the person) whose issue are
referred to in this agreement is the parent of a child (or is treated
as such under applicable law) but never received the child into that
parent's home or never openly held out the child as that parent's
child (unless doing so was precluded solely by death), then neither
the child nor the child's lineal descendants shall be issue of the
person whose issue are referred to in this agreement.
7.01(3). Natural Born Issue. "Natural born issue" means all issue other
----------------------------
than those individuals described in Item 7.01(2)(i) of this agreement.
7.01(4). Per Stirpes. "Per stirpes" means in equal shares among living
---------------------
children of the person whose issue are referred to and the issue (taken
collectively) of each deceased child of such person, with such issue taking
by right of representation of such deceased child.
7.01(5). Internal Revenue Code. "Internal Revenue Code" means the United
-------------------------------
States Internal Revenue Code of 1986 or any successor thereto, as amended,
and all references to a particular Section of the United States Internal
Revenue Code shall include any successor provision to such Section.
7.01(6). Contribution. "Contribution" means any transfer constituting a
----------------------
gift to the trust for federal gift tax purposes.
7.01(7). Contributor. "Contributor" means any person who makes a
---------------------
contribution to the trust.
-13-
<PAGE>
7.02. Other Principles of Construction. Whenever not contrary to the sense of
- ---------------------------------------
this agreement, the singular shall include the plural, and vice versa. All
matters relating to the execution of this agreement shall be determined under
the applicable laws of the State of Minnesota. The interpretation and
construction of this agreement, the enforcement of all rights and remedies
afforded to any devisee, beneficiary, trustee or other interested party under
the provisions of this agreement, the validity and duration of a trust under
this agreement, the powers, duties and responsibilities of any trustee and all
other procedural and substantive matters of law relating to trust administration
under this agreement shall be determined from time to time under the laws of the
state that is then the trust situp If there is a change in trust situp the laws
of the state of any new trust situs shall apply as of the date of the change of
situp and all constructions, interpretations, limitations and restrictions
imposed by the laws of any previous situs shall be of no further effect.
The trustee and I have signed this agreement as of the date written above.
In Presence of:
/s/ Julie A. Huppert /s/ Peter J. King
- --------------------------------- ----------------------------------
Peter J. King
/s/ James C. Tem Donor
- -----------------------------
/s/ Julie A. Huppert /s/ Stephen D. Higgins
- ------------------------------- ------------------------------------
Stephen D. Higgins
/s/ James C. Tem Trustee
- -----------------------------
-14-
<PAGE>
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
On this 28th day of May, 1996, before me, a Notary Public within and for
said County, personally appeared PETER J. KING, to me known to be the person
described in and who executed the foregoing instrument, and acknowledged that he
executed the same as his free act and deed.
/s/ Julie A. Huppert
-----------------------------------------
(Notarial Seal)
JULIE A. HUPPERT
NOTARY PUBLIC -- MINNESOTA
RAMSEY COUNTY
My Comm. Expires Jan. 31, 2000
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
On this 28th day of May, 1996, before me, a Notary Public within and for
said County, personally appeared STEPHEN D. HIGGINS, to me
known to be the person described in and who executed the foregoing instrument,
and acknowledged that he executed the same as his free act and deed.
/s/ Julie A. Huppert
------------------------------------------
(Notarial Seal)
JULIE A. HUPPERT
NOTARY PUBLIC -- MINNESOTA
RAMSEY COUNTY
My Comm. Expires Jan. 31, 2000
-15-
<PAGE>
SCHEDULE
--------
Assets to Constitute the Original Trust Estate
----------------------------------------------
431,999 shares of common stock of Sunrise Resources, Inc.
Authenticated and verified as correct this 28th day of May, 1996.
/s/ Peter J. King
--------------------------------------
Peter J. King
Donor
/s/ Stephen D. Higgins
---------------------------------------
Stephen D. Higgins
Trustee
<PAGE>
Exhibit E
VOTING TRUST AGREEMENT
Agreement, dated September 26, 1996, between each of the record owners
of shares of common stock of Sunrise Resources, Inc., a Minnesota corporation
(the "Corporation"), that are listed on schedule 1 to this agreement and others
who may become parties to this agreement in the manner hereinafter provided (the
"Shareholders"), and Peter J. King (the "Voting Trustee");
WHEREAS, the Shareholders, or their predecessors, have entered into
that certain Shareholder Voting Agreement, dated as of May 1, 1996 (the
"Shareholder's Agreement"), whereby the Shareholders appointed Peter J. King as
their agent in connection with the negotiation, settlement or litigation of
certain claims involving the acquisition of their stock in the Corporation; and
WHEREAS, the Shareholders deem it to be in their mutual best interests
to combine the voting power of the shares of the Corporation's common stock
owned by them and vesting such voting power in the Voting Trustee as provided in
this agreement; and
WHEREAS, the Voting Trustee is willing to act in such capacity
pursuant to the terms of this agreement.
NOW THEREFORE, in consideration of the premises, the respective
commitments and undertakings of the Shareholders and the Voting Trustee set
forth in this agreement, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Shareholders and the Voting
Trustee agree as follows:
1. Delivery of Shares. Concurrently with the execution of this
------------------
agreement, each Shareholder shall transfer and deliver to the Voting Trustee
stock certificates evidencing the number of shares of the Corporation's common
stock as is set forth on schedule 1, which certificates shall be properly
endorsed for transfer on the books of the Corporation, and the Voting Trustees
shall hold and deal with such certificates in the manner contemplated by this
agreement.
2. Voting Trust Certificates. Upon receipt from the Shareholders of
-------------------------
stock certificates for shares of the Corporation's common stock, the Voting
Trustee shall deliver or cause to be delivered to the Shareholders a voting
trust certificate or certificates for the number of shares that is represented
by the stock certificate or certificates so deposited with the Voting Trustee,
which voting trust certificates shall be in substantially the following form:
<PAGE>
VOTING TRUST CERTIFICATE
For Shares of Common Stock of
Sunrise Resources, Inc.
(A Minnesota Corporation)
(Under Voting Trust Agreement Dated September 26, 1996)
No.______ _______Shares
This certifies that _________________________________ has deposited
________________ shares of common stock of Sunrise Resources, Inc. (the
"Corporation"), with the Voting Trustee hereinafter named, pursuant to an
agreement, dated September 26, 1996, between certain shareholders of the
Corporation and the Voting Trustee (the "Agreement"). This certificate and the
interest represented thereby is transferable only on the books of the Voting
Trustee upon the presentation and surrender of this certificate. The holder of
this certificate shall be subject to all the terms and conditions of the
Agreement and shall be entitled to the benefits thereof.
IN WITNESS WHEREOF, the Voting Trustee has caused this certificate to
be signed this _________ day of September, 1996.
____________________________,
Peter J. King, Voting Trustee
In the event of a stock split, stock dividend or distribution of
shares of any class of the Corporation, the Voting Trustee shall issue
additional certificates to the registered holders of outstanding voting trust
certificates, which additional certificates shall be modified as necessary to
indicate the class of shares so represented and to reflect the interests of the
Shareholders in the shares of the Corporation's stock held by the Voting
Trustee.
3. Transfer of Voting Trust Certificates. Subject to transfer
-------------------------------------
restrictions set forth in the Articles of Incorporation and Bylaws of the
Corporation now or hereafter and transfer restrictions imposed by applicable
securities laws, the Shareholders shall be at liberty to sell or transfer the
voting trust certificates as they determine to be proper. The voting trust
certificates issued by the Voting Trustee may be transferred on the books of the
Voting Trustee upon the surrender to the Voting Trustee of such certificates,
which have been properly endorsed by the registered holders. Title to the
voting trust certificates when duly endorsed shall, to the extent permitted by
law, be transferable with the same effect as in the case of negotiable
instruments.
-2-
<PAGE>
Every transferee of a voting trust certificate shall, by the
acceptance of such certificate, become a party to this agreement with the effect
that such transferee shall be deemed to be an original party to this agreement,
and shall be regarded as a Shareholder for all purposes of this agreement.
4. Shareholders' Rights. The record ownership of the shares of
--------------------
stock of the Corporation for which certificates have been deposited with the
Voting Trustee shall be vested in the Voting Trustee and shall be transferred
into the name of the Voting Trustee upon the books of the Corporation. The
Voting Trustee shall, as to all shares of stock so held by him, possess and be
entitled to exercise all shareholders' rights of every kind, including the right
to vote and the right to take part in, or consent to, any corporate or
shareholders' action, except as such right has been given to the agent under the
Shareholder's Agreement or is specifically limited by this agreement.
The holders of voting trust certificates shall not have any right,
with respect to any shares of stock held by the Voting Trustee, to vote such
shares or to take part in or consent to any corporate or shareholders' action of
the Corporation.
The Voting Trustee may deliver the shares of stock subject to this
agreement to the Corporation for exchange or surrender pursuant to any
amendments to the articles of incorporation, plan of reclassification, merger,
consolidation, liquidation or dissolution of the Corporation.
5. Exercise of Voting Rights by Voting Trustee. The Voting Trustee
-------------------------------------------
shall vote on matters which may come before him at any shareholders' meeting and
shall exercise his best judgment from time to time to select suitable directors
to the end that the affairs of the Corporation shall be properly managed.
The Voting Trustee may vote all shares of stock held by him in person
or by such person or persons as he shall select as his proxy.
6. Exculpation. The Voting Trustee shall not be liable for any
-----------
error of judgment or mistake of law, or other mistake, except for his own
willful misconduct or gross negligence.
7. Compensation; Expense Reimbursement. The Voting Trustee shall
-----------------------------------
not be entitled to any compensation for his services, but shall be reimbursed by
the Shareholders, on a pro rata basis, for any expenses or liabilities incurred
by him in connection with his duties under this agreement, including the
disbursements and reasonable compensation of his agents, attorneys, employees
and officers whom he may employ in carrying out the terms and provisions of this
agreement.
-3-
<PAGE>
The Voting Trustee shall be entitled to reimburse himself for all
expenses incurred in the performance of his duties, out of any monies held or
received by him as distributions with respect to any shares held in the voting
trust created by this agreement.
8. Distributions. The holder of each voting trust certificate shall
-------------
be entitled to receive, from time to time, payments equal to the dividends or
distribution payable in cash or property (other than shares of any class of the
Corporation), if any, collected by the Voting Trustee, as is specified in such
voting trust certificates, subject to the ratable payment of expenses of the
Voting Trustee.
9. Restriction on Transfer of Shares. During the term of this
---------------------------------
agreement, the Shareholders shall not be entitled to sell their respective
shares of Corporation stock. The Voting Trustee shall not be entitled to
transfer the shares of Corporation stock registered in his name to any other
person, including the Shareholder from whom such shares were received. However,
notwithstanding the foregoing restriction, the Voting Trustee shall be entitled
to vote to approve a merger or sale of the Corporation or the sale, lease,
transfer or other disposition of all or substantially all of the Corporation's
assets.
10. Inspection of Agreement. A copy of this agreement shall be filed
-----------------------
by the Voting Trustee in the principal office of the Corporation and shall be
available during business hours for inspection by the Corporation's shareholders
or by the trust certificate holders.
11. Amendment. If at any time the Voting Trustee shall deem it
---------
advisable to amend this agreement, he shall submit such amendment to the holders
of voting trust certificates for their approval either by written action or at a
meeting called for that purpose in the manner and upon such notice as provided
by the bylaws of the Corporation for the calling of shareholders' meetings.
If the proposed amendment is approved by the vote, in person or by
proxy, of the holders of a majority in interest of the voting trust certificates
then outstanding, a certificate to that effect shall be made and certified by
the Voting Trustee and filed in the offices in which a copy of this agreement is
required to be filed. Upon filing of such certificate, the proposed amendment
shall be and become a part of this agreement.
12. Term; Termination. The term of this agreement shall commence on
-----------------
the date hereof and shall extend through December 31, 2007. Notwithstanding
the foregoing, the term of this agreement shall automatically terminate prior to
the expiration of the term in the event that (a) the Voting Trustee elects at
any time to terminate this agreement, (b) the Voting Trustee shall have (i)
resigned as Voting Trustee or died or (ii) been determined to be incompetent or
-4-
<PAGE>
incapacitated by the unanimous consent of the Shareholders, after consultation
with a licensed physician who has examined the Voting Trustee, or (c) the
Corporation is dissolved and liquidated.
At any time after such termination, the holders of voting trust
certificates shall be entitled, upon surrender of such certificates to the
Corporation for cancellation, to receive certificates for the number of shares
of the Corporation's common stock represented by their respective voting trust
certificates. For the purpose of transferring such certificates upon
termination, the officers of the Corporation shall be deemed to be the Trustee
for that purpose and that purpose only, and any one of such officers shall have
the power to make such transfer without the consent of any other officer.
13. Acceptance by Voting Trustee. The Voting Trustee hereby accepts
----------------------------
the trust created by the terms of this agreement and agrees to perform his
duties hereunder.
14. Miscellaneous. This agreement shall be construed and enforced in
-------------
accordance with the laws of the state of Minnesota. This agreement shall
evidence the complete understanding and agreement among the parties hereto
relative to the matters discussed herein and supersedes all prior written or
oral agreements or understandings relative to such matters. This agreement may
be executed in multiple counterparts, each of which shall be deemed an original,
and such counterparts together shall constitute one instrument.
[The balance of this page has been left blank intentionally.]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date set forth in the first paragraph.
VOTING TRUSTEE:
/s/ Peter J. King
--------------------------------
Peter J. King, Voting Trustee
SHAREHOLDERS:
PETER J. KING 1996 GRANTOR
RETAINED ANNUITY TRUST:
/s/ Stephen D. Higgins
--------------------------------
Stephen D. Higgins, Trustee
WILLIAM B. KING STOCK TRUST:
/s/ William B. King
--------------------------------
William B. King, Trustee
/s/ Stephen D. Higgins
---------------------------------
Stephen D. Higgins, Trustee
RUSSELL S. KING STOCK TRUST:
/s/ Russell S. King
--------------------------------
Russell S. King, Trustee
/s/ Stephen D. Higgins
---------------------------------
Stephen D. Higgins, Trustee
-6-
<PAGE>
Schedule 1
----------
Shareholders Number of Shares
- ------------ ----------------
PETER J. KING 1996 GRANTOR
RETAINED ANNUITY TRUST 431,999
WILLIAM B. KING STOCK TRUST 1,054,526
RUSSELL S. KING STOCK TRUST 1,054,526
<PAGE>
Exhibit F
APPOINTMENT OF PROXY
The undersigned trustees of the William B. King Stock Trust (the
"Trust") hereby appoint Peter J. King (the "Proxy") with the power to represent
the undersigned and to vote, to the extent set forth herein, the Three Hundred
Thousand (300,000) shares of the capital stock of Sunrise Resources, Inc., a
Minnesota corporation (the "Corporation") owned by the Trust (the "Trust
Shares"), which are not subject to that certain Voting Trust Agreement dated
September 26, 1996, between Peter J. King and certain trusts, including the
Trust (the "Voting Trust").
I. Voting Power
------------
The Proxy shall have the power to represent the undersigned and to
vote the Trust Shares on matters which may come before the shareholders of the
Corporation at any shareholder's meeting other than with respect to any of the
following Corporate Actions:
(a) any amendment of the articles of the Corporation that materially and
adversely affects the rights or preferences of the Trust Shares;
(b) any disposition of all or substantially all of the property and assets
of the Corporation;
(c) a plan of exchange to which the Corporation is a party and pursuant to
which the Trust Shares will be acquired by the acquiring corporation.
II. Termination
-----------
This appointment of proxy shall terminate on December 31, 2007, or
such earlier time as (i) the Proxy shall have resigned as Proxy or died, or (ii)
this appointment is revoked pursuant to Section III hereof.
III. Revocation
----------
This appointment of proxy is not coupled with an interest and shall be
terminable at will by William B. King in his sole discretion by filing written
notice of such termination with an officer of the corporation. Such termination
shall be effective when filed.
By execution of this appointment of proxy in his capacity as trustee
of the Trust, Stephen D. Higgins hereby exercises his authority under the Trust
to give William B. King power to act alone with respect to termination of this
appointment of proxy.
<PAGE>
Date: September 26, 1996 WILLIAM B. KING STOCK TRUST:
/s/ William B. King
----------------------------
William B. King, Trustee
/s/ Stephen D. Higgins
----------------------------
Stephen D. Higgins, Trustee
