UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 1)1
FRITZ COMPANIES, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
358846-10-3
(CUSIP Number)
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John F. Seegal, Esq.
Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, CA 94111
(415) 392-1122
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 31, 1999
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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.
(Continued on following pages)
(PAGE 1 OF __ PAGES)
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1 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
disclosures provided in a prior cover page.
The information required on 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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CUSIP NO. 13D
358846-10-3
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1. NAME OF REPORTING PERSON Lynn C. Fritz
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A)|_|
(B)|_|
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3. SEC USE ONLY
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4. SOURCE OF FUNDS PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS |_|
REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
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6. CITIZENSHIP OR PLACE OF ORGANIZATION United States
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| 7. SOLE VOTING POWER
NUMBER OF | 11,632,216
SHARES |----------------------------------------------
BENEFICIALLY | 8. SHARED VOTING POWER
OWNED BY | 0
EACH REPORTING |----------------------------------------------
PERSON WITH | 9. SOLE DISPOSITIVE POWER
| 11,632,216
|----------------------------------------------
| 10. SHARED DISPOSITIVE POWER
| 0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
12,986,416
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.8%
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14. TYPE OF REPORTING PERSON IN
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Lynn C. Fritz hereby amends the statement on Schedule 13D (the "Schedule
13D"), filed with the Securities and Exchange Commission, with respect to the
shares of Common Stock, $.01 par value (the "Common Stock"), of Fritz Companies,
Inc., a Delaware corporation (the "Issuer"), as follows:
Item 2. Identity and Background.
Item 2 is hereby amended to delete the words "President and" from Mr.
Fritz's title.
Item 4. Purpose of Transaction
The first Paragraph and Paragraph (a) of Item 4 are hereby amended in their
entirety to read as follows:
Mr. Fritz believes that the price of Fritz Common Stock in the public
market is under valued and intends to purchase additional shares from time to
time. Mr. Fritz believes that the grants of restricted stock and stock options
to him by the Compensation Committee reflected the Compensation Committee's
determination that such grants would be in the best interest of the Company.
Mr. Fritz has no plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the issuer,
except as contemplated by the first paragraph of this Item 4, or the
disposition of securities of the issuer except for future gifts of stock
and other routine transfers, and the transfers described in the following
paragraph.
On March 31, 1999, Mr. Fritz transferred, without consideration, 1,334,000
shares of the Company's Common Stock to a grantor annuity retained trust of
which Mr. Fritz is the sole trustee (the "Lynn C. Fritz GRAT"), and
1,334,000 shares of the Company's Common Stock to his wife Tamara Fritz,
who subsequently transferred such shares to a grantor annuity retained
trust of which she is the sole trustee (the "Tamara Fritz GRAT"). Each
grantor annuity retained trust was created under a trust agreement dated
March 30, 1999 (the "Trust Agreements"). Copies of the Trust Agreements are
filed as Exhibits 1 and 2 hereto and are incorporated herein by reference.
Mr. Fritz has sole power to vote and to direct the disposition of the
shares of the Company Common Stock transferred to the Lynn C. Fritz GRAT,
and Mrs. Fritz has sole power to vote and to direct the disposition of the
shares of the Company Common Stock transferred to the Tamara Fritz GRAT.
Item 5. Interest in Securities of Issuer
Item 5 is hereby amended in its entirety to read as follows:
(a) Lynn C. Fritz owns 12,986,416 shares of the Company's Common Stock. Of
such 12,986,416 shares: (i) 14,000 constitute unvested shares of restricted
stock as to which Mr. Fritz currently has voting power; (ii) 176,666
consist of vested stock options; (iii) 20,220 shares are held in a trust
for the benefit of Mr. Fritz's children; (iv) 1,334,000 shares are held in
the Tamara Fritz GRAT described in Item 4 above; and (v) 1,334,000 shares
are held in the Lynn C. Fritz GRAT described in Item 4 above.
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(b) Lynn C. Fritz has sole power to vote and direct the disposition of
11,632,216 shares of the Company's Common Stock owned by him and by the
Lynn C. Fritz GRAT and to direct the disposition of all shares issuable
upon exercise of stock options granted to him at such time as he exercises
such options. An unaffiliated trustee has the power to vote and direct the
disposition of the 20,220 shares held in the above-referenced trust for the
benefit of Mr. Fritz's children. Mrs. Fritz has the sole power to vote and
direct the disposition of the 1,334,000 shares held in the Tamara Fritz
GRAT. Each share of the Company's Common Stock is entitled to one vote.
(c) Lynn C. Fritz has not engaged in any transaction in the Company's
Common Stock since January 31, 1999, except as follows: (i) on March 31,
1999 Mr. Fritz made gifts totaling 7,270 shares to the above-referenced
trust for the benefit of his children; (ii) on March 31, 1999, Mr. Fritz
made a gift of 1,334,000 shares to his wife, Tamara Fritz, who subsequently
transferred such shares to a grantor annuity retained trust of which Mrs.
Fritz is the sole trustee and has sole power to vote and direct the
disposition of such shares; and (iii) on March 31, 1999, Mr. Fritz
transferred 1,334,000 shares to the Lynn C. Fritz GRAT, of which he is the
sole trustee. Mr. Fritz has sole power to vote and direct the disposition
of such shares.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
securities discussed above.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of Issuer
Except as described in this statement or in the documents referred to
herein, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between either Lynn C. Fritz or the Lynn
C. Fritz GRAT and any person with respect to any securities of the Company.
The Lynn C. Fritz GRAT is governed by a Trust Agreement. Mr. Fritz, as
settlor, transferred to the Lynn C. Fritz GRAT 1,334,000 shares of the
Company Common Stock. The Trust Agreement provides that, on or before the
end of each taxable year during the term, Mr. Fritz is to receive an amount
equal to 54.39217% of the initial net fair market value of the assets of
the Lynn C. Fritz GRAT. The distributions are to be paid from income and,
to the extent that income is not sufficient, from principal. The Trust
Agreement is irrevocable and is not subject to amendment except in certain
limited circumstances.
Item 7. Material to be Filed as Exhibits.
The following exhibits are filed herewith:
Exhibit 1 Lynn C. Fritz 1999 Grantor Retained Annuity Trust Agreement
Exhibit 2 The Tamara Fritz 1999 Grantor Retained Annuity Trust Agreement
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After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned hereby certify that the information set forth in this
statement is true, complete and correct.
Dated: April 2, 1999
LYNN C. FRITZ
By /s/ LYNN C. FRITZ
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Lynn C. Fritz
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EXHIBIT INDEX
Exhibit Description of Exhibit Sequentially Numbered Pages
- ------ ---------------------- --------------------------
1 Lynn C. Fritz 1999 Grantor Retained Annuity 7-22
Trust Agreement
2 The Tamara Fritz 1999 Grantor Retained 23-38
Annuity Trust Agreement
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EXHIBIT 1
LYNN C. FRITZ 1999 GRANTOR RETAINED ANNUITY TRUST
This Trust Agreement is entered into at San Francisco, California, on March
30, 1999, by and between LYNN C. FRITZ, of San Francisco, California, as
Trustor, and LYNN C. FRITZ, of San Francisco, California, as Trustee.
LYNN C. FRITZ is the owner, as his separate property, of that certain
property described on Exhibit A and hereby transfers and conveys such property
to the Trustee.
The Trustor desires to provide the terms and conditions upon which the
property now or hereafter transferred to the Trustee shall be held by the
Trustee and, in order to define the terms upon which the Trustee shall hold the
property, it is agreed as follows:
ARTICLE ONE
Trust Term
This trust is effective immediately and shall terminate on expiration of a
period of two (2) years from the date of this Trust Agreement. The period before
termination of the trust is referred to herein as the "Trust Term."
ARTICLE TWO
Distributions During Trust Term
During the Trust Term, the Trustee shall pay the "Annuity Amount," as
hereinafter defined, as provided in this Article Two.
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2.1 Annuity Amount
The Annuity Amount shall be an amount equal to 54.39217 % of the initial
net fair market value of the assets of the Trust valued as of the date of this
Trust Agreement.
2.2 Payment of Annuity Amount
The Trustor's right to receive the Annuity Amount shall commence on the
date of this Trust Agreement. The Trustee shall pay the Annuity Amount to the
Trustor on or before the end of each taxable year of the Trust Term. The Annuity
Amount may be paid after the close of the taxable year, provided the payment is
made no later than the date by which the Trustee is required to file the federal
income tax return of the trust for the taxable year (without regard to
extensions) or, if no return is required to be filed, the date by which the
Trustee would be required to file a return if one were required. The Annuity
Amount shall be paid from income and, to the extent that income is not
sufficient, from principal. Any income of the trust for a taxable year in excess
of the Annuity Amount shall be added to principal.
2.3 Incorrect Payment
If an incorrect payment of the Annuity Amount is made (for example, if the
initial net fair market value of the trust assets is incorrectly determined),
then promptly after the error is discovered (including without limitation
promptly after the initial net fair market value of the trust assets is finally
determined for federal tax purposes) the Trustee shall pay to the Trustor (in
the case of an underpayment) or receive from the Trustor (in the case of an
overpayment) an amount equal to the difference between the Annuity Amount
properly payable and the Annuity Amount actually paid.
2.4 Short Year
Payments of the Annuity Amount for a period of less than one full year
shall be prorated on a daily basis.
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2.5 Additional Distributions
The Trustee is authorized to pay to the Trustor from time to time such
amounts as the Trustor shall certify as being required to discharge the
Trustor's tax liability in respect of income of the trust not distributed to the
Trustor and taxable to the Trustor; provided that no such distributions shall be
made pursuant to this paragraph or applicable state law if that would conflict
with the Trustor's intent expressed in paragraph 2.7.
2.6 Limitation on Distributions, Commutation Prohibited
During the Trust Term, no distributions shall be made to or for the benefit
of anyone other than the Trustor. The interest of the Trustor shall not be
subject to commutation.
2.7 Intent of the Trustor
It is the Trustor's intent in entering into this Trust Agreement to provide
the Trustor with a qualified interest within the meaning of Section 2702(b)(1)
of the Internal Revenue Code of 1986, as amended, and a qualified annuity
interest within the meaning of Section 25.2702-3(b) and (d) of the Treasury
Regulations.
ARTICLE THREE
Distributions Upon Expiration of the Trust Term
Upon the expiration of the Trust Term, the Trustee shall distribute
the remaining property of the trust as follows:
3.1 Distribution to the Trustor
If the Trustor is then living, the Trustee shall distribute to the Trustor
that amount, if any, payable to the Trustor pursuant to the provisions of
Article Two.
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3.2 Distributions to Revocable Trust or Estate
If the Trustor is not then living, the Trustee shall distribute to the
Trustee of The Fritz Family Trust, created by that certain Declaration of Trust
dated December 30, 1988, made by LYNN C. FRITZ and TAMARA FRITZ, as amended in
the entirety by a First Amendment dated December 17, 1992, to be added to the
assets of the trust created thereby and administered as part thereof and
according to its terms and any further amendments made thereto prior to the
death of the Trustor, or, if such trust is not then in existence, to the
Trustor's estate, (i) that amount, if any, payable to the Trustor pursuant to
the provisions of Article Two, and (ii) that fraction of the balance of the
remaining trust property the numerator of which is the amount of the remaining
trust property includible in the Trustor's gross estate for federal estate tax
purposes and the denominator of which is the value of the remaining trust
property as finally determined for such federal estate tax purposes.
3.3 Distribution to Trusts for Children
The Trustee shall divide all of the remaining trust property not required
to be distributed pursuant to the preceding provisions of this Article Three
into equal shares, establishing one such share for each child of the Trustor
living upon the expiration of the Trust Term. Each such share established for a
living child of the Trustor shall be distributed to the Trustee of The Lynn C.
Fritz and Tamara Fritz 1990 Irrevocable Children's Trust, created by that
certain Trust Agreement dated October 30, 1990, between LYNN C. FRITZ and TAMARA
FRITZ as Trustors and STEPHEN B. BLEY as Trustee, to be added to the assets of
the separate trust for such child created thereby and administered as part
thereof and according to its terms. If no separate trust for such living child
is then in existence under The Lynn C. Fritz and Tamara Fritz 1990 Irrevocable
Children's Trust, then the Trustor hereby incorporates by reference the terms of
The Lynn C. Fritz and Tamara Fritz 1990 Irrevocable Children's Trust referred to
above
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and directs the Trustee to distribute all of such child's share to the Trustee
named therein to be set apart to a separate trust for such child and held,
administered and distributed in accordance with the provisions thereof.
3.4 Distribution of Property Not Otherwise Distributed
If no child of the Trustor is living upon the expiration of the Trust Term,
the Trustee shall distribute all of the remaining trust property not required to
be distributed pursuant to the preceding provisions of this Article Three by
right of representation to those of the Trustor's issue who are living upon the
expiration of the Trust Term or, if no issue of the Trustor is living on the
expiration of the Trust Term, in equal shares to those of the Trustor's nephews
and nieces who are living upon the expiration of the Trust Term; provided that
the share of any such person who is under age twenty-one (21) shall be
distributed to the Trustee of The Lynn C. Fritz and Tamara Fritz 1990
Irrevocable Children's Trust, to be retained in trust for such person as
provided in paragraph C of Article IV thereof.
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ARTICLE FOUR
Trust Administrative Provisions
4.1 No Subsequent Additions to the Trust
No additions shall be made to the trust estate during the Trust Term.
4.2 Spendthrift Clause
All income or principal to be paid to any beneficiary herein named shall be
paid by the Trustee direct and only to said beneficiary or to the personal
representative of said beneficiary. Except as may be herein otherwise expressly
provided, the Trustee is not to recognize any transfer, mortgage, pledge,
hypothecation, order or assignment of any beneficiary by way of anticipation of
any part of the income or principal. The income and principal of the trust
estate shall not be subject in any manner to transfer by operation of law and
shall be exempt from the claims of creditors or other claimants and from orders,
decrees, levies, attachments, garnishments and executions and other legal or
equitable process or proceedings to the fullest extent permissible by law.
4.3 Discretionary Powers of Trustee
Any decisions by the Trustee under any discretionary powers given pursuant
to the provisions of this Trust Agreement shall be final and not subject to
challenge by anyone.
4.4 Definition of Incompetency
"Incompetency" as used herein shall be deemed to exist when an individual
referred to herein has been declared incompetent by a court of proper
jurisdiction, when a conservator of the estate has been appointed for such
individual or upon execution of a certificate diagnosing incompetency by a
physician licensed to practice in the state of such individual's
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residence and which physician has been the individual's regular physician, if
any. If the individual whose competency is at issue does not have a "regular"
physician, then certificates of two (2) licensed physicians shall be required.
Any such certificate(s) by a licensed physician(s) shall set forth in substance
that the individual is unable properly to provide for his or her personal needs
for physical health, food, clothing or shelter and is substantially unable to
manage his or her financial resources or resist fraud or undue influence. The
effective date of such incompetency shall be the earliest of the date of the
decree adjudicating the incompetency, the date of the decree appointing the
conservator or the date of the doctor's certificate(s), as the case may be.
4.5 Deferring Division or Distribution of Trust Assets
Whenever the Trustee is directed to distribute trust assets or divide trust
assets into separate trusts or shares, the Trustee may, in the Trustee's
discretion, defer distribution or division until six months thereafter or until
such later time as the Trustee deems necessary or appropriate for the proper
administration or settlement of that trust. When the Trustee defers distributing
or dividing assets, the deferred division or distribution shall be made as if it
had taken place at the time specified in this Trust Agreement (excluding this
paragraph), and all rights given to the beneficiaries of those trust assets
under other provisions of this Trust Agreement shall be deemed to have accrued
and vested as of that specified time. The provisions of this paragraph shall not
apply to the distributions of the Annuity Amount pursuant to Article Two.
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ARTICLE FIVE
Provisions Relating to the Trustees
5.1 Reference to Trustee
The term "Trustee" as sometimes used throughout this instrument in the
singular shall be deemed to refer to the individual Trustee or co-Trustees, the
corporate Trustee or the corporate and individual co-Trustees acting hereunder
from time to time.
5.2 Original Trustee
The original Trustee is LYNN C. FRITZ.
5.3 Successor Trustees
Upon the failure for any reason of LYNN C. FRITZ to continue to act as
Trustee, his wife, TAMARA FRITZ (hereinafter "TAMARA"), shall act as Trustee,
and if she for any reason shall fail to act or to continue to act as Trustee,
then STEPHEN B. BLEY shall act as Trustee. If STEPHEN B. BLEY for any reason
shall fail to act or to continue to act as Trustee, then FRANK GRACE shall act
as Trustee. The last of TAMARA, STEPHEN B. BLEY and FRANK GRACE to act as
Trustee shall have the right to appoint a Trustee, and a series of Trustees,
either individual or corporate, to succeed her or him and also shall have the
right to remove any Trustee so appointed by her or him and to revoke any
appointment she or he has made which was not yet effective.
5.3.1 Vacancy. If there is a vacancy in the office of Trustee of any trust
continuing hereunder and it has not been filled by appointment pursuant to the
foregoing provisions, WELLS FARGO BANK, N.A. shall act as Trustee.
5.3.2 Qualifications of Corporate Trustees. Any corporate Trustee appointed
pursuant to the provisions of this paragraph 5.3 shall have acted as a fiduciary
for at
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least five (5) years prior to its appointment and shall be qualified to serve as
a Trustee in the State of California.
5.3.3 Manner of Appointment or Removal of Trustee. The appointment,
revocation of appointment or removal of a Trustee pursuant to the foregoing
provisions shall be made by the execution of an appropriate writing delivered to
the Trustee or Trustees affected and shall be effective without any court
proceeding or decree. Each successor Trustee shall indicate acceptance of the
office of Trustee by signing an original of this Trust Agreement at the time
such Trustee takes office.
5.4 Resignation of Trustee
A Trustee hereunder may resign at any time without any court proceeding or
decree by giving written notice of such intention to resign to the Trustor or,
if he is not then living or is incompetent, to TAMARA, or to her duly appointed
conservator if she is incompetent.
5.5 Waiver of Bond
No bond shall be required of any Trustee named or appointed in the manner
specified herein.
5.6 Incompetency of Individual Trustee
The incompetency (as that term is defined in paragraph 4.4 of Article Four
hereof) of an individual Trustee shall be deemed a resignation by him or her as
a Trustee hereunder, such resignation to be effective upon the date of the
establishment of such incompetency.
5.7 Compensation of Trustee
Each Trustee (other than LYNN C. FRITZ or TAMARA) shall be entitled to
reasonable compensation for (a) the Trustee's ordinary services hereunder, (b)
any extraordinary services performed by the Trustee and (c) all services in
connection with the termination or
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revocation of the trust in whole or in part. Any disbursements by any Trustee
hereunder for compensation shall be payable, as the Trustee may deem proper,
wholly from principal or wholly from income, or partly from each.
5.8 Powers and Duties of Successor Trustee
A successor Trustee shall have the same duties, powers and discretion as
are given to the original Trustee. A successor Trustee may accept the trust
assets delivered by the predecessor Trustee as constituting the entire trust
estate and shall not be required to take any action to recover further assets or
to investigate any acts done by any predecessor Trustee. No successor Trustee
shall be required to bring any action to determine what constitutes the trust
estate or to obtain possession of any assets thereof.
5.9 Powers of Trustee
The Trustee shall have full power and authority to (a) hold and retain,
either in the Trustee's own name or in the name of a nominee, without liability
for such retention, any and all property (including shares of a corporate
Trustee's own stock or the stock of its parent or affiliated corporation) coming
into the Trustee's possession hereunder and specifically including any interest
in Fritz Companies, Inc. or any affiliated or successor corporation, without any
duty to diversify investments or to consider alternative investments; (b) vote,
and give proxies to vote, any securities (including shares of a corporate
Trustee's own stock or the stock of its parent or affiliated corporation) having
voting rights; (c) exercise any right of option or subscription or otherwise
which may at any time attach, belong or be given to the holders of any stocks,
bonds, securities or other instruments in the nature thereof forming part of the
trust estate, and to join in any plan of lease, mortgage, consolidation,
reorganization or foreclosure of any corporation, trust or organization, or the
property or assets thereof, including the deposit of bonds, securities and stock
with any bondholders', stockholders' or protective committee in which the trust
estate may
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hold stocks or bonds or other securities, and to take and hold any securities
issued under such plan and to pay any assessments thereunder; (d) enforce any
mortgage or deed of trust or pledge held hereunder and to purchase at any sale
thereunder any property subject thereto; (e) sell at public or private sale (for
cash or on terms), improve, lease (without restriction or limitation as to
term), borrow money, mortgage, convey in trust, pledge, hypothecate, lease or
contract with reference to oil, gas or other minerals or natural resources and
mineral rights and mineral royalties which may be part of the trust estate,
transfer, exchange, subdivide, participate, compromise, surrender or otherwise
deal with the whole or any part of the trust property upon such terms and
conditions as the Trustee, in the Trustee's discretion, deems advisable; (f)
borrow money, and pledge trust assets as security therefor for any purpose,
including, without limiting the generality of the power to borrow, the power to
use leverage for the purpose of obtaining funds for further investment or to
make payments to a beneficiary; (g) construct, repair or remodel improvements on
real property of the trust estate, and to remove or otherwise dispose of
improvements of real property, as the Trustee may determine; (h) loan or advance
the Trustee's own funds to the trust for any purpose thereof, at the then
current rate of interest, and any such loan or advance, together with interest,
shall be a first lien against the trust estate and shall be repaid therefrom;
(i) provide the Trustee with public liability insurance in customary forms as an
expense of the trust; (j) purchase assets (for cash or on terms) and invest and
reinvest any of the trust property as the Trustee shall deem fit and proper,
including, without limiting the generality of the foregoing, in mutual funds,
joint ventures, limited partnerships and non-income producing assets, all
without diversification as to kind or amount and without being restricted by any
statutory limitation on investments by Trustees, whether or not in effect at the
date hereof; (k) purchase and/or maintain life insurance or annuities of any
kind or amount on the life of the Trustor or any beneficiary hereof, and to
charge the premiums therefor to income or principal in
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the discretion of the Trustee; (l) purchase and or maintain hospital or medical
insurance (including such variants as major medical) and disability income
insurance on any beneficiary hereof or person in whom any beneficiary has an
insurable interest; and (m) employ and remove any custodian, investment counsel
(with or without discretionary powers; to act on the advice of such advisors and
agents and incur no liability for any action taken or refrained from pursuant to
this advice), attorney, accountant or any other agents to assist the Trustee in
administering the trust and to pay them or any of them reasonable compensation,
charging such compensation to principal or income, as the Trustee, in the
Trustee's discretion shall determine.
ARTICLE SIX
Agreement is Irrevocable
This Trust Agreement is hereby expressly made irrevocable and the Trustor
does not retain any right to modify, alter, revoke or terminate this Trust
Agreement in any manner. The Trustee, however, shall have the power, acting
alone, to amend the trust in any manner required for the sole purpose of
ensuring that the Trust Agreement provides the Trustor with a qualified interest
within the meaning of Section 2702(b)(1) of the Internal Revenue Code of 1986,
as amended, and a qualified annuity interest within the meaning of Section
25.2702-3(b) and (d) of the Treasury Regulations.
ARTICLE SEVEN
Miscellaneous Provisions
7.1 Applicable Law
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This trust has been created in California and accepted by the Trustee
herein. All questions pertaining to the validity, interpretation and
administration of this Trust Agreement shall be determined in accordance with
the laws of California.
7.2 Trustor's Power to Reacquire Trust Property
The Trustor acting in a nonfiduciary capacity shall have the power to
reacquire any property of the trust by substituting other property of an
equivalent value.
7.3 Headings
The headings of articles and paragraphs appearing herein are for
convenience of reference only and shall have no significance in the construction
or interpretation of this Trust Agreement.
7.4 Reference to Trust
For the purposes of identification and convenient reference, the trust
created herein may be referred to as "The Lynn C. Fritz 1999 Grantor Retained
Annuity Trust," and any asset bearing that title or the title "LYNN C. FRITZ,
Trustee of The Lynn C. Fritz 1999 Grantor
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Retained Annuity Trust," or any substantially similar variation thereof, shall
be deemed an asset owned and held subject to this Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement
on March 30, 1999.
/s/ Lynn C. Fritz
-----------------------------------------
LYNN C. FRITZ, Trustor and Trustee
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EXHIBIT A
Separate Property of LYNN C. FRITZ
1,334,000 shares of common stock of Fritz Companies, Inc.
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THE LYNN C. FRITZ
1999 GRANTOR RETAINED ANNUITY TRUST
LYNN C. FRITZ
Trustor
and
Trustee
Dated: March 30, 1999
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Exhibit 2
TAMARA FRITZ 1999 GRANTOR RETAINED ANNUITY TRUST
This Trust Agreement is entered into at San Francisco, California, on March
30, 1999, by and between TAMARA FRITZ, of San Francisco, California, as Trustor,
and TAMARA FRITZ, of San Francisco, California, as Trustee.
TAMARA FRITZ is the owner, as her separate property, of that certain
property described on Exhibit A and hereby transfers and conveys such property
to the Trustee.
The Trustor desires to provide the terms and conditions upon which the
property now or hereafter transferred to the Trustee shall be held by the
Trustee and, in order to define the terms upon which the Trustee shall hold the
property, it is agreed as follows:
ARTICLE ONE
Trust Term
This trust is effective immediately and shall terminate on expiration of a
period of two (2) years from the date of this Trust Agreement. The period before
termination of the trust is referred to herein as the "Trust Term."
ARTICLE TWO
Distributions During Trust Term
During the Trust Term, the Trustee shall pay the "Annuity Amount," as
hereinafter defined, as provided in this Article Two.
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2.1 Annuity Amount
The Annuity Amount shall be an amount equal to 54.39217 % of the initial
net fair market value of the assets of the Trust valued as of the date of this
Trust Agreement.
2.2 Payment of Annuity Amount
The Trustor's right to receive the Annuity Amount shall commence on the
date of this Trust Agreement. The Trustee shall pay the Annuity Amount to the
Trustor on or before the end of each taxable year of the Trust Term. The Annuity
Amount may be paid after the close of the taxable year, provided the payment is
made no later than the date by which the Trustee is required to file the federal
income tax return of the trust for the taxable year (without regard to
extensions) or, if no return is required to be filed, the date by which the
Trustee would be required to file a return if one were required. The Annuity
Amount shall be paid from income and, to the extent that income is not
sufficient, from principal. Any income of the trust for a taxable year in excess
of the Annuity Amount shall be added to principal.
2.3 Incorrect Payment
If an incorrect payment of the Annuity Amount is made (for example, if the
initial net fair market value of the trust assets is incorrectly determined),
then promptly after the error is discovered (including without limitation
promptly after the initial net fair market value of the trust assets is finally
determined for federal tax purposes) the Trustee shall pay to the Trustor (in
the case of an underpayment) or receive from the Trustor (in the case of an
overpayment) an amount equal to the difference between the Annuity Amount
properly payable and the Annuity Amount actually paid.
2.4 Short Year
Payments of the Annuity Amount for a period of less than one full year
shall be prorated on a daily basis.
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2.5 Additional Distributions
The Trustee is authorized to pay to the Trustor from time to time such
amounts as the Trustor shall certify as being required to discharge the
Trustor's tax liability in respect of income of the trust not distributed to the
Trustor and taxable to the Trustor; provided that no such distributions shall be
made pursuant to this paragraph or applicable state law if that would conflict
with the Trustor's intent expressed in paragraph 2.7.
2.6 Limitation on Distributions, Commutation Prohibited
During the Trust Term, no distributions shall be made to or for the benefit
of anyone other than the Trustor. The interest of the Trustor shall not be
subject to commutation.
2.7 Intent of the Trustor
It is the Trustor's intent in entering into this Trust Agreement to provide
the Trustor with a qualified interest within the meaning of Section 2702(b)(1)
of the Internal Revenue Code of 1986, as amended, and a qualified annuity
interest within the meaning of Section 25.2702-3(b) and (d) of the Treasury
Regulations.
ARTICLE THREE
Distributions Upon Expiration of the Trust Term
Upon the expiration of the Trust Term, the Trustee shall distribute
the remaining property of the trust as follows:
3.1 Distribution to the Trustor
If the Trustor is then living, the Trustee shall distribute to the Trustor
that amount, if any, payable to the Trustor pursuant to the provisions of
Article Two.
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3.2 Distributions to Revocable Trust or Estate
If the Trustor is not then living, the Trustee shall distribute to the
Trustee of The Fritz Family Trust, created by that certain Declaration of Trust
dated December 30, 1988, made by LYNN C. FRITZ and TAMARA FRITZ, as amended in
the entirety by a First Amendment dated December 17, 1992, to be added to the
assets of the trust created thereby and administered as part thereof and
according to its terms and any further amendments made thereto prior to the
death of the Trustor, or, if such trust is not then in existence, to the
Trustor's estate, (i) that amount, if any, payable to the Trustor pursuant to
the provisions of Article Two, and (ii) that fraction of the balance of the
remaining trust property the numerator of which is the amount of the remaining
trust property includible in the Trustor's gross estate for federal estate tax
purposes and the denominator of which is the value of the remaining trust
property as finally determined for such federal estate tax purposes.
3.3 Distribution to Trusts for Children
The Trustee shall divide all of the remaining trust property not required
to be distributed pursuant to the preceding provisions of this Article Three
into equal shares, establishing one such share for each child of the Trustor
living upon the expiration of the Trust Term. Each such share established for a
living child of the Trustor shall be distributed to the Trustee of The Lynn C.
Fritz and Tamara Fritz 1990 Irrevocable Children's Trust, created by that
certain Trust Agreement dated October 30, 1990, between LYNN C. FRITZ and TAMARA
FRITZ as Trustors and STEPHEN B. BLEY as Trustee, to be added to the assets of
the separate trust for such child created thereby and administered as part
thereof and according to its terms. If no separate trust for such living child
is then in existence under The Lynn C. Fritz and Tamara Fritz 1990 Irrevocable
Children's Trust, then the Trustor hereby incorporates by reference the terms of
The Lynn C. Fritz and Tamara Fritz 1990 Irrevocable Children's Trust referred to
above
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and directs the Trustee to distribute all of such child's share to the Trustee
named therein to be set apart to a separate trust for such child and held,
administered and distributed in accordance with the provisions thereof.
3.4 Distribution of Property Not Otherwise Distributed
If no child of the Trustor is living upon the expiration of the Trust Term,
the Trustee shall distribute all of the remaining trust property not required to
be distributed pursuant to the preceding provisions of this Article Three by
right of representation to those of the Trustor's issue who are living upon the
expiration of the Trust Term or, if no issue of the Trustor is living on the
expiration of the Trust Term, in equal shares to those of the nephews and nieces
of Trustor's husband, LYNN C. FRITZ, who are living upon the expiration of the
Trust Term; provided that the share of any such person who is under age
twenty-one (21) shall be distributed to the Trustee of The Lynn C. Fritz and
Tamara Fritz 1990 Irrevocable Children's Trust, to be retained in trust for such
person as provided in paragraph C of Article IV thereof.
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ARTICLE FOUR
Trust Administrative Provisions
4.1 No Subsequent Additions to the Trust
No additions shall be made to the trust estate during the Trust Term.
4.2 Spendthrift Clause
All income or principal to be paid to any beneficiary herein named shall be
paid by the Trustee direct and only to said beneficiary or to the personal
representative of said beneficiary. Except as may be herein otherwise expressly
provided, the Trustee is not to recognize any transfer, mortgage, pledge,
hypothecation, order or assignment of any beneficiary by way of anticipation of
any part of the income or principal. The income and principal of the trust
estate shall not be subject in any manner to transfer by operation of law and
shall be exempt from the claims of creditors or other claimants and from orders,
decrees, levies, attachments, garnishments and executions and other legal or
equitable process or proceedings to the fullest extent permissible by law.
4.3 Discretionary Powers of Trustee
Any decisions by the Trustee under any discretionary powers given pursuant
to the provisions of this Trust Agreement shall be final and not subject to
challenge by anyone.
4.4 Definition of Incompetency
"Incompetency" as used herein shall be deemed to exist when an individual
referred to herein has been declared incompetent by a court of proper
jurisdiction, when a conservator of the estate has been appointed for such
individual or upon execution of a certificate diagnosing incompetency by a
physician licensed to practice in the state of such individual's
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residence and which physician has been the individual's regular physician, if
any. If the individual whose competency is at issue does not have a "regular"
physician, then certificates of two (2) licensed physicians shall be required.
Any such certificate(s) by a licensed physician(s) shall set forth in substance
that the individual is unable properly to provide for his or her personal needs
for physical health, food, clothing or shelter and is substantially unable to
manage his or her financial resources or resist fraud or undue influence. The
effective date of such incompetency shall be the earliest of the date of the
decree adjudicating the incompetency, the date of the decree appointing the
conservator or the date of the doctor's certificate(s), as the case may be.
4.5 Deferring Division or Distribution of Trust Assets
Whenever the Trustee is directed to distribute trust assets or divide trust
assets into separate trusts or shares, the Trustee may, in the Trustee's
discretion, defer distribution or division until six months thereafter or until
such later time as the Trustee deems necessary or appropriate for the proper
administration or settlement of that trust. When the Trustee defers distributing
or dividing assets, the deferred division or distribution shall be made as if it
had taken place at the time specified in this Trust Agreement (excluding this
paragraph), and all rights given to the beneficiaries of those trust assets
under other provisions of this Trust Agreement shall be deemed to have accrued
and vested as of that specified time. The provisions of this paragraph shall not
apply to the distributions of the Annuity Amount pursuant to Article Two.
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ARTICLE FIVE
Provisions Relating to the Trustees
5.1 Reference to Trustee
The term "Trustee" as sometimes used throughout this instrument in
the singular shall be deemed to refer to the individual Trustee or co-Trustees,
the corporate Trustee or the corporate and individual co-Trustees acting
hereunder from time to time.
5.2 Original Trustee
The original Trustee is TAMARA FRITZ.
5.3 Successor Trustees
Upon the failure for any reason of TAMARA FRITZ to continue to act as
Trustee, her husband, LYNN C. FRITZ (hereinafter "LYNN"), shall act as Trustee,
and if he for any reason shall fail to act or to continue to act as Trustee,
then STEPHEN B. BLEY shall act as Trustee. If STEPHEN B. BLEY for any reason
shall fail to act or to continue to act as Trustee, then FRANK GRACE shall act
as Trustee. The last of LYNN, STEPHEN B. BLEY and FRANK GRACE to act as Trustee
shall have the right to appoint a Trustee, and a series of Trustees, either
individual or corporate, to succeed him and also shall have the right to remove
any Trustee so appointed by him and to revoke any appointment he has made which
was not yet effective.
5.3.1 Vacancy. If there is a vacancy in the office of Trustee of any trust
continuing hereunder and it has not been filled by appointment pursuant to the
foregoing provisions, WELLS FARGO BANK, N.A. shall act as Trustee.
5.3.2 Qualifications of Corporate Trustees. Any corporate Trustee appointed
pursuant to the provisions of this paragraph 5.3 shall have acted as a fiduciary
for at
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least five (5) years prior to its appointment and shall be qualified to serve as
a Trustee in the State of California.
5.3.3 Manner of Appointment or Removal of Trustee. The appointment,
revocation of appointment or removal of a Trustee pursuant to the foregoing
provisions shall be made by the execution of an appropriate writing delivered to
the Trustee or Trustees affected and shall be effective without any court
proceeding or decree. Each successor Trustee shall indicate acceptance of the
office of Trustee by signing an original of this Trust Agreement at the time
such Trustee takes office.
5.4 Resignation of Trustee
A Trustee hereunder may resign at any time without any court proceeding or
decree by giving written notice of such intention to resign to the Trustor or,
if she is not then living or is incompetent, to LYNN, or to his duly appointed
conservator if he is incompetent.
5.5 Waiver of Bond
No bond shall be required of any Trustee named or appointed in the manner
specified herein.
5.6 Incompetency of Individual Trustee
The incompetency (as that term is defined in paragraph 4.4 of Article Four
hereof) of an individual Trustee shall be deemed a resignation by him or her as
a Trustee hereunder, such resignation to be effective upon the date of the
establishment of such incompetency.
5.7 Compensation of Trustee
Each Trustee (other than TAMARA FRITZ or LYNN) shall be entitled to
reasonable compensation for (a) the Trustee's ordinary services hereunder, (b)
any extraordinary services performed by the Trustee and (c) all services in
connection with the termination or revocation of the trust in whole or in part.
Any disbursements by any Trustee hereunder for
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compensation shall be payable, as the Trustee may deem proper, wholly from
principal or wholly from income, or partly from each.
5.8 Powers and Duties of Successor Trustee
A successor Trustee shall have the same duties, powers and discretion as
are given to the original Trustee. A successor Trustee may accept the trust
assets delivered by the predecessor Trustee as constituting the entire trust
estate and shall not be required to take any action to recover further assets or
to investigate any acts done by any predecessor Trustee. No successor Trustee
shall be required to bring any action to determine what constitutes the trust
estate or to obtain possession of any assets thereof.
5.9 Powers of Trustee
The Trustee shall have full power and authority to (a) hold and retain,
either in the Trustee's own name or in the name of a nominee, without liability
for such retention, any and all property (including shares of a corporate
Trustee's own stock or the stock of its parent or affiliated corporation) coming
into the Trustee's possession hereunder and specifically including any interest
in Fritz Companies, Inc. or any affiliated or successor corporation, without any
duty to diversify investments or to consider alternative investments; (b) vote,
and give proxies to vote, any securities (including shares of a corporate
Trustee's own stock or the stock of its parent or affiliated corporation) having
voting rights; (c) exercise any right of option or subscription or otherwise
which may at any time attach, belong or be given to the holders of any stocks,
bonds, securities or other instruments in the nature thereof forming part of the
trust estate, and to join in any plan of lease, mortgage, consolidation,
reorganization or foreclosure of any corporation, trust or organization, or the
property or assets thereof, including the deposit of bonds, securities and stock
with any bondholders', stockholders' or protective committee in which the trust
estate may hold stocks or bonds or other securities, and to take and hold any
securities issued under such
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plan and to pay any assessments thereunder; (d) enforce any mortgage or deed of
trust or pledge held hereunder and to purchase at any sale thereunder any
property subject thereto; (e) sell at public or private sale (for cash or on
terms), improve, lease (without restriction or limitation as to term), borrow
money, mortgage, convey in trust, pledge, hypothecate, lease or contract with
reference to oil, gas or other minerals or natural resources and mineral rights
and mineral royalties which may be part of the trust estate, transfer, exchange,
subdivide, participate, compromise, surrender or otherwise deal with the whole
or any part of the trust property upon such terms and conditions as the Trustee,
in the Trustee's discretion, deems advisable; (f) borrow money, and pledge trust
assets as security therefor for any purpose, including, without limiting the
generality of the power to borrow, the power to use leverage for the purpose of
obtaining funds for further investment or to make payments to a beneficiary; (g)
construct, repair or remodel improvements on real property of the trust estate,
and to remove or otherwise dispose of improvements of real property, as the
Trustee may determine; (h) loan or advance the Trustee's own funds to the trust
for any purpose thereof, at the then current rate of interest, and any such loan
or advance, together with interest, shall be a first lien against the trust
estate and shall be repaid therefrom; (i) provide the Trustee with public
liability insurance in customary forms as an expense of the trust; (j) purchase
assets (for cash or on terms) and invest and reinvest any of the trust property
as the Trustee shall deem fit and proper, including, without limiting the
generality of the foregoing, in mutual funds, joint ventures, limited
partnerships and non-income producing assets, all without diversification as to
kind or amount and without being restricted by any statutory limitation on
investments by Trustees, whether or not in effect at the date hereof; (k)
purchase and/or maintain life insurance or annuities of any kind or amount on
the life of the Trustor or any beneficiary hereof, and to charge the premiums
therefor to income or principal in the discretion of the Trustee; (l) purchase
and or maintain hospital or medical insurance
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(including such variants as major medical) and disability income insurance on
any beneficiary hereof or person in whom any beneficiary has an insurable
interest; and (m) employ and remove any custodian, investment counsel (with or
without discretionary powers; to act on the advice of such advisors and agents
and incur no liability for any action taken or refrained from pursuant to this
advice), attorney, accountant or any other agents to assist the Trustee in
administering the trust and to pay them or any of them reasonable compensation,
charging such compensation to principal or income, as the Trustee, in the
Trustee's discretion shall determine.
ARTICLE SIX
Agreement is Irrevocable
This Trust Agreement is hereby expressly made irrevocable and the Trustor
does not retain any right to modify, alter, revoke or terminate this Trust
Agreement in any manner. The Trustee, however, shall have the power, acting
alone, to amend the trust in any manner required for the sole purpose of
ensuring that the Trust Agreement provides the Trustor with a qualified interest
within the meaning of Section 2702(b)(1) of the Internal Revenue Code of 1986,
as amended, and a qualified annuity interest within the meaning of Section
25.2702-3(b) and (d) of the Treasury Regulations.
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ARTICLE SEVEN
Miscellaneous Provisions
7.1 Applicable Law
This trust has been created in California and accepted by the Trustee
herein. All questions pertaining to the validity, interpretation and
administration of this Trust Agreement shall be determined in accordance with
the laws of California.
7.2 Trustor's Power to Reacquire Trust Property
The Trustor acting in a nonfiduciary capacity shall have the power to
reacquire any property of the trust by substituting other property of an
equivalent value.
7.3 Headings
The headings of articles and paragraphs appearing herein are for
convenience of reference only and shall have no significance in the construction
or interpretation of this Trust Agreement.
7.4 Reference to Trust
For the purposes of identification and convenient reference, the trust
created herein may be referred to as "The Tamara Fritz 1999 Grantor Retained
Annuity Trust," and any asset bearing that title or the title "TAMARA FRITZ,
Trustee of The Tamara Fritz 1999 Grantor
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Retained Annuity Trust," or any substantially similar variation thereof, shall
be deemed an asset owned and held subject to this Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement
on March 30, 1999.
/s/ Tamara Fritz
-----------------------------------------
TAMARA FRITZ, Trustor and Trustee
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EXHIBIT A
Separate Property of TAMARA FRITZ
1,334,000 shares of common stock of Fritz Companies, Inc.
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THE TAMARA FRITZ
1999 GRANTOR RETAINED ANNUITY TRUST
TAMARA FRITZ
Trustor
and
Trustee
Dated: March 30, 1999
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