SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. _____)<1>
ABC-NACO Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
000 752 105
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(Cusip Number)
John M. Lison, Esq.
ABC-NACO Inc.
100 West Monroe Street
Suite 1010
Chicago, Illinois 60603
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 19, 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 that is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or
13d-1(g), check the following box [ ].
NOTE. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7(b) for other parties to whom copies are to be
sent.
(Continued on following pages)
(Page 1 of 57 pages)
<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 con-
taining 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).
<PAGE>
CUSIP NO. 000 752 105 13D Page 2 of 57 pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JOSEPH A. SEHER
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO - See Item 3.
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
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,515,857 Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,436,000 Shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,385,357 Shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 2,566,500 Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,951,857 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.0%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP NO. 000 752 105 13D Page 3 of 57 pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
MARY BETH SEHER
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO - SEE ITEM 3.
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
NUMBER OF 7 SOLE VOTING POWER
SHARES -0- SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,436,000 SHARES
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0- SHARES
PERSON 10 SHARED DISPOSITIVE POWER
WITH 2,436,000 SHARES
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,436,000 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.3%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP NO. 000 752 105 13D Page 4 of 57 pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
AMY MARIE SEHER TRUST
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO - SEE ITEM 3.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
NUMBER OF 7 SOLE VOTING POWER
SHARES -0- Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,218,000 SHARES
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0- SHARES
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,218,000 SHARES
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,218,000 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.6%
14 TYPE OF REPORTING PERSON*
OO - SEE ITEM 2.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP NO. 000 752 105 13D Page 5 of 57 pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
DEBORAH JILL SEHER TRUST
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO - SEE ITEM 3.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
NUMBER OF 7 SOLE VOTING POWER
SHARES -0- SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,218,000 SHARES
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0- SHARES
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,218,000 SHARES
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,218,000 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.6%
14 TYPE OF REPORTING PERSON*
OO - SEE ITEM 2.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock, par value $.01
per share (the "ABC-NACO Common Stock"), of ABC-NACO Inc., a Delaware
corporation formerly known as ABC Rail Products Corporation ("ABC-
NACO"). The principal executive offices of ABC-NACO are located at
2001 Butterfield Road, Suite 502, Downers Grove, Illinois 60515.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed by: Joseph A. Seher ("Mr.
Seher"); the Amy Marie Seher Trust (the "AMS Trust"); the Deborah Jill
Seher Trust (the "DJS Trust"); and Mary Beth Seher ("Mrs. Seher"), the
trustee for the AMS Trust and the DJS Trust (all of such reporting
persons are collectively referred to herein as the "Reporting
Persons").
Mr. Seher and Mrs. Seher are married and, as such, Mr. Seher
may be deemed to beneficially own the shares of ABC-NACO Common Stock
beneficially owned by Mrs. Seher. In addition, because of Mr. and
Mrs. Seher's relationship, the Reporting Persons may be deemed to be a
"group" within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934. Each of the Reporting Persons, however,
expressly disclaims the existence of a "group" with respect to each
Reporting Person's ownership of shares of ABC-NACO Common Stock.
(b) The address of each of the Reporting Persons is c/o ABC-NACO
Inc., 2001 Butterfield Road, Downers Grove, Illinois 60515.
(c) Mr. Seher's principal occupation is as Chief Executive
Officer of ABC-NACO. See Item 1 for the location of ABC-NACO's
principal executive offices. ABC-NACO is a supplier of
technologically advanced products and services for the railroad
industry.
Mrs. Seher is not currently employed.
The AMS Trust and the DJS Trust are each irrevocable trusts.
(d) During the past five years, none of the Reporting Persons
has been convicted in a criminal proceeding, excluding traffic
violations and similar misdemeanors.
(e) During the past five years, none of the Reporting Persons
has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which proceeding the
Reporting Person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
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(f) Mr. Seher and Mrs. Seher are each citizens of the United
States. The AMS Trust and the DJS Trust are each trusts formed under
the laws of the State of Illinois.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On February 19, 1999, ABCR Acquisition Subsidiary, Inc. ("ABCR"),
a Delaware corporation and a wholly subsidiary of ABC Rail Products
Corporation, a Delaware corporation ("ABC"), merged with and into
NACO, Inc. ("NACO"), a Delaware corporation (the "Merger"). The Merger
was effected pursuant to an Agreement and Plan of Merger, dated as of
September 17, 1998, as amended and restated as of December 10, 1998,
and as further amended as of February 16, 1999 (the "Merger
Agreement"), between NACO, ABC and ABCR. At the time of the Merger,
ABC changed its name to "ABC-NACO Inc."
Pursuant to the Merger Agreement and at the time of the Merger,
each outstanding share of NACO common stock, including the shares held
by the Reporting Persons, was converted into 8.7 shares of ABC-NACO
Common Stock.
The foregoing is a summary description of certain terms of the
Merger Agreement and is qualified in its entirety by reference to the
Merger Agreement, which is incorporated into this Schedule 13D by
reference as Exhibit 2.1.
ITEM 4. PURPOSE OF TRANSACTION.
Each of the Reporting Persons acquired the ABC-NACO Common Stock
beneficially owned by that Reporting Person in connection with the
Merger and for investment purposes.
Mr. Seher is the Chief Executive Officer and a director of ABC-
NACO. In his capacities as such, Mr. Seher may from time to time
consider plans or proposals which relate to or would result in the
transactions described in subsections (a) through (j) inclusive of
Item 4 of Schedule 13D.
Except as described in this Schedule 13D or in the documents
referred to herein, none of the Reporting Persons has any present
plans or intentions which relate to or would result in any of the
transactions described in subsections (a) through (j) inclusive of
Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The share ownership percentages described in this Schedule 13D
are based on 18,356,444 shares of ABC-NACO Common Stock being
outstanding as of the date hereof. That number was derived from ABC's
Proxy Statement/Prospectus dated January 21, 1999 relating to the
Merger, which reported that 8,976,304 shares of ABC-NACO Common Stock
were outstanding as of December 21, 1998 (the record date for the
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<PAGE>
Merger) and that 9,380,140 shares of ABC-NACO Common Stock would be
issued in the Merger.
(a) The aggregate number of shares and percentage of ABC-NACO
Common Stock beneficially owned by each of the Reporting Persons as of
the date hereof is as follows:
(1) Mr. Seher beneficially owns 4,951,857 shares of ABC-
NACO Common Stock, constituting approximately 27.0% of
the outstanding ABC-NACO Common Stock. 2,515,857 of
such shares are owned directly by Mr. Seher and the
remaining 2,436,000 shares are owned indirectly through
Mrs. Seher in her capacity as the sole trustee of the
AMS Trust and the DJS Trust.
(2) Mrs. Seher beneficially owns 2,436,000 shares of ABC-
NACO Common Stock. 1,218,000 of such shares are owned
by the AMS Trust and the remaining 1,218,000 of such
shares are owned by the DJS Trust. Mrs. Seher is the
sole trustee for both trusts.
(3) The AMS Trust owns 1,218,000 shares of ABC-NACO Common
Stock.
(4) The DJS Trust owns 1,218,000 shares of ABC-NACO Common
Stock.
(b) The number of shares of ABC-NACO Common Stock as to which
each Reporting Person has the sole power to vote or to direct the
vote, shared power to vote or to direct the vote, and sole or shared
power to dispose of or to direct the disposition of, is as follows:
(1) Mr. Seher has sole power to vote 2,515,857 shares of
ABC-NACO Common Stock; sole power to dispose of
2,385,357 shares of ABC-NACO Common Stock; shared
power with Mrs. Seher to vote 2,436,000 shares of ABC-
NACO Common Stock; and shared power to dispose of
2,566,500 shares of ABC-NACO Common Stock (2,436,000
shares of which are shared with Mrs. Seher and 130,500
shares of which are shared with John Lison pursuant to
the Warrant Agreement described in Item 6 hereof).
(2) Mrs. Seher does not have sole power to vote or dispose
of any shares of ABC-NACO Common Stock. Mrs. Seher has
shared power with the AMS Trust and the DJS Trust to
vote and dispose of 2,436,000 shares of ABC-NACO Common
Stock.
(3) The AMS Trust does not have sole power to vote or
dispose of any shares of ABC-NACO Common Stock. The
AMS Trust has shared power with Mrs. Seher to vote and
dispose of 1,218,000 shares of ABC-NACO Common Stock.
8
<PAGE>
(4) The DJS Trust does not have sole power to vote or
dispose of any shares of ABC-NACO Common Stock. The
DJS Trust has shared power with Mrs. Seher to vote and
dispose of 1,218,000 shares of ABC-NACO Common Stock.
(c) Other than the conversion of each Reporting Person's shares
of NACO common stock for shares of ABC-NACO Common Stock in the Merger
as described in Item 3 hereof, there have been no transactions in the
ABC-NACO Common Stock by any of the Reporting Persons in the past 60
days.
(d) Pursuant to the Warrant Agreement, John M. Lison will have
the right to receive and the power to direct the receipt of dividends
from, and proceeds from the sale of, the shares of ABC-NACO Common
Stock owned by Mr. Seher with respect to which Mr. Lison has exercised
the warrant issued to him pursuant to the Warrant Agreement. See Item
6. No other person, other than the Reporting Persons, is known to
have the right to receive or the power to direct the receipt of
dividends from, or proceeds from the sale of, the other shares of ABC-
NACO Common Stock beneficially owned by the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Registration Rights Agreement
-----------------------------
In connection with the Merger, Mr. Seher and several other
affiliates of NACO (collectively, the "Holders") entered into a
registration rights agreement with ABC-NACO dated as of February 19,
1999 (the "Registration Rights Agreement"). Under the Registration
Rights Agreement, on or after August 18, 1999, Holders holding at
least two percent of the then outstanding shares of ABC-NACO Common
Stock may demand that ABC-NACO file a registration statement under the
Securities Act of 1933 for a public offering of the shares of ABC-NACO
Common Stock covered by the Registration Rights Agreement (the
"Registrable Securities"), provided that the demand registration
relates to at least 360,000 Registrable Securities. The Registrable
Securities include the shares of ABC-NACO Common Stock beneficially
owned by each of the Holders. In addition, the Holders are entitled
to piggyback registration rights under circumstances where ABC-NACO
proposed to register shares of ABC-NACO Common Stock in a public
offering. The Holders are limited to two demand registrations and one
piggy-back registration, subject to certain exceptions. The
Registration Rights Agreement terminates on its sixth anniversary,
subject to earlier termination for any Holder eligible to sell
Registrable Securities in accordance with Rule 145(d)(2) or (3) under
the Securities Act of 1933.
The foregoing description of the Registration Rights Agreement is
a summary description only and is qualified in its entirety by
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<PAGE>
reference to the Registration Rights Agreement, which is attached
hereto as Exhibit 10.1.
Warrant Agreement
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Mr. Seher entered into a Warrant Agreement, dated as of August
15, 1998 (the "Warrant Agreement"), with John M. Lison, the Issuer's
Executive Vice President Treasury, Corporate Development and
Secretary. Pursuant to the Warrant Agreement, Mr. Lison was granted a
warrant to purchase up to 130,500 shares of ABC-NACO Common Stock
directly owned by Mr. Seher at an exercise price of $100.00 per share
(plus $8.00 per share as consideration for Mr. Seher entering into the
Warrant Agreement). The Warrant Agreement terminates on the earlier
of July 31, 2001 or the date on which the warrant issued thereunder is
exercised in full. During the term of the Warrant Agreement, Mr.
Seher will have authority to vote, in his sole discretion, and will
receive all dividends with respect to, the unexercised shares of ABC-
NACO Common Stock subject to the Warrant Agreement.
The foregoing description of the Warrant Agreement is a summary
description only and is qualified in its entirety by reference to the
Warrant Agreement, which is attached hereto as Exhibit 10.2.
Trust Agreements
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1,218,000 shares of the ABC-NACO Common Stock beneficially owned
by Mr. Seher are held in the AMS Trust for the benefit of Amy Marie
Seher, Mr. Seher's daughter, pursuant to a Trust Agreement dated as of
October 22, 1993 (the "AMS Trust Agreement"). An additional
1,218,000 shares of the ABC-NACO Common Stock beneficially owned by
Mr. Seher are held in the DJS Trust for the benefit of Deborah Jill
Seher, Mr. Seher's other daughter, pursuant to a Trust Agreement dated
as of October 22, 1993 (the "DJS Trust Agreement" and, together with
the AMS Trust Agreement, the "Trust Agreements"). Amy Marie Seher is
the sole beneficiary under the AMS Trust and Deborah Jill Seher is the
sole beneficiary under the DJS Trust. Mrs. Seher is the sole trustee
of the AMS Trust and the DJS Trust, and, pursuant to the Trust
Agreements, has the authority, in her sole discretion, to vote the
shares of ABC-NACO Common Stock subject to each such trust.
The foregoing description of the AMS Trust Agreement and the DJS
Trust Agreement is a summary description only and is qualified in its
entirety by reference to the AMS Trust Agreement and the DJS Trust
Agreement, which are attached hereto as Exhibits 10.3 and 10.4,
respectively.
To the best of each Reporting Person's knowledge, except as
described in this Schedule 13D or in the documents referred to herein,
there are at present no contracts, arrangements, understandings or
relationships (legal or otherwise) among any of the Reporting Persons
10
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or between any Reporting Person and any other person with respect to
any securities of ABC-NACO.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 2.1 Agreement and Plan of Merger, dated as of September 17,
1998, as amended and restated as of December 10, 1998,
by and among ABC, ABCR and NACO (incorporated by
reference to Exhibit 2.1 to ABC-NACO's Registration
Statement on Form S-4 (Reg. No. 333-65517)).
Exhibit 10.1 Registration Rights Agreement, dated as of February 19,
1999, by and among Mr. Seher, certain affiliates of
NACO, and ABC.
Exhibit 10.2 Warrant Agreement, dated as of August 15, 1998, between
Mr. Seher and John M. Lison.
Exhibit 10.3 Amy Marie Seher Trust Agreement, dated as of the
22nd day of October, 1993.
Exhibit 10.4 Deborah Jill Seher Trust Agreement, dated as of the
22nd day of October, 1993.
Exhibit 10.5 Joint Filing Agreement.
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SIGNATURES
After reasonable inquiry and to the best of each of the
undersigned's knowledge and belief, each of the undersigned certifies
that the information set forth in this instrument is true, complete
and correct.
Dated: February 22, 1999
/s/ Joseph A. Seher
-----------------------------------
Joseph A. Seher
/s/ Mary Beth Seher
-----------------------------------
Mary Beth Seher
AMY MARIE SEHER TRUST
By: /s/ Mary Beth Seher
--------------------------------
Mary Beth Seher, as Trustee
DEBORAH JILL SEHER TRUST
By: /s/ Mary Beth Seher
--------------------------------
Mary Beth Seher, as Trustee
12
EXHIBIT 10.1
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered
into as of this 19th day of February, 1999 by and among ABC Rail
Products Corporation, a Delaware corporation ("ABC") and the
stockholders listed on the signature page of this Agreement (each, a
"Stockholder" and collectively, the "Stockholders").
WHEREAS, ABC is a party to an Agreement and Plan of Merger with
NACO, Inc., a Delaware corporation ("NACO"), and ABCR Acquisition Sub,
Inc., a Delaware corporation and wholly owned subsidiary of ABC
("Merger Subsidiary") dated as of September 17, 1998 and amended and
restated as of December 10, 1998, as further amended as of
February 16, 1999 (the "Merger Agreement");
WHEREAS, pursuant to the merger (the "Merger") contemplated by
the Merger Agreement all issued and outstanding shares of common
stock, par value $.01 per share, of NACO ("NACO Common Stock"),
including shares beneficially owned by the Stockholders, will be
converted at the Effective Time of the Merger into shares of common
stock, par value $0.01 per share, of ABC ("ABC Common Stock");
WHEREAS, the parties hereto desire to make provisions for the
registration of possible resales of ABC Common Stock beneficially
owned immediately after the Merger by the Stockholders who otherwise
are restricted by Rule 144 under the Act in their resales of ABC
Common Stock; and
WHEREAS, the undertakings and agreements of ABC contained herein
are a material inducement to the Stockholders to consummate and effect
the transactions contemplated by the Merger Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
(a) DEFINITIONS. For purposes of this Agreement:
(i) The term "Act" means the Securities Act of 1933, as
heretofore or hereafter amended;
(ii) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the
Act, and the declaration or ordering of effectiveness of such
registration statement or document;
(iii) The term "Registrable Securities" means the shares
of ABC Common Stock beneficially owned by the Stockholders
immediately after the Merger, and any securities paid, issued or
distributed in respect of such shares by way of stock dividend or
distribution or stock split or in connection with a combination
<PAGE>
of shares, recapitalization, reorganization, merger,
consolidation or otherwise.
(iv) The term "Sellers" means the Stockholders who elect to
join in a registration effected pursuant to this Agreement; and
(v) All other capitalized terms not defined herein shall
have the meanings assigned to them in the Merger Agreement.
(b) DEMAND RIGHTS.
(i) If ABC shall receive at any time after 180 days after
the Effective Time of the Merger, a written request from
Stockholders beneficially owning at least two percent (2%) of the
then outstanding shares of ABC Common Stock that ABC file a
registration statement under the Act for a public offering of all
or a part of the Registrable Securities (which written request
shall specify the aggregate number of shares of Registrable
Securities requested to be registered), then ABC shall effect
such registration of Registrable Securities in accordance with
this Agreement; provided, however, that ABC shall not be required
to take any action pursuant to this Paragraph (b) unless the
requested registration relates to at least 360,000 shares of
Registrable Securities.
(ii) If the Sellers intend to distribute the Registrable
Securities covered by their request by means of an underwriting,
they shall so advise ABC as a part of the request made pursuant
to the foregoing Subparagraph (b)(i), in which event the managing
underwriter shall be selected by ABC with the prior written
consent of the Sellers holding a majority in number of the
Registrable Securities covered by the registration request.
(iii) ABC may postpone a registration requested pursuant to
Subparagraph (b)(i) for a period not to exceed 90 days if, at the
time ABC receives a registration request pursuant to Subparagraph
(b)(i), ABC is engaged in confidential negotiations or other
confidential business activities (a "Confidential Transaction"),
the disclosure of which, based upon the written advice of outside
counsel, would be required in the registration statement, and the
Board of Directors of ABC determines in good faith that such
disclosure would be materially detrimental to ABC and its
stockholders or would have a material adverse effect on the
Confidential Transaction.
(iv) (a) ABC will not include in any demand registration
pursuant to this Paragraph (b) any securities which are not
Registrable Securities without the prior written consent of the
Sellers holding a majority in number of the Registrable
Securities covered by the registration request, subject to ABC's
obligations existing at the date hereof to register additional
shares of ABC Common Stock as set forth on Exhibit A hereto.
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<PAGE>
(b) If a demand registration pursuant to this
Paragraph (b) is an underwritten offering and the managing
underwriter advises ABC in writing that in its opinion the number
of Registrable Securities requested to be included in such
offering and, if permitted, the number of securities which are
not Registrable Securities requested to be included in such
offering exceed the number of securities which can be sold in an
orderly manner in such offering within a price range acceptable
to the Sellers holding a majority in number of Registrable
Securities covered by the registration request, ABC will include
in such registration, FIRST, prior to the inclusion of any
securities which are not Registrable Securities, the number of
Registrable Securities requested to be included which in the
opinion of such underwriter can be sold in an orderly manner
within the price range of such offering, pro rata (as nearly as
practicable) among the Sellers on the basis of the number of
Registrable Securities proposed to be sold by each such Seller;
and SECOND, the number of securities which are not Registrable
Securities requested to be included which in the opinion of such
underwriter can be sold in an orderly manner within the price
range of such offering, pro rata (as nearly as practicable) among
the holders of such securities on the basis of the number of
securities proposed to be sold by each such holder.
(v) Upon the closing of a demand registration pursuant to
this Paragraph (b), each Seller agrees not to effect any public
sale or distribution of equity securities, or any securities
convertible into or exchangeable or exercisable for such
securities, of ABC for a period of at least 90 days after such
closing.
(vi) ABC agrees:
(a) not to effect any public sale or distribution of
its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the
25-day period prior to and during the 90-day period
beginning on the effective date of any underwritten
registration under this Paragraph (b) (except pursuant to
(i) registrations on Form S-8 or any successor form, and
(ii) registrations on a form which does not include
substantially the same information as would be required to
be included in a registration statement covering the sale of
the Registrable Securities or which does not permit the
inclusion of shares of persons other than ABC) unless the
underwriters managing the registered public offering
otherwise agree, and
(b) after the date hereof not to grant, directly or
indirectly, any other persons the right to request ABC to
register any equity securities of ABC in excess of the
number of shares equal to four percent (4%) of the then
outstanding shares of ABC Common Stock.
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(c) PIGGYBACK RIGHTS. If ABC proposes to register shares of its
Common Stock for a public offering (including an offering by stock-
holders other than the Sellers but excluding an offering to employees
on Form S-8 or any other offering on a form which does not include
substantially the same information as would be required to be included
in a registration statement covering the sale of the Registrable
Securities or which does not permit the inclusion of shares of persons
other than ABC), ABC shall promptly give the Stockholders written
notice of such proposed registration. Upon the written request of any
Stockholder given within 20 days after mailing of such notice by ABC,
ABC shall, subject to the provisions of Paragraph (g) hereof, use its
reasonable best efforts to register under the Act all of the Registra-
ble Securities that any Stockholder has requested to have included.
The Sellers' participation in a registration pursuant to this
Paragraph (c) shall be conditioned upon the Sellers' complete and full
cooperation on a timely basis with all requirements reasonably
established by ABC and/or the managing underwriter in the course of
such registration.
(d) OBLIGATIONS OF ABC. Whenever required under this Agreement
to effect the registration of any Registrable Securities, ABC shall,
as expeditiously as possible:
(i) Prepare and file with the Securities and Exchange
Commission (the "SEC") (or any successor agency) a registration
statement with respect to such Registrable Securities (provided
that before filing a registration statement or prospectus or any
amendments or supplements thereto, ABC will furnish on a timely
basis to the counsel selected by Sellers copies of all such
documents required to be filed, which documents in the case of a
registration under Paragraph (b) will be subject to review by
such counsel), and use its reasonable best efforts to cause such
registration statement to become effective, and, upon the request
of the Sellers, use its reasonable best efforts to keep such
registration statement effective for up to 120 days;
(ii) Prepare and file with the SEC such supplements and
amendments to such registration statement and the prospectus used
in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect
to the disposition of all securities covered by such registration
statement during an effective period, if requested by the Sell-
ers, of not to exceed 120 continuous days;
(iii) Furnish to the Sellers such numbers of copies of the
prospectus, including a preliminary prospectus in conformity with
the requirements of the Act, and such other documents as the
Sellers may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them;
(iv) Use its reasonable best efforts to expeditiously
register or qualify the Registrable Securities under such securi-
ties or Blue Sky laws of such jurisdictions within the United
4
<PAGE>
States as shall be appropriate or reasonably requested by the
Sellers;
(v) In the case of a registration under Paragraph (b),
enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as
the holders of a majority of the shares of Registrable Securities
being sold or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such
Registrable Securities, including, without limitation:
(a) making such representations and warranties to the
underwriters in form, substance and scope, reasonably
satisfactory to the managing underwriter, as are customarily
made by issuers to underwriters in underwritten secondary
offerings;
(b) obtaining opinions and updates thereof of counsel,
which counsel and opinions to ABC (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriter, addressed to the managing underwriter covering
the matters customarily covered in opinions requested in
underwritten secondary offerings and such other matters as
may be reasonably requested by the managing underwriter;
(c) causing the underwriting agreements to set forth
in full the indemnification provisions and procedures of
Paragraph (j) below (or such other substantially similar
provisions and procedures as the managing underwriter shall
reasonably request) with respect to all parties to be
indemnified pursuant to said Paragraph (j); and
(d) delivering such documents and certificates as may
be reasonably requested by the Sellers to evidence
compliance with the provisions of this Subparagraph (d)(v)
and with any customary conditions contained in the under-
writing agreement or other agreement entered into by ABC;
and
(vi) Promptly notify each Seller at any time when a
prospectus relating thereto is required to be delivered under the
Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an
untrue statement of a material fact or omits any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and,
at the request of any such Seller, ABC will promptly prepare and
furnish such Seller a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
5
<PAGE>
(e) SELLER INFORMATION. It shall be a condition precedent to
the obligations of ABC to take any action pursuant to this Agreement
that the Sellers shall furnish to ABC such information regarding
themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to
effect the registration of their Registrable Securities.
(f) EXPENSES. ABC shall pay all fees and expenses incurred in
connection with any registration pursuant to this Agreement, in-
cluding, without limitation, all registration, filing and qualifica-
tion fees and expenses, accounting fees, fees and disbursements of
counsel for ABC, printing fees, listing fees, miscellaneous travel
and other out-of-pocket expenditures incurred by ABC. Sellers shall
pay all fees and disbursements of counsel for Sellers and all
underwriting discounts and all commissions or brokerage fees
applicable to the Registrable Securities sold by them and all
miscellaneous travel and other out-of-pocket expenditures incurred by
them.
(g) UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares, ABC shall not be required under
Paragraph (c) to include any of the Registrable Securities in such
underwriting unless Sellers accept the terms of the underwriting as
agreed upon between ABC and the underwriters selected by it, and then
only in such quantity as will not, in the opinion of the underwriters,
jeopardize the success of the offering by ABC. If the total number of
Registrable Securities that Sellers request be included in such offer-
ing exceeds (when combined with the securities being offered by ABC
and any other selling stockholders having rights to participate in
such offering) the number of securities that the underwriters reason-
ably believe compatible with the success of the offering by ABC, then
ABC shall be required to include in the offering only that number of
securities, including Registrable Securities, which the underwriters
believe will not jeopardize the success of the offering by ABC, the
securities so included to be allocated pro rata (as nearly as
practicable) among the Sellers and other selling stockholders on the
basis of the number of securities proposed to be sold by each.
(h) SUCCESSORS AND ASSIGNS. The registration rights provided by
this Agreement shall be binding upon and inure to the benefit of ABC
(and its successors and assigns), and the Stockholders (and any
affiliates thereof to whom the Registrable Securities are transferred,
sold or disposed). Except as expressly stated in the foregoing
sentence, the registration rights provided by this Agreement may not
be assigned by the Stockholders without the prior written consent of
ABC.
(i) LIMITS ON RIGHTS. The right of the Stockholders to require
a registration pursuant to Paragraph (b) shall be limited to two
registrations. Participation in a registration pursuant to Paragraph
(c) shall be limited, as to any Stockholder, to a single registration
and any Stockholder participating in a registration pursuant to
Paragraph (c) shall have no right to participate in any further
6
<PAGE>
registration pursuant thereto unless such Stockholder was not allowed
to register at least seventy-five percent (75%) of the Registrable
Securities requested for inclusion in such registration due to the
operation of Paragraph (g) above. The failure of the Sellers to sell
all of the Registrable Securities offered in a registration effected
pursuant to Paragraph (b) shall not entitle any of the Sellers to
require or participate in any further registration under Paragraph (b)
of ABC securities.
(j) INDEMNIFICATION.
(i) ABC agrees to indemnify, to the extent permitted by
law, each holder of Registrable Securities, its officers,
directors, stockholders, partners and employees and each person
who controls (within the meaning of the Act) such holder against
all losses, claims, damages, liabilities and expenses whatsoever,
as incurred, and reasonable fees and expenses of counsel incurred
in investigating, preparing or defending against, or aggregate
amounts paid in settlement of any litigation, action,
investigation or proceeding by any governmental agency or body,
commenced or threatened, in each case whether or not a party, or
any claim whatsoever based upon, caused by or arising out of any
untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus
or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any
information furnished in writing to ABC by such holder expressly
for use therein or by such holder's failure to deliver a copy of
the registration statement or prospectus or any amendments or
supplements thereto after ABC has furnished such holder with a
sufficient number of copies of the same. In connection with an
underwritten offering, ABC will indemnify such underwriters,
their officers and directors and each person who controls (within
the meaning of the Act) such underwriters to the same extent as
provided above with respect to the indemnification of the holders
of Registrable Securities.
(ii) In connection with any registration statement in which
a holder of Registrable Securities is participating, each such
holder will furnish to ABC in writing such information as ABC
reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted
by law, will indemnify ABC, its directors, stockholders,
employees and officers and each person who controls (within the
meaning of the Act) ABC against any losses, claims, damages,
liabilities and expenses whatsoever, as incurred, and reasonable
fees and expenses of counsel incurred in investigating, preparing
or defending against, or aggregate amounts paid in settlement of
any litigation, action, investigation or proceeding by any
governmental agency or body, commenced or threatened, in each
case whether or not a party, or any claim whatsoever based upon,
7
<PAGE>
caused by or arising out of any untrue or alleged untrue
statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any
information so furnished in writing by such holder expressly for
such purpose and is reasonably relied upon in conformity with
such written information.
(iii) Any person entitled to indemnification hereunder will
(a) give reasonably prompt written notice to the indemnifying
party of any claim with respect to which he or it seeks
indemnification and (b) unless in such indemnified party's
reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to
such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying
party will not be subject to any liability for any settlement
made by the indemnified party without his or its consent (but
such consent will not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim.
(iv) The indemnification provided for under this Agreement
will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or
any officer, director or controlling person of such indemnified
party and will survive the transfer of securities. ABC also
agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the
event ABC's indemnification is unavailable for any reason. Such
right to contribution shall be in such proportion as is
appropriate to reflect the relative fault of and benefits to ABC
on the one hand and the Sellers on the other (in such proportions
that the Sellers are severally, not jointly, responsible for the
balance), in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified
parties shall be determined by reference to, among other things,
the total proceeds received by the indemnifying party and the
indemnified parties in connection with the offering to which
losses, claims, damages, liabilities or expense relate. The
relative fault of the indemnifying party and indemnified parties
shall be determined by reference to, among other things, whether
8
<PAGE>
the action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or the
indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
action.
The parties hereto agree that it would not be just or
equitable if contribution pursuant hereto were determined by pro
rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in
the immediate preceding paragraph. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not found guilty of such fraudulent misrepresentation.
Notwithstanding the provisions of this Subparagraph (j)(iv), no
Seller shall be required to contribute any amount in excess of
the net amount of proceeds received by such Seller from the sale
of Registrable Securities pursuant to the registration statement.
(k) ENTIRE AGREEMENT; MODIFICATION; AMENDMENT. This Agreement
constitutes the entire Agreement between the parties covering the
subject matter hereof and supersedes all prior agreements or
understandings whether written or oral. This Agreement may not be
modified or amended other than in a writing signed by ABC and
Stockholders holding a majority of the Registrable Securities.
(l) NO INCONSISTENT AGREEMENTS. ABC will not hereafter enter
into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of
Registrable Securities in this Agreement.
(m) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. ABC will not
take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of
the holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement
provided that this Paragraph (m) shall not apply to actions or changes
with respect to ABC's business, earnings, revenues, financial
conditions or prospects.
(n) TERMINATION. This Agreement, other than the provisions of
Paragraph (j) above, shall terminate on the sixth anniversary of the
date hereof; PROVIDED, HOWEVER, that such termination shall not be
effective until completion of any registration of Registrable
Securities requested prior to such sixth anniversary in accordance
with this Agreement; and PROVIDED FURTHER, that with respect to any
Stockholder, this Agreement shall terminate on the date on which such
Stockholder may sell Registrable Securities in accordance with Rule
145(d)(2) or (3) under the Act.
9
<PAGE>
(o) REMEDIES. Any person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law. The
parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and
that any party may in its sole discretion apply to any court of law or
equity of competent jurisdiction (without posting any bond or other
security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of the
Agreement.
(p) 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
provisions will be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this Agreement.
(q) DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
(r) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely
within the State, without regard to the conflicts of laws provision
thereof.
(s) NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date of receipt and shall be delivered
personally or mailed by registered or certified mail (postage prepaid,
return receipt requested), sent by overnight courier or sent by
telecopy, to the Parties at the following addresses or telecopy
numbers (or at such other address or telecopy number for a Party as
shall be specified by like notice):
(a) If to ABC:
ABC Rail Products Corporation
200 South Michigan Avenue
13th Floor
Chicago, IL 60604
Attention: Donald W. Ginter
Telecopy No.: (312) 322-0397
(b) If to a Stockholder, at the address
specified by such holder to ABC.
10
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into by the
parties hereto as of the date first written above.
ABC RAIL PRODUCTS CORPORATION
By: /s/ James P. Singsank
-------------------------------------
Name: James P. Singsank
Title: Assistant Secretary
STOCKHOLDERS:
/s/ Joseph A. Seher
---------------------------------------
Joseph A. Seher
/s/ Vaughn W. Makary
---------------------------------------
Vaughn W. Makary
/s/ Wayne R. Rockenbach
----------------------------------------
Wayne R. Rockenbach
/s/ John W. Waite
----------------------------------------
John W. Waite
/s/ John M. Lison
----------------------------------------
John M. Lison
/s/ Stephen W. Becker
----------------------------------------
Stephen W. Becker
/s/ John M. Giba
----------------------------------------
John M. Giba
/s/ Brian L. Greenburg
----------------------------------------
Brian L. Greenburg
11
<PAGE>
/s/ Michael B. Heisler
----------------------------------------
Michael B. Heisler
/s/ Jack R. Long
----------------------------------------
Jack R. Long
/s/ Wilbur G. Streams
----------------------------------------
Wilbur G. Streams
/s/ Richard A. Drexler
----------------------------------------
Richard A. Drexler
/s/ Daniel W. Duval
----------------------------------------
Daniel W. Duval
/s/ Willard H. Thompson
----------------------------------------
Willard H. Thompson
12
EXHIBIT 10.2
------------
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of August 15, 1998, between Joseph A.
Seher ("Seher") and John M. Lison ("Holder").
W I T N E S S E T H:
WHEREAS, the Holder desires to purchase from Seher, and Seher
desires to sell to the Holder, upon the terms and conditions set forth
herein, the stock purchase warrant substantially in the form of
Exhibit A hereto (the "Warrant");
NOW, THEREFORE in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS. The following terms have the meanings
set forth below:
"Common Stock" means the Company's Common Stock, par value $.01
per share, as constituted on the date hereof, and any capital stock
into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class
(regardless of how denominated) issued to the holders of shares of
Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets over any other class of stock of
the Company and which is not subject to redemption and (ii) shares of
common stock of any successor or acquiring corporation received by or
distributed to the holders of Common Stock of the Company in
connection with a consolidation, merger or other business combination
contemplated by Section 2.2 of the Warrant.
"Company" means NACO, Inc., a Delaware corporation.
"Exercise Price" shall be $100.00 per share of Common Stock, as
adjusted from time to time pursuant to the terms of the Warrant.
"Termination Date" shall mean the earlier of July 31, 2001 or the
date on which the Warrant is exercised in full in accordance with the
procedures set forth in Section 1.2 of the Warrant.
"Warrant Price" shall be $8.00 per share of Warrant Stock or
$120,000 in the aggregate.
"Warrant Stock" means the 15,000 shares of the Company's Common
Stock deliverable upon exercise of the Warrant, initially as set forth
on the signature page of this Agreement, as adjusted from time to
time.
<PAGE>
Section 2. TERMS AND CONDITIONS OF EXECUTION AND DELIVERY OF THE
WARRANT.
2.1 DESCRIPTION OF THE WARRANT. Subject to the terms and
conditions herein, Seher agrees to sell to the Holder, and the Holder
agrees to purchase from Seher, the Warrant. The Warrant to be
executed and delivered by Seher under this Agreement shall entitle the
Holder to purchase upon exercise of such Warrant that number of shares
of the Company's Common Stock as set forth on the signature page of
this Agreement, as adjusted from time to time.
2.2 WARRANT PRICE.
(a) Subject to Section 2.2(c), the Holder agrees to pay the
Warrant Price to Seller according to the following schedule:
10% of Warrant Price ($12,000) Upon execution of this Agreement
30% of Warrant Price ($36,000) July 31, 1999
30% of Warrant Price ($36,000) July 31, 2000
30% of Warrant Price ($36,000) July 31, 2001
(b) Concurrently with the execution of this Agreement, the
Holder shall (i) pay in cash to Seher 10% of the Warrant Price
($12,000) for the Warrant Stock, and (ii) execute and deliver to Seher
a note, substantially in the form of Exhibit B hereto (the "Note")
providing for payment of the balance of the Warrant Price ($108,000).
(c) In the event that the Warrant is exercised in full, the
Warrant Price shall be immediately due and payable by the Holder. In
the event that the Warrant is partially exercised, a proportionate
amount of the Warrant Price shall be immediately due and payable by
the Holder, and the unpaid balance of the Warrant Price shall be paid
in accordance with subsections (a)-(b) above.
Section 3. REPRESENTATIONS AND WARRANTIES.
3.1 SEHER REPRESENTATIONS AND WARRANTIES. Seher represents and
warrants to the Holder that Seher (a) owns the Warrant Stock free and
clear of all liens, charges, security interests, restrictions or other
legal or equitable encumbrances and (b) has all requisite power and
authority to enter into and perform this Agreement and to sell the
Warrant and the Warrant Stock as contemplated herein.
3.2 HOLDER REPRESENTATIONS AND WARRANTIES. The Holder
represents and warrants to Seher that he is acquiring the Warrant for
his own account for the purpose of investment and not with a view to
any distribution thereof.
Section 4. COVENANTS.
4.1 SUFFICIENCY; GOOD TITLE. Until the Termination Date, Seher
agrees to segregate and keep available such number of shares of
Warrant Stock to be delivered to the Holder upon the exercise of the
2
<PAGE>
Warrant. Seher covenants that all shares of Warrant Stock shall, when
delivered, be duly and validly issued, fully paid and nonassessable
and free from all taxes, liens, charges, security interests,
restrictions or other legal or equitable encumbrances.
4.2 ESCROW ACCOUNT. Concurrently with the execution of this
Agreement, Seher and Holder shall execute and deliver an Escrow
Agreement substantially in the form of Exhibit C hereto (the "Escrow
Agreement") providing for the escrow of the Warrant Shares pending the
payment in full of the Warrant Price.
Section 5. MISCELLANEOUS.
5.1 NOTICES. Except as otherwise expressly provided herein, all
notices referred to in this Warrant Agreement shall be in writing and
shall be delivered personally, sent by reputable express courier
service (charges prepaid) or sent by registered or certified mail,
return receipt requested, postage prepaid and shall be deemed to have
been given when so delivered, sent or deposited in the U.S. Mail (i)
to Seher at 3637 Buckthorn Lane, Downers Grove, IL 60515 (unless
otherwise indicated by Seher) and (ii) to the Holder at 505 N. Lake
Shore Drive, Unit #4705, Chicago, Illinois 60611 (unless otherwise
indicated by the Holder).
5.2 EXCLUSION. This Agreement and the Warrant shall be binding
upon, and inure solely to the benefit of Seher and the Holder, and no
other person shall acquire or have any right under or by virtue of
this Agreement or the Warrant.
5.3 NO WAIVERS. No failure or delay by any party in exercising
any rights, power or privilege hereunder or under the Warrant shall
operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies
provided herein shall be cumulative and not exclusive of any rights or
remedies provided by law.
5.4 AMENDMENTS AND WAIVERS. Any provision of this Agreement or
the Warrant may be amended or waived if, but only if, such amendment
or waiver is in writing and signed by Seher and the Holder.
5.5 GOVERNING LAW. This Agreement and the Warrant shall be
governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflict of laws
thereof.
5.6 COUNTERPARTS. This Agreement may be signed in counterpart,
each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above
written.
/s/ Joseph A. Seher
----------------------------------------
Joseph A. Seher
/s/ John M. Lison
----------------------------------------
John M. Lison
(Warrant to purchase 15,000 shares of
the Company's Common Stock owned by
Joseph A. Seher)
4
<PAGE>
EXHIBIT A to EXHIBIT 10.2
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
* THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN *
* ACQUIRED BY THE HOLDER FOR HIS OWN ACCOUNT, FOR INVESTMENT *
* PURPOSES AND NOT WITH A VIEW TO THE DISTRIBUTION OF SUCH *
* SECURITIES. THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY *
* HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS *
* AMENDED (THE "ACT") OR ANY APPLICABLE STATE SECURITIES LAW AND MAY *
* NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFEC- *
* TIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE *
* SECURITIES LAW OR AN EXEMPTION THEREFROM OR THE PROVISIONS OF THIS *
* WARRANT. *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
STOCK PURCHASE WARRANT
Date of Issuance: August 15, 1998
Certificate No. W-1
For value received, Joseph A. Seher ("Seher"), hereby grants to
John M. Lison (the "Holder") the right to purchase from Seher
15,000 shares of Warrant Stock (as determined and adjusted
pursuant to Section 1.1 and Section 2 and from time to time
hereunder) at a price per share of $100.00 (as adjusted from time
to time hereunder, the "Exercise Price"). The amount and kind of
securities purchasable pursuant to the rights granted hereunder
and the purchase price for such securities are subject to
adjustment pursuant to the provisions contained in this Warrant.
This Warrant is executed and delivered pursuant to the terms of
the Warrant Agreement, dated of even date herewith, between Seher
and the Holder (the "Warrant Agreement"). Certain capitalized
terms used herein are defined in Section 1 of the Warrant
Agreement. The amount and kind of securities purchasable
pursuant to the rights granted hereunder and the purchase price
for such securities are subject to adjustment pursuant to the
provisions contained in this Warrant.
This Warrant is subject to the following provisions:
Section 1. EXERCISE OF WARRANT.
1.1. EXERCISE PERIOD. At any time or from time to time from
the date hereof until 5:00 P.M., Central Time on July 1, 2001 (the
"Exercise Period"), the Holder may exercise, in whole or in part, the
right to purchase 15,000 shares of the Company's Common Stock (subject
to adjustment pursuant to Section 2 hereunder).
1.2. EXERCISE PROCEDURE.
(i) This Warrant shall be deemed to have been exercised
when Seher has received all of the following items (the "Exercise
Time"):
<PAGE>
(a) a completed Exercise Agreement, as described
in Section 1.3 below and in substantially the form set forth
in EXHIBIT I hereof, executed by the Person exercising all
or part of the purchase rights represented by this Warrant
(the "Purchaser");
(b) this Warrant;
(c) if this Warrant is not registered in the name
of the Purchaser, an Assignment or Assignments in the form
set forth in EXHIBIT II hereto evidencing the assignment of
this Warrant to the Purchaser, in which case the Holder
shall have complied with the provisions set forth in Section
5 hereof; and
(d) a check or wire transfer of immediately
available funds payable to Seher in an amount equal to the
product of the Exercise Price multiplied by the number of
shares of Warrant Stock being purchased upon such exercise.
(ii) Certificates for shares of Warrant Stock purchased upon
exercise of this Warrant shall be delivered by Seher to the
Purchaser within five business days after the date of the
Exercise Time. Unless this Warrant has expired or all of the
purchase rights represented hereby have been exercised, Seher
shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant
which have not expired or been exercised and shall, within such
five-day period, deliver such new Warrant to the Person
designated for delivery in the Exercise Agreement.
(iii) The Warrant Stock deliverable upon the exercise of
this Warrant shall be deemed to have been transferred to the
Purchaser at the Exercise Time, and the Purchaser shall be deemed
for all purposes to have become the record holder of such Warrant
Stock at the Exercise Time.
1.3. EXERCISE AGREEMENT. Upon any exercise of this Warrant,
the Exercise Agreement shall be substantially in the form set forth in
EXHIBIT I hereto, except that if the shares of Warrant Stock are not
to be held in the name of the Holder, the Exercise Agreement shall
also state the name of the Person to whom the certificates for the
shares of Warrant Stock are to be held, and if the number of shares of
Warrant Stock to be delivered does not include all the shares of
Warrant Stock purchasable hereunder, it shall also state the name of
the Person to whom a new Warrant for the unexercised portion of the
rights hereunder is to be delivered. Such Exercise Agreement shall be
dated the actual date of execution thereof. For purposes of this
Warrant, "Person" means an individual, a partnership, a joint venture,
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a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
Section 2. ADJUSTMENT OF NUMBER OF SHARES. In order to prevent
dilution of the rights granted under this Warrant, the number of
shares of Warrant Stock obtainable upon exercise of this Warrant shall
be subject to adjustment from time to time as provided in this Section
2.
2.1. STOCK DIVIDENDS, SUBDIVISION OR COMBINATION OF COMMON
STOCK. If the Company at any time declares a dividend or makes a
distribution on its Common Stock payable in shares of its capital
stock (whether shares of Common Stock or of capital stock of any other
class), the Holder shall thereafter be entitled to purchase the
aggregate number of any kind of shares which, if the Warrant had been
exercised immediately prior to such event, such Holder would have
owned upon such exercise and been entitled to receive by virtue of
such dividend or distribution and the Exercise Price and Warrant Price
in effect immediately prior to the record date shall automatically be
adjusted to allow the purchase of such aggregate number and kind of
shares. If the Company at any time subdivides (by any stock split,
stock dividend, recapitalization or otherwise) its outstanding shares
of Common Stock into a greater number of shares, the number of shares
of Warrant Stock obtainable upon exercise of this Warrant immediately
prior to such subdivision shall be proportionately increased. If the
Company at any time combines (by reverse stock split or otherwise) its
outstanding shares of Common Stock into a smaller number of shares,
the number of shares of Warrant Stock obtainable upon exercise of this
Warrant immediately prior to such combination shall be proportionately
decreased.
2.2. MINIMUM ADJUSTMENT. No adjustment pursuant to Section
2.1 in the number of shares of Warrant Stock purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one whole share; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 2.2 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 2 shall be made to
the nearest share.
2.3 CONSOLIDATION, MERGER OR BUSINESS COMBINATION. In case
the Company shall consolidate, merge or enter into a business
combination with another corporation and pursuant to the terms of such
consolation, merger or business combination, shares of common stock of
the successor or acquiring corporation or any cash, shares of stock or
other securities or property of any nature whatsoever in addition to
or in lieu of common stock of the successor or acquiring corporation
("Other Property") are to be received by or distributed to holders of
the Common Stock of the Company, then the Holder shall have the right
thereafter to receive, upon exercise of the Warrant, the number of
shares of common stock of the successor or acquiring corporation or of
the Company, if it is the surviving corporation, and Other Property
receivable upon or as a result of such merger, consolidation or
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business combination by a holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such
event.
2.4 NOTICES. Immediately upon any adjustment of the number
of shares of Warrant Stock obtainable upon exercise of this Warrant,
Seher shall give written notice thereof to the Holder, setting forth
in reasonable detail the calculation of such adjustment.
Section 3. NO VOTING RIGHTS; LIMITATIONS OF LIABILITY. This
Warrant shall not entitle the holder hereof to any voting rights or
other rights as a stockholder of the Company. No provision hereof, in
the absence of affirmative action by the Holder to purchase Warrant
Stock, and no enumeration herein of the rights or privileges of the
Holder shall give rise to any liability of such holder for the
Exercise Price of Warrant Stock acquirable by exercise hereof or as a
stockholder of the Company.
Section 4. REPLACEMENT. Upon receipt of evidence reasonably
satisfactory to Seher (an affidavit of the Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing this Warrant, and in the case
of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to Seher, or, in the case of any such
mutilation upon surrender of such certificate, Seher shall execute and
deliver in lieu of such certificate a new certificate of like kind
representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
Section 5. NOTICES. Except as otherwise expressly provided
herein, all notices referred to in this Warrant shall be in writing
and shall be delivered personally, sent by reputable express courier
service (charges prepaid) or sent by registered or certified mail,
return receipt requested, postage prepaid and shall be deemed to have
been given when so delivered, sent or deposited in the U.S. Mail (i)
to Seher, at 3637 Buckthorn Lane, Downers Grove, IL 60515 (unless
otherwise indicated by Seher) and (ii) to the Holder at 505 N. Lake
Shore Drive, Unit #4705, Chicago, Illinois 60611 (unless otherwise
indicated by the Holder).
Section 6. AMENDMENT AND WAIVER. Any provision of this
Agreement or the Warrant may be amended or waived if, but only if,
such amendment or waiver is in writing and signed by Seher and the
Holder.
Section 7. DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive
headings of the several Sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this
Warrant. The corporate law of the State of Delaware shall govern all
questions concerning the relative rights of the Company and its
stockholders. The construction, validity and interpretation of this
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Warrant shall be governed by the internal law, and not the conflicts
law, of the State of Delaware.
IN WITNESS WHEREOF, Joseph A. Seher has signed this Warrant as of
its Date of Issuance.
----------------------------------------
Joseph A. Seher
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EXHIBIT I to EXHIBIT 10.2
EXERCISE AGREEMENT
[To be executed only upon exercise of the Warrant]
To: Joseph A. Seher Dated:______________________
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-1), hereby agrees to purchase
_______ shares of the Warrant Stock covered by such Warrant and makes
payment herewith in full therefor at the price per share provided by
such Warrant.
Signature: ________________________
Address: __________________________
___________________________________
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EXHIBIT II to EXHIBIT 10.2
ASSIGNMENT
FOR VALUE RECEIVED, ____________________ hereby sells, assigns
and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W- 1) with respect to the number of shares of
the Warrant Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
----------------- ------- -------------
Dated: _______________ Signature: ________________________
Address:___________________________
___________________________________
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EXHIBIT 10.3
------------
TRUST AGREEMENT
JOSEPH A. SEHER, hereinafter referred to as the "Grantor," hereby
assigns, transfers and sets over to MARY BETH SEHER, hereinafter
referred to as the "Trustee," the property described in Schedule "A"
attached hereto and made a part hereof, receipt of which is hereby
acknowledged by the Trustee. Such property and any other property
that may be received by the Trustee, hereinafter referred to as the
"trust estate", shall be held by the Trustee upon the terms, trusts
and conditions hereinafter set forth. This instrument and the trust
established hereunder shall be known as the "AMY MARIE SEHER TRUST".
ARTICLE I
IRREVOCABILITY
The Trust created hereunder is irrevocable. The Grantor
expressly waives all rights and powers to revoke, amend or alter this
Trust Agreement or the terms of the Trust hereby created in any
respect, either in whole or in part.
ARTICLE II
CURRENT BENEFICIARY
AMY MARIE SEHER (the "Current Beneficiary"), during her lifetime,
shall be the sole beneficiary of the Trust.
ARTICLE III
DISTRIBUTION PROVISIONS
The trust estate shall be held, administered and distributed as
hereinafter provided.
3.1 RIGHTS OF WITHDRAWAL. In any calendar year in which a
transfer of property is made to this trust by any person, the Current
Beneficiary, at such date, shall have the power, in his or her sole
discretion, commencing with such date, to withdraw property then
belonging to the principal of the trust (including the property then
transferred into trust) having a value equal at the time of withdrawal
to the value of such transferred property at the date of such
transfer, but in no case exceeding Twenty Thousand Dollars
($20,000.00) per calendar year. Any power of withdrawal hereunder
shall be noncumulative. The Trustee shall, promptly after the initial
transfer into trust or after an addition is made in a later calendar
year, notify in writing the person having a withdrawal power of the
existence of the power, except that in the case of any such person who
is under a legal disability, notification shall be given to his legal
guardian; or if none, to a parent of an infant or to such other
individual whom the Trustee shall deem appropriate Such person
receiving notification from the Trustee shall have thirty (30) days
after receiving such notification to exercise the power by a written
instrument delivered to the Trustee, except that in the case of a
person under a legal disability, his or her power may be exercised
<PAGE>
only by his or her legal guardian. An adult beneficiary, or a
guardian, may after receiving such notice at least once, waive further
notice by an instrument in writing delivered to the Trustee.
3.2 DISTRIBUTION OF INCOME. During the life of the Current
Beneficiary, the Trustee, in her sole discretion, shall distribute
such portions or all of the net income of the trust estate to the
Current Beneficiary as Trustee shall from time to time determine to be
of for the comfortable maintenance, welfare and support of the Current
Beneficiary, provided that, absent unusual circumstances, the maximum
amount distributable in any year prior to the date the Current
Beneficiary attains age twenty-five (25) should not exceed Fifty
Thousand Dollars ($50,000.00).
3.3 DISTRIBUTION OF PRINCIPAL. During the life of the Current
Beneficiary, the Trustee, in her sole discretion, shall distribute to
or use for the benefit of the Current Beneficiary such portions or all
of the principal of the trust as the Trustee shall from time to time
determine to be for the comfortable maintenance, welfare and support
of the Current Beneficiary.
3.4 RIGHTS OF WITHDRAWAL OF PRINCIPAL. After the last to occur
of (i) the death of the Grantor; and (ii) the attaining of the
following respective ages, the Current Beneficiary shall have the
right at any time and from time to time during her lifetime to
withdraw portions of the principal of the trust which shall not exceed
in the aggregate the portions thereof which are set forth below with
respect to each such age:
(a) On or after age twenty-five (25), ten percent (10%)
thereof;
(b) On or after age thirty (30), twenty percent (20%)
thereof;
(c) On or after age thirty-five (35), forty percent (40%)
thereof; and
(d) On or after age forty (40), the entire remaining
balance thereof.
For the purpose of determining amounts subject to withdrawal, the
value of the principal of the trust shall be its value as of the date
a withdrawal is requested plus the amount of all previous withdrawals
valued as of the date of each such withdrawal. The aggregate amount
of all such previous withdrawals valued as aforesaid shall be charged
against any amounts subject to withdrawal pursuant hereto. All such
withdrawals shall be made by written request delivered to the Trustee
during the lifetime of the Current Beneficiary and after the right to
make the withdrawal has accrued. Upon delivery of such request, so
much of the principal of the trust as is properly requested shall
immediately vest in the Current Beneficiary.
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3.5 LIMITED POWER OF APPOINTMENT. Upon the death of the Current
Beneficiary before complete distribution of the trust, the remainder
thereof shall be distributed to or in trust for such one or more of
such Current Beneficiary's descendants in such manner and in such
proportions and upon such terms, conditions and trusts as such
beneficiary may appoint by her will, specifically referring to the
power hereby granted.
3.6 FAILURE TO EXERCISE POWER OF APPOINTMENT. To the extent
that the Current Beneficiary shall fail validly to exercise the
foregoing power of appointment, the balance of the trust, upon her
death, shall be distributed to her then living descendants, per
stirpes, or if no such descendant shall have survived such deceased
child, to the then living descendants of the Current Beneficiary's
father, per stirpes; subject, however, to the holdback provisions
hereof.
3.7 HOLDBACK PROVISIONS FOR BENEFICIARIES UNDER TWENTY-ONE YEARS
OF AGE. If at any time part or all of the principal of any trust
created hereunder shall be distributable to a beneficiary who has not
yet attained twenty-one (21) years of age and for whose benefit a
separate trust is not then being held hereunder, the distributable
share of such beneficiary shall at once vest in him or her, but the
Trustee, notwithstanding any provisions for distribution, shall either
(a) establish with such distributable share a custodianship for the
beneficiary under a Uniform Transfers to Minors Act, designating the
parent or a relative of the beneficiary as the custodian, or (b)
continue to hold such distributable share as a separate trust for the
beneficiary, using so much of the net income and principal as the
Trustee deems to be necessary or advisable for the education,
comfortable maintenance, welfare and support of such beneficiary,
accumulating and adding to principal any net income not so used, and
distributing to such beneficiary upon attaining twenty-one (21) years
of age the then remaining principal and any accumulated income
therefrom.
3.8 ULTIMATE DISTRIBUTION. If, at the death of the last
survivor of the Grantor, the Current Beneficiary and the last
surviving descendant of the Current Beneficiary's father, any portion
of any trust created hereunder, except a trust created pursuant to the
holdback provisions hereof relating to beneficiaries under twenty-one
(21) years of age, remains undistributed under the foregoing
provisions hereof or pursuant to the exercise of a power of
appointment created hereunder, then such trust shall be distributed by
the Trustee to those persons who would then be the Grantor's heirs-at-
law. For the purposes hereof, the term "heirs-at-law" shall mean
those persons who would then be the heirs-at-law as determined by the
then existing laws of descent and distribution of the State of
Illinois as if the Grantor had died intestate at such time.
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ARTICLE IV
DISTRIBUTION TO BENEFICIARIES
4.1 DISCRETIONARY DISTRIBUTIONS. The Trustee shall exercise the
discretionary powers herein conferred primarily to the benefit of the
Current Beneficiary rather than the remaindermen.
4.2 COMFORTABLE MAINTENANCE, WELFARE AND SUPPORT. The
"comfortable maintenance, welfare and support" of a beneficiary shall
include without limitation medical, dental and psychiatric care. In
applying such standards, the Trustee shall consider the standard of
living to which such beneficiary shall have been accustomed at the
time of the creation of the trust and the other income and resources
known to the Trustee to be available to the beneficiary for such
purposes (including any other distributions made to the beneficiary
pursuant to this instrument and the income and resources of any person
who shall be legally obligated to support the beneficiary.) It is the
Grantor's intention that each beneficiary be assisted by the Trustee
in any educational, business or personal endeavor which the Trustee
deems to be in his best interests. In that connection, the Trustee
may make distributions to permit a beneficiary to travel for
educational or pleasure purposes; to permit a beneficiary to purchase
or furnish a personal residence; or to permit a beneficiary to
purchase, initiate or invest in a business which the Trustee deems to
be sound or promising, even though said business might be the type of
investment in which, because of its risk, the Trustee would not or
could not invest the trust estate. At such time as a financial
institution is acting as the Trustee, the Trustee shall consult with
the Grantor's sister, JANICE LOUISE KELLEY, regarding the needs of the
Current Beneficiary for comfortable, maintenance, welfare and support.
The Trustee may rely on the recommendations of the Grantor's sister.
4.3 EDUCATION. The "education" of a beneficiary shall include
without limitation college, post-graduate, professional, vocational,
language and artistic studies.
4.4 BENEFICIARY UNDER DISABILITY. In the event that income or
principal shall become distributable free of any trust to a minor
beneficiary, to a beneficiary under other legal disability or to a
beneficiary not adjudicated incompetent, but who, by reason of illness
or mental or physical disability, is, in the sole opinion of the
Trustee, unable properly to administer such amounts, then such amounts
may be used by the Trustee directly for the best interests of the
beneficiary or distributed by the Trustee for the benefit of the
beneficiary in such one or more of the following ways as the Trustee
deems advisable:
(a) directly to the beneficiary;
(b) to the legally appointed guardian or conservator of the
beneficiary, if any;
(c) to an adult relative or friend of the beneficiary; or
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(d) to a custodian for the beneficiary under a Uniform
Transfers to Minors Act;
and the receipt of any such distributee shall constitute a full
release and discharge to the Trustee upon making such distribution,
and the Trustee shall not be obligated to see to the application of
any money or property so distributed.
ARTICLE V
GENERAL PROVISIONS
5.1 ADDITIONS TO TRUST ESTATE. The Grantor and any other person
may at any time and from time to time transfer, devise and bequeath to
the Trustee additional property of any kind acceptable to the Trustee,
to be held and administered in accordance with the provisions hereof
5.2 SPENDTHRIFT PROVISION. The interests of a beneficiary in the
income or principal shall not be subject to the claims of any
creditor, any spouse for alimony or support, or others, or to legal
process, and may not be voluntarily or involuntarily alienated or
encumbered. This provision shall not limit the exercise of any power
of appointment.
5.3 PERPETUITIES. Notwithstanding anything herein to the
contrary, the trust under this instrument shall terminate not later
than twenty-one (21) years after the death of the last survivor of the
Grantor, the Current Beneficiary and the Current Beneficiary's
descendants who are living on the date of this Trust Agreement, at the
end of which period the Trustee shall distribute the trust to the then
income beneficiary or beneficiaries in the proportions in which they
are then entitled to receive income, or if their interests are
indefinite, then in equal shares.
5.4 SMALL TRUST TERMINATION. If at any time a separate trust
created hereunder shall be of the aggregate principal value of Fifty
Thousand Dollars ($50,000.00) or less, the Trustee, in the Trustee's
sole discretion, may distribute the assets of such trust then in the
possession of the Trustee to the Current Beneficiary if he is then
living, or if he is not then living to the then income beneficiary or
beneficiaries in the proportions in which they are then entitled to
receive income, or, if their respective rights to receive income are
discretionary with the Trustee, then to such of the income
beneficiaries who are descendants of the Grantor, per stirpes, and
such trust shall thereupon terminate, notwithstanding any provision
herein to the contrary.
5.5 EXERCISE OF TESTAMENTARY POWER OF APPOINTMENT. In
determining whether, in what manner and to what extent a power of
appointment hereunder has been exercised by will, the trustee may act
in reliance upon a court order in any jurisdiction admitting an
instrument to probate as the will of the holder of the power or
finding that he died intestate, and unless within three months after
the holder's death the Trustee has actual notice of the existence of a
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will or of probate proceedings, the Trustee may assume that he died
intestate (but the provisions of this paragraph shall not affect any
right which an appointee or beneficiary in default of appointment may
have against any distributee).
ARTICLE VI
TRUSTEE POWERS, RIGHTS AND DUTIES
6.1 POWERS OF TRUST. In addition to any powers conferred by law
upon trustees, the Trustee shall have the following powers and
discretions in the administration, investment and distribution of any
trust created hereunder:
(1) to invest and reinvest the principal and any
income which the Trustee is authorized or directed
to accumulate, in such bonds, notes, debentures,
mortgages, preferred or common stock, interests in
common trust funds, partnership interests, or in
other property, real, personal or mixed, whether
like or unlike the types of property enumerated,
either within or without the State of Illinois, as
the Trustee may deem advisable, without being
limited by any statute or rule of law regarding
investments by trustees;
(2) to sell, contract to sell and grant options to
purchase any part or all of the trust estate at
public or private sale for cash or on credit, and
to exchange any part or all of the trust estate
for other property;
(3) to enter into leases for any period of time,
though extending beyond the termination of the
trust;
(4) to borrow money for any purpose, and if a bank or
trust company is then acting as trustee, said
money may be borrowed from its banking department
or from others, and to mortgage, pledge or
otherwise encumber any part or all of the trust
estate;
(5) to grant easements, subdivide, operate, maintain,
repair, improve, rehabilitate, give consents and
enter into contracts relating to real estate or
its use and dedicate any interest in real estate;
(6) to transfer the situs of the trust property to
such other place as the Trustee deems to be for
the best interests of the trust; and to designate
or appoint a trustee to act in any other
jurisdiction as sole trustee or co-trustee of any
part or all of the trust estate located in such
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other jurisdiction; to confer upon the appointed
trustee any or all of the powers, duties or rights
of the appointing Trustee; and to remove any
trustee appointed pursuant hereto and appoint
another, including the appointing Trustee;
(7) to enter into agreements for bank or other deposit
accounts, safe deposit boxes, custodian, agency or
depositary arrangements for all or any part of the
trust estate;
(8) to exercise all the rights and powers of an
individual owner with respect to shares of stock,
bonds or other securities in the trust estate,
including, but not by way of limitation, voting,
giving proxies, participating in voting trusts,
mergers, consolidations, foreclosures,
reorganizations or liquidations, and exercising or
selling subscription or conversion rights;
(9) to pay taxes and reasonable expenses incurred in
administering the trust estate;
(10) to appoint attorneys, auditors, financial advisers
and other agents, with or without discretionary
powers, and to pay reasonable compensation to such
appointees;
(11) to compromise contest, prosecute or abandon claims
or other charges in favor of or against the trust
estate;
(12) to execute contracts, notes, conveyances and other
instruments, whether or not containing covenants
and warranties binding upon and creating a charge
against the trust estate or excluding personal
liability;
(13) to receive from any source and administer
additional property as part of the trust estate;
(14) to invest in or hold undivided interest in
property;
(15) except as otherwise provided herein, to retain any
property or undivided interests in property
received from any source, regardless of any lack
of diversification, risk, or non- productivity;
(16) to deal with the executor, trustee or other
representative of any other trust or estate in
which a beneficiary of the trust estate has an
interest, notwithstanding the fact that the
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Trustee is an executor, trustee or other
representative of the other trust or estate;
(17) to make equitable division or distribution in cash
or in kind, or both, and for that purpose to value
any property divided or distributed in kind,
except as otherwise specifically provided in this
instrument;
(18) to rely upon any affidavit, certificate, letter or
other evidence reasonably believed to be genuine
and on the basis of any such evidence to make any
payment or distribution in good faith without
liability;
(19) to have all of the rights, powers, duties and
discretions given to or imposed upon the Trustee
by law and the provisions of the trust instrument
during the period between the termination of the
trust and the distribution thereof and during any
period in which any litigation is pending which
may void or invalidate the trust in whole or in
part or in any other way affect the rights,
powers, duties or discretions of the Trustee;
(20) to purchase and keep in force insurance of an
appropriate nature and form and in a reasonable
amount for the protection of the trust estate or
the ownership thereof;
(21) to determine the manner of ascertainment of income
and principal, and the allocation or apportionment
between income and principal of all receipts and
disbursements. The Trustee may at any time or
times charge all or any part of the Trustee's
regular annual compensation against the principal,
regardless of any rule of law or statue to the
contrary;
(22) to allocate different kind or disproportionate
shares of property or undivided interests in
property among the beneficiaries or trusts, and to
determine the value of any such property;
(23) to hold the several trusts as a common fund and to
make joint investments of funds in such trusts,
dividing the net income therefrom among the
beneficiaries of the several trusts
proportionately;
(24) to establish or refrain from establishing out of
income and credit to principal reasonable reserves
for the depreciation, obsolescence or depletion of
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tangible property, regardless of any rule of law
or statute to the contrary;
(25) to abandon any property, real or personal, which
the Trustee shall deem to be worthless or not of
sufficient value to warrant keeping or protecting;
to abstain from the payment of taxes, water rents,
assessments, repairs, maintenance and upkeep of
any such property; to permit any such property to
be lost by tax sale or other proceedings, or to
convey any such property for a nominal
consideration or without consideration; to permit
the expiration of any renewal, sale or purchase
option with respect to any property or lease;
(26) to purchase, acquire or retain any business
interest, as shareholder, security holder,
creditor, partner, proprietor or otherwise, even
though it may constitute all or a large portion of
the trust estate and to participate in the conduct
of any business with respect to its management and
affairs which an individual could do as owner of
the business, including but not limited to (a) the
voting of stock and the determination of all
questions or policy; (b) the execution of
partnership agreements and amendments thereto; (c)
the participation in any incorporation,
reorganization merger, consolidation,
recapitalization, liquidation or dissolution of
any business or any change in its nature; (d) the
investment of additional capital in, subscription
to or purchase of additional stock or securities
of, or the making of secured, unsecured or
subordinated loans to, any business, with trust
funds; (e) the election or employment with
compensation as directors, officers, employees or
agents of any business, or any persons, including
a trustee or a director or agent of a trustee. If
any such business is continued by the Trustee, the
Trustee shall not be liable for any losses to the
trust estate arising therefrom, and they may
retain and continue such business without
application to any court for authority to do so.
(27) to lend the principal or income of the trust
estate of a separate trust to a beneficiary of
such trust, without interest and without security,
or to make loans to or guarantee loans by any
other person, partnership, corporation, trust or
estate, including the estate of the Grantor or any
person who shall be deemed to be a grantor of the
trust estate, upon such terms as the Trustee may
deem advisable, with or without security and
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whether or not such loan is subordinated to other
obligations of the indebted party; to deal in
every way and without limitation or restriction
with the executor, trustee or other representative
of any other trust or estate whether or not the
beneficiary has any existing or future interest
therein (and even though the Trustee is acting in
such other capacity); provided, however, that
nothing herein contained shall be construed to
enable the Trustee to lend the principal or income
of the trust estate, directly or indirectly, to
the Grantor or any person who shall be deemed to
be a grantor of the trust estate or the estate of
the Grantor or such person without adequate
interest and security, nor enable any person to
purchase, exchange or otherwise deal with or
dispose of the principal or income of the trust
estate for less than an adequate consideration in
money or money's worth;
(28) to designate a name for any separate trust created
hereunder, and a collective name for any two or
more of such trusts, and, from time to time, to
change the name of any separate trust or the
collective name of any two or more of such trusts;
to merge or consolidate any two or more trusts
which shall be held hereunder by the trustee under
identical terms for identical beneficiaries and
remaindermen; to divide any separate trust into
two or more equal and unequal separate trusts to
be held by the Trustee under the identical terms
and for the identical beneficiaries and
remaindermen as said trust shall have been held
before such division; except as otherwise provided
herein, to allocate different kinds or
disproportionate shares of property or undivided
interest in property of a separate trust among the
beneficiaries thereof or among trusts into which
such trust shall have been divided; to determine
the value thereof; to make joint investments for
any separate trusts hereunder or of which the
Trustee is trustee or co-trustee, to designate a
name for such joint investments and to hold such
joint investments as a common fund for purposes of
administration dividing the net income (gains or
losses) therefrom in the same proportions as the
respective interests of such trusts therein;
(29) to inspect, review and monitor periodically, or to
require the inspection, review and monitoring, of
any property which is or becomes a part of the
Trust for the purpose of determining compliance
with any environmental law, or regulation
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thereunder, affecting such property, with all such
expenses of such inspection, review or monitoring
being paid from income or principal as the Trustee
may determine;
(30) to take any and all actions the Trustee shall deem
necessary to prevent, abate, clean up, or
otherwise respond to actual or threatened
violation of any federal, state or local law, rule
or ordinance affecting any property held in the
Trust relating to the generation, use, treatment,
storage, disposal, release, discharge or
contamination by any materials or substances that
are prohibited or regulated by federal, state or
local law; to take such actions prior to the
initiation of enforcement action by a federal,
state or local agency; and to charge any such
costs against income or principal, as the Trustee
shall determine;
(31) to release any power which will or may cause the
Trustee to be considered an "owner" or "operator"
of property held in the Trust, under the
provisions of Comprehensive Environmental
Response, Compensation and Liability Act of 1980
as amended ("CERCLA") 42 U.S.C. Section 9601, ET
SEQ. or which shall otherwise cause the Trustee to
incur liability under CERCLA or any successor to
such law or regulation thereunder; and
(33) to inspect and monitor businesses and real property (whether
held directly or through a partnership, corporation, trust or other
entity) for environmental conditions or possible violations on
environmental laws; to remediate environmentally damaged property or
to take steps to prevent environmental damage in the future, even if
no action by public or private parties is currently pending or
threatened; to abandon or refuse to accept property which may have
environmental damage; the trustee may expend trust property to do the
foregoing, and no action or failure to act by the trustee pursuant to
this paragraph shall be subject to question by any beneficiary.
6.2 NOMINEE REGISTRATION. The Trustee may cause stocks, bonds
and other property, real or personal, belonging to the trust to be
registered and held in the name of a nominee without mention of the
trust in any instrument of record constituting or evidencing title
thereto. The Trustee shall not be liable for the acts of the nominee
with respect to any investment so registered. The records of the
Trustee shall show at all times the ownership of the investment by the
Trustee, and the stocks, bonds and other similar investments shall be
in the possession and control of the Trustee and be kept separate and
apart from assets which are the individual property of the Trustee.
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6.3 COMPENSATION. The Trustee shall be reimbursed for all
proper expenses incurred in the management and protection of each
trust created hereunder and shall be entitled to reasonable
compensation for services rendered.
6.4 BONDS OR COURT APPROVAL. To the extent that any such
requirements can legally be waived, no trustee shall ever be required
to give any bond as trustee; to qualify before, be appointed by or, in
the absence of breach of trust, account to any court; or to obtain an
order or the approval of any court in the exercise of any power or
discretion hereunder,
6.5 BENEFICIARY AS TRUSTEE. Except with respect to any powers
of appointment expressly granted herein to a beneficiary, no trustee
who is also a beneficiary of a trust created hereunder or who is
legally obligated to support a beneficiary shall have any voice,
determination or vote relating to any discretionary payments of the
income or principal of the trust either to or for the benefit of the
said trustee-beneficiary or to or for the benefit of any person whom
the said trustee-beneficiary is legally obligated to support, when
such distribution is or would be a full or partial discharge of such
obligation. Notwithstanding anything herein to the contrary, if such
trustee-beneficiary is acting as sole trustee, such trustee may make
discretionary distributions of income and/or principal of the trust
solely for the health, education and support of such trustee-
beneficiary.
6.6 RELATION WITH THIRD PERSONS. Anyone dealing with the
Trustee shall not be obliged to inquire as to the Trustee's powers or
to see to the application of any money or property delivered to the
Trustee and may assume that the trust is in full force and effect,
that the Trustee is authorized to act and that the Trustee's act is in
accordance with the provisions of this instrument.
6.7 CUSTODY OF ASSETS. If a corporation is acting as co-
trustee of any trust created hereunder together with one or more
individuals, the corporate trustee shall have custody of the trust
estate and may perform for the trustees all acts necessary for the
acquisition and transfer of personal property and money, including the
signing and endorsement of checks, receipts, stock certificates and
other instruments, unless all of the trustees otherwise agree.
6.8 DELEGATION OF POWERS TO CO-TRUSTEE. Except as provided in
Section 6.5, any trustee may at any time by a signed instrument
delivered to a co-trustee delegate to the co-trustee any or all powers
and discretion which the Trustee has under this instrument, including
the power to convey real property, either for a specified time or
until the delegation is revoked by a similar instrument. Any person
dealing in good faith with the co-trustee may rely without inquiry
upon the certification of the co-trustee with respect to any
delegation.
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6.9 ACCOUNTS. Upon the request of any income beneficiary, the
Trustee shall furnish to such beneficiary an account showing the
receipts and disbursements of the trust estate and an account showing
the inventory of the trust estate; provided, however, that in no event
shall an individual trustee be required to furnish such accounts more
often than annually and a corporate trustee more often than quarter-
annually.
6.10 TRUSTEE'S DISCRETION. The decision of the Trustee in
exercising any of the discretions granted hereunder shall be
conclusive and binding upon all persons.
6.11 TRUSTEE'S LIABILITY. The Trustee shall be liable only for
gross negligence or willful default, and no trustee shall be liable
for errors of judgment or acts or omissions of any co-trustee. The
Trustee shall not be personally liable for any obligation of the trust
and shall have power to bind the trust without binding the Trustee
personally.
ARTICLE VII
SUCCESSOR TRUSTEES
7.1 RESIGNATION TRUSTEE. Any Trustee may resign by giving
written notice to each beneficiary of the trust (or such beneficiary's
guardian or conservator, if such beneficiary is under legal
disability) and to each co-trustee of the trust, if any, and to the
resigning Trustee's successor as trustee.
7.2 VACANCIES AND SUCCESSOR TRUSTEES. Upon the death,
resignation, inability or refusal to act of any Trustee, the following
provisions shall be applicable:
(a) In the case of MARY BETH SEHER, the successor shall be
the HARRIS TRUST AND SAVINGS BANK.
(b) In the case of HARRIS TRUST AND SAVINGS BANK or any
successor trustee, a successor trustee shall be appointed by the
person then entitled to receive or eligible to have the benefit
of the income of the trust estate; provided, however, that any
such successor so appointed shall be a bank or trust company,
wherever located, authorized to accept and administer trusts and
having a combined capital and surplus of not less than Ten
Million Dollars ($10,000,000.00)
7.3 POWERS, RIGHTS AND DUTIES OF SUCCESSOR. A successor trustee
shall automatically acquire the title to each trust asset which was
vested in the predecessor of such successor trustee, but any
predecessor trustee shall execute all documents and do all acts
necessary to vest such title in such successor trustee.
A successor trustee shall have all rights, powers, duties,
discretions, immunities, authorities and obligations which are granted
to or imposed on the predecessor. A successor trustee shall be under
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no duty to inquire into the acts or doings of a predecessor trustee,
and is not liable for any act or failure to act of a predecessor
trustee.
Wherever reference is made herein to the Trustee, such reference
shall be deemed to include the singular and plural thereof wherever
the context and facts require, and to include any and all successor
trustee at any time acting as the Trustee of a separate trust, unless
otherwise specifically provided herein to the contrary.
7.4 LIABILITY OF SUCCESSOR TRUSTEE. No successor trustee shall
be liable for the acts or defaults of any predecessor trustee, nor for
any loss or expense from anything done or neglected to be done by any
predecessor trustee, but such successor trustee shall be liable only
for his own willful wrongdoing or gross negligence with respect to
property received by him as Trustee and a successor trustee may accept
the account rendered and the assets and property delivered to him by
the predecessor trustee, and shall incur no liability to any person
beneficially interested in any separate trust by reason of so doing.
The parties have executed this Trust Agreement as of the 22nd day
of October, 1993.
/s/ Joseph A. Seher
-----------------------------------
JOSEPH A. SEHER, Grantor
/s/ Mary Beth Seher
-----------------------------------
MARY BETH SEHER, Trustee
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EXHIBIT 10.4
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TRUST AGREEMENT
JOSEPH A. SEHER, hereinafter referred to as the "Grantor," hereby
assigns, transfers and sets over to MARY BETH SEHER, hereinafter
referred to as the "Trustee," the property described in Schedule "A"
attached hereto and made a part hereof, receipt of which is hereby
acknowledged by the Trustee. Such property and any other property
that may be received by the Trustee, hereinafter referred to as the
"trust estate", shall be held by the Trustee upon the terms, trusts
and conditions hereinafter set forth. This instrument and the trust
established hereunder shall be known as the "DEBORAH JILL SEHER
TRUST".
ARTICLE I
IRREVOCABILITY
The Trust created hereunder is irrevocable. The Grantor
expressly waives all rights and powers to revoke, amend or alter this
Trust Agreement or the terms of the Trust hereby created in any
respect, either in whole or in part.
ARTICLE II
CURRENT BENEFICIARY
DEBORAH JILL SEHER (the "Current Beneficiary"), during her
lifetime, shall be the sole beneficiary of the Trust.
ARTICLE III
DISTRIBUTION PROVISIONS
The trust estate shall be held, administered and distributed as
hereinafter provided.
3.1 RIGHTS OF WITHDRAWAL. In any calendar year in which a
transfer of property is made to this trust by any person, the Current
Beneficiary, at such date, shall have the power, in his or her sole
discretion, commencing with such date, to withdraw property then
belonging to the principal of the trust (including the property then
transferred into trust) having a value equal at the time of withdrawal
to the value of such transferred property at the date of such
transfer, but in no case exceeding Twenty Thousand Dollars
($20,000.00) per calendar year. Any power of withdrawal hereunder
shall be noncumulative. The Trustee shall, promptly after the initial
transfer into trust or after an addition is made in a later calendar
year, notify in writing the person having a withdrawal power of the
existence of the power, except that in the case of any such person who
is under a legal disability, notification shall be given to his legal
guardian; or if none, to a parent of an infant or to such other
individual whom the Trustee shall deem appropriate Such person
receiving notification from the Trustee shall have thirty (30) days
after receiving such notification to exercise the power by a written
instrument delivered to the Trustee, except that in the case of a
<PAGE>
person under a legal disability, his or her power may be exercised
only by his or her legal guardian. An adult beneficiary, or a
guardian, may after receiving such notice at least once, waive further
notice by an instrument in writing delivered to the Trustee.
3.2 DISTRIBUTION OF INCOME. During the life of the Current
Beneficiary, the Trustee, in her sole discretion, shall distribute
such portions or all of the net income of the trust estate to the
Current Beneficiary as Trustee shall from time to time determine to be
of for the comfortable maintenance, welfare and support of the Current
Beneficiary, provided that, absent unusual circumstances, the maximum
amount distributable in any year prior to the date the Current
Beneficiary attains age twenty-five (25) should not exceed Fifty
Thousand Dollars ($50,000.00).
3.3 DISTRIBUTION OF PRINCIPAL. During the life of the Current
Beneficiary, the Trustee, in her sole discretion, shall distribute to
or use for the benefit of the Current Beneficiary such portions or all
of the principal of the trust as the Trustee shall from time to time
determine to be for the comfortable maintenance, welfare and support
of the Current Beneficiary.
3.4 RIGHTS OF WITHDRAWAL OF PRINCIPAL. After the last to occur
of (i) the death of the Grantor; and (ii) the attaining of the
following respective ages, the Current Beneficiary shall have the
right at any time and from time to time during her lifetime to
withdraw portions of the principal of the trust which shall not exceed
in the aggregate the portions thereof which are set forth below with
respect to each such age:
(a) On or after age twenty-five (25), ten percent (10%)
thereof;
(b) On or after age thirty (30), twenty percent (20%)
thereof;
(c) On or after age thirty-five (35), forty percent (40%)
thereof; and
(d) On or after age forty (40), the entire remaining
balance thereof.
For the purpose of determining amounts subject to withdrawal, the
value of the principal of the trust shall be its value as of the date
a withdrawal is requested plus the amount of all previous withdrawals
valued as of the date of each such withdrawal. The aggregate amount
of all such previous withdrawals valued as aforesaid shall be charged
against any amounts subject to withdrawal pursuant hereto. All such
withdrawals shall be made by written request delivered to the Trustee
during the lifetime of the Current Beneficiary and after the right to
make the withdrawal has accrued. Upon delivery of such request, so
much of the principal of the trust as is properly requested shall
immediately vest in the Current Beneficiary.
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3.5 LIMITED POWER OF APPOINTMENT. Upon the death of the Current
Beneficiary before complete distribution of the trust, the remainder
thereof shall be distributed to or in trust for such one or more of
such Current Beneficiary's descendants in such manner and in such
proportions and upon such terms, conditions and trusts as such
beneficiary may appoint by her will, specifically referring to the
power hereby granted.
3.6 FAILURE TO EXERCISE POWER OF APPOINTMENT. To the extent
that the Current Beneficiary shall fail validly to exercise the
foregoing power of appointment, the balance of the trust, upon her
death, shall be distributed to her then living descendants, per
stirpes, or if no such descendant shall have survived such deceased
child, to the then living descendants of the Current Beneficiary's
father, per stirpes; subject, however, to the holdback provisions
hereof.
3.7 HOLDBACK PROVISIONS FOR BENEFICIARIES UNDER TWENTY-ONE YEARS
OF AGE. If at any time part or all of the principal of any trust
created hereunder shall be distributable to a beneficiary who has not
yet attained twenty-one (21) years of age and for whose benefit a
separate trust is not then being held hereunder, the distributable
share of such beneficiary shall at once vest in him or her, but the
Trustee, notwithstanding any provisions for distribution, shall either
(a) establish with such distributable share a custodianship for the
beneficiary under a Uniform Transfers to Minors Act, designating the
parent or a relative of the beneficiary as the custodian, or (b)
continue to hold such distributable share as a separate trust for the
beneficiary, using so much of the net income and principal as the
Trustee deems to be necessary or advisable for the education,
comfortable maintenance, welfare and support of such beneficiary,
accumulating and adding to principal any net income not so used, and
distributing to such beneficiary upon attaining twenty-one (21) years
of age the then remaining principal and any accumulated income
therefrom.
3.8 ULTIMATE DISTRIBUTION. If, at the death of the last
survivor of the Grantor, the Current Beneficiary and the last
surviving descendant of the Current Beneficiary's father, any portion
of any trust created hereunder, except a trust created pursuant to the
holdback provisions hereof relating to beneficiaries under twenty-one
(21) years of age, remains undistributed under the foregoing
provisions hereof or pursuant to the exercise of a power of
appointment created hereunder, then such trust shall be distributed by
the Trustee to those persons who would then be the Grantor's heirs-at-
law. For the purposes hereof, the term "heirs-at-law" shall mean
those persons who would then be the heirs-at-law as determined by the
then existing laws of descent and distribution of the State of
Illinois as if the Grantor had died intestate at such time.
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ARTICLE IV
DISTRIBUTION TO BENEFICIARIES
4.1 DISCRETIONARY DISTRIBUTIONS. The Trustee shall exercise the
discretionary powers herein conferred primarily to the benefit of the
Current Beneficiary rather than the remaindermen.
4.2 COMFORTABLE MAINTENANCE, WELFARE AND SUPPORT. The
"comfortable maintenance, welfare and support" of a beneficiary shall
include without limitation medical, dental and psychiatric care. In
applying such standards, the Trustee shall consider the standard of
living to which such beneficiary shall have been accustomed at the
time of the creation of the trust and the other income and resources
known to the Trustee to be available to the beneficiary for such
purposes (including any other distributions made to the beneficiary
pursuant to this instrument and the income and resources of any person
who shall be legally obligated to support the beneficiary.) It is the
Grantor's intention that each beneficiary be assisted by the Trustee
in any educational, business or personal endeavor which the Trustee
deems to be in his best interests. In that connection, the Trustee
may make distributions to permit a beneficiary to travel for
educational or pleasure purposes; to permit a beneficiary to purchase
or furnish a personal residence; or to permit a beneficiary to
purchase, initiate or invest in a business which the Trustee deems to
be sound or promising, even though said business might be the type of
investment in which, because of its risk, the Trustee would not or
could not invest the trust estate. At such time as a financial
institution is acting as the Trustee, the Trustee shall consult with
the Grantor's sister, JANICE LOUISE KELLEY, regarding the needs of the
Current Beneficiary for comfortable, maintenance, welfare and support.
The Trustee may rely on the recommendations of the Grantor's sister.
4.3 EDUCATION. The "education" of a beneficiary shall include
without limitation college, post-graduate, professional, vocational,
language and artistic studies.
4.4 BENEFICIARY UNDER DISABILITY. In the event that income or
principal shall become distributable free of any trust to a minor
beneficiary, to a beneficiary under other legal disability or to a
beneficiary not adjudicated incompetent, but who, by reason of illness
or mental or physical disability, is, in the sole opinion of the
Trustee, unable properly to administer such amounts, then such amounts
may be used by the Trustee directly for the best interests of the
beneficiary or distributed by the Trustee for the benefit of the
beneficiary in such one or more of the following ways as the Trustee
deems advisable:
(a) directly to the beneficiary;
(b) to the legally appointed guardian or conservator of the
beneficiary, if any;
(c) to an adult relative or friend of the beneficiary; or
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(d) to a custodian for the beneficiary under a Uniform
Transfers to Minors Act;
and the receipt of any such distributee shall constitute a full
release and discharge to the Trustee upon making such distribution,
and the Trustee shall not be obligated to see to the application of
any money or property so distributed.
ARTICLE V
GENERAL PROVISIONS
5.1 ADDITIONS TO TRUST ESTATE. The Grantor and any other person
may at any time and from time to time transfer, devise and bequeath to
the Trustee additional property of any kind acceptable to the Trustee,
to be held and administered in accordance with the provisions hereof
5.2 SPENDTHRIFT PROVISION. The interests of a beneficiary in the
income or principal shall not be subject to the claims of any
creditor, any spouse for alimony or support, or others, or to legal
process, and may not be voluntarily or involuntarily alienated or
encumbered. This provision shall not limit the exercise of any power
of appointment.
5.3 PERPETUITIES. Notwithstanding anything herein to the
contrary, the trust under this instrument shall terminate not later
than twenty-one (21) years after the death of the last survivor of the
Grantor, the Current Beneficiary and the Current Beneficiary's
descendants who are living on the date of this Trust Agreement, at the
end of which period the Trustee shall distribute the trust to the then
income beneficiary or beneficiaries in the proportions in which they
are then entitled to receive income, or if their interests are
indefinite, then in equal shares.
5.4 SMALL TRUST TERMINATION. If at any time a separate trust
created hereunder shall be of the aggregate principal value of Fifty
Thousand Dollars ($50,000.00) or less, the Trustee, in the Trustee's
sole discretion, may distribute the assets of such trust then in the
possession of the Trustee to the Current Beneficiary if he is then
living, or if he is not then living to the then income beneficiary or
beneficiaries in the proportions in which they are then entitled to
receive income, or, if their respective rights to receive income are
discretionary with the Trustee, then to such of the income
beneficiaries who are descendants of the Grantor, per stirpes, and
such trust shall thereupon terminate, notwithstanding any provision
herein to the contrary.
5.5 EXERCISE OF TESTAMENTARY POWER OF APPOINTMENT. In
determining whether, in what manner and to what extent a power of
appointment hereunder has been exercised by will, the trustee may act
in reliance upon a court order in any jurisdiction admitting an
instrument to probate as the will of the holder of the power or
finding that he died intestate, and unless within three months after
the holder's death the Trustee has actual notice of the existence of a
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will or of probate proceedings, the Trustee may assume that he died
intestate (but the provisions of this paragraph shall not affect any
right which an appointee or beneficiary in default of appointment may
have against any distributee).
ARTICLE VI
TRUSTEE POWERS, RIGHTS AND DUTIES
6.1 POWERS OF TRUST. In addition to any powers conferred by law
upon trustees, the Trustee shall have the following powers and
discretions in the administration, investment and distribution of any
trust created hereunder:
(32) to invest and reinvest the principal and any
income which the Trustee is authorized or directed
to accumulate, in such bonds, notes, debentures,
mortgages, preferred or common stock, interests in
common trust funds, partnership interests, or in
other property, real, personal or mixed, whether
like or unlike the types of property enumerated,
either within or without the State of Illinois, as
the Trustee may deem advisable, without being
limited by any statute or rule of law regarding
investments by trustees;
(33) to sell, contract to sell and grant options to
purchase any part or all of the trust estate at
public or private sale for cash or on credit, and
to exchange any part or all of the trust estate
for other property;
(34) to enter into leases for any period of time,
though extending beyond the termination of the
trust;
(35) to borrow money for any purpose, and if a bank or
trust company is then acting as trustee, said
money may be borrowed from its banking department
or from others, and to mortgage, pledge or
otherwise encumber any part or all of the trust
estate;
(36) to grant easements, subdivide, operate, maintain,
repair, improve, rehabilitate, give consents and
enter into contracts relating to real estate or
its use and dedicate any interest in real estate;
(37) to transfer the situs of the trust property to
such other place as the Trustee deems to be for
the best interests of the trust; and to designate
or appoint a trustee to act in any other
jurisdiction as sole trustee or co-trustee of any
part or all of the trust estate located in such
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other jurisdiction; to confer upon the appointed
trustee any or all of the powers, duties or rights
of the appointing Trustee; and to remove any
trustee appointed pursuant hereto and appoint
another, including the appointing Trustee;
(38) to enter into agreements for bank or other deposit
accounts, safe deposit boxes, custodian, agency or
depositary arrangements for all or any part of the
trust estate;
(39) to exercise all the rights and powers of an
individual owner with respect to shares of stock,
bonds or other securities in the trust estate,
including, but not by way of limitation, voting,
giving proxies, participating in voting trusts,
mergers, consolidations, foreclosures,
reorganizations or liquidations, and exercising or
selling subscription or conversion rights;
(40) to pay taxes and reasonable expenses incurred in
administering the trust estate;
(41) to appoint attorneys, auditors, financial advisers
and other agents, with or without discretionary
powers, and to pay reasonable compensation to such
appointees;
(42) to compromise contest, prosecute or abandon claims
or other charges in favor of or against the trust
estate;
(43) to execute contracts, notes, conveyances and other
instruments, whether or not containing covenants
and warranties binding upon and creating a charge
against the trust estate or excluding personal
liability;
(44) to receive from any source and administer
additional property as part of the trust estate;
(45) to invest in or hold undivided interest in
property;
(46) except as otherwise provided herein, to retain any
property or undivided interests in property
received from any source, regardless of any lack
of diversification, risk, or non- productivity;
(47) to deal with the executor, trustee or other
representative of any other trust or estate in
which a beneficiary of the trust estate has an
interest, notwithstanding the fact that the
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Trustee is an executor, trustee or other
representative of the other trust or estate;
(48) to make equitable division or distribution in cash
or in kind, or both, and for that purpose to value
any property divided or distributed in kind,
except as otherwise specifically provided in this
instrument;
(49) to rely upon any affidavit, certificate, letter or
other evidence reasonably believed to be genuine
and on the basis of any such evidence to make any
payment or distribution in good faith without
liability;
(50) to have all of the rights, powers, duties and
discretions given to or imposed upon the Trustee
by law and the provisions of the trust instrument
during the period between the termination of the
trust and the distribution thereof and during any
period in which any litigation is pending which
may void or invalidate the trust in whole or in
part or in any other way affect the rights,
powers, duties or discretions of the Trustee;
(51) to purchase and keep in force insurance of an
appropriate nature and form and in a reasonable
amount for the protection of the trust estate or
the ownership thereof;
(52) to determine the manner of ascertainment of income
and principal, and the allocation or apportionment
between income and principal of all receipts and
disbursements. The Trustee may at any time or
times charge all or any part of the Trustee's
regular annual compensation against the principal,
regardless of any rule of law or statue to the
contrary;
(53) to allocate different kind or disproportionate
shares of property or undivided interests in
property among the beneficiaries or trusts, and to
determine the value of any such property;
(54) to hold the several trusts as a common fund and to
make joint investments of funds in such trusts,
dividing the net income therefrom among the
beneficiaries of the several trusts
proportionately;
(55) to establish or refrain from establishing out of
income and credit to principal reasonable reserves
for the depreciation, obsolescence or depletion of
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tangible property, regardless of any rule of law
or statute to the contrary;
(56) to abandon any property, real or personal, which
the Trustee shall deem to be worthless or not of
sufficient value to warrant keeping or protecting;
to abstain from the payment of taxes, water rents,
assessments, repairs, maintenance and upkeep of
any such property; to permit any such property to
be lost by tax sale or other proceedings, or to
convey any such property for a nominal
consideration or without consideration; to permit
the expiration of any renewal, sale or purchase
option with respect to any property or lease;
(57) to purchase, acquire or retain any business
interest, as shareholder, security holder,
creditor, partner, proprietor or otherwise, even
though it may constitute all or a large portion of
the trust estate and to participate in the conduct
of any business with respect to its management and
affairs which an individual could do as owner of
the business, including but not limited to (a) the
voting of stock and the determination of all
questions or policy; (b) the execution of
partnership agreements and amendments thereto; (c)
the participation in any incorporation,
reorganization merger, consolidation,
recapitalization, liquidation or dissolution of
any business or any change in its nature; (d) the
investment of additional capital in, subscription
to or purchase of additional stock or securities
of, or the making of secured, unsecured or
subordinated loans to, any business, with trust
funds; (e) the election or employment with
compensation as directors, officers, employees or
agents of any business, or any persons, including
a trustee or a director or agent of a trustee. If
any such business is continued by the Trustee, the
Trustee shall not be liable for any losses to the
trust estate arising therefrom, and they may
retain and continue such business without
application to any court for authority to do so.
(58) to lend the principal or income of the trust
estate of a separate trust to a beneficiary of
such trust, without interest and without security,
or to make loans to or guarantee loans by any
other person, partnership, corporation, trust or
estate, including the estate of the Grantor or any
person who shall be deemed to be a grantor of the
trust estate, upon such terms as the Trustee may
deem advisable, with or without security and
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whether or not such loan is subordinated to other
obligations of the indebted party; to deal in
every way and without limitation or restriction
with the executor, trustee or other representative
of any other trust or estate whether or not the
beneficiary has any existing or future interest
therein (and even though the Trustee is acting in
such other capacity); provided, however, that
nothing herein contained shall be construed to
enable the Trustee to lend the principal or income
of the trust estate, directly or indirectly, to
the Grantor or any person who shall be deemed to
be a grantor of the trust estate or the estate of
the Grantor or such person without adequate
interest and security, nor enable any person to
purchase, exchange or otherwise deal with or
dispose of the principal or income of the trust
estate for less than an adequate consideration in
money or money's worth;
(59) to designate a name for any separate trust created
hereunder, and a collective name for any two or
more of such trusts, and, from time to time, to
change the name of any separate trust or the
collective name of any two or more of such trusts;
to merge or consolidate any two or more trusts
which shall be held hereunder by the trustee under
identical terms for identical beneficiaries and
remaindermen; to divide any separate trust into
two or more equal and unequal separate trusts to
be held by the Trustee under the identical terms
and for the identical beneficiaries and
remaindermen as said trust shall have been held
before such division; except as otherwise provided
herein, to allocate different kinds or
disproportionate shares of property or undivided
interest in property of a separate trust among the
beneficiaries thereof or among trusts into which
such trust shall have been divided; to determine
the value thereof; to make joint investments for
any separate trusts hereunder or of which the
Trustee is trustee or co-trustee, to designate a
name for such joint investments and to hold such
joint investments as a common fund for purposes of
administration dividing the net income (gains or
losses) therefrom in the same proportions as the
respective interests of such trusts therein;
(60) to inspect, review and monitor periodically, or to
require the inspection, review and monitoring, of
any property which is or becomes a part of the
Trust for the purpose of determining compliance
with any environmental law, or regulation
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thereunder, affecting such property, with all such
expenses of such inspection, review or monitoring
being paid from income or principal as the Trustee
may determine;
(61) to take any and all actions the Trustee shall deem
necessary to prevent, abate, clean up, or
otherwise respond to actual or threatened
violation of any federal, state or local law, rule
or ordinance affecting any property held in the
Trust relating to the generation, use, treatment,
storage, disposal, release, discharge or
contamination by any materials or substances that
are prohibited or regulated by federal, state or
local law; to take such actions prior to the
initiation of enforcement action by a federal,
state or local agency; and to charge any such
costs against income or principal, as the Trustee
shall determine;
(62) to release any power which will or may cause the
Trustee to be considered an "owner" or "operator"
of property held in the Trust, under the
provisions of Comprehensive Environmental
Response, Compensation and Liability Act of 1980
as amended ("CERCLA") 42 U.S.C. Section 9601, ET
SEQ. or which shall otherwise cause the Trustee to
incur liability under CERCLA or any successor to
such law or regulation thereunder; and
(33) to inspect and monitor businesses and real property (whether
held directly or through a partnership, corporation, trust or other
entity) for environmental conditions or possible violations on
environmental laws; to remediate environmentally damaged property or
to take steps to prevent environmental damage in the future, even if
no action by public or private parties is currently pending or
threatened; to abandon or refuse to accept property which may have
environmental damage; the trustee may expend trust property to do the
foregoing, and no action or failure to act by the trustee pursuant to
this paragraph shall be subject to question by any beneficiary.
6.2 NOMINEE REGISTRATION. The Trustee may cause stocks, bonds
and other property, real or personal, belonging to the trust to be
registered and held in the name of a nominee without mention of the
trust in any instrument of record constituting or evidencing title
thereto. The Trustee shall not be liable for the acts of the nominee
with respect to any investment so registered. The records of the
Trustee shall show at all times the ownership of the investment by the
Trustee, and the stocks, bonds and other similar investments shall be
in the possession and control of the Trustee and be kept separate and
apart from assets which are the individual property of the Trustee.
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6.3 COMPENSATION. The Trustee shall be reimbursed for all
proper expenses incurred in the management and protection of each
trust created hereunder and shall be entitled to reasonable
compensation for services rendered.
6.4 BONDS OR COURT APPROVAL. To the extent that any such
requirements can legally be waived, no trustee shall ever be required
to give any bond as trustee; to qualify before, be appointed by or, in
the absence of breach of trust, account to any court; or to obtain an
order or the approval of any court in the exercise of any power or
discretion hereunder,
6.5 BENEFICIARY AS TRUSTEE. Except with respect to any powers
of appointment expressly granted herein to a beneficiary, no trustee
who is also a beneficiary of a trust created hereunder or who is
legally obligated to support a beneficiary shall have any voice,
determination or vote relating to any discretionary payments of the
income or principal of the trust either to or for the benefit of the
said trustee-beneficiary or to or for the benefit of any person whom
the said trustee-beneficiary is legally obligated to support, when
such distribution is or would be a full or partial discharge of such
obligation. Notwithstanding anything herein to the contrary, if such
trustee-beneficiary is acting as sole trustee, such trustee may make
discretionary distributions of income and/or principal of the trust
solely for the health, education and support of such trustee-
beneficiary.
6.6 RELATION WITH THIRD PERSONS. Anyone dealing with the
Trustee shall not be obliged to inquire as to the Trustee's powers or
to see to the application of any money or property delivered to the
Trustee and may assume that the trust is in full force and effect,
that the Trustee is authorized to act and that the Trustee's act is in
accordance with the provisions of this instrument.
6.7 CUSTODY OF ASSETS. If a corporation is acting as co-
trustee of any trust created hereunder together with one or more
individuals, the corporate trustee shall have custody of the trust
estate and may perform for the trustees all acts necessary for the
acquisition and transfer of personal property and money, including the
signing and endorsement of checks, receipts, stock certificates and
other instruments, unless all of the trustees otherwise agree.
6.8 DELEGATION OF POWERS TO CO-TRUSTEE. Except as provided in
Section 6.5, any trustee may at any time by a signed instrument
delivered to a co-trustee delegate to the co-trustee any or all powers
and discretion which the Trustee has under this instrument, including
the power to convey real property, either for a specified time or
until the delegation is revoked by a similar instrument. Any person
dealing in good faith with the co-trustee may rely without inquiry
upon the certification of the co-trustee with respect to any
delegation.
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6.9 ACCOUNTS. Upon the request of any income beneficiary, the
Trustee shall furnish to such beneficiary an account showing the
receipts and disbursements of the trust estate and an account showing
the inventory of the trust estate; provided, however, that in no event
shall an individual trustee be required to furnish such accounts more
often than annually and a corporate trustee more often than quarter-
annually.
6.10 TRUSTEE'S DISCRETION. The decision of the Trustee in
exercising any of the discretions granted hereunder shall be
conclusive and binding upon all persons.
6.11 TRUSTEE'S LIABILITY. The Trustee shall be liable only for
gross negligence or willful default, and no trustee shall be liable
for errors of judgment or acts or omissions of any co-trustee. The
Trustee shall not be personally liable for any obligation of the trust
and shall have power to bind the trust without binding the Trustee
personally.
ARTICLE VII
SUCCESSOR TRUSTEES
7.1 RESIGNATION TRUSTEE. Any Trustee may resign by giving
written notice to each beneficiary of the trust (or such beneficiary's
guardian or conservator, if such beneficiary is under legal
disability) and to each co-trustee of the trust, if any, and to the
resigning Trustee's successor as trustee.
7.2 VACANCIES AND SUCCESSOR TRUSTEES. Upon the death,
resignation, inability or refusal to act of any Trustee, the following
provisions shall be applicable:
(a) In the case of MARY BETH SEHER, the successor shall be
the HARRIS TRUST AND SAVINGS BANK.
(b) In the case of HARRIS TRUST AND SAVINGS BANK or any
successor trustee, a successor trustee shall be appointed by the
person then entitled to receive or eligible to have the benefit
of the income of the trust estate; provided, however, that any
such successor so appointed shall be a bank or trust company,
wherever located, authorized to accept and administer trusts and
having a combined capital and surplus of not less than Ten
Million Dollars ($10,000,000.00)
7.3 POWERS, RIGHTS AND DUTIES OF SUCCESSOR. A successor trustee
shall automatically acquire the title to each trust asset which was
vested in the predecessor of such successor trustee, but any
predecessor trustee shall execute all documents and do all acts
necessary to vest such title in such successor trustee.
A successor trustee shall have all rights, powers, duties,
discretions, immunities, authorities and obligations which are granted
to or imposed on the predecessor. A successor trustee shall be under
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no duty to inquire into the acts or doings of a predecessor trustee,
and is not liable for any act or failure to act of a predecessor
trustee.
Wherever reference is made herein to the Trustee, such reference
shall be deemed to include the singular and plural thereof wherever
the context and facts require, and to include any and all successor
trustee at any time acting as the Trustee of a separate trust, unless
otherwise specifically provided herein to the contrary.
7.4 LIABILITY OF SUCCESSOR TRUSTEE. No successor trustee shall
be liable for the acts or defaults of any predecessor trustee, nor for
any loss or expense from anything done or neglected to be done by any
predecessor trustee, but such successor trustee shall be liable only
for his own willful wrongdoing or gross negligence with respect to
property received by him as Trustee and a successor trustee may accept
the account rendered and the assets and property delivered to him by
the predecessor trustee, and shall incur no liability to any person
beneficially interested in any separate trust by reason of so doing.
The parties have executed this Trust Agreement as of the 22nd day
of October, 1993.
/s/ Joseph A. Seher
-----------------------------------
JOSEPH A. SEHER, Grantor
/s/ Mary Beth Seher
-----------------------------------
MARY BETH SEHER, Trustee
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EXHIBIT 10.5
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JOINT FILING AGREEMENT
The undersigned hereby agree that the statements in their
Schedule 13D with respect to the shares of common stock, par value
$0.01 per share, of ABC-NACO Inc., dated February 19, 1999, is, and
any amendments to such Schedule 13D signed by each of the undersigned
shall be, filed on behalf of each of the undersigned pursuant to and
in accordance with the provisions of Rule 13d-1(k) under the
Securities Exchange Act of 1934.
Dated: February 22, 1999
/s/ Joseph A. Seher
-----------------------------------
Joseph A. Seher
/s/ Mary Beth Seher
-----------------------------------
Mary Beth Seher
AMY MARIE SEHER TRUST
By: /s/ Mary Beth Seher
--------------------------------
Mary Beth Seher, as Trustee
DEBORAH JILL SEHER TRUST
By: /s/ Mary Beth Seher
--------------------------------
Mary Beth Seher, as Trustee
