1
EXHIBIT 10.2
SALARY DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, made this 10th day of March 1986, by and between Stewart
Information Services Corporation, hereinafter called the "Company" and
Malcom S. Morris, an employee, hereinafter called the "Participant".
WHEREAS, the Participant's competent and faithful efforts on behalf of the
Company have resulted in substantial growth and profits to the Company, and,
WHEREAS, the Company values the efforts, abilities and accomplishments of
the Participant as an important member of management and recognizes that his
future services are vital to its continued growth and profits and that the loss
of his services would result in substantial financial losses, and,
WHEREAS, the Company, in order to retain the services of the Participant,
is willing to provide pre and post-retirement benefits to Participant or his
designated beneficiary pursuant to the terms and conditions contained in this
Salary Deferred Compensation Plan,
NOW, THEREFORE, IT IS MUTUALLY AGREED THAT:
1. DEATH BENEFITS.
If death occurs while Participant is serving as an employee of the Company
or an affiliated Company prior to attaining the retirement age of 65 years,
the company will pay the amount of dollars necessary to net after payment
of Federal Income Taxes $133,333.33 per year, for a period of fifteen
years, to such individual or individuals as the Participant shall have
designated in writing, or in the absence of such designation, to the estate
of the Participant. The first payment shall commence not later than three
months following the Participant's death. Annual benefits are to be paid
1/12th each month.
Definition of "net after payment of federal income taxes" (above). For the
purpose of this agreement, to determine the amount to be paid, it will be
assumed that the payment will be subject to tax at the highest federal
marginal rate applicable to individuals for that year. Should the rate be
increased during the year, the Participant will be entitled to an
adjustment payment within three months of the effective date of the
increase.
2. RETIREMENT BENEFITS.
In addition to any other compensation, beginning at age 65 (whether or not
the Participant retires at such time), the Participant shall be entitled to
receive from the Company the amount of dollars necessary to net after
payment of Federal Income Taxes $133,333.33 per year commencing not later
than three months after the Participant has reached age 65, for a period of
fifteen years. If the Participant should die during said fifteen year
period, the sum of $133,333.33 per year shall be payable until the
expiration of said fifteen year period to such individual or individuals as
the Participant shall have designated in writing filed with the Company, or
in the absence of such designation, to the estate of the Participant.
Annual benefits are to be paid 1/12th each month.
2
3. FORFEITURE PROVISIONS.
3.1 Except as provided in sections 3.2 and 3.3, the participant's rights to
the death benefit and retirement benefit provided in this agreement shall
be vested one-seventh per year, the first one-seventh becoming invested
December 31, 1986 and amounts so vested are nonforfeitable even though the
Participant's employment with the Corporation terminates.
3.2 If the Participant's employment with the Corporation is terminated by
reason of fraud, dishonesty, embezzlement or theft, the Agreement shall
terminate and all payments whether vested or not under the terms of this
Agreement shall be forfeited.
3.3 The Participant expressly agrees, as a condition to the performance
by the Corporation of its obligations hereunder, that, during and after the
Participant's employment with the Corporation, or if the Participant is
suffering from total and permanent disability, the Participant will not,
directly or indirectly, render any services of an advisory nature to or
otherwise become employed by or participate or engage in any business
competitive with any of the businesses of the Corporation, without the
prior written consent of the Corporation; provided, however, that nothing
herein shall prohibit the Participant from owning stock or other securities
of a competitor which do not exceed one percent (1%) of the total
outstanding stock of such competitor, and so long as the Participant in
fact does not have the power to control or direct the management or
policies of such competitor. The Corporation shall not be required to make
any payments hereunder whether vested or not if the Participant fails to
comply with the conditions of this section.
4. VESTING.
This benefit shall vest one-seventh per year at the end of each calendar
year beginning December 31, 1986 when the first one-seventh shall vest. If
the Participant terminates his employment with Company, no further amounts
shall vest thereafter. If Participant's employment is terminated by
Company, he shall continue to vest one-seventh each year until fully
vested, subject to the forfeiture provisions of Paragraph 3. Participant
shall be fully vested on death even though prior to the end of the seventh
year. Participant shall continue to vest in the event of permanent
disability.
5. ASSIGNMENT OF RIGHTS.
This Agreement may not be assigned.
6. CONSTRUCTION AGREEMENT.
Any payments under this Agreement shall be independent of and in addition
to, those under any other plan, program, or agreement which may be in
effect between the parties hereto, or any other compensation payable to the
Participant or the Participant's designee by the Company. This Agreement
shall not be construed as a contract of employment and shall not operate to
change in any way any of the other terms and conditions of Participant's
employment and furthermore does not restrict the right of the Company to
discharge the Participant for proper cause or the right of the Participant
to discontinue service as an employee of the Company.
Benefits under this Agreement are compensation for services and rendered
and with respect to such benefit amounts shall constitute a liability of
the Company to the Participant and/or the beneficiaries in accordance with
the terms hereof.
3
6. Construction Agreement (continued).
The Company shall be under no obligation whatever to purchase or maintain
any contract, policy or other asset to provide the benefits under this
Agreement. Further, any contract, policy or other asset which the Company
may utilize to insure itself of the funds to provide the benefits hereunder
shall not serve in any way as security to the Participant for the Company's
performance under this Agreement. The right accruing to the Participant or
any designated beneficiary hereunder shall be no greater than the right of
any unsecured general creditor of the Company.
The law of the State of Texas shall govern this Agreement.
7. AMENDMENT OF AGREEMENT.
This Agreement may not be altered, amended or revoked except by a written
agreement signed by the Company and the Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first hereinabove written.
STEWART INFORMATION SERVICES CORPORATION
ATTEST:
By: /s/ SUE M. NOLZ By: /s/ CARLOSS MORRIS
---------------------------- ------------------------------------
Asst. Secretary Title: Chairman
-----------------------------
By: /s/ MALCOM S. MORRIS
-------------------------------------
Participant
4
DESIGNATION OF BENEFICIARY
Pursuant to the terms of a Salaried Deferred Compensation Agreement, dated
March 10, 1986, between myself and the Company, I hereby designate the
following beneficiary(ies) to receive any payments which may be due under such
Agreement after my death. This designation hereby revokes any prior
designation which may have been in effect.
/s/ REBECCA ANN MORRIS
- ------------------------------- -------------------------------------
(Primary Beneficiary) (Secondary Beneficiary)
Date: 3/12/86 By: /s/ MALCOM S. MORRIS
-------------------------- ----------------------------------
Acknowledged by: STEWARD INFORMATION
SERVICES CORPORATION
By: /s/ CARLOSS MORRIS
----------------------------------
Title: Chairman
5
SALARY DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, made this 10th day of March 1986, by and between Stewart
Information Services Corporation, hereinafter called the "Company" and Stewart
Morris, Jr. an employee, hereinafter called the "Participant".
WHEREAS, the Participant's competent and faithful efforts on behalf of the
Company have resulted in substantial growth and profits to the Company, and,
WHEREAS, the Company values the efforts, abilities and accomplishments of
the Participant as an important member of management and recognizes that his
future services are vital to its continued growth and profits and that the loss
of his services would result in substantial financial losses, and,
WHEREAS, the Company, in order to retain the services of the Participant,
is willing to provide pre and post-retirement benefits to Participant or his
designated beneficiary pursuant to the terms and conditions contained in this
Salary Deferred Compensation Plan,
NOW, THEREFORE, IT IS MUTUALLY AGREED THAT:
1. DEATH BENEFITS.
If death occurs while Participant is serving as an employee of the Company
or an affiliated Company prior to attaining the retirement age of 65
years, the company will pay the amount of dollars necessary to net after
payment of Federal Income Taxes $133,333.33 per year, for a period of
fifteen years, to such individual or individuals as the Participant shall
have designated in writing, or in the absence of such designation, to the
estate of the Participant. The first payment shall commence not later than
three months following the Participant's death. Annual benefits are to be
paid 1/12th each month.
Definition of "net after payment of federal income taxes" (above). For the
purpose of this agreement, to determine the amount to be paid, it will be
assumed that the payment will be subject to tax at the highest federal
marginal rate applicable to individuals for that year. Should the rate be
increased during the year, the Participant will be entitled to an
adjustment payment within three months of the effective date of the
increase.
2. RETIREMENT BENEFITS.
In addition to any other competition, beginning at age 65 (whether or not
the Participant retires at such time), the Participant shall be entitled
to receive from the Company the amount of dollars necessary to net after
payment of federal Income Taxes $133,333.33 per year commencing not later
than three months after the Participant has reached age 65, for a period
of fifteen years. If the Participant should die during said fifteen year
period, the sum of $133,333.33 per year shall be payable until the
expiration of said fifteen year period to such individual or individuals
as the Participant shall have designated in writing filed with the
Company, or in the absence of such designation, to the estate of the
Participant. Annual benefits are to be paid 1/12 each month.
6
6. Construction Agreement (continued).
The Company shall be under no obligation whatever to purchase or
maintain any contract, policy or other asset to provide the benefits
under this Agreement. Further, any contract, policy or other asset
which the Company may utilize to insure itself of the funds to
provide the benefits hereunder shall not serve in any way as security
to the Participant for the Company's performance under this
Agreement. The right accruing to the Participant or any designated
beneficiary hereunder shall be no greater than the right of any
unsecured general creditor of the Company
The law of the State of Texas shall govern this Agreement.
7. AMENDMENT OF AGREEMENT.
This Agreement may not be altered, amended or revoked except by a
written agreement signed by the Company and the Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first hereinabove written.
STEWART INFORMATION SERVICES CORPORATION
ATTEST:
By: /s/ SUE M. NOLZ By: /s/ CARLOSS MORRIS
---------------------------- ----------------------------
Asst. Secretary Title: Chairman
-------------------
By: /s/ STEWART MORRIS, JR.
----------------------------
7
DESIGNATION OF BENEFICIARY
Pursuant to the terms of a Salaried Deferred Compensation Agreement, dated
_______________, between myself and the Company, I hereby designate the
following beneficiary(ies) to receive any payments which may be due under such
Agreement after my death. This designation hereby revokes any prior designation
which may have been in affect.
/s/ CARLOTTA BARKER
- ------------------------------------ ------------------------------------
(Primary Beneficiary) (Secondary Beneficiary)
Date: March 12, 1986 By: /s/ STEWART MORRIS, JR.
- ------------------------------------ ------------------------------------
Acknowledged by: STEWART INFORMATION
SERVICES CORPORATION
By: /s/ CARLOSS MORRIS
------------------------------------
Title: Chairman
------------------------------------
8
DESIGNATION OF BENEFICIARY
Pursuant to the terms of a Salaried Deferred Compensation Agreement, dated
March 10, 1986, between myself and the Company, I hereby designate the
following beneficiary (ies) to receive any payments which may be due under such
Agreement after my death. This designation hereby revokes any prior designation
which may have been in effect.
STEWART MORRIS, SR. CARLOTTA BARKER
- ------------------------------ ----------------------------
(Primary Beneficiary as to the (Secondary Beneficiary as to
first one million) the remainder)
Date: 9/15/87 By: /s/ STEWART MORRIS, JR.
------------------------- -------------------------
Acknowledge By:
STEWART INFORMATION SERVICES
CORPORATION
By: /s/ MALCOM S. MORRIS
-------------------------
Title: SR EX V.P.
----------------------
9
SALARY DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, made this 10th day of March 1986, by and between Stewart
Information Services Corporation, hereinafter called the "Company" and Max
Crisp, an employee, hereinafter called the "Participant".
WHEREAS, the Participant's competent and faithful efforts on behalf of the
Company have resulted in substantial growth and profits to the Company, and,
WHEREAS, the Company values the efforts, abilities and accomplishments of
the Participant as an important member of management and recognizes that his
future services are vital to its continued growth and profits and that the loss
of his services would result in substantial financial losses, and,
WHEREAS, the Company, in order to retain the services of the Participant,
is willing to provide pre and post-retirement benefits to Participant or his
designated beneficiary pursuant to the terms and conditions contained in this
Salary Deferred Compensation Plan,
NOW, THEREFORE, IT IS MUTUALLY AGREED THAT:
1. DEATH BENEFITS.
If death occurs while Participant is serving as an employee of the Company
or an affiliated Company prior to attaining the retirement age of 65 years,
the company will pay the amount of dollars necessary to net after payment
of Federal Income Taxes $66,666.67 per year, for a period of fifteen years,
to such individual or individuals as the Participant shall have designated
in writing, or in the absence of such designation, to the estate of the
Participant. The first payment shall commence not later than three months
following the Participant's death. Annual benefits are to be paid 1/12th
each month.
Definition of "net after payment of federal income taxes" (above). For the
purpose of this agreement, to determine the amount to be paid, it will be
assumed that the payment will be subject to tax at the highest federal
marginal rate applicable to individuals for that year. Should the rate be
increased during the year, the Participant will be entitled to an
adjustment payment within three months of the effective date of the
increase.
2. RETIREMENT BENEFITS.
In addition to any other compensation, beginning at age 65 (whether or not
the Participant retires at such time), the Participant shall be entitled to
receive from the Company the amount of dollars necessary to net after
payment of Federal Income Taxes $66,666.67 per year commencing not later
than three months after the Participant has reached age 65, for a period of
fifteen years. If the Participant should die during said fifteen year
period, the sum of $66,666.67 per year shall be payable until the
expiration of said fifteen year period to such individual or individuals as
the Participant shall have designated in writing filed with the Company, or
in the absence of such designation, to the estate of the Participant.
Annual benefits are to be paid 1/12th each month.
10
3. FORFEITURE PROVISIONS.
3.1 Except as provided in sections 3.2 and 3.3, the Participant's rights
to the death benefit and retirement benefit provided in this agreement
shall be vested one-seventh per year, the first one-seventh becoming
invested December 31, 1986 and amounts so vested are nonforfeitable even
though the Participant's employment with the Corporation terminates.
3.2 If the Participant's employment with the Corporation is terminated by
reason of fraud, dishonesty, embezzlement or theft, the Agreement shall
terminate and all payments whether vested or not under the terms of this
Agreement shall be forfeited.
3.3 The Participant expressly agrees, as a condition to the performance by
the Corporation of its obligations hereunder, that, during and after the
Participant's employment with the Corporation, or if the Participant is
suffering from total and permanent disability, the Participant will not,
directly or indirectly, render any services of an advisory nature to or
otherwise become employed by or participate or engage in any business
competitive with any of the businesses of the Corporation, without the
prior written consent of the Corporation; provided, however, that nothing
herein shall prohibit the Participant from owning stock or other securities
of a competitor which do not exceed one percent (1%) of the total
outstanding stock of such competitor, and so long as the Participant in
fact does not have the power to control or direct the management or
policies of such competitor. The Corporation shall not be required to make
any payments hereunder whether vested or not if the Participant fails to
comply with the conditions of this section.
4. VESTING.
This benefit shall vest one-seventh per year at the end of each calendar
year beginning December 31, 1986 when the first one-seventh shall vest. If
the Participant terminates his employment with Company, no further amounts
shall vest thereafter. If Participant's employment is terminated by
Company, he shall continue to vest one-seventh each year until fully
vested, subject to the forfeiture provisions of Paragraph 3. Participant
shall be fully vested on death even though prior to the end of the seventh
year. Participant shall continue to vest in the event of permanent
disability.
5. ASSIGNMENT OF RIGHTS.
This Agreement may not be assigned.
6. CONSTRUCTION AGREEMENT.
Any payments under this Agreement shall be independent of, and in addition
to, those under any other plan, program or agreement which may be in effect
between the parties hereto, or any other compensation payable to the
Participant or the Participant's designee by the Company. This Agreement
shall not be construed as a contract of employment and shall not operate to
change in any way any of the other terms and conditions of Participant's
employment and furthermore does not restrict the right of the Company to
discharge the Participant for proper cause or the right of the Participant
to discontinue service as an employee of the Company.
Benefits under this Agreement are compensation for services and rendered
and with respect to such benefit amounts shall constitute a liability of
the Company to the Participant and/or the beneficiaries in accordance with
the terms hereof.
11
6. Construction Agreement (continued).
The Company shall be under no obligation whatever to purchase or maintain
any contract, policy or other asset to provide the benefits under this
Agreement. Further, any contract, policy or other asset which the Company
may utilize to insure itself of the funds to provide the benefits hereunder
shall not serve in any way as security to the Participant for the Company's
performance under this Agreement. The right accruing to the Participant or
any designated beneficiary hereunder shall be no greater than the right of
any unsecured general creditor of the Company.
The law of the State of Texas shall govern this Agreement.
7. AMENDMENT OF AGREEMENT.
This Agreement may not be altered, amended or revoked except by a written
agreement signed by the Company and the Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first hereinabove written.
STEWART INFORMATION SERVICES CORPORATION
ATTEST:
By: /s/ SUE M. NOLZ By: /s/ CARLOSS MORRIS
------------------------------ --------------------------------
Asst. Secretary Title: Chairman
-------------------
By: /s/ MAX CRISP
--------------------------------
Participant
12
DESIGNATION OF BENEFICIARY
Pursuant to the terms of a Salaried Deferred Compensation Agreement, dated
March 10, 1986, between myself and the Company, I hereby designate the
following beneficiary(ies) to receive any payments which may be due under such
Agreement after my death. This designation hereby revokes any prior
designation which may have been in effect.
JIM CRISP ESTATE OF MAX CRISP
- -------------------------- --------------------------------
(Primary Beneficiary) (Secondary Beneficiary)
Date: March 10, 1986 By: MAX CRISP
-------------------- ----------------------------
Acknowledged by: STEWART INFORMATION
SERVICES CORPORATION
By: /s/ CARLOSS MORRIS
-----------------------------
Title: Chairman
-------------------------
13
FIRST AMENDMENT TO
SALARY DEFERRED COMPENSATION AGREEMENT
This First Amendment to Salary Deferred Compensation Agreement is made
this 24th day of July, 1990, by and between Stewart Information Services
Corporation (the "Company") and Malcolm Morris, an employee, (the
"Participant").
WHEREAS, the Company and Participant entered into a Salary Deferred
Compensation Agreement on March 10, 1986, (the "Agreement");
WHEREAS, the Company and Participant desire to amend the Agreement to
provide for a specialized funding mechanism to informally fund the benefits to
be provided under the Agreement;
WHEREAS, the Company and Participant have provided for the establishment
of an irrevocable trust (known as the Stewart Information Services Corporation
Salary Deferred Compensation Trust) as the vehicle for this informal funding;
NOW THEREFORE, it is mutually agreed that:
1. In accordance with the terms of Section 7 of the Agreement (pertaining to
the Amendment of the Agreement), Section 6 (pertaining to Construction of the
Agreement), shall be amended by deleting the second and third paragraphs
thereof in their entirety and substituting therefor, the following two
paragraphs:
The Company shall establish an irrevocable trust (the "Trust") pursuant to
a trust agreement, substantially in the form of Exhibit "I" attached to and
made a part of this Agreement with Ameritrust Texas, N.A. as trustee. The
Company shall transfer to the Trust such life insurance policies or other
property or funds as the Company in its sole discretion deems appropriate
for the purpose of making funds available to pay the benefits to the
Participant under this Agreement.
14
Any such transfers to the Trust shall be irrevocable and be held by the
trustee in accordance with the terms of the Trust for payment in
accordance with this Agreement. In transferring any insurance contracts
or other property rights to the Trust, the Company shall cause such
contracts or rights to be assigned to and in the name of the Trust or
trustee for the Trust and for the benefits thereunder to be payable to
the Trust or trustee for the Trust.
Benefits under the Agreement are compensation for services rendered
and with respect to such benefit amounts, beyond what is funded by and
paid to the Participant (or his beneficiaries) from the Trust, shall
constitute a liability of the Company to the Participant (or his
beneficiaries) in accordance with the terms of this Agreement. Apart from
what the Company transfers to the Trust, the Company shall be under no
obligation to purchase or maintain any assets to provide the benefits
under this Agreement and any asset which the Company may utilize for the
purpose of providing funds to pay the benefits under this Agreement shall
not be considered as security to the Participant for the Company's
performance under this Agreement. The right accruing to the Participant or
any designated beneficiary under this Agreement, shall be no greater than
the right of any unsecured general creditor of the Company.
2. The Agreement shall, except as otherwise hereby amended, continue and
remain in effect.
IN WITNESS WHEREOF, the parties hereto have executed, this First Amendment
to Salary Deferred Compensation Agreement the day and year first hereinabove
written.
STEWART INFORMATION SERVICES
CORPORATION
Affix Corporate Seal
By: /s/ STEWART MORRIS
[SEAL] -------------------------------
Attest Title: President
By: /s/ SUE M. NOLZ -----------------------------
----------------------------------
Assistant Secretary
By: /s/ MALCOLM S. MORRIS
-------------------------------
Malcolm S. Morris, Participant
2
15
FIRST AMENDMENT TO
SALARY DEFERRED COMPENSATION AGREEMENT
This First Amendment to Salary Deferred Compensation Agreement is made
this 24th day of July, 1990, by and between Stewart Information Services
Corporation (the "Company") and Stewart Morris, Jr. an employee, (the
"Participant").
WHEREAS, the Company and Participant entered into a Salary Deferred
Compensation Agreement on March 10, 1986, (the "Agreement");
WHEREAS, the Company and Participant desire to amend the Agreement to
provide for a specialized funding mechanism to informally fund the benefits to
be provided under the Agreement;
WHEREAS, the Company and Participant have provided for the establishment
of an irrevocable trust (known as the Stewart Information Services Corporation
Salary Deferred Compensation Trust) as the vehicle for this informal funding;
NOW THEREFORE, it is mutually agreed that:
1. In accordance with the terms of Section 7 of the Agreement (pertaining to
the Amendment of the Agreement), Section 6 (pertaining to Construction of the
Agreement) shall be amended by deleting the second and third paragraphs thereof
in their entirety and substituting therefor, the following two paragraphs:
The Company shall establish an irrevocable trust (the "Trust")
pursuant to a trust agreement, substantially in the form of Exhibit "I"
attached to and made a part of this Agreement with Ameritrust Texas, N.A.
as trustee. The Company shall transfer to the Trust such life insurance
policies or other property or funds as the Company in its sole discretion
deems appropriate for the purpose of making funds available to pay the
benefits to the Participant under this Agreement.
16
Any such transfers to the Trust shall be irrevocable and be held by the
trustee in accordance with the terms of the Trust for payment in accordance
with this Agreement. In transferring any insurance contracts or other
property rights to the Trust, the Company shall cause such contracts or
rights to be assigned to and in the name of the Trust or trustee for the
Trust and for the benefits thereunder to be payable to the Trust or trustee
for the Trust.
Benefits under the Agreement are compensation for services rendered and
with respect to such benefit amounts, beyond what is funded by and paid to
the Participant (or his beneficiaries) from the Trust, shall constitute a
liability of the Company to the Participant (or his beneficiaries) in
accordance with the terms of this Agreement. Apart from what the Company
transfers to the Trust, the Company shall be under no obligation to
purchase or maintain any assets to provide the benefits under this
Agreement and any asset which the Company may utilize for the purpose of
providing funds to pay the benefits under this Agreement shall not be
considered as security to the Participant for the Company's performance
under this Agreement. The right accruing to the Participant or any
designated beneficiary under this Agreement, shall be no greater than the
right of any unsecured general creditor of the Company.
2. The Agreement shall, except as otherwise hereby amended, continue and
remain in effect.
IN WITNESS WHEREOF, the parties hereto have executed, this First Amendment
to Salary Deferred Compensation Agreement the day and year first hereinabove
written.
STEWART INFORMATION SERVICES
CORPORATION
[SEAL]
By:/s/ STEWART MORRIS
Attest -----------------------------
By: /s/ SUE M. NOLZ
-------------------- Title: President
Assistant Secretary --------------------------
By:/s/ STEWART MORRIS, JR.
-----------------------------
Stewart Morris, Jr. Participant
--------------------
2
17
FIRST AMENDMENT TO
SALARY DEFERRED COMPENSATION AGREEMENT
This First Amendment to Salary Deferred Compensation Agreement is made
this 24th day of July, 1990, by and between Stewart Information Services
Corporation (the "Company") and Max Crisp, an employee, (the "Participant").
WHEREAS, the Company and Participant entered into a Salary Deferred
Compensation Agreement on March 10, 1986, (the "Agreement");
WHEREAS, the Company and Participant desire to amend the Agreement to
provide for a specialized funding mechanism to informally fund the benefits to
be provided under the Agreement;
WHEREAS, the Company and Participant have provided for the establishment
of an irrevocable trust (known as the Stewart Information Services Corporation
Salary Deferred Compensation Trust) as the vehicle for this informal funding;
NOW THEREFORE, it is mutually agreed that:
1. In accordance with the terms of Section 7 of the Agreement (pertaining to
the Amendment of the Agreement), Section 6 (pertaining to Construction of the
Agreement) shall be amended by deleting the second and third paragraphs thereof
in their entirety and substituting therefor, the following two paragraphs:
The Company shall establish an irrevocable trust (the "Trust")
pursuant to a trust agreement, substantially in the form of Exhibit "I"
attached to and made a part of this Agreement with Ameritrust Texas, N.A.
as trustee. The Company shall transfer to the Trust such life insurance
policies or other property or funds as the Company in its sole discretion
deems appropriate for the purpose of making funds available to pay the
benefits to the Participant under this Agreement.
18
Any such transfers to the Trust shall be irrevocable and be held by the
trustee in accordance with the terms of the Trust for payment in
accordance with this Agreement. In transferring any insurance contracts or
other property rights to the Trust, the Company shall cause such contracts
or rights to be assigned to and in the name of the Trust or trustee for
the Trust and for the benefits thereunder to be payable to the Trust or
trustee for the Trust.
Benefits under the Agreement are compensation for services rendered
and with respect to such benefit amounts, beyond what is funded by and
paid to the Participant (or his beneficiaries) from the Trust, shall
constitute a liability of the Company to the Participant (or his
beneficiaries) in accordance with the terms of this Agreement. Apart from
what the Company transfers to the Trust, the Company shall be under no
obligation to purchase or maintain any assets to provide the benefits
under this Agreement and any asset which the Company may utilize for the
purpose of providing funds to pay the benefits under this Agreement shall
not be considered as security to the Participant for the Company's
performance under this Agreement. The right accruing to the Participant
or any designated beneficiary under this Agreement, shall be no greater
than the right of any unsecured general creditor of the Company.
2. The Agreement shall, except as otherwise hereby amended, continue and
remain in effect.
IN WITNESS WHEREOF, the parties hereto have executed, this First Amendment
to Salary Deferred Compensation Agreement the day and year first hereinabove
written.
STEWART INFORMATION SERVICES
CORPORATION
Affix Corporate Seal
[SEAL] By: /s/ STEWART MORRIS
Attest: ------------------------------
By: /s/ SUE M. NOLZ Title: President
------------------------------ ----------------------------
Assistant Secretary
By: /s/ MAX CRISP
------------------------------
Max Crisp, Participant
------------------------------
2
19
STEWART INFORMATION SERVICES CORPORATION
SALARY DEFERRED COMPENSATION TRUST
This Trust Agreement is entered into this 24th day of July, 1990 between
Stewart Information Services Corporation (the "Corporation") as settlor and
Ameritrust Texas, N.A., as Trustee (the "Trustee") which in conjunction with
the Salary Deferred Compensation Agreement ("the Agreement") described below,
is intended to be maintained, as an irrevocable, grantor trust for the purpose
of setting aside and providing a specialized funding mechanism for the deferred
compensation provided under the Agreement. The Corporation has transferred and
delivered to the Trustee the property described in Exhibit "A" attached to and
made a part of this Trust Agreement. The Trustee accepts such property in trust
under the terms of this Trust Agreement.
ARTICLE I
DEFINITIONS
1.1 AGREEMENT. The term "Agreement" shall mean the Stewart Information
Services Corporation Salary Deferred Compensation Agreement entered into on
March 10, 1986, including any amendments thereto.
1.2 BENEFICIARIES. The term "Beneficiaries" shall mean any "participant"
or the "beneficiary" of such participant, as those terms are defined or
provided for under the Agreement.
1.3 EMPLOYER. The term "Employer" shall mean the Corporation.
1.4 TRUST. The term "Trust" shall mean all property transferred to the
Trustee by the Employer and thereafter held by the Trustee pursuant to this
Trust Agreement, including the investments and reinvestments thereof. This Trust
shall be known as the Stewart Information Services Corporation Salary Deferred
Compensation Trust.
1.5 TRUSTEE. The term "Trustee" shall mean the Trustee designated herein
and any successor Trustee.
1.6 CODE. The term "Code" shall mean the Internal Revenue Code of 1986,
as amended (or predecessor or successor codes thereto).
1.7 ERISA. The term "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
20
ARTICLE II
IRREVOCABILITY AND AMENDABILITY
2.1 GENERAL. Except as provided in Section 2.2 of this Article II, this
Trust shall be irrevocable for its term and shall only terminate when all the
assets of the Trust have been distributed in accordance with the terms of the
Agreement and of this Trust Agreement, and the Corporation shall have no right
or power to revoke this instrument.
2.2 AMENDMENT. This Trust Agreement may be amended by the express
written agreement of the Corporation and Trustee executed and acknowledged in
the same form of this Trust Agreement.
ARTICLE III
INCORPORATION OF OTHER DOCUMENTS
3.1 OTHER DOCUMENTS. The Agreement is hereby incorporated herein by
reference.
3.2 ORDER FOR INTERPRETATION IN THE EVENT OF CONFLICT. If a conflict
between the interpretation of this Trust and the Agreement occurs, then
precedence shall be given to the provisions of the documents in the following
order:
(a) The Trust
(b) The Agreement
To the extent possible, the Agreement shall be interpreted as mutually
consistent.
ARTICLE IV
LEGAL TREATMENT OF THE TRUST
4.1 TRUSTEE. The Trustee of this Trust is the person (or entity) named
herein, and said person (or entity), evidenced by the authorized signature of
its agent and representative hereon, accepts such position. The Trustee shall
receive, hold and disburse the assets designated to be so handled under the
Agreement in trust, for the Beneficiaries in accordance with the provisions of
this Trust Agreement.
4.2 CONTRIBUTIONS.
(a) The Employer shall make contributions to this Trust in accordance
with the provisions of the Agreement as a means of
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providing deferred compensation to the Beneficiaries. The Employer shall
transfer to the Trustee all amounts provided for in the Agreement in accordance
with the terms and conditions of the Agreement, to be held by the Trustee,
together with the investments and reinvestments thereof, in TRUST, for the
purposes and with the powers and authorities provided by this Trust Agreement
and subject to the terms and conditions of this Trust Agreement. Except as
otherwise provided in the Agreement and this Trust Agreement, all contributions
made pursuant to the provisions of the Agreement and this Trust Agreement and
all assets and earnings of the Trust are solely and irrevocably dedicated to
the payment of benefits to the Beneficiaries pursuant to the Agreement. The
Trustee shall not have the responsibility for determining the amount of
contributions or collecting contributions to the Trust from the Employer. The
Trustee shall only be responsible for assets transferred to the Trustee by the
Employer.
(b) The Trustee shall not be required to determine amounts to be
contributed or to take any legal action to collect such amounts or collect,
preserve or maintain any Trust property unless it has been indemnified either
by the Trust itself, with the approval of the Employer, or by the Employer with
respect to any expenses or losses to which it may be subjected by taking such
action. Any property acquired by the Trustee through the enforcement or
compromise of any claim or claims it has as Trustee of this Trust will become a
part of the assets of the Trust.
4.3 ALIENATION AND ASSIGNMENT; SPENDTHRIFT TRUST. The interest of each
Beneficiary in this Trust shall be held subject to a "spendthrift trust" within
the meaning of Section 112.035 of the Texas Trust Code. Accordingly, the
interest of the Beneficiaries in the Trust may not be alienated or assigned,
voluntarily or involuntarily and any such attempt at alienation, assignment, or
attachment shall be void, and such interest is not subject to attachment by or
subject to the claim of any creditors of the Beneficiaries, except for debts
owed the Employer.
4.4 TRUST SUBJECT TO GENERAL CREDITORS OF EMPLOYER.
(a) The assets of the Trust shall be treated as general assets of the
Employer and, as such, shall remain subject to claims of the general creditors
of the Employer (including Beneficiaries) under applicable state and federal
law. Nothing in this Trust Agreement shall affect Beneficiaries' rights as
general creditors of the Employer under the Agreement or this Trust Agreement.
No Beneficiary shall have any preferred claim on or any beneficial ownership in
the Trust prior to the time for
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distribution to such Beneficiary under the Agreement. By agreeing to
participate in the Agreement, each Participant shall, in the event that the
Employer of such Participant becomes insolvent, thereby waive any priority such
Participant may have had under law as an employee with respect to any claim
against the Employer for amounts or benefits payable to such Participant under
the Agreement and Trust beyond the rights such Participant would have as a
general creditor.
(b) At any time the Trustee receives actual notice from the Employer that
the Employer is insolvent, the Trustee shall deliver any undistributed
principal and income in the Trust attributable to the Participants who are
employees of such Employer to satisfy such claims of the general creditors of
such Employer as a court of competent jurisdiction may direct. For purposes of
the preceding sentence (i) the term "employees of such Employer" shall include
former employees of such Employer to the extent such undistributed principal
and income is attributable to contributions made by such Employer and (ii) the
Trustee shall have the right to pay the assets of the Trust into such court in
an interpleader proceeding for the purposes of being directed by such court as
to the proper disposition of such assets. The Trustee and all other parties
shall be bound by such direction, and payment of the Trust assets by the
Trustee pursuant to such court's direction shall discharge it from liability
with respect to such payment under the Trust. The Board of Directors of the
Employer shall appoint an individual with notice to the Trustee who shall have
the duty to inform the Trustee of the Employer's insolvency. If a creditor of
the Employer files a claim with the Trustee against the assets of the Trust,
the Trustee shall determine, within 30 days after receipt of such claim,
whether the Employer is insolvent. Pending such determination of insolvency by
the Trustee, the Trustee shall discontinue payments to the Beneficiaries with
respect to such Employer. The Trustee shall resume holding the Trust assets for
the benefit of the Beneficiaries and resume making any payments under the
Agreement to the Beneficiaries only after the Trustee has determined that the
Employer is not insolvent (or is no longer insolvent, if Trustee initially
determined the Employer to be insolvent). Unless the Trustee has actual notice
of the Employer's insolvency or has received a written claim against the Trust
by a creditor of the Employer, the Trustee shall have no duty to inquire whether
the Employer is insolvent. An Employer shall be considered "insolvent" for
purposes of this Trust Agreement if (i) the Employer is unable to pay its debts
as they mature, or (ii) the Employer is subject to a pending proceeding as a
debtor under the Bankruptcy Code. The determination of insolvency shall be given
to the Trustee by the Employer or shall be made by the Trustee in its reasonable
discretion, whichever
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may be applicable, and the Trustee may rely on evidence of solvency provided by
the Employer and shall not be liable to any person for any good faith actions
it takes on account of any such determination. If more than one Employer
participates in the Agreement and Trust, the provisions of this Section 4(b)
shall only apply to the affected Employer.
4.5 GRANTOR TRUST. It is intended that the Trust be taxed as a grantor
trust under the provisions of Section 671 and Section 677(a)(2) of the Code and
that the Employer, as grantor, be treated as the "owner" within the meaning of
those provisions. The Employer shall file its federal income tax return in a
manner consistent with the provisions of the preceding sentence.
ARTICLE V
DISTRIBUTIONS; INDIVIDUAL ACCOUNTS; EMPLOYER LOANS; TERMINATION
5.1 DISTRIBUTIONS. This Trust shall be an accumulation trust. Principal
and all currently earned income shall be accumulated during the term of the
Trust. The Trustee shall hold, manage, invest and reinvest the assets of the
Trust, collect the income therefrom and, after deducting all charges and
expenses properly payable therefrom, hold and distribute the then principal of
the Trust and the income therefrom, in accordance with the provisions of the
Agreement and this Trust Agreement.
5.2 INDIVIDUAL ACCOUNTS. The Employer shall establish an individual
account or accounts for each Beneficiary in accordance with the terms of the
Agreement.
5.3 EMPLOYER LOANS. The Employer shall have the right to borrow an
amount from the Trust to the extent that any life insurance policies held in
the Trust have available cash loan values; provided that the maximum amount of
such borrowings may not exceed the excess of the sum of any premiums paid on
any such policy and interest paid to the life insurance carrier on any loans
made with respect to any such policy over the outstanding balance of any
previous borrowings made by the Employer hereunder. The terms of any loan
entered into between the Trustee and the Employer hereunder shall be set by the
Trustee based on reasonable terms that are mutually acceptable to the Employer.
5.4 TERMINATION. Unless earlier revoked pursuant to the provisions of
Section 2.2 of this Trust Agreement, this Trust shall terminate upon (a) a
complete distribution of the Trust as provided in the Agreement or (b) if
earlier and if required by the applicable rule against perpetuities, one day
prior to the
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last day of the period ending 21 years after the death of the last to die of
the original "participants" under the Agreement. If the trust terminates
pursuant to clause (b) above then the assets of this Trust shall be transferred
to a successor trust established for this purpose; provided such a transfer
does not result in the taxation of the transferred assets to the Beneficiaries.
Except as otherwise provided in this Trust Agreement or the Agreement any
assets remaining in the Trust (or in the case of multiple participants, in each
respective participant's subtrust or separate account) at the time of
termination of the Trust (or subtrust or separate account, as the case may be)
shall be returned to the Employer.
ARTICLE VI
POWERS AND DUTIES OF TRUSTEE
6.1 GENERAL POWERS. Except as provided herein to the contrary, the
Trustee shall have all the powers granted trustees under the Texas Trust Code,
as amended from time to time, and shall have the power to perform every act
necessary or appropriate to carry out the terms of this Trust to the maximum
extent permitted by law, including, without limitation, the following:
(a) The receipt of contributions or funding under the Agreement;
(b) The investment of Trust assets in the forms of investment
provided in Schedule "A" attached to and made a part of this Trust
Agreement. The forms of investment listed on Schedule "A" may be
modified in accordance with the provisions of Section 6.8 of this
Trust Agreement.
(c) The entering into and performance of any agreement;
(d) Subject to the provisions of Section 4.2(b) of this Trust Agreement,
the undertaking of any legal action, whether as plaintiff or
defendant, on behalf of the Trust;
(e) The payment of any tax or assessment incurred in the administration
of the Trust;
(f) The employment of any person, including attorneys, accountants,
investment managers and agents, to advise and assist the Trustee in
the performance of its duties;
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(g) The execution and delivery of all instruments necessary or
appropriate to accomplishing or facilitating the exercise of the
Trustee's powers;
(h) The borrowing of money from any source as may be necessary or
advisable to effectuate the purposes of the Trust on such terms and
conditions as the Trustee, in the Trustee's absolute discretion, may
deem advisable, and for this purpose to mortgage or pledge on a
nonrecourse basis the assets of the Trust; provided however, except as
may be otherwise provided in Section 5.3 of this Trust Agreement, the
proceeds of any insurance company loan may not be paid from the Trust
and, unless each respective Beneficiary otherwise consents, shall not
be used for any purpose other then to maintain the insurance policy
(with respect to which the loan was made) on a "paid up basis," i.e.,
to pay both current premium and interest expense on prior loans from
that policy;
(i) To release, in the discretion of the Trustee, any fiduciary power at
any time, in whole or in part, temporarily or permanently, whenever
the Trustee may deem it advisable, by acknowledged instrument;
(j) To keep any and all securities or other assets of the Trust in the
name of some other person or entity with a power of attorney for the
transfer attached or in bearer or Federal Reserve Book - Entry form or
in the name of the Trustee without disclosing the fiduciary capacity
of the Trustee;
(k) Subject to the provisions of Section 6.11 of the Trust Agreement, to
vote, either in person or by proxy, any share of stock held as part of
the assets of the Trust; and
(l) To hold cash uninvested at any time and in any amount pending
investment pursuant to the terms of the Agreement.
6.2 PRUDENT MAN STANDARD. Except to the extent otherwise provided in
this Trust Agreement or the Agreement, in acquiring, investing, reinvesting,
exchanging, retaining, selling, supervising and managing trust property, a
trustee shall exercise the judgment and care under the current circumstances
that persons of ordinary prudence, discretion and intelligence exercise in the
management of their own affairs, not in regard to speculation, but in regard to
the permanent disposition of their
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funds, considering the probable income from as well as the probable increase in
value and the safety of their capital. Provided, however, except as may
otherwise be provided under applicable law which cannot be waived, the Trustee
shall incur no liability to any person or entity for any action taken pursuant
to a direction, request or approval (given by any Beneficiary, the Employer or
any agent appointed by or representing such person or persons) contemplated by
the terms of this Trust Agreement, and to that extent shall be relieved of the
Prudent Man standard regarding investments of the Trust.
6.3 Compensation of Trustee. The Trustee shall be paid reasonable
compensation for its services as may be agreed upon between the Trustee and
Company from time to time. Such payment shall be made by the person designated
in Section 6.7 of this Trust Agreement.
6.4 Reliance by Third Parties. Any person dealing in good faith
with the Trustee or in good faith assisting the Trustee in conducting a
transaction shall be entitled to rely without inquiry upon the representation
that the Trustee has the power it purports to exercise and has exercised such
power in accordance with the provisions of this Trust Agreement, and in such
event such person shall not be responsible for the application of money or
property paid or delivered to the Trustee.
6.5 Receipt and Disbursement of Funds. The Trustee shall receive
all contributions from the Employer and disburse the Trust in accordance with
the provisions of the Agreement and the terms of this Trust Agreement.
6.6 Cooperation with Employer. The Trustee shall exert reasonable
efforts to cooperate with the Employer and any investment manager or third
party recordkeeper as to any filings, reports and disclosures required by
United States federal, state and local law. Within thirty (30) days (or such
other reasonable time mutually agreeable to the Trustee and the Corporation)
following the end of each Agreement Year during the term of this Trust, the
Trustee shall provide the Employer with a verified written statement of
accounts based on the Trustee's best information and knowledge in a form which
shall substantially reflects the following:
(a) The period covered by the account;
(b) The total principal with which the Trustee is chargeable
according to the last preceding written statement of accounts
or the original principal if there is no preceding statement;
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(c) An itemized schedule of all principal, cash and property
received and disbursed, distributed, or otherwise disposed of
during the period;
(d) An itemized schedule of income received and disbursed,
distributed, or otherwise disposed of during the period;
(e) The balance of principal and income remaining at the close of
the period, how invested, and both the inventory and current
market values of all investments; and
(f) A statement that the Trust has been administered according to
its terms.
Any information transmitted by the Trustee to the Employer hereunder shall be
certified to as complete and accurate by the Trustee. Any information required
to be provided for the preparation of any annual reporting and disclosure
materials shall be provided on an annual basis not less than 30 days prior to
the time required for filing the applicable report, disclosure or return
(including extensions thereof), unless the Employer and Trustee shall in
writing have agreed to a later date for the provision of such information. The
Trustee shall not be responsible for complying with the provisions of this
Section 6.6 to the extent that the underlying administrative responsibility has
been allocated to a third party in accordance with Section 6.10 of this
Agreement. The statements provided in accordance with the above shall be deemed
correct and final and binding as to all parties 90 days after receipt by the
Employer except to the extent objected to prior to the end of such period.
6.7 Payment of Expenses.
(a) The expenses incurred by the Trustee in the performance of its
duties, including fees for legal services rendered to the
Trustee (whether or not rendered in connection with a judicial
or administrative proceeding and whether or not incurred while
it is acting as Trustee) and the costs of the accounting
described in Section 6.6 above;
(b) any compensation paid to the Trustee in accordance with
Section 6.3 above; and
(c) all other proper charges and disbursements of the Trustee
shall be paid by the Employer.
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6.8 Direction of Investments. The Employer shall have the right to
select the investment alternatives provided in Section 6.1(b) of the Trust
Agreement and to modify them from time to time, provided however, that to the
extent that the Trust shall be holding life insurance policies or contracts
that are eligible for any significant advantages or benefits with respect to
transitional rules and grandfathering protection under the Tax Reform Act of
1986 or other tax legislation, such contract or policy shall not be assigned,
transferred, surrendered, exchanged or cancelled without the prior advice and
consent of an independent insurance advisor mutually designated by the Trustee
and the Company.
6.9 Valuation. The Trustee shall value the Trust at the fair
market value of the assets in the Trust as of the last business day of each
Agreement year and upon such other dates as may be determined by the Employer
or the Trustee or as may be specified under the Agreement. The determination of
the Trustee with respect to the fair market value of any asset shall be final
and conclusive. In making such valuation, the Trustee shall deduct all charges,
expenses and other liabilities, if any, contingent or otherwise, then
chargeable against the Trust, in order to give effect to income realized and
expenses paid or incurred, losses sustained, and unrealized gains or losses
constituting appreciation or depreciation in the value of the Trust investments
since the last previous valuation.
6.10 Appointment of Other Fiduciaries and Service Providers. The
Corporation and Trustee agree that either party with the prior consent of the
other may appoint third parties to be allocated administrative or investment
responsibilities under the Trust as mutually agreeable between the Corporation
and Trustee, including recordkeeping and investment fund managers or sponsors.
6.11 Investment Company Shares. The voting rights of any shares of
any registered funds under the Investment Company Act of 1940 in the Trust
shall be exercised in accordance with the direction given the Trustee by the
Employer.
6.12 Limitation of Trustee Liability. The Trustee shall not be
liable to the Trust or to any person having a beneficial interest in the Trust
for any losses or decline in value which may be incurred upon any investment of
the trust assets, as long as the Trustee acts in good faith and in accordance
with the terms of the Agreement and this Trust Agreement. The Trustee shall not
be liable for any act or omission by the Trustee, because of a direction of any
Beneficiary, the Employer or any investment manager appointed by the Employer,
nor for any act or
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omission of any Beneficiary, the Employer, any investment manager appointed by
the Employer or any other agent appointed by the Employer except to the extent
required by applicable state or federal law under which liability cannot be
waived. The Trustee shall not be liable for any act or omission on the
Trustee's own part (except for any act or omission as is attributable to gross
negligence, a willful breach of trust or bad faith on the part of the Trustee)
except to the extent required by the terms of applicable state or federal law
under which liability cannot be waived. The Trustee shall not be accountable or
held liable for any act or omission of any agent of the Trustee if the Trustee
has used good faith and ordinary care in the selection of such agent, and in
such event, any liability shall be solely that of such agent.
6.13 Reliance on Information. When the Trustee acts in good faith,
the Trustee, in all matters pertaining to the Trustee's management and
investment of the Trust, may rely upon any notice, resolution, instruction,
direction, order, certificate, opinion, letter, telegram or other document
believed by the Trustee to be genuine, to have been signed by a proper
representative of any Beneficiary, the Employer or any investment manager or
third party recordkeeper, if one is appointed, and to be the act of any
Beneficiary, the Employer or the investment manager or third party
recordkeeper, as the case may be. The Trustee shall accept any certificate or
other instrument duly signed by a proper representative of any Beneficiary, the
Employer or the investment manager or third party recordkeeper, if one is
appointed which purports to evidence an instruction, direction or order of any
Beneficiary, the Employer, the investment manager or third party recordkeeper,
as the case may be, as conclusive evidence thereof.
6.14 Indemnification. The Employer hereby, jointly and severally,
agrees to indemnify and hold harmless the Trustee from and against any and all
losses, claims, damages, liabilities costs and expenses, including but not
limited to, liability for any judgments, settlements consented to in writing by
the Trustee, which consents will not be unreasonably withheld, and reasonable
attorneys fees arising out of or in connection with or as a direct or indirect
result of its serving as Trustee of the Trust established under this Trust
Agreement, (including but not limited to the Trustee's acts or omissions with
respect to (a) the voting of any share of stock held as part of the assets of
the Trust, or (b) establishing or maintaining investment funds or effecting
investments therein in accordance with the terms and provisions of the Trust,
or the Trustee's determination of insolvency of any Employer and the Trustee's
acts or omissions in accordance with the terms and provisions of the Trust
following any determination of insolvency of any Employer), except only
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those losses, claims, changes, liabilities, costs and expenses, if any, arising
out of or in connection with or as a direct or indirect result of the Trustee's
bad faith, gross negligence or willful neglect or breach of trust. The Trustee
shall promptly notify each Employer of any claim, action or proceeding for
which it may seek indemnity, Such indemnity is a continuing obligation and
shall be binding on each Employer and its successors, whether by merger or
otherwise, and assigns. In addition, such indemnity shall survive the
resignation or removal of the Trustee and/or the liquidation of the Trust.
ARTICLE VII
ENFORCEMENT AND REMEDIES
7.1 Right to Sue. The Trustee may maintain on behalf of the Trust
in its representative capacity a civil action for any legal or equitable remedy
against a third person that it could maintain in its own right if it were the
party aggrieved.
7.2 Liens. The Trustee is entitled to a lien against the Trust -
(a) for any advances made by it for the benefit of the
Trust or for any unpaid expenses properly chargeable against
the Trust; and
(b) for payment of its compensation under Section 6.3 of
this Trust Agreement.
ARTICLE VIII
REMOVAL, RESIGNATION AND APPOINTMENT
OF TRUSTEES: AMENDMENTS
8.1 Removal of Trustee. The Trustee may be removed at any time by
the Corporation. No such removal shall take effect until thirty (30) days from
the date that a written notice was delivered to the Trustee unless prior
thereto a successor Trustee shall have been appointed and accepted and the
Trustee consents to such earlier date.
8.2 Resignation of Trustee. The Trustee may resign at any time
upon seven (7) days written notice delivered to the Corporation.
8.3 Appointment of Successor Trustee; and Transfer of Funds. The
Corporation shall appoint a qualified corporate
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fiduciary as Trustee to replace a removed or resigned Trustee and such
appointment shall be made not later than the effective date of such removal or
resignation of such Trustee. The predecessor Trustee shall assign, transfer and
pay over the assets of the Trust to the Successor Trustee. The predecessor
Trustee is authorized, however, to reserve such sum of money as is reasonable
for the payment of its fees and expenses in connection with the settlement of
its account or otherwise, and any balance of such reserve remaining after the
payment of such fees and expenses shall be paid over to the successor Trustee.
8.4 Accounting of Removed or Resigned Trustee. Any Trustee removed
under Section 8.1 above shall remain as Trustee until its successor shall have
been appointed, but not more than thirty (30) days following notice of removal.
Within ninety (90) days following the expiration of the thirty (30) day period
following its removal or resignation, the Trustee shall provide the Corporation
with a full and final accounting. The written approval of such an accounting by
an Employer, or the failure of the Employer to notify the Trustee of their
disapproval of such an accounting Within ninety (90) days after its receipt
shall be final and binding as to the Trustee's administration of the Trust for
the applicable accounting period upon the Employer and all persons who have or
may thereafter have an interest in the Trust.
ARTICLE IX
MISCELLANEOUS
9.1 Controlling Law. This Trust has been entered into in the state
of Texas and except to the extent preempted by ERISA or other federal law shall
be construed and enforced in accordance with the laws of Texas.
9.2 Income Tax Deferral; ERISA Status. This Trust is intended to
comply with the law and rulings under Sections 83, 402(b), 451 and 671 of the
Code and the economic benefit and constructive receipt doctrines thereunder,
including the ruling positions and criteria of the Internal Revenue Service as
in effect from time to time, and the related rulings and regulations, which
result in a deferral of income tax to the Participants (or Beneficiaries). This
Trust is also intended to comply with Sections 201(2), 301(a) (3) and 401(a)
(1) of ERISA and the related rules and regulations thereunder, applying to
unfunded plans maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.
The Trust is also intended to qualify as maintaining separate accounts for each
employee within the meaning of Section 404(a) (5) of the Code pertaining to the
allowance of the Employer's deduction.
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9.3 Subtrusts. This Trust may receive contributions for more than
one Participant, pursuant to the separate Agreement for each such Participant,
provided in the event that more than one Participant is covered by the Trust, a
separate subtrust shall be established for each such Participant in a manner
that satisfies the provisions of the last sentence of the preceding section
(9.2) of this Agreement.
9.4 Accountability For Funds Received. The Trustee shall be
accountable only for funds or other property received by him pursuant to the
Agreement and Trust.
9.5 Recourse Beyond Trust Assets. The Employer shall be liable to
the Beneficiary for the payment of the benefits under the Agreement to the
extent of any insufficiency in the funds available under and paid to the
Beneficiary from the Trust. In addition, the rights of the Beneficiaries
against the Employer for the payment of benefits under the Agreement shall be
preserved in accordance with the provisions of Section 4.4(a) of this Trust
Agreement in the event that the assets of this Trust are paid to the general
creditors of the Employer in accordance with the provisions of Section 4.4(b)
of this Trust Agreement. The provisions of this Section 9.5 shall not limit the
rights of the Beneficiaries under this Trust Agreement or as otherwise allowed
by law with respect to the Trustee.
9.6 Facility of Payment. If the Employer determines that a payee
under this Trust Agreement is unable to care for his own affairs because of
physical or mental condition or minority, any such payment (unless a claim
shall have been made therefor by a duly appointed guardian or other legal
representative) may be made to the payee's guardian or spouse, or to any
descendant, parent, relative, or other person determined by the Employer to be
trustworthy to utilize the payment for the benefit of the payee, and the
payments so made shall completely discharge the liability of the Trustee with
respect thereto.
9.7 No Bond Required. Except as otherwise required by law, no
Trustee acting hereunder shall be required to give bond or other security in
any jurisdiction.
9.8 Gender and Number. To the extent required by the context
herein, each gender shall include the masculine, the feminine and the neuter,
and each number shall include the singular and the plural.
9.9 Execution in Counterparts. This Trust may be executed in
counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the Corporation and Trustee have caused their
respective seals to be hereunto affixed the date first above written.
CORPORATION:
ASSET STEWART INFORMATION SERVICES CORPORATION
By /s/ [ILLEGIBLE]
-----------------------------
Assistant, Secretary By: /s/ STEWART MORRIS
--------------------------------
Stewart Morris, President
TRUSTEE: AMERITRUST TEXAS, N.A.
By:
Name: /s/ [ILLEGIBLE]
-------------------------------
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THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Stewart Morris, known to me to be the President of Stewart Information Services
Corporation whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the 24th day of July,
1990.
/s/ LOU ANN WOCLAND
----------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires: 7/14/92
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Carl W. Pitschmonn Jr., known to me to be the person whose name is subscribed to
the foregoing instrument as Trustee and acknowledged to me that such person
executed the same for the purposes and consideration therein expressed, in the
capacity therein stated and as the act and deed of said banking institution.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the 21st day of
September, 1990.
/s/ LAURA VALDES
------------------------------
[SEAL] NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires: 5/27/94
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SCHEDULE "A"
Pursuant to Section 6.1(b) of the Trust Agreement the Trustee shall
make investments available under this Trust in the following categories of
investments:
(1) life insurance contracts and policies of a type mutually approved
by or acceptable to both the Employer and the Beneficiaries
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EXHIBIT "A"
The Corporation has transferred and delivered to the Trustee the property
described below:
Security Life of Denver Policy Number 000953922 Dated April 1, 1986 in
the Face Amount of $604,084 for Martin M. Crisp, Insured.
Security Life of Denver Policy Number 000957576 Dated April 1, 1986,
Expiry Date April 1, 1987 in the Face Amount of $219,250 for Martin M.
Crisp, Insured.
Security Life of Denver Policy Number 000953920 Dated April 1, 1986 in
the Face Amount of $877,655 for Malcolm S. Morris, Insured.
Security Life of Denver Policy Number 000957578 Dated April 1, 1986,
Expiry Date April 1, 1987 in the Face Amount of $300,000 for Malcolm
S. Morris, Insured.
Security Life of Denver Policy Number 000953921 Dated April 1, 1986 in
the Face Amount off $958,222 for Stewart Morris, Jr., Insured.
Security Life of Denver (Duplicate) Policy Number 000957577 Dated
April 1, 1986, Expiry Date April 1, 1990 in the Face Amount of
$220,000 for Stewart Morris, Insured.
-18-
37
SECOND AMENDMENT TO THE
SALARY DEFERRED COMPENSATION AGREEMENT
This Second Amendment to Salary Deferred Compensation Agreement is made
this 30th day of October, 1992 by and between Stewart Information Services
Corporation (the "Company") and Malcolm S. Morris, an employee, (the
"Participant").
WHEREAS, the Company and Participant entered into a Salary Deferred
Compensation Agreement on March 10, 1986, (the "Agreement");
WHEREAS, the Agreement was amended on July 24, 1990;
WHEREAS, the Company and Participant desire to amend the Agreement for a
change in the informal funding mechanism for the benefits to be provided under
the Agreement to accommodate a split-dollar arrangement;
NOW, THEREFORE, it is mutually agreed that:
In accordance with the terms of Section 7 of the Agreement (pertaining to
the Amendment of the Agreement) the Agreement shall be amended as follows:
1. Section 1 (pertaining to Death Benefits) shall be amended by deleting it in
its entirety and substituting therefor, the following:
38
1. DEATH BENEFITS
If death occurs while Participant is serving as an employee of the Company
or of an affiliated company prior to attaining the retirement age of 65
years, the Company will pay the amount of dollars necessary to net after
the payment of federal, state, county and city income taxes $133,333.33
per year, for a period of 15 years, to such individual or individuals as
the Participant shall have designated in writing, or in the absence of
such designation, to the estate of the Participant. The first payment
shall commence not later than three months following the Participant's
death. Annual payments are to be paid 1/12 each month.
For the purposes of this Agreement, to determine the "net after the payment
of federal, state, county and city income tax," it will be assumed that the
payment will be subject to tax at the highest marginal rates and highest
surtax rates applicable to an individual taxpayer for the year of payment
as set by the federal, State of Texas, Harris County and City of Houston
government.
The amount used for federal, state, county and city taxes shall be treated
separately and shall not be deducted one from the other in the calculation
of the payment to the Participant. Should the tax rates be increased
during the year, the Participant shall be entitled to an adjustment
payment within three months of the effective date of the increase.
2. Section 2 (pertaining to Retirement Benefits) shall be amended by deleting
it in its entirety and substituting therefor the following:
2. RETIREMENT BENEFITS
In addition to any other compensation, beginning at age 65 (whether or not
the Participant retires at such time), the Participant shall be entitled
to receive from the Company the amount of dollars necessary to net after
the payment of federal, state, county and city income taxes $133,333.33
per year commencing not later than three months after the Participant has
reached age 65, for a period of 15 years. If the Participant should die
during the said 15 year period, the sum of $133,333.33 per year shall be
paid until the expiration of said 15 year period to such individual or
individuals as the Participant shall have designated in writing, or in the
absence of such designation, to the estate of the Participant. Annual
benefits are to be paid 1/12 each month.
2
39
3. Section 6 (pertaining to Construction), as amended by the first amendment,
shall be amended by deleting it in its entirety and substituting therefor the
following:
6. CONSTRUCTION AGREEMENT.
Any payments under this Agreement shall be independent of, and in
addition to, those under any other plan, program or agreement which may be
in effect between the parties hereto, or any other compensation payable to
the Participant or the Participant's designee by the Company. This
Agreement shall not be construed as a contract of employment and shall not
operate to change in any way any of the other terms and conditions of
Participant's employment and furthermore does not restrict the right of the
Company to discharge the Participant for proper cause or the right of the
Participant to discontinue service as an employee of the Company.
The Company shall establish an irrevocable trust (the "Trust") pursuant to
a trust agreement, substantially in the form of Exhibit "A" attached to
and made a part of this Agreement with Ameritrust Texas, N.A., as trustee.
The Company shall transfer to the Trust such life insurance policies or
other property or funds as the Company in its sole discretion deems
appropriate for the purpose of making funds available to pay the benefits
to the Participant under this Agreement.
Any such transfers to the Trust shall be irrevocable and be held by the
trustee in accordance with the terms of the Trust for payment in accordance
with this Agreement. In transferring any insurance contracts or other
property rights to the Trust, the Company shall cause such contracts or
rights to be assigned to and in the name of the Trust or trustee for the
Trust and for the benefits thereunder to be payable to the Trust or trustee
for the Trust.
Benefits under the Agreement are compensation for services rendered and
with respect to such benefit amounts, beyond what is funded by and paid to
the Participant (or his beneficiaries) from the Trust, shall constitute a
liability of the Company to the Participant (or his beneficiaries) in
accordance with the terms of this Agreement. Apart from what the Company
transfers to the Trust, the Company shall be under no obligation to
purchase or maintain any assets to provide the benefits under this
Agreement and any asset which the Company may utilize for the purpose of
providing funds to pay the benefits under this Agreement shall not be
considered as security to the Participant for the Company's performance
under this Agreement. The right accruing to the Participant or any
designated beneficiary under this Agreement, shall be no greater than the
right of any unsecured general creditor of the Company.
3
40
Although it is not required to do so, the Company may establish a split
dollar agreement with the Participant for the purchase of life insurance as
a means of meeting in whole or in part its obligations under this
Agreement. It is hereby agreed that the amount of policy death benefits (in
event of the Participant's death, to the extent that the death benefits are
payable under the life insurance contract) and accumulated cash values
owned by the Participant under the policy (collectively the "Insurance
Benefits") which are paid to the Participant shall be deemed to be payments
by the Company in discharging its obligations under this Agreement.
In using the Insurance Benefits to offset obligations under this Agreement,
the following steps shall be followed to calculate the amount of payments
due to the Participant or the Participant's beneficiary: (1) the annual
payments of $133,333.33 shall be increased to a pretax amount using the
federal, state, county and city tax rates in effect at the date of the
calculation (consistent with the methodology set forth in the second
paragraph of Section 1 of this Agreement, as amended) and (2) the present
value shall then be calculated based on the payment amount determined in
(1), using a 7% interest rate, and a 15-year payment period.
If the Company establishes a split dollar agreement the Company hereby
agrees that if paying of the Insurance Benefits to the Participant does not
fully satisfy the Company's obligation under this Agreement then the
Company agrees to pay the Participant a lump sum from the Company's
collateral assignment portion of the split dollar insurance contract and
apply such lump sum in satisfaction of such deficiency to the extent
necessary to satisfy such deficiency. To the extent that there are not
sufficient amounts available from the Company's collateral assignment
portion of the split dollar insurance contract to fully satisfy this
deficiency and its obligations under this Agreement then the Company shall
pay any remaining deficiency directly to the Participant in the form of a
lump sum cash bonus or through installments as described in Section 1 and 2
of this amendment.
The trustee of the Trust shall apply any Insurance Benefits, collateral
assignment portion, and any other assets in the Trust in a manner
consistent with the preceding provisions of this Section 6 of the
Agreement, as amended, to satisfy the Company's obligations under this
Agreement. To the extent the assets of the Trust are not sufficient for the
purpose, the Company shall pay the Participant directly any remaining
deficiency in its obligation under this Agreement.
The laws of the State of Texas shall govern this Agreement.
4
41
4. The Agreement shall, except as otherwise hereby amended, continue and
remain if effect.
IN WITNESS WHEREOF, the parties hereto have executed, this Second
Amendment to Salary Deferred Compensation Agreement the day and year first
hereinabove written.
STEWART INFORMATION SERVICES
CORPORATION
Affix Corporate Seal
By: /s/ CARLOSS MORRIS
-------------------------
Title: Chairman
----------------------
Attest
By: /s/ SUE M. NOLZ
--------------------------
ASST. SECRETARY By: /s/ MALCOLM S. MORRIS
-------------------------
Malcolm S. Morris, Participant
5
42
SECOND AMENDMENT TO THE
SALARY DEFERRED COMPENSATION AGREEMENT
This Second Amendment to Salary Deferred Compensation Agreement is made
this 30th day of October, 1992 by and between Stewart Information Services
Corporation (the "Company") and Stewart Morris, Jr., an employee, (the
"Participant").
WHEREAS, the Company and Participant entered into a Salary Deferred
Compensation Agreement on March 10, 1986, (the "Agreement");
WHEREAS, the Agreement was amended on July 24, 1990;
WHEREAS, the Company and Participant desire to amend the Agreement for a
change in the informal funding mechanism for the benefits to be provided under
the Agreement to accommodate a split-dollar arrangement;
NOW, THEREFORE, it is mutually agreed that:
In accordance with the terms of Section 7 of the Agreement (pertaining to
the Amendment of the Agreement) the Agreement shall be amended as follows:
1. Section 1 (pertaining to Death Benefits) shall be amended by deleting it in
its entirety and substituting therefor, the following:
43
1. DEATH BENEFITS
If death occurs while Participant is serving as an employee of the Company
or of an affiliated company prior to attaining the retirement age of 65
years, the Company will pay the amount of dollars necessary to net after
the payment of federal, state, county and city income taxes $133,333.33
per year, for a period of 15 years, to such individuals or individuals as
the Participant shall have designated in writing, or in the absence of
such designation, to the estate of the Participant. The first payment
shall commence not later than three months following the Participant's
death. Annual payments are to be paid 1/12 each month.
For the purposes of this Agreement, to determine the "net after the
payment of federal, state, county and city income tax," it will be assumed
that the payment will be subject to tax at the highest marginal rates and
highest surtax rates applicable to an individual taxpayer for the year of
payment as set by the federal, State of Texas, Harris County and City of
Houston government.
The amount used for federal, state, county and city taxes shall be treated
separately and shall not be deducted one from the other in the calculation
of the payment to the Participant. Should the tax rates be increased
during the year, the Participant shall be entitled to an adjustment
payment within three months of the effective date of the increase.
2. Section 2 (pertaining to Retirement Benefits) shall be amended by deleting
it in its entirety and substituting therefor the following:
2. RETIREMENT BENEFITS
In addition to any other compensation, beginning at age 65 (whether or not
the Participant retires at such time), the Participant shall be entitled
to receive from the Company the amount of dollars necessary to net after
the payment of federal, state, county and city income taxes $133,333.33
per year commencing not later than three months after the Participant has
reached age 65, for a period of 15 years. If the Participant should die
during the said 15 year period, the sum of $133,333.33 per year shall be
paid until the expiration of said 15 year period to such individual or
individuals as the Participant shall have designated in writing, or in the
absence of such designation, to the estate of the Participant. Annual
benefits are to be paid 1/12 each month.
2
44
3. Section 6 (pertaining to Construction), as amended by the first amendment,
shall be amended by deleting it in its entirety and substituting therefor the
following:
6. CONSTRUCTION AGREEMENT.
Any payments under this Agreement shall be independent of, and in addition
to, those under any other plan, program or agreement which may be in effect
between the parties hereto, or any other compensation payable to the
Participant or the Participant's designee by the Company. This Agreement
shall not be construed as a contract of employment and shall not operate to
change in any way any of the other terms and conditions of Participant's
employment and furthermore does not restrict the right of the Company to
discharge the Participant for proper cause or the right of the Participant
to discontinue service as an employee of the Company.
The Company shall establish an irrevocable trust (the "Trust") pursuant to
a trust agreement, substantially in the form of Exhibit "A" attached to
and made a part of this Agreement with Ameritrust Texas, N.A., as trustee.
The Company shall transfer to the Trust such life insurance policies or
other property or funds as the Company in its sole discretion deems
appropriate for the purpose of making funds available to pay the benefits
to the Participant under this Agreement.
Any such transfers to the Trust shall be irrevocable and be held by the
trustee in accordance with the terms of the Trust for payment in accordance
with this Agreement. In transferring any insurance contracts or other
property rights to the Trust, the Company shall cause such contracts or
rights to be assigned to and in the name of the Trust or trustee for the
Trust and for the benefits thereunder to be payable to the Trust or trustee
for the Trust.
Benefits under the Agreement are compensation for services rendered and
with respect to such benefit amounts, beyond what is funded by and paid to
the Participant (or his beneficiaries) from the Trust, shall constitute a
liability of the Company to the Participant (or his beneficiaries) in
accordance with the terms of this Agreement. Apart from what the Company
transfers to the Trust, the Company shall be under no obligation to
purchase or maintain any assets to provide the benefits under this
Agreement and any asset which the Company may utilize for the purpose of
providing funds to pay the benefits under this Agreement shall not be
considered as security to the Participant for the Company's performance
under this Agreement. The right accruing to the Participant or any
designated beneficiary under this Agreement, shall be no greater than the
right of any unsecured general creditor of the Company.
3
45
Although it is not required to do so, the Company may establish a split
dollar agreement with the Participant for the purchase of life insurance as
a means of meeting in whole or in part its obligations under this
Agreement. It is hereby agreed that the amount of policy death benefits (in
event of the Participant's death, to the extent that the death benefits are
payable under the life insurance contract) and accumulated cash values
owned by the Participant under the policy (collectively the "Insurance
Benefits") which are paid to the Participant shall be deemed to be payments
by the Company in discharging its obligations under this Agreement.
In using the Insurance Benefits to offset obligations under this Agreement,
the following steps shall be followed to calculate the amount of payments
due to the Participant or the Participant's beneficiary: (1) the annual
payments of $133,333.33 shall be increased to a pretax amount using the
federal, state, county and city tax rates in effect at the date of the
calculation (consistent with the methodology set forth in the second
paragraph of Section 1 of this Agreement, as amended) and (2) the present
value shall then be calculated based on the payment amount determined in
(1), using a 7% interest rate, and a 15-year payment period.
If the Company establishes a split dollar agreement the Company hereby
agrees that if paying of the Insurance Benefits to the Participant does not
fully satisfy the Company's obligation under this Agreement then the
Company agrees to pay the Participant a lump sum from the Company's
collateral assignment portion of the split dollar insurance contract and
apply such lump sum in satisfaction of such deficiency. To the extent that
there are not sufficient amounts available from the Company's collateral
assignment portion of the split dollar insurance contract to fully satisfy
this deficiency and its obligations under this Agreement then the Company
shall pay any remaining deficiency directly to the Participant in the form
of a lump sum cash bonus or through installments as described in Section 1
and 2 of this amendment.
The trustee of the Trust shall apply any Insurance Benefits, collateral
assignment portion, and any other assets in the Trust in a manner
consistent with the preceding provisions of this Section 6 of the
Agreement, as amended, to satisfy the Company's obligations under this
Agreement. To the extent the assets of the Trust are not sufficient for the
purpose, the Company shall pay the Participant directly any remaining
deficiency in its obligation under this Agreement.
The laws of the State of Texas shall govern this Agreement.
4
46
4. The Agreement shall, except as otherwise hereby amended, continue and
remain in effect.
IN WITNESS WHEREOF, the parties hereto have executed, this Second
Amendment to Salary Deferred Compensation Agreement the day and year first
hereinabove written.
STEWART INFORMATION SERVICES
CORPORATION
Affix Corporate Seal
By: /s/ CARLOSS MORRIS
-----------------------------
Title: Chairman
--------------------------
Attest
By: /s/ SUE M. NOLZ
-----------------------------
Asst. Secretary By: /s/ STEWART MORRIS, JR.
-----------------------------
Stewart Morris, Jr., Participant
5
47
SECOND AMENDMENT TO THE
SALARY DEFERRED COMPENSATION AGREEMENT
This Second Amendment to Salary Deferred Compensation Agreement is made
this 30th day of October, 1992 by and between Stewart Information Services
Corporation (the "Company") and Max Crisp, an employee, (the "Participant").
WHEREAS, the Company and Participant entered into a Salary Deferred
Compensation Agreement on March 10, 1986, (the "Agreement");
WHEREAS, the Agreement was amended on July 24, 1990;
WHEREAS, the Company and Participant desire to amend the Agreement for a
change in the informal funding mechanism for the benefits to be provided under
the Agreement to accommodate a split-dollar arrangement;
NOW, THEREFORE, it is mutually agreed that:
In accordance with the Terms of Section 7 of the Agreement (pertaining to
the Amendment of the Agreement) the Agreement shall be amended as follows:
1. Section 1 (pertaining to Death Benefits) shall be amended by deleting it in
its entirety and substituting therefor, the following:
48
3. Section 6 (pertaining to Construction), as amended by the first amendment,
shall be amended by deleting it in its entirety and substituting therefor the
following:
6. CONSTRUCTION AGREEMENT.
Any payments under this Agreement shall be independent of, and in addition
to, those under any other plan, program or agreement which may be in effect
between the parties hereto, or any other compensation payable to the
Participant or the Participant's designee by the Company. This Agreement
shall not be construed as a contract of employment and shall not operate to
change in any way any of the other terms and conditions of Participant's
employment and furthermore does not restrict the right of the Company to
discharge the Participant for proper cause or the right of the Participant
to discontinue service as an employee of the Company.
The Company shall establish an irrevocable trust (the "Trust") pursuant to
a trust agreement, substantially in the form of Exhibit "A" attached to and
made a part of this Agreement with Ameritrust Texas, N.A., as trustee. The
Company shall transfer to the Trust such life insurance policies or other
property or funds as the Company in its sole discretion deems appropriate
for the purpose of making funds available to pay the benefits to the
Participant under this Agreement.
Any such transfers to the Trust shall be irrevocable and be held by the
trustee in accordance with the terms of the Trust for payment in accordance
with this Agreement. In transferring any insurance contracts or other
property rights to the Trust, the Company shall cause such contracts or
rights to be assigned to and in the name of the Trust or trustee for the
Trust and for the benefits thereunder to be payable to the Trust or trustee
for the Trust.
Benefits under the Agreement are compensation for services rendered and with
respect to such benefit amounts, beyond what is funded by and paid to the
Participant (or his beneficiaries) in accordance with the terms of this
Agreement. Apart from what the Company transfers to the Trust, the Company
shall be under no obligation to purchase or maintain any assets to provide
the benefits under this Agreement and any asset which the Company may
utilize for the purpose of providing funds to pay the benefits under this
Agreement shall not be considered as security to the Participant for the
Company's performance under this Agreement. The right accruing to the
Participant or any designated beneficiary under this Agreement, shall be no
greater than the right of any unsecured general creditor of the Company.
3
49
Although it is not required to do so, the Company may establish a split
dollar agreement with the Participant for the purchase of life insurance as
a means of meeting in whole or in part its obligations under this
Agreement. It is hereby agreed that the amount of policy death benefits (in
event of the Participant's death, to the extent that the death benefits are
payable under the life insurance contract) and accumulated cash values
owned by the Participant under the policy (collectively the "Insurance
Benefits") which are paid to the Participant shall be deemed to be payments
by the Company in discharging its obligations under this Agreement.
In using the Insurance Benefits to offset obligations under this Agreement,
the following steps shall be followed to calculate the amount of payments
due to the Participant or the Participant's beneficiary: (1) the annual
payments of $66,666.67 shall be increased to a pretax amount using the
federal, state, county and city tax rates in effect at the date of the
calculation (consistent with the methodology set forth in the second
paragraph of Section 1 of this Agreement, as amended) and (2) the present
value shall then be calculated based on the payment amount determined in
(1), using a 7% interest rate, and a 15-year payment period.
If the Company establishes a split dollar agreement the Company hereby
agrees that if paying of the Insurance Benefits to the Participant does not
fully satisfy the Company's obligation under this Agreement then the
Company agrees to pay the Participant a lump sum from the Company's
collateral assignment portion of the split dollar insurance contract and
apply such lump sum in satisfaction of such deficiency to the extent that
there are not sufficient amounts available from the Company's collateral
assignment portion of the split dollar insurance contract to fully satisfy
this deficiency and its obligations under this Agreement then the Company
shall pay any remaining deficiency directly to the Participant in the form
of a lump sum cash bonus or through installments as described in Section 1
and 2 of this amendment.
The trustee of the Trust shall apply any Insurance Benefits, collateral
assignment portion, and any other assets in the Trust in a manner
consistent with the preceding provisions of this Section 6 of the
Agreement, as amended, to satisfy the Company's obligations under this
Agreement. To the extent the assets of the Trust are not sufficient for the
purpose, the Company shall pay the Participant directly any remaining
deficiency in its obligation under this Agreement.
The laws of the State of Texas shall govern this Agreement.
4
50
4. The Agreement shall, except as otherwise hereby amended, continue and
remain in effect.
IN WITNESS WHEREOF, the parties hereto have executed, this Second
Amendment to Salary Deferred Compensation Agreement the day and year first
hereinabove written.
STEWART INFORMATION SERVICES
CORPORATION
Affix Corporate Seal
By: /s/ CARLOSS MORRIS
-----------------------------
Title: Chairman
--------------------------
Attest
By: /s/ SUE M. NOLZ
-----------------------------
Asst. Secretary
By: /s/ MAX CRISP
-----------------------------
Max Crisp, Participant
5