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EXHIBIT 4.2
STEWART INFORMATION SERVICES CORPORATION
1999
DEFERRED COMPENSATION TRUST AGREEMENT
For The
1999
Salary Deferred Compensation Plan
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TABLE OF CONTENTS
Section 1. Establishment of Trust.................................................................2
Section 2. Payments to the Participants and Their Beneficiaries...................................3
Section 3. Trustee Responsibility Regarding Payments To Trust Beneficiary When Company Is
Insolvent..............................................................................4
Section 4. Payments to Company....................................................................6
Section 5. Investment Authority...................................................................7
Section 6. Powers and Duties of Trustee...........................................................7
Section 7. Disposition of Income.................................................................11
Section 8. Accounting by Trustee.................................................................11
Section 9. Responsibility of Trustee.............................................................12
Section 10. Compensation and Expenses of Trustee..................................................14
Section 11. Resignation and Removal of Trustee....................................................15
Section 12. Appointment of Successor..............................................................16
Section 13. Single Trust..........................................................................17
Section 14. Communications with Trustee...........................................................17
Section 15. Change of Control.....................................................................17
Section 16. Insurers..............................................................................20
Section 17. Taxes.................................................................................21
Section 18. Amendment or Termination..............................................................22
Section 19. Miscellaneous.........................................................................23
Section 20. Effective Date........................................................................25
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STEWART INFORMATION SERVICES CORPORATION
1999
DEFERRED COMPENSATION TRUST AGREEMENT
For The
1999
Salary Deferred Compensation Plan
(a) This Stewart Information Services Corporation 1999 Deferred
Compensation Trust Agreement ("Trust Agreement") is made this ______ day of
October, 1998, effective beginning January 1, 1999 by and between Stewart
Information Services Corporation ("Company") and Wells Fargo Bank (Texas), N.A.
("Trustee") for use in conjunction with the 1999 Salary Deferred Compensation
Plan.
(b) WHEREAS, Company has adopted the nonqualified deferred compensation
plan listed in Appendix I hereto (the "Plan");
(c) WHEREAS, each participating employee (the "Participant") may make
current annual contributions to the Plan from his current compensation under the
terms of the Plan;
(d) WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") and to transfer the Participant contributions and any other
contributions to the Trust, as assets that shall be held in the Trust, subject
to the claims of Company's creditors in the event of Company's Insolvency, as
herein defined, until paid to the Participants and their beneficiaries in such
manner and at such times as provided in the Plan;
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(e) WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended;
(f) WHEREAS, it is the intention of Company to transfer the Participant
contributions to the Trust to provide a source of funds for meeting the
Company's liability under the Plan;
NOW THEREFORE, this Trust Agreement, is hereby made by and between the
Company and the Trustee with provisions as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) Company has deposited with Trustee in trust an amount equal to or
no less than $100, which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable subject to
approval by the Board of Directors of the Company.
(c) The Trust is intended to be a grantor trust, of which Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed accordingly.
(d) The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of the Participants and
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general creditors of the Company as herein set forth. The Participants and their
beneficiaries shall have no preferred claim on, or any beneficial ownership
interest in, any assets of the Trust. Any rights created under the Plan and this
Trust Agreement shall be mere unsecured contractual rights of Participants and
their beneficiaries against Company. Any assets held by the Trust will be
subject to the claims of Company's general creditors under federal and state law
in the event of Insolvency, as defined in Section 3(a) herein.
(e) After the Trust has become irrevocable pursuant to Section 1(b)
hereof, Company shall be required in accordance with the terms of the Plan to
transfer to the Trust no less frequently than quarterly the Participant
contributions in cash or in kind pursuant to the terms of the Plan.
SECTION 2. PAYMENTS TO THE PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule"), which shall be revised and updated by the Company from time to time,
that indicates the amounts payable in respect of each Participant (and his
beneficiaries), which provides the time and manner of payment to the Participant
of funds from the Trust. Except as otherwise provided herein, Trustee shall make
payments in cash or in kind to each Participant and his beneficiaries in
accordance with the Payment Schedule. Trustee shall make provision for the
reporting and withholding of any federal, state or local
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taxes that may be required to be withheld with respect to the payment of
benefits under the Plan and shall either pay amounts withheld from the Trust to
the appropriate taxing authority or determine that such amounts have been
reported, withheld and paid by the Company.
(b) The entitlement of a Participant or his beneficiaries to benefits
under the Plan shall be determined by Company or such person as Company may
designate under the Plan and any claim for such benefits shall be considered
reviewed under the procedures set out in the Plan.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to the Participants and
their beneficiaries if Company is Insolvent. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay
its debts as they become due, or (ii) Company is subject to a pending proceeding
as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
(1) The Board of Directors and the highest ranking officer of
the Company shall have the duty to inform Trustee in writing of
Company's Insolvency. If a person claiming to
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be a creditor of Company alleges in writing to Trustee that Company has
become Insolvent, Trustee shall determine whether Company is Insolvent
and, pending such determination, Trustee shall discontinue payment of
benefits to the Participants or their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person claiming to
be a creditor alleging that Company is Insolvent, Trustee shall have no
duty to inquire whether Company is Insolvent. Trustee may in all events
rely on such evidence concerning Company's solvency as may be furnished
to Trustee and that provides Trustee with a reasonable basis for making
a determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to the Participants or
their beneficiaries and shall hold the assets of the Trust for the
benefit of Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of the Participants or their
beneficiaries to pursue their rights as general creditors of Company
with respect to benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to the
Participants or their beneficiaries in accordance with Section 2 of
this Trust Agreement only after Trustee has determined that Company is
not Insolvent (or is no longer Insolvent).
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(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made to
Plan participants or their beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
(d) For purposes of this Section 3, the Trustee shall have the right as
a reimbursable administration cost and expense under this Trust Agreement to
retain any outside counsel and experts it reasonably believes is necessary or
appropriate to assist it with regard to the determination of insolvency and to
commence a judicial interpleader or declaratory judgment or other appropriate
action for direction regarding this determination.
SECTION 4. PAYMENTS TO COMPANY.
(a) Except as provided in Section 3 above and Section 4(b) below, after
the Trust has become irrevocable, Company shall have no right or power to direct
Trustee to return to Company or to divert to others any of the Trust assets
before all payment of benefits have been made to the Participants and their
beneficiaries pursuant to the terms of the Plan. Once all payments due under the
Plan have been made from the Trust to all Participants and their
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beneficiaries, any remaining assets in the Trust shall revert to the Company.
(b) If as of the end of any Plan Year, the value of the Trust exceeds
150 percent of the total aggregate account balances of all Participants in the
Plan, the Company shall have the right to receive a withdrawal or reversion from
the Trust of such excess. The Trustee shall transfer all or any part of such
excess to the Company upon request by the Company.
SECTION 5. INVESTMENT AUTHORITY.
In no event may Trustee invest in securities (including stock or rights
to acquire stock) or obligations issued by Company (or affiliated corporations
within the same commonly controlled group), other than a de minimis amount held
in common investment vehicles in which the Trustee invests. All rights
associated with assets of the Trust shall be exercised by Trustee or the person
designated by Trustee, and shall in no event be exercisable by or rest with the
Participants.
SECTION 6. POWERS AND DUTIES OF TRUSTEE.
All investment and disbursement powers over all property held
in this Trust shall be vested exclusively in the Trustee. Except as provided in
this Trust Agreement to the contrary, Trustee shall have all the rights, powers
and duties granted trustees under the Texas Trust Code, as amended from time to
time, and shall have the power and authority to perform every act necessary or
appropriate
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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 Plan;
(b) To hold, manage, invest, reinvest, sell and exchange all
property of the Trust, together with any additional property which may
from time to time be transferred to the Trustee as herein provided; to
collect, invest and reinvest any and all income resulting from all such
Trust property; to accumulate and distribute the income and principal
of the Trust in accordance with this Trust Agreement, after deducting
expenses properly payable from trust income;
(c) The entering into and performance of any agreement;
(d) Subject to the provisions of Section 3 above, the
undertaking of any legal action, whether as plaintiff or defendant, on
behalf of the Trust;
(e) The employment of any person, including attorneys,
accountants, investment managers and agents, to advise and assist
Trustee in the performance of its duties;
(f) The execution and delivery of all instruments necessary or
appropriate to accomplishing or facilitating the exercise of Trustee's
powers;
(g) To release, in the discretion of Trustee, any fiduciary
power at any time, in whole or in part, temporarily or permanently,
whenever Trustee may deem it advisable, by acknowledged instrument;
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(h) 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 Trustee without disclosing the fiduciary
capacity of Trustee;
(i) To vote, either in person or by proxy, any share of stock
held as part of the assets of the Trust;
(j) To invest and reinvest Trust property and the income
therefrom in a money market fund or other mutual fund from which the
Trustee or an affiliate of the Trustee may receive advisory fees or
other remuneration;
(k) To hold cash uninvested at any time and in any amount
pending investment pursuant to the terms of this Trust Agreement; and
(l) To invest in and hold life insurance policies and
contracts on the life or lives of any of the Participants, whether on a
group or individual basis, with a carrier or carriers who are qualified
and authorized to do such business, as well as variable annuities,
mutual funds and separate accounts sponsored or managed by the
designated life insurance carrier(s), of the type approved or
designated by the Company.
When Trustee acts in good faith, Trustee, in all matters pertaining to
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
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by Trustee to be genuine, to have been signed by a proper representative of the
Participant or beneficiary, Company or any investment manager or third party
recordkeeper, if one is appointed, and to be the act of the Participant or
beneficiary, Company or the investment manager or third party recordkeeper, as
the case may be. Trustee may accept any certificate or other instrument duly
signed by a proper representative of the Participant or beneficiary, Company or
the investment manager or third party recordkeeper, if one is appointed which
purports to evidence an instruction, direction or order of the Participant or
beneficiary, Company, the investment manager or third party recordkeeper, as the
case may be, as conclusive evidence thereof.
Any person dealing in good faith with Trustee or in good faith
assisting Trustee in conducting a transaction shall be entitled to rely without
inquiry upon the representation that Trustee has the power Trustee 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 Trustee.
In holding, investing and managing the investments and assets of the
Trust, Trustee shall take into account, any investment objectives and guidelines
prescribed by the Company from time to time. Until further notice, the initial
investment objectives and guidelines of the Company for the Plan and Trust are
set forth in Appendix II to this Trust Agreement.
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With respect to the holding of any life insurance policy or separate
account, variable annuity or mutual fund generally described in Appendix II to
this Trust Agreement, the Company shall have the right to select any one or more
life insurance carriers as the issuer or manager of such holdings, and direct
the Trustee to accept such holdings for the Trust.
SECTION 7. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses, shall be accumulated and reinvested.
SECTION 8. ACCOUNTING BY TRUSTEE.
(a) Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
Company and Trustee. Within 60 days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the last preceding
year to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such
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year or as of the date of such removal or resignation, as the case may be.
(b) Trustee shall keep and maintain complete and accurate records of
the Trust and all transactions involving any property of the Trust. Such records
shall be available for inspection by Company or any Participant at all times
during normal business hours. Trustee shall produce and furnish to Company
quarterly (or monthly if the Company requests) annual itemized statements
identifying all transactions of the Trust and generally reflecting the condition
of the Trust.
SECTION 9. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by Company which is contemplated by, and
in conformity with, the terms of the Plan or this Trust and is given in writing
by Company. In the event of a dispute between Company and a party, Trustee may
apply to a court of competent jurisdiction in Harris County, Texas to resolve
the dispute.
(b) Company shall indemnify and hold harmless Trustee for any damages,
expenses, liabilities or losses, incurred or sustained by or imposed on Trustee,
arising in connection with the Trust or the
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Plan (including reasonable attorneys' fees), including any litigation that the
Trustee defends against or initiates in connection with the administration of
Trustee's powers and duties under the Trust or the Plan. If Company does not pay
such costs, expenses and liabilities in a reasonably timely manner, Trustee may
obtain payment by withdrawing funds from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of
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section 301.7701-2 of the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.
(g) Notwithstanding any provisions of this Trust Agreement or the Plan
to the contrary, Trustee may in good faith fully rely on any representations or
directions given to Trustee by Company (or its officers and employees designated
to Trustee for this purpose) under this Trust Agreement or the Plan.
(h) Notwithstanding any provisions of this Trust Agreement or the Plan
to the contrary, Trustee shall not be liable for any action taken or omitted as
Trustee of this Trust unless such action or omission constitutes bad faith,
gross negligence or willful disregard for the provisions of this Trust
Agreement.
(i) The Trustee shall be responsible and liable for the assets in the
Trust including assets accepted as contributions to the Trust from the Company.
The Trustee shall be under no obligation and shall not have the duty to collect
or recover any funds or assets that have not yet been contributed to the Trust
until those funds and assets have both been contributed by the Company and
accepted by the Trustee.
SECTION 10. COMPENSATION AND EXPENSES OF TRUSTEE.
For its services hereunder, Trustee shall receive reasonable
annual compensation in accordance with its standard fee schedule in effect at
the time that such services are furnished to the Trust. The Company shall pay
all reasonable or agreed upon administrative and Trustee's fees and expenses,
including any expenses
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attributable to the payment of persons engaged or expenses paid in accordance
with the provisions of Sections 3(d), 5A and 8 above. The Trustee shall
periodically (but no less frequently than quarterly) submit its statements of
account to the Company. Payment shall be made by Company in a prompt manner. If
not so paid, the fees and expenses shall be paid from the Trust.
SECTION 11. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective 30 days after receipt of such notice unless Company and
Trustee agree otherwise.
(b) Trustee may be removed by Company on 30 days written notice or upon
shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 120 days after receipt of
written notice of resignation, removal or transfer, unless Company extends the
time limit.
(d) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 12 below, by the effective date of resignation or
removal under paragraph (a) or (b) of this section. If no such appointment has
been made, Trustee may apply to a court of competent jurisdiction in Harris
County, Texas for appointment of a successor or for instructions. All expenses
of Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
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(e) The resignation or removal of Trustee shall not be effective and
shall not occur unless and until a successor trustee is appointed in accordance
with Section 12 below or the second sentence in Section 11(d) above.
(f) After a Change in Control (as defined in Section 15 below) Trustee
may not resign or be removed without the written approval at the time of such
resignation or removal of at least two-thirds of the total number of the
Participants (or the beneficiary for a deceased Participant) due amounts to be
paid under the Plan on the basis of one vote per Participant (or beneficiary for
a deceased Participant).
SECTION 12. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with Section 11(a)
or (b) above, Company may appoint any qualified corporate fiduciary, such as a
bank trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by Company or the successor
Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing
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Trust assets, subject to Sections 8 and 9 above. The successor Trustee shall not
be responsible for, and Company shall indemnify and defend the successor Trustee
from any claim or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing at the time it
becomes successor Trustee.
SECTION 13. SINGLE TRUST.
This Trust shall constitute a single pooled trust with aggregate
funding and aggregate liability as to all employees and their respective
employers who participate in the Plan and have accounts in the Trust. The funds
and assets in the Trust shall be available to pay distributions to all
Participants in the Plan.
SECTION 14. COMMUNICATIONS WITH TRUSTEE.
The Company may designate a committee (the "Committee") of one or more
individuals for the purposes or carrying out the Company's responsibility and
authority under the Trust. The Committee shall communicate, as appropriate to
the Trustee, the actions of the Committee, which shall be binding on the Company
and may be relied upon by the Trustee.
SECTION 15. CHANGE OF CONTROL.
(a) Change in Control shall mean the first to occur of any of the
following items:
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(i) Any "person" (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Act")) becomes the
beneficial owner (as that term is used in Section 13(d) of the Act),
directly or indirectly, of 50 percent or more of the Company's capital
stock entitled to vote in the election of directors;
(ii) During any period of not more than two consecutive years,
not including any period prior to the adoption of this Trust,
individuals who, at the beginning of such period constitute the board
of directors of the Company, and any new director (other than a
director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (i), (iii),
(iv) or (v) of this Section 15(a)) whose election by the board of
directors or nomination for election by the Company's stockholders was
approved by a vote of at least three-fourths of the directors then
still in office, either were directors at the beginning of the period
or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof;
(iii) The shareholders of the Company approve any
consolidation or merger of the Company, other than a consolidation or
merger of the Company in which the holders of the common stock of the
Company immediately prior to the consolidation or merger hold more than
50 percent of the
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common stock of the surviving corporation immediately after the
consolidation or merger;
(iv) The shareholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company;
(v) The shareholders of the Company approve the sale or
transfer of substantially all of the Company's assets to parties that
are not within a "controlled group of corporations" (as defined in Code
Section 1563) in which the Company is a member; or
(vi) The purchase or other acquisition by any person, entity
or group of persons, within the meaning of Section 13(d) or 14(d) of
the Act, or any comparable successor provisions, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Act)
of 30 percent or more of either the outstanding shares of common stock
or the combined voting power of Company's then outstanding voting
securities entitled to vote generally, or the approval by the
stockholders of the Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were
stockholders of Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than
50 percent of the combined voting power entitled to vote generally in
the election of directors of the reorganized, merged or consolidated
Company's then outstanding securities, or a liquidation or dissolution
of
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Company or of the sale of all or substantially all of Company's assets.
(b) Following a change of control, the following modifications shall be
implemented by the Trustee under the Trust:
(i) No further changes may be made in the investment
objectives and guidelines in Appendix II except as deemed appropriate
in the sole discretion of the Trustee.
(ii) The authority of the Committee under Section 14 above may
be disregarded to the extent deemed appropriate in the sole discretion
of the Trustee.
(iii) The limitations on the resignation or removal of Trustee
under Section 10(f) above shall become applicable.
(c) For purposes of this Section 15, the term "Company" shall mean
Stewart Information Services Corporation and/or Stewart Title Guaranty Company.
SECTION 16. INSURERS.
(a) No insurance company or carrier, i.e., insurer shall be deemed to
be a party to the Trust and an insurer's obligations shall be measured and
determined solely by the terms of contracts and other agreements executed by it.
(b) An insurer shall accept the signature of the Trustee to any
documents or papers executed in connection with such contracts. The signature of
the Trustee shall be conclusive proof to the insurer that the person on whose
life an application is being made
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is eligible to have a contract issued on his or her life and is eligible for a
contract of the type and amount requested.
(c) An insurer shall deal with the Trustee as the sole and absolute
owner of any insurance contracts and shall have no obligation to inquire whether
any action or failure to act on the part of the Trustee is in accordance with or
authorized by the terms of the Plans or this Trust Agreement.
(d) An insurer shall be fully discharged from any and all liability for
any action taken or any amount paid in accordance with the direction of the
Trustee and shall have no liability for the operation of the Trust or the Plan,
whether or not in accordance with their terms and provisions.
(e) An insurer shall be fully discharged from any and all liability for
dealing with a party or parties indicated on its records to be the Trustee until
such time as it shall receive at its home office written notice of the
appointment and qualification of a successor Trustee.
SECTION 17. TAXES.
The Company (or its subsidiary, as the case may be) shall from time to
time pay taxes of any kind whatsoever that at any time is lawfully levied or
assessed upon or become payable in respect of the Trust, the income or any
property forming a part thereof, or any security transaction pertaining thereto.
To the extent that any taxes lawfully levied or assessed upon the Trust are not
paid by the Company, the Trustee shall have the power to pay such taxes
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out of the Trust and shall seek reimbursement from the Company. Prior to making
any payment, the Trustee may require such releases or other documents from any
lawful taxing authority as it shall deem necessary. The Trustee shall contest
the validity of taxes in any manner deemed appropriate by the Company or its
counsel, but at the Company's expense, and only if it has received an indemnity
bond or other security satisfactory to it to pay any such expenses. The Trustee
(i) shall not be liable for any nonpayment of tax when it distributes an
interest hereunder on directions from the Committee, and (ii) shall not have the
obligation to file any tax return on behalf of the Trust, unless such return is
not prepared and filed by the Company. The Trustee shall cooperate with the
Committee in connection with the preparation and filing of any such return.
SECTION 18. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b) above.
(b) The Trust shall not terminate until the date on which the
Participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. In accordance with Section 4 above, upon termination
of the Trust any assets remaining in the Trust shall be returned to Company.
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(c) Upon written approval of at least three-fourths of the total number
of Participants (or the beneficiary for a deceased Participant) due amounts to
be paid at any time thereafter under the Plan on the basis of one vote per
Participant (or beneficiary for a deceased Participant), Company may terminate
this Trust prior to the time all benefit payments under the Plan have been made.
In such case, all assets in the Trust at termination shall be returned to
Company.
(d) Notwithstanding the preceding provisions of this Section 18, the
Trust shall terminate (to the extent required under the applicable rule against
perpetuities) one day prior to the last day of the period ending 21 years after
the death of the last surviving Participant who was a Participant at the
inception of the Trust under the Plan.
SECTION 19. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to the Participant and his beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process except to the extent
provided in the Plan with respect to domestic relations orders.
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(c) For purposes of facility of payment, in the event that the
Participant or beneficiary to receive a payment or distribution from the Trust
is incompetent or otherwise incapacitated in a manner that the Trustee can
reasonably question that individual's ability to manage his own affairs, the
Trustee may make the payment to (i) such individual's guardian or other legal
representative; (ii) the person responsible for the support and care of such
individual if the Trustee can reasonably determine that such person is
trustworthy; or (iii) any other person a court with proper jurisdiction may
direct. Notwithstanding the preceding provisions of this Section 19(c), if in
the judgment of Trustee, the Participant becomes incapacitated, Trustee shall
have full discretionary authority to utilize the income and principal of the
Trust for the health, education, maintenance, support and other needs of the
Participant, as determined by Trustee in its sole discretion. No judicial
determination shall be required and the Trustee shall incur no liability to any
person whatsoever for making such distributions to or for the benefit of the
Participant.
(d) This Trust Agreement shall be governed by and construed in
accordance with the laws of Texas.
(e) Any provision or requirement for notice to be made under this Trust
Agreement shall mean written notice. Written notice may be delivered in hand
(i.e., personal hand delivery) or by certified mail with a return receipt to the
current address of the person to receive the notice. Telecopy or electronic
facsimile transmissions of notice shall not be binding.
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(f) All persons dealing with the Trustee are released from inquiring
into the decisions or authority of the Trustee and from seeing to the
application of any moneys, securities or other property paid or delivered to the
Trustee.
(g) Words used in the masculine shall include to the feminine where
applicable, and when the context requires, the plural shall be read as the
singular and the singular as the plural.
(h) This Trust Agreement may be executed in an original and any number
of counterparts, each of which shall be deemed to be an original of one and the
same instrument.
(i) Except as otherwise provided in this Trust Agreement, for purposes
of this Trust Agreement, the term Company shall generally include Stewart Title
Guaranty Company and their operating affiliates who have adopted and have an
employee who is a Participant in the Plan.
(j) In the event of any inconsistency or conflict between the terms of
this Trust Agreement and the Plan, the Trustee shall be bound and obligated only
to follow the terms of this Trust Agreement, which shall be controlling.
SECTION 20. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be January 1, 1999, or
if sooner, the date this Trust Agreement has been fully executed and accepted by
the Trustee.
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In witness whereof, this Trust Agreement has been entered into on the
date first set forth hereinabove.
STEWART INFORMATION SERVICES
CORPORATION
By:
---------------------------
Stewart Morris, President
Attest:
Affix Corporate Seal
- --------------------------
Sue M. Pizzitola, Secretary
WELLS FARGO BANK (TEXAS), N.A.
By:
--------------------------------
John J. Kelley
Vice President & Trust Officer
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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 person whose name is subscribed to the
foregoing instrument as President of Stewart Information Services Corporation, a
Delaware state corporation, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed, in the capacity therein
stated, and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of October
1998.
------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF T E X A S
Printed Name:
-----------------
My commission expires:
--------
THE STATE OF TEXAS)
)
COUNTY OF HARRIS)
BEFORE ME, the undersigned authority, on this day personally appeared
John J. Kelley, known to me to be the person whose name is subscribed to the
foregoing instrument as Vice President & Trust Officer of Wells Fargo Bank
(Texas), N.A., a banking institution, and 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, this the _____ day of October
1998.
------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF T E X A S
Printed Name:
-----------------
My commission expires:
--------
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APPENDIX I
"Plan"
The Stewart Information Services Corporation 1999 Salary Deferred
Compensation Plan adopted by Stewart Information Services Corporation on October
___, 1998.
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APPENDIX II
"Investment Objectives and Guidelines"
Until further notice from the Company to the Trustee the following
initial investment objectives and guidelines have been established by the
Company for the Plan and the Trust. The following investments are contemplated
and authorized:
(a) Life insurance policies and contracts on the life or lives
of any of the eligible participants, whether on a group or individual
basis, with a carrier or carriers who are qualified and authorized to
do such business, designated by the Company.
(b) Variable annuities, mutual funds and separate accounts
sponsored or managed by the designated life insurance carrier(s), of
the type approved or designated by the Company.
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