EXHIBIT (10)(q)
Composite Conformed Copy
THE FIRST AMERICAN FINANCIAL CORPORATION
DEFERRED COMPENSATION PLAN TRUST AGREEMENT
TABLE OF CONTENTS
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Page
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ARTICLE I. TITLE AND DEFINITIONS............................................ 1
Section 1.1 Title.................................................... 1
Section 1.2 Definitions.............................................. 1
ARTICLE II. ADMINISTRATION.................................................. 2
Section 2.1 Trustee Responsibility................................... 2
Section 2.2 Maintenance of Records................................... 2
ARTICLE III. FUNDING........................................................ 2
Section 3.1 Contributions............................................ 2
Section 3.2 Subtrusts................................................ 3
ARTICLE IV. PAYMENTS FROM TRUST FUND........................................ 4
Section 4.1 Payments to Trust Beneficiaries.......................... 4
Section 4.2 Trustee Responsibility Regarding Payments to Trust
Beneficiaries When the Company Is Insolvent.............. 5
Section 4.3 Payments to the Company.................................. 5
Section 4.4 Trustee Compensation and Expenses; Other
Fees and Expenses........................................ 6
Section 4.5 Taxes.................................................... 6
Section 4.6 Alienation............................................... 6
Section 4.7 Disputes................................................. 6
ARTICLE V. INVESTMENT OF TRUST ASSETS....................................... 6
Section 5.1 Investment of Subtrust Assets............................ 6
Section 5.2 Disposition of Income.................................... 7
ARTICLE VI. TRUSTEE......................................................... 7
Section 6.1 General Powers and Duties................................ 7
Section 6.2 Records.................................................. 8
Section 6.3 Third Persons............................................ 8
Section 6.4 Limitation on Obligation of Trustee...................... 8
ARTICLE VII. RESIGNATION AND REMOVAL OF TRUSTEE............................. 9
Section 7.1 Method and Procedure..................................... 9
ARTICLE VIII. AMENDMENT AND TERMINATION..................................... 9
Section 8.1 Amendments............................................... 9
Section 8.2 Duration and Termination................................. 10
Section 8.3 Distribution upon Termination............................ 10
ARTICLE IX. MISCELLANEOUS................................................... 11
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TABLE OF CONTENTS (CONT'D)
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Page
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Section 9.1 Limitation on Participants' Rights....................... 11
Section 9.2 Receipt or Release....................................... 11
Section 9.3 Governing Law............................................ 11
Section 9.4 Headings, etc., No Part of Agreement..................... 11
Section 9.5 Instrument in Counterparts............................... 11
Section 9.6 Successors and Assigns................................... 12
Section 9.7 Indemnity................................................ 12
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DEFERRED COMPENSATION PLAN TRUST AGREEMENT
This Trust Agreement made and entered into this 1st day of October,
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1997, by and between The First American Financial Corporation (hereinafter
called the "Company") and FIRST AMERICAN TRUST COMPANY (hereinafter called
"Trustee"), evidences the terms of a trust for the benefit of certain employees,
former employees and their designated beneficiaries (hereinafter collectively
called "Trust Beneficiaries") who will be entitled to receive benefits under The
First American Financial Corporation Deferred Compensation Plan ("Plan").
This Trust is intended to be a grantor trust, of which the 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, and shall be
construed accordingly.
W I T N E S S E T H:
WHEREAS, the Company wishes to establish an irrevocable trust
(hereinafter called the "Trust") and to transfer to the Trust assets which shall
be held therein, subject to the claims of the Company's creditors in the event
of the Company's insolvency, until paid to the Trust Beneficiaries as benefits
in such manner and at such times as required hereunder; and
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 1994,
as amended ("ERISA");
NOW, THEREFORE, it is mutually understood and agreed as follows:
ARTICLE I.
TITLE AND DEFINITIONS
Section 1.1 Title.
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This Trust Agreement shall be known as The First American Financial
Corporation Deferred Compensation Plan Trust Agreement.
Section 1.2 Definitions.
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The following words, when used in this Trust Agreement with initial
letter capitalized, shall have the meanings set forth below:
"Company" shall mean The First American Financial Corporation, and any
successor corporations. It shall also include each corporation which is a
member of a controlled group of corporations (within the meaning of Section
414(b) of the Code) of which Company is a
component member if the Board of Directors designates that such corporation
shall participate in the Plan.
"General Fund" shall mean that portion of the Trust fund which is not
allocated to a Subtrust.
"Plan" shall mean The First American Financial Corporation Deferred
Compensation Plan.
"Policy" shall mean an insurance policy purchased in accordance with
the terms of the Plan.
"Subtrust" shall mean a separate subtrust established for a
Participant pursuant to Section 3.2.
Capitalized terms not defined above shall be defined in accordance
with the Plan.
ARTICLE II.
ADMINISTRATION
Section 2.1 Trustee Responsibility.
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By its acceptance of this Trust, Trustee agrees to make payments under
this Trust to Trust Beneficiaries in accordance with the provisions of this
Trust Agreement.
Section 2.2 Maintenance of Records.
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The Committee shall have the duty and responsibility to maintain all
individual Trust Beneficiary records and to prepare and file all reports and
other information required by any federal or state law or regulation relating to
the Trust and the Trust assets.
ARTICLE III.
FUNDING
Section 3.1 Contributions.
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(a) The Company hereby deposits with the Trustee in trust the sum of
$100.00 to be held in the General Fund of the Trust.
(b) The Company shall contribute to the Trust an amount equal to the
amount deferred by each Participant for the Plan Year; in no event shall these
contributions be made after the Company's tax return due date for that Plan
Year. The Company may also contribute cash to the Trust in an amount
approximately equal to the "cost of insurance" (as defined in the Policies)
needed to fund the death benefits described in Section 6.1(c) (l) of the Plan;
provided that such obligation shall not apply with respect to a Policy if (l)
the Committee has directed the Trustee to
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discontinue the Policy, (2) the applicable Participant is no longer employed by
the Company, or (3) the applicable Participant is not entitled to a death
benefit under the Policy because he has taken an early distribution (as
described in Section 6.2 of the Plan). The Committee may direct the Trustee to
discontinue the Policy for any reason, without regard to whether Section
6.l(c)(l) of the Plan is in effect, whether the Participant is employed or
otherwise.
(c) Except as provided otherwise herein, all contributions received
pursuant to (a) and (b) above, together with the income therefrom and any
increment thereon, shall be held, managed and administered by Trustee as a
single Trust pursuant to the terms of this Trust Agreement without distinction
between principal and income.
(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 Plan Participants and general creditors as herein set
forth. Trust Beneficiaries shall not have any preferred claim on, or any
beneficial ownership interest in, any assets of the Trust prior to the time such
assets are paid to Trust Beneficiaries as benefits as provided in Section 4.1,
and all rights created under this Trust Agreement shall be mere unsecured
contractual rights of Trust Beneficiaries against the Company or Trust. 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 4:2(a) herein.
Section 3.2 Subtrusts.
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(a) If directed by the Committee, the Trustee shall establish a
separate Subtrust for that Participant and credit the amount of such
contribution to that Participant's Subtrust. Each Subtrust shall reflect an
individual interest in the assets of the Trust fund and shall not require any
segregation of particular assets.
(b) Following the allocation of assets to Subtrusts pursuant to
Section 3.2(a), the Trustee shall allocate investment earnings and losses of the
Trust fund among the Subtrusts in accordance with Section 5.2. Payments to
general creditors pursuant to Section 4.2 hereof shall be charged against the
Subtrusts in proportion to their account balances, except that the payment of
benefits to a Trust Beneficiary shall be charged against the Subtrust
established or maintained for such Trust Beneficiary.
(c) Amounts allocated to a Participant's Subtrust may not be utilized
to pay benefits to another Participant or Beneficiary of another Participant.
Following payment of a Participant's entire benefit under the Plan, including
payment of an early distribution under Section 6.2 of the Plan (whether by the
Trustee pursuant to the terms of this Trust Agreement or by the Company or by a
combination thereof), any amounts remaining allocated to that Participant's
Subtrust (and any Policy held with respect to such Participant) shall be
transferred by the Trustee to the Company. In lieu of transferring the Policy,
the Committee may direct the Trustee to designate a new beneficiary (which may
be the Company) under the Policy or cash in the applicable Policy and transfer
the proceeds to the Company.
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ARTICLE IV.
PAYMENTS FROM TRUST FUND
Section 4.1 Payments to Trust Beneficiaries.
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(a) The Committee shall direct the Trustee to pay (or to commence to
pay) to a Participant (or, in the case of the Participant's death, to the
Participant's Beneficiary) the benefit, excluding amounts described in Section
6.1(c)(l) of the Plan, payable to such Participant under the Plan (the "Benefit
Amount") as soon as practicable following the Participant's Payment Eligibility
Date (as defined in the Plan). If Subtrusts are established, the Trustee shall
make such payment only from funds allocated to the Participant's Subtrust plus
the General Fund, if any.
(b) The Committee shall have full authority and responsibility to
determine the correct time and amount of payment of the Benefit Amount. In
making such determination, the Committee shall be governed by the terms of the
Plan and this Trust Agreement.
(c) Any obligation to a Trust Beneficiary under this Trust Agreement
is also an obligation of the Company to the extent not paid from the Trust.
Accordingly, to the extent payments to a Trust Beneficiary are discontinued
pursuant to Section 4.2, the Company shall be obligated to pay the Trust
Beneficiary the same amount (plus applicable interest from its general fund). If
the amount credited to the Trust (or a Subtrust if applicable) is not sufficient
to make the payment of the Benefit Amount to a Trust Beneficiary in accordance
with the determination by the Committee, the Company agrees that it shall make
the balance of such payment. Notwithstanding the foregoing, neither the Trustee
nor the Company shall have any obligation to pay any amounts described in
Section 6.l(c)(l) of the Plan; all such amounts shall be payable solely from the
proceeds of the Policy, if any.
(d) Unless a Trust Beneficiary furnishes documentation in form and
substance satisfactory to Trustee that no withholding is required with respect
to a payment of benefits from the Trust, Trustee shall deduct from any such
Benefit Payment any federal, state or local taxes required by law to be withheld
by Trustee and shall be responsible for payment and reporting of such withheld
taxes to the appropriate taxing authorities. The Trustee shall inform the
Company of the amounts so remitted.
(e) Trustee shall provide the Company and the Committee with written
confirmation of the fact and time of any payment hereunder within ten business
days after making any payment to a Trust Beneficiary.
(f) Following payment of a Participant's entire benefit under the
Plan, including payment of an early distribution under Section 6.2 (whether by
the Trustee pursuant to the terms of this Trust Agreement or by the Company or
by a combination thereof), the Trustee shall, at the direction of the Committee,
either (l) transfer ownership of the applicable Policy to the Company, (2)
designate a new beneficiary named by the Committee (which may include the
Company), or (3) cash in the applicable Policy and transfer the proceeds to the
Company. In
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addition, any cash previously received with respect to such Policy not used to
pay benefits to the Participant shall be transferred to the Company.
Section 4.2 Trustee Responsibility Regarding Payments to Trust Beneficiaries
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When the Company Is Insolvent.
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(a) The Company shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) the Company is unable to pay its debts as they become
due, or (ii) is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
(b) At all times during the continuance of the Trust, the principal
and income of the Trust shall be subject to claims of general creditors of the
Company as hereinafter set forth, and at any time Trustee has actual knowledge,
or has determined, that the Company is Insolvent, Trustee shall deliver any
undistributed principal and income in the Trust to satisfy such claims as a
court of competent jurisdiction may direct. The Company, through its Board of
Directors or any of its executive officers, shall advise Trustee promptly in
writing of the Company's Insolvency. If Trustee receives such notice, or
otherwise receives written notice from a third party which Trustee, in its sole
discretion, deems reliable and responsible, Trustee shall discontinue payments
to Trust Beneficiaries, shall hold the Trust assets for the benefit of the
Company's general creditors, and shall resume payments to Trust Beneficiaries in
accordance with Section 4.1 of this Trust Agreement only after Trustee has
determined that the Company is not Insolvent or is no longer Insolvent. Unless
Trustee has actual knowledge of the Company's Insolvency or has received notice
from the Company or a third party alleging the Company is Insolvent, Trustee
shall have no duty to inquire whether the Company is Insolvent. Trustee may in
all events rely on such evidence concerning the solvency of the Company as may
be furnished to Trustee which will give Trustee a reasonable basis for making a
determination concerning its solvency. Nothing in this Trust Agreement shall in
any way diminish any rights of Trust Beneficiaries to pursue their rights as
general creditors of the Company with respect to benefits payable hereunder or
otherwise.
(c) If Trustee discontinues payments of benefits from the Trust
pursuant to Section 4.2(b) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate amount of all
payments which would have been made to Trust Beneficiaries together with
interest at the Pension Benefit Guaranty Corporation rate applicable to
immediate annuities on the amount delayed during the period of such
discontinuance, less the aggregate amount of payments made to Trust
Beneficiaries by the Company in lieu of the payments provided for hereunder
during any such period of discontinuance.
Section 4.3 Payments to the Company.
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Except as provided in Sections 3.2(c), 4.1(f) or 4.2, the Company
shall have no right or power to direct Trustee to return to the Company or to
divert to others any of the Trust assets before the Trust is terminated pursuant
to Section 8.2.
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Section 4.4 Trustee Compensation and Expenses; Other Fees and Expenses.
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The Company shall pay the Trustee such reasonable compensation for its
services as shall be agreed upon from time to time by the Company and Trustee,
and Trustee shall be reimbursed by the Company for its expenses that are
reasonably necessary and incident to its administration of the Trust.
Following reasonable consultation with the Company such expenses shall
include fees of counsel and other advisors, if any, incurred by Trustee for the
purpose of determining its responsibilities under the Trust. Such compensation,
expenses or fees, as well as all other administrative fees and expenses, shall
be paid from Trust assets unless paid directly by the Company.
Section 4.5 Taxes.
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Trustee shall not be personally liable for any real and personal
property taxes, income taxes and other taxes of any kind levied or assessed
under the existing or future laws against the Trust assets. Such taxes shall be
paid directly from the Trust assets unless paid by the Company, in the
discretion of the Company.
Section 4.6 Alienation.
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The benefits, proceeds, payments or claims of Trust Beneficiaries
payable from the Trust assets shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, garnish, levy or otherwise dispose of or execute upon any
right or benefits payable hereunder shall be void. The Trust assets shall not in
any manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any Trust Beneficiary entitled to benefits hereunder and
such benefits shall not be considered an asset of Trust Beneficiary in the event
of his insolvency or bankruptcy.
Section 4.7 Disputes.
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All disputes, other than disputes between the Trustee and the
Committee or Company, shall be resolved in accordance with Section 7.8 of the
Plan.
ARTICLE V.
INVESTMENT OF TRUST ASSETS
Section 5.1 Investment of Subtrust Assets.
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The Trustee shall invest and manage the assets of the Trust (and each
Subtrust, if any) in accordance with written directions from the Committee.
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Section 5.2 Disposition of Income.
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All income received by the Trust shall be reinvested. Any income that
is attributable to the amount credited to a Subtrust in accordance with Section
3.2, and income thereon, shall be credited to such Subtrust and reinvested.
ARTICLE VI.
TRUSTEE
Section 6.1 General Powers and Duties.
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Subject to written directions from the Committee regarding the
investment of Trust assets, Trustee, on behalf of Trust Beneficiaries, shall
have all powers necessary to administer the Trust, including, but not by way of
limitation, the following powers in addition to other powers as are set forth
herein or conferred by law:
(a) To hold, invest and reinvest the principal or income of the Trust
in bonds, common or preferred stock, other securities, or other personal, real
or mixed tangible or intangible property (including investment in deposits with
Trustee which bear a reasonable interest rate, including without limitation
investments in trust savings accounts, certificates of deposit, time
certificates or similar investments or deposits maintained by the Trustee);
(b) To hold, invest and reinvest the principal or income of the Trust
in the Policies, direct investments under the Policies and take any other action
regarding the Policies, as specifically directed by the Committee (including
those specified by Sections 3.1(b), 3.2(c) or 4.1(f)) and to enter into split
dollar life insurance agreements with Participants pursuant to which each
Participant designates the beneficiary to receive the portion of the death
benefits described in Section 6.1(c)(1) of the Plan;
(c) If (i) directed by the Company or Committee to discontinue a
Policy or (ii) notified by the Committee or Company that a Participant has
terminated employment for a reason other than death, to immediately notify the
insurance company that no death benefits are payable to the beneficiaries of the
applicable Participant under the Policy (and that neither the Participant nor
his beneficiary has any rights under the Policy or the benefits under the
Policy) and to file a new beneficiary designation with the Insurance Company
naming the Trust as beneficiary, unless directed by the Committee to cash in the
Policy;
(d) To pay and provide for the payment of all reasonable and necessary
expenses of administering the affairs of the Trust, subject to reimbursement of
such expenses within 30 days by the Company in accordance with Section 4.4;
(e) To pay and provide for the payment of all benefits to Trust
Beneficiaries in accordance with the provisions of this Trust Agreement;
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(f) To retain noninterest bearing deposits or a cash balance with
Trustee of so much of the funds as may be determined to be temporarily held
awaiting investment or payment of benefits or expenses;
(g) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust and to institute, compromise and defend actions and
proceedings;
(h) To vote any stock, bonds or other securities of any corporation or
other issuer at any time held in the Trust; to otherwise consent to or request
any action on the part of any such corporation or other issuer; to give general
or special proxies or powers of attorney, with or without power of substitution;
to participate in any reorganization, recapitalization, consolidation, merger or
similar transaction with respect to such stocks, bonds or other securities and
to deposit such stocks, bonds or other securities in any voting trust, or with
any protective or like committee, or with a trustee, or with the depositories
designated thereby; to exercise any subscription rights and conversion
privileges; and to generally exercise any of the powers of an owner with respect
to the stocks, bonds or other securities or properties in the Trust; and
(i) Generally, to do all such acts, execute all such instruments, take
all such proceedings, and exercise all such rights and privileges with relation
to the property constituting the Trust as if Trustee were the absolute owner
thereof.
Section 6.2 Records.
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Trustee shall keep a full, accurate and detailed record of all
transactions of the Trust which the Company shall have the right to examine at
any time during Trustee's regular business hours. Within 90 days after the
close of each calendar year and within 15 days after the removal or resignation
of Trustee, Trustee shall furnish the Company with a statement of account with
respect to the Trust. This account shall set forth all receipts, disbursements
and other transactions (including sales and purchases) effected by Trustee
during said year (or until its removal or resignation), shall show the
investments at the end of the year (or date of removal or resignation),
including the cost and fair market value of each item, and the amounts allocated
to each Subtrust.
Section 6.3 Third Persons.
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A third person dealing with Trustee shall not be required to make any
inquiry as to whether the Company or the Committee has instructed Trustee, or
Trustee is otherwise authorized, to take or omit any action, and shall not be
required to follow the application by Trustee of any money or property which may
be paid or delivered to Trustee.
Section 6.4 Limitation on Obligation of Trustee.
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Trustee shall have no responsibility for the validity of the Plan or
of the Trust and does not guarantee the payment of any amount which may become
payable to any Trust Beneficiary under the terms hereof.
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ARTICLE VII.
RESIGNATION AND REMOVAL OF TRUSTEE
Section 7.1 Method and Procedure.
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(a) Trustee may resign at any time by delivering to the Company a
written notice of resignation, to take effect on a date specified therein, which
shall be not less than 30 days after the delivery thereof, unless such notice
shall be waived.
(b) The Company may remove Trustee at any time by delivering to
Trustee a written notice of removal, to take effect on a date specified therein,
which shall be not less than 30 days after the delivery thereof, unless such
notice shall be waived.
(c) In case of the resignation or removal of Trustee, Trustee shall
have a right to a settlement of its accounts, which may be made, at the option
of Trustee, either (1) by a judicial settlement in an action instituted by
Trustee in a court of competent jurisdiction, or (2) by an agreement of
settlement between Trustee and the Company.
(d) Upon such settlement, all right, title and interest of such
Trustee in the assets of the Trust, and all rights and privileges under the
Trust theretofore vested in such Trustee shall vest in the successor Trustee,
and thereupon all liabilities of such Trustee shall terminate; provided,
however, that Trustee shall execute, acknowledge and deliver all documents and
written instruments which are necessary to transfer and convey all the right,
title and interest in the assets of the Trust, and all rights and privileges in
the Trust to the successor Trustee.
(e) The Company, upon receipt of or giving notice of the resignation
or removal of Trustee, shall promptly appoint a successor Trustee. The successor
Trustee shall be a bank or trust company qualified and authorized to do trust
business in the State of California and having on the date of appointment total
assets of at least $10,000,000 and a credit rating from Moody's of A or better.
In the event of the failure or refusal of the Company to appoint such a
successor Trustee within 30 days after the notice of resignation or removal,
Trustee may secure, at the expense of the Company, the appointment of such
successor Trustee by an appropriate action in a court of competent jurisdiction.
Any successor Trustee so appointed may qualify by executing and delivering to
the Company an instrument accepting such appointment and, upon delivery, such
successor, without further act, shall become vested with all the right, title
and interest, and all rights and privileges of the predecessor Trustee with like
effect as if originally named as Trustee herein.
ARTICLE VIII.
AMENDMENT AND TERMINATION
Section 8.1 Amendments.
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The Company shall have the right to amend (but not terminate) the
Trust from time to time and to amend further or cancel any such amendment. Any
amendment shall be stated
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in an instrument in writing executed by the Company and Trustee, and this Trust
Agreement shall be amended in the manner and at the time therein set forth, and
the Company and Trustee shall be bound thereby; provided, however:
(a) No amendment shall have any retroactive effect so as to deprive
any Trust Beneficiary of any benefits already vested under the Plan, or create
a reversion of Trust assets to the Company except as already provided in this
Trust Agreement, other than such changes, if any, as may be required in order
for the Trust to be considered a component of a plan described in Section 9.3;
(b) No amendment shall make the Trust revocable; and
(c) No amendment shall increase the duties or liabilities of Trustee
without its written consent.
Section 8.2 Duration and Termination.
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This Trust shall not be revocable and shall continue until the
earliest of (a) the accomplishment of the purpose for which it was created, (b)
the exhaustion of all appeals of a final determination of a court of competent
jurisdiction that the interest in the Trust of Trust Beneficiaries is includable
for federal income tax purposes in the gross income of such Trust Beneficiaries,
without such determination having been reversed (or the earlier expiration of
the time to appeal), (c) if required to comply with California rules regulating
the maximum length for which trusts may be established, the expiration of twenty
years and six months after the death of the last surviving Trust Beneficiary who
is living and is a Trust Beneficiary on the date this Trust is established, (d)
a determination of the Company to terminate the Trust because applicable law
requires it to be amended in a way that could make it taxable and failure to so
amend the Trust would subject the Company to material penalties, or (e) the
dissolution or liquidation of the Company.
Section 8.3 Distribution upon Termination.
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Upon termination of this Trust, Trustee shall liquidate the Trust fund
and provide a final account to the Company and the Committee. To the extent
Trust assets are sufficient, the Trustee shall pay to each Participant the
appropriate Benefit Amount. After its final account has been settled as
provided in Section 7.1(c), Trustee shall return to the Company any assets
remaining after the distributions described in this Section 8.3. Upon making
such distributions, Trustee shall be relieved from all further liability. The
powers of Trustee hereunder shall continue so long as any assets of the Trust
fund remain in its hands.
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ARTICLE IX.
MISCELLANEOUS
Section 9.1 Limitation on Participants' Rights.
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Participation in the Trust shall not give Participants the right to be
retained in the Company's employ or any right or interest in the Trust other
than as herein provided. The Company reserves the right to dismiss Participants
without any liability for any claim either against the Trust, except to the
extent provided herein, or against the Company. All benefits payable hereunder
shall be provided solely from the assets of the Trust, except as otherwise
provided in the Plan.
Section 9.2 Receipt or Release.
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Any payment to a Trust Beneficiary in accordance with the provisions
of the Trust shall, to the extent thereof, be in full satisfaction of all claims
against Trustee and the Company, and Trustee may require such Trust Beneficiary,
as a condition precedent to such payment, to execute a receipt and release to
such effect.
Section 9.3 Governing Law.
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This Trust Agreement and the Trust hereby created shall be construed,
administered and governed in all respects under applicable federal law, and to
the extent that federal law is inapplicable, under the laws of the State of
California; provided, however, that if any provision is susceptible to more than
one interpretation, such interpretation shall be given thereto as is consistent
with the Trust being (a) classified as a grantor trust as defined in Sections
671 et seq. of the Code, and (b) classified as a component of an unfunded plan
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maintained primarily to provide deferred compensation for a select group of
management or highly compensated employees, as described in Section 201(2) of
the Employee Retirement Income Security Act of 1974, as amended. If any
provision of this instrument shall be held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining provisions hereof shall continue
to be fully effective.
Section 9.4 Headings, etc., No Part of Agreement.
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Headings and subheadings in this Trust Agreement are inserted for
convenience of reference only and are not to be considered in the construction
of the provisions hereof.
Section 9.5 Instrument in Counterparts.
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This Trust Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instruments, which may be sufficiently evidenced by any one
counterpart.
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Section 9.6 Successors and Assigns.
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This Trust Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns.
Section 9.7 Indemnity.
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(a) Except in the case of liabilities and claims arising out of
Trustee's willful misconduct or gross negligence, Company shall indemnify and
hold Trustee harmless from and against all liabilities and claims (including
reasonable attorney's fees and expenses in defense thereof) arising out of or in
any way connected with the Plan or the Trust fund or the management, operation,
administration or control thereof and based in whole or in part on:
(l) Any act or inaction of Company or Committee (which term includes,
in this paragraph, any actual or ostensible agent of Company) or
(2) Any act or inaction of Trustee resulting from the absence of
proper directions hereunder, or in accordance with any directions, purported
or real, from Company or Committee, whether or not proper hereunder, if relied
upon in good faith by Trustee.
(b) The Trustee does not warrant and shall not be liable for any tax
consequences associated with the Trust or the Plans.
(c) The Trustee shall not be liable for the inadequacy of the Trust to
pay all amounts due under the Plans.
IN WITNESS WHEREOF the undersigned have executed this Trust Agreement
as of the date first written above.
THE FIRST AMERICAN FINANCIAL CORPORATION
By /s/ Parker S. Kennedy
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Its: President
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FIRST AMERICAN TRUST CO.
By /s/ H. B. Benjamin
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Its: Sr. Vice Pres.
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