Document:

exv10w2

Exhibit 10.2

VOTING AGREEMENT

     This VOTING AGREEMENT (this “Agreement”), dated as of April 20, 2008, is by and between Grey
Wolf, Inc., a Texas corporation (“Grey Wolf”), and the undersigned holder (the “Affiliate”) of
shares or options to acquire shares of common stock of Basic Energy Services, Inc., a Delaware
corporation (“Basic”). Capitalized terms used and not defined herein shall have the respective
meanings ascribed to them in the Merger Agreement referenced below.

RECITALS:

     A. Basic, Grey Wolf and Horsepower Holdings, Inc. (“Holdings”) have entered into an Agreement
and Plan of Merger dated April 20, 2008 (as the same may be amended from time to time, the “Merger
Agreement”) pursuant to which Basic and Grey Wolf will merge with and into Holdings, with Holdings
surviving the mergers, on the terms and subject to the conditions set forth in the Merger
Agreement.

     B. As of the date hereof, Affiliate “beneficially owns” (as such term is defined in Rule 13d-3
under the Exchange Act) and Affiliate is entitled to dispose of (or to direct the disposition of)
and to vote (or to direct the voting of) the number of shares of common stock, par value of $0.01
per share, of Basic (the “Basic Common Stock”) set forth beneath the Affiliate’s name on the
signature page hereto, as such shares may be adjusted by stock dividend, stock split,
recapitalization, combination, merger, consolidation, reorganization or other change in the capital
structure of Basic affecting the Basic Common Stock (such shares of Basic Common Stock, plus any
other shares of Basic Common Stock the voting power over which is acquired by Affiliate and less
any shares of Basic Common Stock the entire beneficial ownership in, including all voting rights
with respect to, are disposed of by Affiliate, in each case during the period from and including
the date hereof through and including the date on which this Agreement is terminated in accordance
with its terms, are collectively referred to herein as Affiliate’s “Subject Shares”).

     C. As an inducement to the willingness of Grey Wolf to enter into the Merger Agreement, and as
an inducement and in consideration therefor, Affiliate has agreed to enter into this Agreement.

     NOW, THEREFORE, intending to be legally bound, the parties agree as follows:

     1. Agreement to Vote the Subject Shares. Affiliate, solely in Affiliate’s capacity as a
stockholder of Basic, hereby agrees that during the period commencing on the date hereof and
continuing until the termination of this Agreement (such period, the “Voting Period”), at any
meeting (or any adjournment or postponement thereof) of the holders of any class or classes of the
capital stock of Basic, however called, or in connection with any written consent

 

 

of the holders of any class or classes of the capital stock of Basic, Affiliate shall vote (or
cause to be voted) Affiliate’s Subject Shares in favor of the approval and adoption of the terms of
the Basic Proposals and each of the other transactions contemplated by the Merger Agreement (and
any actions required in furtherance thereof) at every meeting of the stockholders of Basic (or in
connection with any written consent) at which such matters are considered and at every adjournment
thereof. Any such vote shall be cast or consent shall be given by Affiliate in accordance with
such procedures relating thereto as shall ensure that it is duly counted for purposes of
determining that a quorum is present and for purposes of recording the results of such vote or
consent. Affiliate agrees not to enter into any agreement, letter of intent, agreement in
principle or understanding with any person that violates or conflicts with or could reasonably be
expected to violate or conflict with the provisions and agreements contained in this Agreement or
the Merger Agreement; provided, however, that nothing in this Agreement shall be deemed to prevent
Affiliate from making a bona fide disposition of the entire beneficial ownership in, including all
voting rights with respect to, any or all of the Subject Shares (a “Permitted Disposition”). For
the avoidance of doubt, this Agreement is intended to constitute a voting agreement entered into
under Section 218(c) of the Delaware General Corporation Law for the duration of the Voting Period.

     2. Grant of Irrevocable Proxy.

     (a) Affiliate hereby irrevocably (to the fullest extent permitted by law) grants to, and
appoints, Grey Wolf and each of its executive officers and any of them, in their capacities as
officers of Grey Wolf (the “Grantees”), as Affiliate’s proxy and attorney-in-fact (with full power
of substitution and resubstitution), for and in the name, place and stead of Affiliate, to vote the
Subject Shares, to instruct nominees or record holders to vote the Subject Shares, or grant a
consent or approval or dissent or disapproval in respect of such Subject Shares in accordance with
Section 1 hereof and, in the discretion of the Grantees with respect to any proposed
adjournments or postponements of any meeting of stockholders of Basic at which any of the matters
described in Section 1 hereof is to be considered.

     (b) Affiliate represents that any proxies heretofore given in respect of the Subject Shares
that may still be in effect are not irrevocable, and such proxies are hereby revoked.

     (c) Affiliate hereby affirms that the irrevocable proxy set forth in this Section 2 is
given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is
given to secure the performance of the duties of Affiliate under this Agreement. Affiliate hereby
further affirms that the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Affiliate hereby ratifies and confirms all that such irrevocable proxy
may lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of

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Section 212 of the Delaware General Corporation Law. Notwithstanding this Section
2(c), the proxy granted by Affiliate shall be revoked upon termination of this Agreement in
accordance with its terms.

     (d) The Grantees may not exercise this irrevocable proxy on any other matter except as
provided above. Affiliate shall retain at all times the right to vote the Subject Shares in
Affiliate’s sole discretion and without any other limitation on all matters other than those set
forth in Section 1 that are at any time or from time to time presented for consideration to
Basic’s stockholders generally.

     (e) Grey Wolf may terminate this proxy with respect to Affiliate at any time at its sole
election by written notice provided to Affiliate.

     3. Covenants. Except for pledges in existence as of the date hereof, Affiliate agrees that,
except as contemplated by the terms of this Agreement, Affiliate shall not (a) grant any proxies or
powers of attorney in respect of the Subject Shares, deposit any of Affiliate’s Subject Shares into
a voting trust or enter into a voting agreement with respect to any of Affiliate’s Subject Shares;
or (b) take any action that would have the effect of preventing, impeding, interfering with or
adversely affecting Affiliate’s ability to perform Affiliate’s respective obligations under this
Agreement, other than a Permitted Disposition. Notwithstanding the foregoing, nothing herein shall
prevent Affiliate from assigning or transferring any Subject Shares beneficially owned by Affiliate
to any trust, estate, family partnership, foundation (whether family, private or public) or other
charitable organization (a “Permitted Transferee”) if such Permitted Transferee agrees in writing
to hold any Subject Shares subject to all of the provisions of this Agreement as Affiliate
hereunder.

     4. Representations and Warranties of Affiliate. Affiliate hereby represents and warrants to
Grey Wolf as follows:

     (a) Due Authority. Affiliate has the capacity to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Affiliate hereby represents and warrants to Grey
Wolf as follows: if Affiliate is an entity, Affiliate is duly organized and validly existing under
the laws of the jurisdiction of its organization, and Affiliate has all necessary power and
authority to execute and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Affiliate have, if Affiliate is an entity, been duly authorized by all
necessary action on the part of Affiliate, and, assuming its due authorization, execution and
delivery by Grey Wolf, constitutes a valid and binding obligation of Affiliate, enforceable against
Affiliate in accordance with its terms, except to the extent that its enforceability may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and by equitable principles.

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     (b) Ownership of Shares. Affiliate legally or beneficially owns the number of shares of Basic
Common Stock set forth beneath Affiliate’s name on the signature page hereto. The number of shares
of Basic Common Stock set forth beneath Affiliate’s name on the signature page hereto are all of
the shares of Basic Common Stock legally or beneficially owned by Affiliate. Affiliate has sole
voting power and sole power of disposition, in each case with respect to all of the shares of Basic
Common Stock set forth beneath Affiliate’s name on the signature page hereto, with no limitations,
qualifications or restrictions on such rights, subject only to applicable securities laws and the
terms of this Agreement and as otherwise noted on the signature page hereto. Also set forth on the
signature page hereto is (i) the number of shares of Basic Common Stock issuable pursuant to Basic
Stock Options held by Affiliate and (ii) the number of shares of Basic Restricted Stock (which have
not vested) held by Affiliate.

     (c) No Conflicts. (i) No filing with any governmental authority, and no authorization,
consent or approval of any other person is necessary for the execution of this Agreement by
Affiliate and the consummation by Affiliate of the transactions contemplated hereby (it being
understood that nothing herein shall prevent Affiliate’s compliance with Section 13(d) of the
Exchange Act) and (ii) none of the execution and delivery of this Agreement by Affiliate, the
consummation by Affiliate of the transactions contemplated hereby or compliance by Affiliate with
any of the provisions hereof shall (A) result in, or give rise to, a violation or breach of or a
default under any of the terms of any material contract, understanding, agreement or other
instrument or obligation to which Affiliate is a party or by which Affiliate or any of Affiliate’s
Subject Shares or assets may be bound, or (B) violate any applicable order, writ, injunction,
decree, judgment, statute, rule or regulation which could reasonably be expected to adversely
affect Affiliate’s ability to perform Affiliate’s obligations under this Agreement.

     (d) Reliance by Grey Wolf. Affiliate understands and acknowledges that Grey Wolf has entered
into the Merger Agreement in reliance upon the covenants contained therein requiring the execution
and delivery of this Agreement by Affiliate.

     5. Representations and Warranties of Grey Wolf. Grey Wolf hereby represents and warrants to
Affiliate as follows:

     (a) Due Organization, etc. Grey Wolf is a corporation duly incorporated and validly existing
under the laws of the jurisdiction of its incorporation. Grey Wolf has all necessary corporate
power and authority to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Grey Wolf has been duly authorized by all necessary action on
the part of Grey Wolf and, assuming its due authorization, execution and delivery by Affiliate,
constitutes a valid and binding obligation of Grey Wolf, enforceable against Grey Wolf in
accordance with its terms, except to the extent that its enforceability may be subject to

4

 

applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles.

     (b) Conflicts. (i) No filing with any governmental authority, and no authorization, consent
or approval of any other person is necessary for the execution of this Agreement by Grey Wolf and
the consummation by Grey Wolf of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by Grey Wolf, the consummation by Grey Wolf of the
transactions contemplated hereby shall (A) conflict with or result in any breach of the
organizational documents of Grey Wolf, (B) result in a violation or breach of or a default under
any of the terms of any material contract, understanding, agreement or other instrument or
obligation to which Grey Wolf is a party or by which Grey Wolf or any of its assets may be bound,
or (C) violate any applicable order, writ, injunction, decree, judgment, statute, rule or
regulation which could reasonably be expected to adversely affect Grey Wolf’s ability to perform
its obligations under this Agreement.

     (c) Reliance by Affiliate. Grey Wolf understands and acknowledges that (i) Affiliate is
entering into this Agreement in reliance upon the execution and delivery of the Merger Agreement by
Grey Wolf and (ii) that the closing of the transactions contemplated by the Merger Agreement would
be of material benefit to Affiliate.

     6. Miscellaneous.

     (a) Affiliate Capacity. If Affiliate is or becomes during the term hereof a director or
officer of Basic, Affiliate does not make any agreement or understanding herein in Affiliate’s
capacity as such director or officer. Affiliate executes this Agreement solely in Affiliate’s
capacity as the record holder or beneficial owner of Affiliate’s Subject Shares and nothing herein
shall limit or affect any actions taken by Affiliate in Affiliate’s capacity as an officer or
director of Basic. Without limiting the foregoing, nothing in this Agreement shall limit or affect
the ability of a director or officer of Basic to take any action as may be advisable or necessary
in the discharge of his or her fiduciary duties as such director or officer, and without regard to
whether he or she is, without limitation, (i) a trustee or co-trustee of one or more Affiliates,
(ii) an officer, consultant or other representative of a trustee or co-trustee of one or more
Affiliates, or (iii) a beneficiary of one or more Affiliates.

     (b) Publication. Affiliate hereby permits Basic and Grey Wolf to publish and disclose in the
Proxy Statement/Prospectus (including all documents and schedules filed with the SEC) and in other
filings with the SEC Affiliate’s identity and ownership of shares of Basic Common Stock and the
nature of Affiliate’s commitments, arrangements, and understandings pursuant to this Agreement.

5

 

     (c) Further Actions. Each of the parties hereto agrees that it will use its best efforts to
do all things necessary to effectuate this Agreement.

     (d) Entire Agreement. This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein and supersedes all prior agreements and
understandings, oral and written, with respect thereto.

     (e) Binding Effect; Benefit; Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their Permitted Transferees, heirs, estates and successors.
Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto, except by will or by the laws of descent and distribution, without
the prior written consent of each of the other parties. Nothing in this Agreement, expressed or
implied, is intended to confer on any person, other than the parties hereto, any rights or
remedies.

     (f) Amendments, Waivers, etc. This Agreement may not be amended, changed, supplemented,
waived or otherwise modified or terminated, except upon the execution and delivery of a written
agreement executed by all of the parties hereto.

     (g) Specific Enforcement. The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. Accordingly, the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity.

     (h) Remedies Cumulative. All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative and not alternative,
and the exercise of any thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.

     (i) No Waiver. The failure of any party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to demand such
compliance.

     (j) Governing Law; Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AS THEY RELATE TO THIS

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AGREEMENT. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

     (k) Headings. The descriptive headings of this Agreement are inserted for convenience only,
do not constitute a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.

     (l) Counterparts; Facsimiles. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, and all of which together shall be deemed to be one and
the same instrument. A signature transmitted by facsimile or by electronic mail in “portable
document format” shall be treated for all purposes by the parties hereto as an original and shall
be binding upon the party transmitting such signature without limitation.

     (m) Termination. This Agreement shall terminate, and neither Grey Wolf nor Affiliate shall
have any rights or obligations hereunder, and this Agreement shall become null and void and have no
effect upon the earliest to occur of (i) the mutual consent of Grey Wolf and Affiliate, (ii) the
Effective Time, (iii) a Basic Acquisition Proposal Recommendation or (iv) the effective termination
of the Merger Agreement pursuant to its terms; provided, further, that termination of this
Agreement shall not prevent any party hereunder from seeking any remedies (at law or in equity)
against any other party hereto for such party’s breach of any of the terms of this Agreement.
Notwithstanding the foregoing, Sections 6(d), 6(e), 6(h) and 6(j) shall survive the termination of
this Agreement.

[Signatures on following pages]

7

 

     IN WITNESS WHEREOF, this Agreement is executed as of the date first stated above.

	 	 	 	 	 
	 	GREY WOLF, INC.

a Texas corporation

 	 
	 	By:  	/s/
Thomas P. Richards 	 
	 	Name:  	Thomas P. Richards 	 
	 	Title:  	President & CEO 	 
	 

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJ Merchant Banking Partners III, L.P.

By: DLJ Merchant Banking III, Inc.,
	 

	 	 	 	Its Managing General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock owned: 12,650,117
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJ Merchant Banking
III, Inc., as
Advisory General Partner on behalf of

DLJ Offshore Partners III, C.V.

	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of
Basic Common
Stock owned: 884,531
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJ Merchant Banking
III, Inc., as
Advisory General Partner on behalf
 of DLJ Offshore Partners
III-1, C.V. and as attorney-in-fact for
DLJ Merchant Banking
III, L.P., as Associate General Partner of
DLJ Offshore
Partners III-1, C.V.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of
Basic Common
Stock owned: 228,284
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJ Merchant Banking
III, Inc., as
Advisory General Partner on behalf
 of DLJ Offshore Partners
III-2, C.V. and as attorney-in-fact for
DLJ Merchant Banking
III, L.P., as Associate General Partner of
DLJ Offshore
Partners III-2, C.V.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of
Basic Common
Stock owned: 162,622
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJ Merchant Banking
III, Inc., as
General Partner DLJ Merchant
Banking III, L.P. and as
attorney-in-fact for DLJ Merchant Banking III, L.P. as Managing
Limited Partner for and on behalf of DLJ MB PartnersIII GmbH
& Co. KG
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	DLJ MB GmbH, as
General Partner for and on behalf of
DLJ MB PartnersIII GmbH
& Co. KG
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Director
	 
	 	 	 	 
	 	 	Number of shares of
Basic Common
Stock owned: 107,898
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	Millennium Partners II, L.P.

By: DLJ Merchant Banking III, Inc.,
	 

	 	 	 	Its Managing General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of
Basic Common
Stock owned: 21,516
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJ ESC II, L.P.

By: DLJ LBO Plans Management Corporation,
	 

	 	 	 	Its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock owned: 1,493,185
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	DLJMB Funding III, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock owned: 132,220
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/A

 

 

	 	 	 	 	 
	 	 	AFFILIATE
	 
	 	 	 	 
	 	 	MBP III Plan Investors, L.P.

By: DLJ LBO Plans Management Corporation II,
	 

	 	 	 	Its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth Lohsen
	 

	 	 	 	 
	 

	 	Name:
	 	Kenneth Lohsen
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Number of shares of
Basic Common
Stock owned: 2,379,051
	 
	 	 	 	 
	 	 	Number of shares of Basic Common
Stock
issuable upon exercise of
Basic Stock Options
held: N/A
	 
	 	 	 	 
	 	 	Number of shares of Basic Restricted
Stock
(which have not vested) held: N/Aexv10w1

EXHIBIT 10.1

STEWART INFORMATION SERVICES CORPORATION

2008 STRATEGIC INCENTIVE POOL PLAN

(Adopted by the Board of Directors on May 9, 2008)

ARTICLE I

ESTABLISHMENT, PURPOSE AND PAYMENT OF AWARDS

     1.1 Purpose of the Plan.  The purpose of the Stewart Information Services Corporation
2008 Strategic Incentive Pool Plan (the “Plan”) is to reward the Co-Chief Executive Officers of
Stewart Information Services Corporation (the “Company”) by providing them with a further incentive
to achieve certain strategic goals of the Company, as set forth herein. The Plan is intended to
advance the best interests of the Company and its stockholders by providing the Co-Chief Executive
Officers with additional performance incentives.

     1.2 Participants.  The participants in the Plan are Malcolm S. Morris and Stewart
Morris, Jr., the Co-Chief Executive Officers of the Company.

     1.3 Determination of Awards. The amount of the Bonus Pool shall be determined by the
Compensation Committee of the Company’s Board of Directors (the “Committee”) as soon as practicable
after audited financial statements for the Company’s fiscal year ending December 31, 2010
have been made publicly available. Prior to making any payment under the Plan, the Committee shall
certify in writing the extent to which the performance goals established under the Plan were
achieved. The amount of the Bonus Pool so determined by the Committee shall be divided equally
between the Participants. A Participant’s share of the Bonus Pool may be reduced pursuant to
Section 1.4. Any such reduction shall not increase the amount payable under the Plan to the other
Participant. The Committee shall not make any upward discretionary increase in the amount of the
Bonus Pool or in the amount payable to either Participant under the Plan.

     1.4 Reduction or Forfeiture of Benefit. If a Participant dies, voluntarily ceases his
employment with the Company or incurs a termination of employment due to his incurring a
disability, in each case before January 1, 2011, any amount that would otherwise be payable to such
Participant under the Plan shall be reduced pro rata based upon the number of days during the
period beginning on March 3, 2008 and ending on December 31, 2010, that the Participant was not an
employee of the Company by reason of death, voluntary termination of employment or incurring a
disability. If a Participant incurs a termination of employment with the Company before January 1,
2011 for any reason other than due to his death, voluntary resignation or his incurring a
disability, he shall receive no benefit under the Plan. For purposes of the Plan, a Participant
shall have incurred a “disability” if he has been determined to have incurred a disability for
purposes of the Company’s long-term disability benefit plan.

     1.5 Payment of Awards. On the Payment Date the Company shall pay to each Participant
(or to his beneficiary) the amount due the Participant under the Plan. Such payment shall be in
cash.

 

 

     1.6 Death of Participant. In the event of the death of a Participant prior to the
payment of the Participant’s Plan benefit, the Participant’s Plan benefit (calculated taking into
effect Section 1.4) shall be paid to the Participant’s beneficiary on the Payment Date. The
Participant’s beneficiary shall be the person or persons designated by the Participant. Any such
designation shall be made by a notice in writing filed with the Chief Financial Officer of the
Company prior to the Participant’s death, in such form as the Committee shall require. If there is
no such beneficiary designation filed with the Chief Financial Officer of the Company at the time
of the Participant’s death, for purposes of the Plan, the beneficiary or beneficiaries who shall
receive payment of a Participant’s benefit in the event of his death shall be as follows:

	 	(a)	 	If the Participant leaves a surviving spouse, his benefit shall be paid to such
surviving spouse; or
	 
	 	(b)	 	If the Participant leaves no surviving spouse, his benefit shall be paid to his
executor or administrator, for the benefit of his estate, or to his heirs at law if
there is no administration of such Participant’s estate.

ARTICLE II

DEFINITIONS

     For purposes of the Plan, the words and phrases defined in this Article shall have the
meanings set forth below.

     2.1 “Bonus Pool” means an amount in cash equivalent to the Fair Market Value of 50,000
shares of Common Stock (as adjusted pursuant to Section 6.9) as of the last trading day of 2010,
based upon the closing price of a share of Common Stock on the New York Stock Exchange, or such
other national securities exchange on which Common Stock may then be traded, adjusted as follows:

If 80% of a Target is not achieved, the Bonus Pool will be reduced by one-third for each
Target not achieved.

If at least 80% but less than 100% of a Target is achieved, the Bonus Pool will be reduced
by an amount equal to one-third of the Bonus Pool for that Target, multiplied by the
difference between 100% and the percentage of the Target actually achieved; and

If more than 100% of a Target is achieved, the percentage points in excess of 100% achieved
for such Target shall be allocated by the Committee to one or more of the other Targets for
purposes of calculating the Bonus Pool, but only if such other Target is achieved at the 80%
level before giving effect to such allocation and provided that no more than 10 percentage
points may be reallocated to any Target under this provision. Any such reallocation
permitted hereunder shall be effected in the manner that will result in the greatest Plan
benefit for the Participant.

     2.2 “Code” shall mean the Internal Revenue Code of 1986, as amended.

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     2.3 “Commercial Market Target” shall mean a 4.0% share of the U.S. domestic real estate
market for commercial properties determined as of December 31, 2010 as reported by Fistac, Inc., or
if Fistac, Inc. is not in existence, another comparable source.

     2.4 “Committee” shall have the meaning specified in Section 1.3.

     2.5 “Common Stock” shall mean the Common Stock, $1.00 par value, of the Company, as such
Common Stock may be modified by merger or reclassification.

     2.6 “Company” shall have the meaning specified in Section 1.1.

     2.7 “Fair Market Value” shall mean the closing price of a share of Common Stock on the
New York Stock Exchange, or such other national securities exchange on which Common Stock is listed
as of the relevant date.

     2.8 “International Target” shall mean revenues of $158,376,000 for the year ending December
31, 2010 from sources outside the United States.

     2.9 “Participants” shall mean Malcolm S. Morris and Stewart Morris, Jr.

     2.10 “Payment Date” shall mean May 15, 2011.

     2.11 “Plan” shall have the meaning specified in Section 1.1.

     2.12 “Regional Centralized Title Production Centers’ Target” shall mean the use of any
or all of the components of the Stewart Title Production Engine technology in the processing of 31%
of the title orders processed by the Company for the year ending December 31, 2010.

     2.13 “Targets” shall mean the Commercial Market Target, the International Target and the
Regional Centralized Title Production Centers’ Target.

ARTICLE III

ADMINISTRATION

     3.1 Administration. The Plan shall be administered by the Committee. The Committee
shall have full and exclusive power and authority to administer the Plan and to take all actions
that the Plan expressly contemplates or are necessary or appropriate in connection with the
administration of the Plan.

     3.2 Authority of the Committee. The Committee shall have full and exclusive power to
interpret and apply the terms and provisions of the Plan, and to adopt such rules, regulations and
guidelines for implementing the Plan as the Committee may deem necessary or proper, all of which
powers shall be exercised in the best interests of the Company and in keeping with the objectives
of the Plan. A majority of the members of the Committee shall constitute a quorum for the
transaction of business, and the vote of a majority of those members present at any meeting shall
decide any question brought before that meeting. Any decision or determination reduced to writing
and signed by a majority of the members shall be as effective as if it had been made by a majority
vote at a meeting properly called and held. All questions of interpretation

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and application of the Plan, or as to awards granted under the Plan, shall be subject to the
determination, which shall be final and binding, of a majority of the Committee. No member of the
Committee shall be liable for any act or omission of any other member of the Committee or for any
act or omission on his or her own part, including but not limited to the exercise of any power or
discretion given to him or her under the Plan, except those resulting from his or her own gross
negligence or willful misconduct. In carrying out its authority under the Plan, the Committee
shall have full and final authority and discretion, including but not limited to the following
rights, powers and authorities, to:

	 	(a)	 	oversee the performance of the Target calculations required by the Plan;
	 
	 	(b)	 	prescribe, amend and rescind rules and regulations relating to administration
of the Plan; and
	 
	 	(c)	 	make all other determinations and take all other actions deemed necessary,
appropriate or advisable for the proper administration of the Plan.

The Committee may correct any defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent the Committee deems necessary or desirable to further the
Plan’s objectives. Further, the Committee shall make all other determinations that may be
necessary or advisable for the administration of the Plan. The actions of the Committee in
exercising all of the rights, powers, and authorities set out in this Article III and all other
Articles of the Plan, when performed in good faith and in its sole judgment, shall be final,
conclusive and binding on all persons. The Committee may employ attorneys, consultants,
accountants, agents, and other persons, any of whom may be an Associate, and the Committee, the
Company, and its officers and Board of Directors of the Company shall be entitled to rely upon the
advice, opinions, or valuations of any such persons.

     3.3 No Liability. Under no circumstances shall the Company, the Board or the
Committee incur liability for any indirect, incidental, consequential or special damages (including
lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the
form of the act in which such a claim may be brought, with respect to the Plan or the
Company’s, the Committee’s or the Board’s roles in connection with the Plan.

ARTICLE IV

REINVESTMENT REQUIREMENT

     Each of the Chief Executive Officers hereby agrees that he will invest at least one-half of
any net after-tax amounts received under the Plan in shares of Common Stock through purchases on
the New York Stock Exchange or such other national securities exchange on which Common Stock may
then trade. Such investment shall be made not later than 90 days after the Payment Date.

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ARTICLE V

INCOME AND EMPLOYMENT TAXES

     5.1 Withholding. Each of the Chief Executive Officers hereby authorizes the Company to
withhold from any remuneration or consideration whatsoever payable to such Participant hereunder,
any amounts required by any taxing authority to be withheld for taxes of any kind as a consequence
of such participation in the Plan.

     5.2 Compliance with Section 162(m). It is intended that the rights of the Co-Chief
Executive Officers under the Plan shall satisfy the requirements for “performance-based
compensation” under section 162(m) of the Code. The interpretation of the Plan shall be guided by
such provisions, as appropriate. If a provision of the Plan would cause a payment to a Participant
to fail to satisfy these requirements, it shall be interpreted and applied in a manner such that
said payment will satisfy section 162(m) of the Code to the extent practicable. If the Plan does
not contain any provision required to be included herein under section 162(m) of the Code or
applicable Department of Treasury regulations, such provision shall be deemed to be incorporated
herein with the same force and effect as if such provision had been set out at length herein.

     5.3 Compliance with Section 409A. To the extent applicable, the Plan shall be
operated in compliance with section 409A of the Code and the provisions of the Plan shall be
interpreted by the Committee in a manner that is consistent with this intention.

ARTICLE VI

GENERAL PROVISIONS

     6.1 Unfunded Plan/No Establishment of a Trust Fund. Participants shall have no right,
title, or interest whatsoever in or to any investments that the Company may make to aid in meeting
obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship
between the Company and any Participant, beneficiary, legal representative, or any other person.
Any right of a Participant to receive a payment under the Plan shall be no greater than the right
of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts. No property shall be set
aside nor shall a trust fund of any kind be established to secure the rights of any Participant
under the Plan. Participants shall at all times rely solely upon the general credit of the Company
for the payment of any benefit that becomes payable under the Plan. The Plan is not subject to the
Employee Retirement Income Security Act of 1974, as amended. Rather, the Plan is a bonus program
exempt from coverage under the Employee Retirement Income Security Act of 1974, as amended pursuant
to the application of Department of Labor Regulation section 2510.3-2(c).

     6.2 No Employment Obligation. The adoption and maintenance of the Plan by the Company
shall not constitute an employment contract, express or implied, nor impose upon the Company any
obligation to employ or continue to employ, or utilize the services of, either Participant. The
right of the Company to terminate the employment of either Participant shall not

-5-

 

be diminished or affected by reason of the existence of the Plan, and nothing in the Plan
shall interfere with or limit in any way the right of the Company to terminate any
Participant’s employment at any time or for any reason not prohibited by law.

     6.3 Gender and Number. If the context requires, words of one gender when used in the
Plan shall include the other and words used in the singular or plural shall include the other.

     6.4 Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.

     6.5 Headings. Headings of Articles and Sections are included for convenience of
reference only and do not constitute part of the Plan and shall not be used in construing the terms
and provisions of the Plan.

     6.6 Other Compensation Plans. The adoption of the Plan shall not affect any other
incentive or other compensation or benefit plans in effect for the Company, nor shall the Plan
preclude the Company from establishing any other forms of incentive compensation arrangements.

     6.7 Successors. All obligations of the Company under the Plan shall be binding upon
any successor to the Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

     6.8 Arbitration of Disputes. Any controversy arising out of or relating to the Plan,
including without limitation, any and all disputes, claims (whether in tort, contract, statutory or
otherwise) or disagreements concerning the interpretation or application of the provisions of the
Plan, the Company’s employment of the Participant, and the termination of that employment, shall be
resolved by arbitration in accordance with the Employee Benefit Plan Claims Arbitration Rules of
the American Arbitration Association (the “AAA”) then in effect. Within ten business days of the
initiation of an arbitration hereunder, the Company and the Participant will each separately
designate an arbitrator, and within 20 business days of selection, the appointed arbitrators will
appoint a neutral arbitrator from the panel of AAA National Panel of Employee Benefit Plan Claims
Arbitrators. The arbitrators shall issue their written decision (including a statement of finding
of facts) within 30 days from the date of the close of the arbitration hearing. The decision of
the arbitrators selected hereunder shall be final and binding on both parties. This arbitration
provision is expressly made pursuant to and shall be governed by the Federal Arbitration Act, 9
U.S.C. Sections 1-16 (or replacement or successor statute). Pursuant to Section 9 of the Federal
Arbitration Act, the Company and both Participants agree that any judgment of the United States
District Court for the District in which the headquarters of the Company is located at the time of
initiation of an arbitration hereunder shall be entered upon the award made pursuant to the
arbitration. Nothing in this Section 6.8 shall be construed to, in any way, limit the scope and
effect of Section 3.2. In any arbitration proceeding full effect shall be given to the rights,
powers, and authorities of the Committee under Section 3.2.

-6-

 

     6.9 Changes in the Company’s Capital Structure. If following May 9, 2008 and prior to
January 1, 2011 the Company shall effect a subdivision or consolidation of the Common Stock or
other capital readjustment, the payment of a Common Stock dividend, or other increase or reduction
in the number of shares of Common Stock outstanding, without receiving compensation therefor in
money, services or property, then the number of shares of Common Stock taken into account for
purposes of calculating the Bonus Pool shall be appropriately adjusted to reflect the change.

     6.10 Change of Control of the Company. Notwithstanding any other provision of the
Plan, if prior to January 1, 2011 there occurs a change in ownership or effective control of the
Company or in the ownership of a substantial portion of the assets of the Company (in each case,
within the meaning of section 409A of the Code), 80% of each of the Targets shall be deemed to have
been achieved, the date of the consummation of the corporate transaction shall be substituted for
the reference to December 31, 2010 in Section 1.4, and the words “last trading day before the date
of the consummation of the corporate transaction” shall be substituted for the words “last trading
day of 2010” in the definition of “Bonus Pool”.

     6.11 Stockholder Approval. Notwithstanding any other provision of the Plan, no amount
will be paid under the Plan unless, prior to the payment, the stockholders of the Company approve
the material terms of the performance criteria for benefits under the Plan.

     6.12 Governing Law. The provisions of the Plan and the rights of all persons claiming
thereunder shall be construed, administered and governed under the laws of the State of Texas.

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly
authorized officer this                   
   day of                   
                     
 , 2008.

	 	 	 	 	 	 	 
	 	 	STEWART INFORMATION SERVICES CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Agreed and accepted:

PARTICIPANTS

Malcolm S. Morris                                    

Stewart Morris, Jr.                                    

-7-

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