Exhibit 10.3

 

STEWART INFORMATION SERVICES CORPORATION
STOCK UNIT AWARD AGREEMENT

 

THIS STOCK UNIT AWARD AGREEMENT (the “Award Agreement”) is hereby granted as of
February 8, 2018 (the “Grant Date”) by Stewart Information Services Corporation,
a Delaware corporation (the “Company”), to [_________] (the “Participant”)
pursuant to the Stewart Information Services Corporation 2014 Long Term
Incentive Plan (the “Plan”), subject to the terms and conditions set forth
therein and as set out in this Award Agreement. Capitalized terms used herein
shall, unless otherwise required by the context, have the meaning ascribed to
such terms in the Plan.

 

By action of the Committee, and subject to the terms of the Plan, the
Participant is hereby granted Stock Units (the “Units”), each of which represent
a contractual right that entitles the Participant potentially to receive a share
of the Company’s Common Stock (each, a “Share”), provided all of the conditions
for settlement of the Units have been satisfied, subject to the Plan and to the
restrictions and risks of forfeiture as set forth in this Award Agreement.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained in this Award Agreement, the Company and the Participant agree as
follows:

 

1.           Grant. The Company grants to the Participant, upon the terms and
conditions set forth in this Award Agreement and as set forth in the Plan
[______] Units.

 

2.           Vesting and Forfeiture.

 

(a)          Any Units that are not vested as of the date of the Participant’s
termination of employment for any reason shall be automatically forfeited
without any further action required to be taken by the Participant or the
Company.

 

(b)          In general, the Units shall become vested on the dates set forth
below (each, a “Vesting Date”), as to the specified percentage of the Units
indicated:

 

Vesting Date  Incremental Vesting
Percentage   Cumulative Vesting
Percentage            First anniversary of the Grant Date   33⅓%   33⅓%        
    Second anniversary of the Grant Date   33⅓%   66⅔%             Third
Anniversary of the Grant Date   33⅓%   100%

 

The vesting of the Participant’s Units, as set forth above, shall only occur if
the Participant has remained continuously employed through the relevant Vesting
Date.

 

 

 

 

(c)          Notwithstanding any other provision of this Award Agreement, in the
event there is a Change of Control while the Participant remains employed with
the Company or in the event the Participant is terminated in connection with a
Change in Control, the Participant shall be vested in the number of Units set
forth in Section 1 as of the date of the Participant’s termination of
employment.

 

(d)          Special Pro-Rata Vesting. The Units (if not already vested under
any other provision of this Award Agreement) shall be vested pursuant to this
Section 2(d) immediately prior to the Participant’s termination of employment
under any of the following circumstances (“Special Vesting Termination Events”):

 

(i)          Termination of the Participant’s employment due to Executive’s
death;

 

(ii)         Termination of the Participant’s employment due to Executive’s
Disability;

 

(iii)        Termination of the Participant’s employment by the Company without
Cause;

 

(iv)        Termination of the Participant’s employment by the Participant for
Good Reason (if the Participant’s employment agreement has provisions for
severance pay benefits in such circumstances).

 

In order for the Participant to be eligible for special pro-rata vesting under
this Section 2(d), the Participant must have been continuously employed for at
least twenty-five percent (25%) of the period covered by the vesting schedule
set forth in Section 2(a), and the Participant must execute and not, thereafter,
revoke, a full release of all claims that Executive may have against the
Company, its Subsidiaries and affiliates, and all of their respective officers,
employees, directors, and agents, and that shall include the Participant’s
agreement not to disparage the Company and not to divulge any of the Company’s
confidential information, in a form acceptable to the Company in a form
satisfactory to the Committee (the “Release”).

 

(e)          Calculation of Special Pro-Rata Vesting. If the Participant is
eligible for special pro-rata vesting under Section 2(d), vesting shall be
calculated as follows:

 

(i)          Special Pro-rata Vesting shall be based on the number of full,
completed calendar months worked by Executive during the applicable incentive
period (as set forth in the applicable LTI Award). The calculation of Special
Pro-Rata Vesting shall be determined as a percent of the total possible vested
award that would have been vested to Executive had Executive remained employed
during the entire incentive period, measured in whole calendar months,
multiplied by a fraction whose numerator is the percentage of the number of
calendar months of completed employment during the entire incentive period plus
100% and whose denominator is two.

 

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(ii)         By way of hypothetical example only: if Executive shall experience
a Special Vesting Termination Event during the 24th month of a 36-month
incentive program, Executive would receive 81.94% of the applicable LTI Award.
The formula for calculating Special Pro-Rata Vesting based on the foregoing
hypothetical is as follows:

 

(23 ÷ 36) = 63.88% + 100% = 163.88% = 81.94%

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(iii)        The time of payment of LTI Awards subject to Special Pro-Rata
Vesting shall occur as provided in the applicable LTI Awards.

 

(f)           Voluntary Retirement. Notwithstanding anything in this Section 2
to the contrary, the Participant’s Units shall be fully vested if the
Participant is eligible to resign from employment with the Company and have that
resignation treated as a Voluntary Retirement (as that term is defined in the
Stewart Information Services Corporation Executive Voluntary Retirement Plan, or
“EVRP”), provided the Participant satisfies all of the requirements of the EVRP
to receive benefits under that plan.

 

3.           Settlement of Vested Units. Vested Units shall generally be settled
on or as soon as practicable following the Vesting Dates set forth in Section
2(b), and shall be settled by the delivery of Shares corresponding to the
portion of the Units that are indicated as being vested on each of the Vesting
Dates. Notwithstanding anything herein to the contrary, the accelerated vesting
of Units that may occur based on the circumstances of the Participant’s
termination of employment, or eligibility for Voluntary Retirement, shall not
have any impact on the settlement date for the Units, so that no acceleration of
settlement or payment occurs as a result of any such change in vesting.
Settlement of Units shall be contingent on the Participant making appropriate
arrangements for payment of amounts required to be withheld for federal, state
and local income and wage taxes, and the Company shall also have the right to
withhold or cancel Units or Shares that are otherwise to be delivered on
settlement of Units so as to enable the Company to comply with its withholding
obligations (and any such cancellation of withholding of Units or Shares shall
be deemed to be a taxable distribution of Shares and a repurchase of such Shares
for federal income tax purposes at the time that occurs). In addition, in the
event any dividends are paid to shareholders during the period following the
Grant Date and up to the delivery of any Shares, the Participant shall be
entitled to a payment, at the same time the Shares are delivered to the
Participant, equal to the amount that would have been paid as dividends to the
Participant had the Participant held the Shares during that period (“Dividend
Equivalents”). The Committee shall have the right to determine whether the
Dividend Equivalents shall be paid in cash or in the form of a distribution of
additional shares of Common Stock having the same value and to determine whether
to deem such dividends to have been reinvested in shares at the time the
dividends were paid.

 

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4.           Status of Units and Certain Tax Matters. The Units subject to this
Award Agreement are only a contractual right of the Participant potentially to
receive Shares corresponding to the number of Units granted to the Participant.
As a consequence, the Units do not constitute property for purposes of Code
Section 83. As a consequence, the Participant will be taxable for federal income
tax purposes on the value of the Shares distributed to the Participant at the
time the Shares are distributed, and not at the time the Units vest.
Notwithstanding the foregoing, the value of the Units is treated as creating a
form of nonqualified deferred compensation to which Code Sections 409A and
3121(v) are applicable. As a consequence, the value of the Units is subject to
certain wages taxes (for Social Security and Medicare) at the time of vesting
and the Company shall be entitled to cancel vested Units as a means to cover the
Company’s wage withholding obligations that arise on vesting. Vesting is not,
however, intended generally to be a taxable event for purposes of federal income
taxation or Code Section 409A. Because the time of settlement or payment is, in
all cases, fixed by reference to a specified schedule of payments that is not
subject to acceleration, except for the cancellation of Units for withholding
purposes, which is permissible under Code Section 409A, all requirements of Code
Section 409A are intended to be met, and this Award Agreement shall be
interpreted in a manner consistent with the Company’s intent to satisfy all
applicable requirements of Code Section 409A.

 

5.           Employment. Nothing in the Plan or in this Award Agreement shall
confer upon the Participant any right to be continued as an employee of the
Company or interfere in any way with the right of the Company to remove the
Grantee as an employee at any time for any cause.

 

6.           Binding Effect. This Award Agreement shall be binding upon and
shall inure to the benefit of any successor of the Company, but except as
provided above, the Shares subject to this Award Agreement shall not be assigned
or otherwise disposed of by the Participant.

 

7.           The Plan. This Award Agreement is subject to the terms and
conditions of the Plan. In the event of a conflict between the Plan and this
Agreement, the terms of the Plan shall control.

 

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IN WITNESS WHEREOF, this Award Agreement has been executed on this 22nd day of
February, 2018.

 

  STEWART INFORMATION SERVICES CORPORATION       By:     Its Chief Executive
Officer         ACKNOWLEDGED         By:       PARTICIPANT

 

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