Document:

Exhibit 10.5

 

STEWART INFORMATION SERVICES CORPORATION

RESTRICTED PERFORMANCE UNIT AGREEMENT (BV)

 

THIS RESTRICTED PERFORMANCE UNIT 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”), and 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 or as set forth herein.

 

By action of the Committee, and subject to the
terms of the Plan, the Participant is hereby granted a Restricted Performance Units as described in Article IX of the Plan, subject
to the terms of the Plan and to the provisions 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 [_____] Restricted Performance Units (the “Units”), representing a contractual right of the Participant potentially
to receive shares of Common Stock (“Shares”), with the number of Shares to be delivered at settlement, if any, being
determined by reference to the number of Units that are deemed vested and to be settled provided all of the conditions for settlement
of the Units have been satisfied and subject to the terms and conditions of the Plan and this Award Agreement.

 

2.           Vesting
and Forfeiture.

 

(a)          Except
as otherwise expressly provide herein, 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.
Except as otherwise provided herein or at the discretion of the Committee, the Units are not deemed vested until after the results
for the Performance Period have been determined and settlement of the Units by the delivery of Shares has occurred. As a consequence,
in general the Participant shall forfeit all rights with respect to the Units if the Participant’s employment with the Company
terminates prior to the date the Units are settled.

 

(b)          The
number of Units that are treated as vested shall be determined after the end of the Performance Period, as specified in Exhibit
A, attached hereto, based on the achievement of the performance criteria, also set forth in Exhibit A, and subject in all regards
to such other discretion by action of the Committee as permitted under the terms of the Plan.

 

     

     

    

 

(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)          Waiver
of Continued Employment Requirement. The general requirement that the Participant be continuously employed through the date
the Units are settled (the “Employment Requirement”) shall be waived to the extent provided in this Section 2(d), subject,
however, in all regards, to the Committee’s discretionary authority as provided under the Plan. Specifically, the Employment
Requirement shall not be applicable in the following circumstances (“Special Circumstances”):

 

(i)          The
Participant’s termination of employment under circumstances where the Participant is eligible for benefits under the Company’s
Executive Voluntary Retirement Plan;

 

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

 

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

 

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

 

(v)         Termination
of the Participant’s employment by the Participant for Good Reason (but only in circumstances where the Participant’s
employment agreement provides for severance pay benefits on a resignation for Good Reason.

 

In order for the Participant receive any Shares with respect to
Unit following the occurrence of any of the above Special Circumstances, 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”)

 

(a)          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.

 

    	 	- 2 -	 

     

    

 

(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%

 2

 

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

 

(b)          Notwithstanding
anything herein to the contrary, in the event the Participant is terminated for Cause, the Participant’s rights to any payments
otherwise due under this Award Agreement are forfeited in their entirety.

 

3.           Status
of Units. The Units subject to this Award Agreement are not intended to constitute property for purposes of Section 83 of the
Code. The Units represent a right to receive a payment, in the form Shares, at the time the Units are settled.

 

4.           Time
of Payment/Settlement. In all cases, Units that are vested and settled under the terms of this Award Agreement shall be settled
as soon as practicable following the determination of the extent to which the performance criteria have been attained, and, in
all events, during the calendar year following the end of the Performance Period. In addition, in the event any dividends are paid
to shareholders during the Performance Period or thereafter prior to the settlement of the Units, the Participant shall be entitled
to a payment equal to the amount that would have been paid as dividends to the Participant had the Participant held the Shares
actually delivered to the Participant throughout 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.

 

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 Units subject to this Award Agreement shall not be assigned or otherwise disposed of by the Participant.

 

    	 	- 3 -	 

     

    

 

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.

 

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 

 

    	 	- 4 -	 

     

    

 

Exhibit A

 

The performance metric for these Units is the
Compound Annual Growth Rate (CAGR) Book Value Per Share + Cumulative Dividends Per Share performance scale ("BV").

 

Set forth below is the table of performance
targets and percentage of Units that may become vested and payable under the terms of the Performance Award Agreement. The number
of vested and payable Units will range from 0 to 225% of the stated number of Units set out in Section 1 of the Award Agreement.

 

Threshold and Maximum opportunity to incentivize
performance will be associated with varying levels of relative performance. Targeted performance is achieved when Company BV is
10%. Threshold performance is set at 5%. In the event performance is below 5%, the associated payout is equal to zero. Maximum
Payout is achieved when performance is 15%.

 

	 	 	CAGR Book Value Per Share +
 Cumulative
    Dividends Per Share
 Performance Achieved	 	 	Payout as % of
 Target
    Number of
 Shares	 
	Maximum	 	 	15	%	 	 	225	%
	Target	 	 	10	%	 	 	100	%
	Threshold	 	 	5	%	 	 	25	%
	Below Threshold	 	 	<5	%	 	 	0	%

 

Payout percentages will be interpolated for
performance achievement between threshold, target, and maximum.

 

The Performance Period is the period from January
1, 2018 through December 31, 2020.

 

The following sets forth the definition of
specific terms and calculations

 

	Term/Calculation	 	Definition
	Average Shares Outstanding	 	Average Shares Outstanding is the number of shares at the end of the Baseline Period, plus the shares at the end of the Performance Period, divided by two.
	Baseline Period	 	Baseline Period is the 12-month period ending immediately preceding the Performance Period.  For example, a Performance Period of January 1, 2018 through December 31, 2020 would have a baseline period of 12 months ending December 31, 2017.
	Book Value per Share	 	Book Value is calculated as assets less total liabilities as reported in the Company 10K, divided by Average Shares Outstanding.

 

    	 	- 5 -	 

     

    

 

	Term/Calculation	 	Definition
	Compound Annual Growth Rate (CAGR)	 	
        CAGR is the annual growth rate, taking into account the Performance
        Period and effects of compounded growth. The formula used to determine CAGR is as follows:

         

        CAGR = (Value at end of Performance Period / Value at end of Baseline
        Period)^(1/years in Performance Period) – 1.

         

        For example, for a Performance Period of January 1, 2018 through
        December 31, 2020, the basis for the CAGR calculation would be as follows:

         

        CAGR = (Value at December 31, 2020

        / Value at December 31, 2017)^(1/3)-1

	Company	 	The Company is Stewart Information Services Corporation and its subsidiaries.
	Cumulative Dividends Per Share	 	Cumulative Dividends Per Share is the aggregate cash dividend paid during the Performance Period as reported in the 10K.
	Maximum Performance Level	 	The level of performance that results in Maximum Payout for a metric. 
	Maximum Payout	 	The Maximum Payout is the maximum number of shares that can be earned under the LTI Plan for each performance metric. It is calculated by multiplying the Target number of shares by an agreed upon percentage as indicated.
	Performance Period	 	Performance Period is a three-year period beginning on January 1 of the initial award year and ending December 31 three years later.  For example, the Performance Period for 2018-initiated awards is January 1, 2018 through December 31, 2020. 
	System of Record	 	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
	Target Performance Level	 	The expected level of performance, which results in a payout of 100% of Target number of shares. 
	Threshold Performance Level	 	The level of performance for a metric below which no shares will vest.

 

    	 	- 6 -Exhibit

AMENDMENT TO OLD REPUBLIC INTERNATIONAL CORPORATION 
2005 KEY EMPLOYEES PERFORMANCE RECOGNITION PLAN
The Old Republic International Corporation 2005 Key Employees Performance Recognition Plan (the “Plan”) is hereby amended in the following respects, effective as of January 1, 2015:
1. Section 2.12 is revised to read as follows:
2.12    “Calculation Year” shall mean the Company’s fiscal year immediately preceding the year for which the Performance Recognition Pool is being calculated. 
If the Company does not report any Consolidated Net Operating Income in the year prior to the Calculation Year, the “prior year” to be used in the following definitions and for Section 4.1 calculations is the first year prior to the Calculation Year in which the Company reported Consolidated Net Operating Income.
2.    Section 2.18 is revised to read as follows:
2.18  “Consolidated Net Operating Income” shall mean the Company’s net income exclusive of realized capital gains or losses (irrespective of the treatment of such amounts under GAAP), extraordinary credits or charges, and the results of the Republic Financial Indemnity Group run-off segment as reported in the Company's annual Form 10-K.
3.     Section 4.2 is revised to read as follows:
4.2  Notwithstanding any provision herein to the contrary, the Performance Recognition Pool shall be zero for any Calculation Year for which the Company did not report any Consolidated Net Operating Income.
4.    Except as modified by this Amendment, the terms and conditions of the Plan are unchanged.
IN WITNESS WHEREOF, the Company has caused this Amendment to be signed by its duly qualified officers and caused its corporate seal to be hereunto affixed on this ___ day of March, 2016.
OLD REPUBLIC INTERNATIONAL CORPORATION

By: __________________________________

Title: _________________________________
Attest:
By: _______________________________
Title: ______________________________

AMENDMENT TO OLD REPUBLIC INTERNATIONAL CORPORATION 
2005 KEY EMPLOYEES PERFORMANCE RECOGNITION PLAN
The Old Republic International Corporation 2005 Key Employees Performance Recognition Plan (the “Plan”) is hereby amended in the following respects, effective as of January 1, 2017:
2.     Section 6.01 is revised to read as follows:
6.1  Within ninety (90) days of the date the Committee and/or CEO make such awards,, an Eligible Employee shall automatically receive in cash one hundred percent (100%) of any Performance Recognition Pool award up to Thirty-seven Thousand, Five Hundred Dollars ($37,500) and fifty percent (50%) of any excess above that.  The remaining fifty percent (50%) of the excess of any such award shall be credited to the Employee’s 2005 Plan Account balance as of such year and shall become vested in accordance with the vesting schedule set forth in Section 6.3.
2.    Except as modified by this Amendment, the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the Company has caused this Amendment to be signed by its duly qualified officers and caused its corporate seal to be hereunto affixed on this first day of March, 2017.
OLD REPUBLIC INTERNATIONAL CORPORATION

By: __________________________________

Title: _________________________________
Attest:
By: _______________________________
Title: ______________________________

AMENDMENT TO OLD REPUBLIC INTERNATIONAL CORPORATION 
2005 KEY EMPLOYEES PERFORMANCE RECOGNITION PLAN
The Old Republic International Corporation 2005 Key Employees Performance Recognition Plan (the “Plan”) is hereby amended in the following respects, effective as of January 1, 2018:
		
	1.
	 Section 6.01 is revised to read as follows:

6.1  Within ninety (90) days of the date the Committee and/or CEO make such awards,, an Eligible Employee shall automatically receive in cash one hundred percent (100%) of any Performance Recognition Pool award up to Fifty Thousand Dollars ($50,000) and fifty percent (50%) of any excess above that.  The remaining fifty percent (50%) of the excess of any such award shall be credited to the Employee’s 2005 Plan Account balance as of such year and shall become vested in accordance with the vesting schedule set forth in Section 6.3.
2.    Except as modified by this Amendment, the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the Company has caused this Amendment to be signed by its duly qualified officers affixed on this first day of March, 2018.
OLD REPUBLIC INTERNATIONAL CORPORATION

By: __________________________________

Title: _________________________________
Attest:
By: _______________________________
Title: ______________________________

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