10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number 001-02658

STEWART INFORMATION SERVICES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	74-1677330
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1980 Post Oak Blvd., Houston TX	77056
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 625-8100

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $1 par value	New York Stock Exchange
(Title of each class of stock)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	þ
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  þ

The aggregate market value of the Common Stock (based upon the closing sales price of the Common Stock of Stewart Information Services Corporation, as reported by the NYSE on June 30, 2012) held by non-affiliates of the Registrant was approximately $280,935,000.

At March 1, 2013, the following shares of each of the registrant’s classes of stock were outstanding:

Common, $1 par value	20,045,307
Class B Common, $1 par value	1,050,012

Documents Incorporated by Reference

Portions of the definitive proxy statement (the Proxy Statement), relating to the annual meeting of the registrant’s stockholders to be held May 3, 2013, are incorporated by reference in Part III of this document.

FORM 10-K ANNUAL REPORT

YEAR ENDED DECEMBER 31, 2012

TABLE OF CONTENTS

Item		Page
	PART I
1.	Business		1
1A.	Risk Factors		6
1B.	Unresolved Staff Comments		9
2.	Properties		9
3.	Legal Proceedings		10
4.	Mine Safety Disclosures		10
	PART II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		10
6.	Selected Financial Data		12
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
7A.	Quantitative and Qualitative Disclosures About Market Risk		27
8.	Financial Statements and Supplementary Data		27
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		28
9A.	Controls and Procedures		28
9B.	Other Information		28
	PART III
10.	Directors, Executive Officers and Corporate Governance		29
11.	Executive Compensation		29
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		29
13.	Certain Relationships and Related Transactions, and Director Independence		30
14.	Principal Accounting Fees and Services		30
	PART IV
15.	Exhibits, Financial Statement Schedules		30
	Signatures		31

As used in this report, “we,” “us,” “our,” the “Company” and “Stewart” mean Stewart Information Services Corporation and our subsidiaries, unless the context indicates otherwise.

PART I

Item 1. Business

We are a Delaware corporation formed in 1970. We and our predecessors have been engaged in the title business since 1893.

Stewart Information Services Corporation (NYSE-STC) is a customer-focused, global title insurance and real estate services company offering products and services through our direct operations, network of approved agencies and other companies within the Stewart family. Stewart provides these services to homebuyers and sellers; residential and commercial real estate professionals; mortgage lenders and servicers; title agencies and real estate attorneys; home builders; and United States and foreign governments. Stewart also provides loan origination and servicing support; loan review services; loss mitigation; REO asset management; home and personal insurance services; and technology to streamline the real estate process.

Our international division delivers products and services protecting and promoting private land ownership worldwide. Currently, our primary international operations are in Canada, the United Kingdom, Central Europe, Central America and Australia.

We report our business in three segments: title insurance and related services, mortgage services and corporate. The financial information related to these segments is discussed in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 20 to our audited consolidated financial statements.

Title Insurance Services

Title insurance and related services (title segment) include the functions of searching, examining, closing and insuring the condition of the title to real property. The title segment also includes certain ancillary services provided for tax-deferred exchanges and home and personal insurance services.

Examination and closing. The purpose of a title examination is to ascertain the ownership of the property being transferred, debts that are owed on it and the scope of the title policy coverage. This involves searching for and examining documents such as deeds, mortgages, wills, divorce decrees, court judgments, liens, paving assessments and tax records.

At the closing or “settlement” of a sale transaction, the seller executes and delivers a deed to the new owner. The buyer typically signs new mortgage documents. Closing funds are then disbursed to the seller, the prior lender, real estate brokers, the title company and others. The documents are then recorded in the public records. A title insurance policy is generally issued to both the new lender and the owner.

Title insurance policies. Lenders in the United States generally require title insurance as a condition to making a loan on real estate, including securitized lending. This is to assure lenders of the priority of their lien position. The purchasers of the property want insurance to protect against claims that may arise against the title to the property. The face amount of the policy is normally the purchase price or the amount of the related loan.

1

Title insurance is substantially different from other types of insurance. Fire, auto, health and life insurance protect against future losses and events. In contrast, title insurance insures against losses from past events and seeks to protect the public by eliminating covered risks through the examination and settlement process. In essence, a title insurance policy provides a warranty to the policyholder that the title to the property is free from defects that might impair ownership rights. Most other forms of insurance provide protection for a limited period of time and, hence the policy must be periodically renewed. Title insurance, however, is issued for a one-time premium and the policy provides protection for as long as the owner owns the property or has liability in connection with the property. Also, a title insurance policy does not have a finite contract term, whereas most other lines of insurance have a definite beginning and ending date for coverage. Although a title insurance policy provides protection as long as the owner owns the property being covered, the title insurance company generally does not have information about which policies are still effective. Most other lines of insurance receive periodic premium payments and policy renewals thereby allowing the insurance company to know which policies are effective.

Investments in debt securities. Our title insurance underwriters maintain investments in accordance with certain statutory requirements for the funding of statutory premium reserves and state deposits. We have established policies and procedures to minimize our exposure to changes in the fair values of our investments. These policies include retaining an investment advisory firm, emphasizing credit quality, managing portfolio duration, maintaining or increasing investment income and actively monitoring profile and security mix based upon market conditions.

Losses. Losses on policies occur when a title defect is not discovered during the examination and settlement process. Reasons for losses include forgeries, misrepresentations, unrecorded or undiscovered liens, the failure to pay off existing liens, mortgage lending fraud, mishandling or defalcation of settlement funds, issuance by title agencies of unauthorized coverage and defending insureds when covered claims are filed against their interest in the property.

Some claimants seek damages in excess of policy limits. Those claims are based on various legal theories. We vigorously defend against spurious claims and provide protection for covered claims up to policy limits. We have from time-to-time incurred losses in excess of policy limits.

Experience shows that most policy claims and claim payments are made in the first six years after the policy has been issued, although claims can also be incurred and paid many years later. By their nature, claims are often complex, vary greatly in dollar amounts and are affected by economic and market conditions and the legal environment existing at the time claims are processed.

Our liability for estimated title losses comprises both known claims and our estimate of claims that may be reported in the future. The amount of our loss reserve represents the aggregate future payments (net of recoveries) that we expect to incur on policy and escrow losses and in costs to settle claims. In accordance with industry practice, these amounts have not been discounted to their present values.

Estimating future title loss payments is challenging because of the complex nature of title claims, the length of time over which claims are paid, the significantly varying dollar amounts of individual claims and other factors. Estimated provisions for current year policy losses are charged to income in the same year the related premium revenues are recognized. The amounts provided for policy losses are based on reported claims, historical loss payment experience, title industry averages and the current legal and economic environment. Actual loss payment experience relating to policies issued in previous years, including the impact of large losses, is the primary reason for increases or decreases in our loss provision.

Amounts shown as our estimated liability for future loss payments are continually reviewed by us for reasonableness and adjusted as appropriate. We have consistently followed the same basic method of estimating and recording our loss reserves for more than 10 years. As part of our process, we also obtain input from third-party actuaries regarding our methodology and resulting reserve calculations. While we are responsible for determining our loss reserves, we utilize this actuarial input to assess the overall reasonableness of our reserve estimation.

2

Factors affecting revenues. Title insurance revenues are closely related to the level of activity in the real estate markets we serve and the prices at which real estate sales are made. Real estate sales are directly affected by the availability and cost of money to finance purchases. Other factors include consumer confidence and demand by buyers. These factors may override the seasonal nature of the title business. Generally, our first quarter is the least active and our third and fourth quarters are the most active in terms of title insurance revenues.

Selected information from the U.S. Department of Housing and Urban Development and National Association of Realtors^® for the U.S. real estate industry follows (2012 figures are preliminary and subject to revision):

	2012		2011		2010
New home sales – in millions		0.37		0.30		0.32
Existing home sales – in millions		4.65		4.26		4.19
Existing home sales – median sales price in $ thousands		176.6		166.1		172.9

Customers. The primary sources of title insurance business are attorneys, builders, developers, home buyers and home sellers, lenders and real estate brokers and agents. No one customer was responsible for as much as 10% or more of our consolidated revenues in any of the last three years. Titles insured include residential and commercial properties, undeveloped acreage, farms, ranches, wind and solar power installations and water rights.

Service, location, financial strength, size and related factors affect customer acceptance. Increasing market share is accomplished primarily by providing superior service. The parties to a closing are concerned with personal schedules and the interest and other costs associated with any delays in the settlement. The rates charged to customers are regulated, to varying degrees, in many states.

The financial strength and stability of the title underwriter are important factors in maintaining and increasing our agency network. We are rated as investment grade by the title industry’s leading rating companies. Our principal underwriter, Stewart Title Guaranty Company (Guaranty) is currently rated “A” by Demotech, Inc., BBB+ by Fitch, B++ by A. M. Best and B- by Kroll Bond Rating Agency.

Market share. Title insurance statistics are compiled quarterly by the title industry’s national trade association. Based on 2012 unconsolidated statutory net premiums written through September 30, 2012, Guaranty is one of the leading title insurers in the United States.

Our principal competitors are Fidelity National Financial, Inc. (which includes Fidelity National Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, and Alamo Title Insurance), Old Republic Title Insurance Group, which includes Old Republic National Title Insurance Company, and The First American Corporation, which includes First American Title Insurance Company. Like most title insurers, we also compete with abstractors, attorneys who issue title opinions and attorney-owned title insurance funds. A number of homebuilders, financial institutions, real estate brokers and others own or control title insurance agencies, some of which issue policies underwritten by Guaranty.

3

Title insurance revenues by geographic location. The approximate amounts and percentages of our consolidated title operating revenues were:

	Amounts ($ millions)						Percentages
	2012		2011		2010		2012		2011		2010
Texas		299		247		244		17		16		16
California		204		181		203		12		12		13
New York		190		165		136		11		11		9
International		117		109		98		7		7		6
Florida		71		58		71		4		4		5
All others		845		745		788		49		50		51
		1,726		1,505		1,540		100		100		100

Regulations. Title insurance companies are subject to comprehensive state regulations covering premium rates, agency licensing, policy forms, trade practices, reserve requirements, investments and the transfer of funds between an insurer and its parent or its subsidiaries and any similar related party transactions. Kickbacks and similar practices are prohibited by most state and federal laws.

Mortgage Services

Our mortgage services segment includes a diverse group of products and services provided to multiple markets. These services are provided principally through our Stewart Lender Services (SLS), PropertyInfo^® Corporation and Stewart Government Services businesses.

SLS offers origination support, loss mitigation, default, and post-closing services to residential mortgage lenders, servicers and investors. Loss mitigation products include loan modification, loan review, loan default and REO asset recovery services. SLS also offers outsourcing solutions for post-closing and servicing support to lenders.

PropertyInfo^® Corporation offers technology that a title business requires. PropertyInfo^® offers a production system, AIM+™, along with web-based search tools designed to increase the processing speed of title examinations by connecting all aspects of the title examination process to proprietary title information databases and to public land and court record information sources.

Factors affecting revenues. As in the title segment, mortgage services revenues, particularly those generated by lender services, are closely related to the level of activity in the real estate market, including the volume of foreclosure or other distressed property activity. Revenues related to many services are generated on a project basis.

Companies that compete with our mortgage services companies vary across a wide range of industries. In the mortgage-related products and services area, competitors include the major title insurance underwriters mentioned under “Title – Market share” as well as other real estate technology and business process outsourcing providers. In some cases the competitor may be the customer itself. For example, certain services offered by SLS can be, or historically have been, performed by internal departments of large mortgage lenders.

Customers. Customers for our mortgage services products and services primarily include mortgage lenders and servicers, mortgage brokers, mortgage investors and government entities.

Many of the services and products offered by our mortgage services segment are used by professionals and intermediaries who have been retained to assist consumers with the sale, purchase, mortgage, transfer, recording and servicing of real estate-related transactions. To that end, timely and accurate services are critical to our customers since these factors directly affect the service they provide to their customers. Financial strength, marketplace presence and reputation as a technology innovator are important factors in attracting new business.

4

Corporate

The corporate segment consists of the expenses of the parent holding company and certain other corporate overhead expenses not allocated to the lines of business. We periodically review our allocation models and may make adjustments to the amounts charged to the business units as deemed appropriate. Underwriter investment income is recorded in the corporate segment.

General

Internal Technology. Our internally developed title production technology, is increasing productivity in our core title business, while reducing the time involved in the real estate closing process for lenders, real estate professionals and consumers.

Trademarks. We have developed numerous automated products and processes that are crucial to both our title and mortgage services segments. These systems automate most facets of the real estate transaction. Among these trademarked products and processes are AIM+™, E-Title^®, PropertyInfo^®, SureClose^®, TitleSearch^®, eClosingRoom^TM and Virtual Underwriter^®. We consider these trademarks, which are perpetual in duration, to be important to our business.

Employees. As of December 31, 2012, we employed approximately 6,300 people. We consider our relationship with our employees to be good.

Available information. We file annual, quarterly and other reports and information with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, as amended (Exchange Act). You may read and copy any material that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain additional information about the Public Reference Room by calling the SEC at (800) SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and other information statements, and other information regarding issuers that file electronically with the SEC.

We also make available upon written request, free of charge, or through our Internet site (www.stewart.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Code of Ethics and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Transfer agent. Our transfer agent is Computershare, which is located at 250 Royall St., Canton, MA, 02021. Its phone number is (888) 478-2392 and website is www.computershare.com.

CEO and CFO Certifications. The CEO and CFO certifications required under Section 302 of the Sarbanes-Oxley Act are filed as exhibits to our 2012 Form 10-K. Stewart Information Services Corporation submitted a Section 12(a) CEO Certification to the New York Stock Exchange in 2012.

5

Item 1A. Risk Factors

You should consider the following risk factors, as well as the other information presented in this report and our other filings with the SEC, in evaluating our business and any investment in Stewart. These risks could materially and adversely affect our business, financial condition and results of operations. In that event, the trading price of our Common Stock could decline materially.

Adverse changes in the levels of real estate activity reduce our revenues.

Our financial condition and results of operations are affected by changes in economic conditions, particularly mortgage interest rates, credit availability, real estate prices and consumer confidence. Our revenues and earnings have fluctuated in the past and we expect them to fluctuate in the future.

The demand for our title insurance-related and mortgage services offerings depends in large part on the volume of residential and commercial real estate transactions. The volume of these transactions historically has been influenced by such factors as mortgage interest rates, availability of financing and the overall state of the economy. Typically, when interest rates are increasing or when the economy is experiencing a downturn, real estate activity declines. As a result, the title insurance industry tends to experience decreased revenues and earnings. Increases in interest rates also may have an adverse impact on our bond portfolio and the amount of interest we pay on our floating-rate bank debt.

Our revenues and results of operations have been and could continue to be adversely affected as a result of the decline in home prices, real estate activity and the availability of financing alternatives. In addition, continued weakness or further adverse changes in the level of real estate activity could have a material adverse effect on our consolidated financial condition or results of operations.

Our claims experience may require us to increase our provision for title losses or to record additional reserves, either of which would adversely affect our earnings.

Estimating future loss payments is difficult, and our assumptions about future losses may prove inaccurate. Provisions for policy losses on policies written within a given year are charged to income in the same year the related premium revenues are recognized. The amounts provided are based on reported claims, historical loss payment experience, title industry averages and the current legal and economic environment. Losses that are higher than anticipated are an indication that total losses for a given policy year may be higher than originally calculated. Changes in the total estimated future loss for prior policy years are recorded in the period in which the estimate changes. Claims are often complex and involve uncertainties as to the dollar amount and timing of individual payments. Claims are often paid many years after a policy is issued. From time-to-time, we experience large losses, including losses from independent agency defalcations, from title policies that have been issued or worsening loss payment experience, any of which may require us to increase our title loss reserves. These events are unpredictable and adversely affect our earnings. Provisions for strengthening policy loss reserves were $4.8 million for the year ended 2010.

6

Competition in the title insurance industry affects our revenues.

Competition in the title insurance industry is intense, particularly with respect to price, service and expertise. Larger commercial customers and mortgage originators also look to the size and financial strength of the title insurer. Although we are one of the leading title insurance underwriters based on market share, Fidelity National Financial, Inc. and The First American Corporation each has substantially greater revenues than we do. Their holding companies have significantly greater capital than we do. Although we are not aware of any current initiatives to reduce regulatory barriers to entering our industry, any such reduction could result in new competitors, including financial institutions, entering the title insurance business. Competition among the major title insurance companies and any new entrants could lower our premium and fee revenues. From time-to-time, new entrants enter the marketplace with alternative products to traditional title insurance, although many of these alternative products have been disallowed by title insurance regulators. These alternative products, if permitted by regulators, could adversely affect our revenues and earnings.

Availability of credit may reduce our liquidity and negatively impact our ability to fund operating losses or initiatives.

As a result of our past history of operating losses, we may not be able to obtain, on acceptable terms, the financing necessary to fund our operations or initiatives. However, we expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, pay our claims and fund initiatives. To the extent that these funds are not sufficient, we may be required to borrow funds on less favorable terms or seek funding from the equity market, which may be on terms that are dilutive to existing shareholders.

A downgrade of our underwriters by rating agencies may reduce our revenues.

Ratings are a significant component in determining the competitiveness of insurance companies. Our principal underwriter, Guaranty is currently rated “A” by Demotech, Inc., BBB+ by Fitch, B++ by A. M. Best and B- by Kroll Bond Rating Agency. Guaranty has historically been highly rated by the rating agencies that cover us. These ratings are not credit ratings. Instead, the ratings are based on quantitative, and in some cases qualitative, information and reflect the conclusions of the rating agencies with respect to our financial strength, results of operations and ability to pay policyholder claims. Our ratings are subject to continual review by the rating agencies and we cannot be assured that our current ratings will be maintained. If our ratings are downgraded from current levels by the rating agencies, our ability to retain existing customers and develop new customer relationships may be negatively impacted, which could result in an adverse impact on our results of operations.

Our insurance subsidiaries must comply with extensive government regulations. These regulations could adversely affect our ability to increase our revenues and operating results.

The Consumer Financial Protection Bureau (CFPB) is charged with protecting consumers by enforcing Federal consumer protective laws and regulations. The CFPB is an independent unit inside, and funded by, the United States Federal Reserve System. Its jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage servicing operations, foreclosure relief services, debt collectors and other financial companies. The nature and extent of these regulations include, but are not limited to:

• conducting rule-making, supervision, and enforcement for Federal consumer protection laws;

• restricting unfair, deceptive, or abusive acts or practices;

• taking consumer complaints;

• promoting financial education;

• researching consumer behavior;

• monitoring financial markets for new risks to consumers; and

• enforcing laws that outlaw discrimination and other unfair treatment in consumer finance.

7

Governmental authorities regulate our insurance subsidiaries in the various states and international jurisdictions in which we do business. These regulations generally are intended for the protection of policyholders rather than stockholders. The nature and extent of these regulations vary from jurisdiction to jurisdiction, but typically involve:

• approving or setting of insurance premium rates;

• standards of solvency and minimum amounts of statutory capital and surplus that must be maintained;

• limitations on types and amounts of investments;

• establishing reserves, including statutory premium reserves, for losses and loss adjustment expenses;

• regulating underwriting and marketing practices;

• regulating dividend payments and other transactions among affiliates;

• prior approval for the acquisition and control of an insurance company or of any company controlling an insurance company;

• licensing of insurers, agencies and, in certain states, escrow officers;

• regulation of reinsurance;

• restrictions on the size of risks that may be insured by a single company;

• deposits of securities for the benefit of policyholders;

• approval of policy forms;

• methods of accounting; and

• filing of annual and other reports with respect to financial condition and other matters.

These regulations may impede or impose burdensome conditions on rate increases or other actions that we might want to take to enhance our operating results.

We may also be subject to additional federal regulations prescribed by legislation such as the Dodd-Frank Act or by regulations issued by the Department of Labor.

Changes in regulations may adversely affect us. In addition, state regulators perform periodic examinations of insurance companies, which could result in increased compliance or litigation expenses.

Rapid changes in our industry require secure, timely and cost-effective technological responses. Our earnings may be adversely affected if we are unable to effectively use technology to address regulatory changes and increase productivity.

We believe that our future success depends on our ability to anticipate technological changes and to offer products and services that meet evolving standards on a timely and cost-effective basis. To do so, requires a flexible technology architecture which can continuously comply with changing regulations, improve productivity, reduce risk and enhance the customer experience. Our earnings could also be adversely affected by unanticipated downtime in our technology although we have never experienced such. We also maintain insurance coverage to mitigate our risk of loss from the unintended disclosure of personal data.

We rely on dividends from our insurance underwriting subsidiaries.

We are a holding company and our principal assets are our insurance underwriting subsidiaries. Consequently, we may depend on receiving sufficient dividends from our insurance subsidiaries to meet our debt service obligations and to pay our operating expenses and dividends to our stockholders. The insurance statutes and regulations of some states require us to maintain a minimum amount of statutory capital and restrict the amount of dividends that our insurance subsidiaries may pay to us. Guaranty is a wholly owned subsidiary of Stewart and the principal source of our cash flow. In this regard, the ability of Guaranty to pay dividends to us is dependent on the approval of the Texas Insurance Commissioner. As of December 31, 2012, under Texas insurance law, Guaranty could pay dividends or make distributions of up to $85.8 million in 2013 after approval of the Texas Insurance Commissioner. However, Guaranty voluntarily restricts dividends to us so that it can grow its statutory surplus, maintain liquidity at competitive levels and maintain its high ratings. Guaranty did not pay a dividend in any of the three years ended December 31, 2012 and does not anticipate paying a dividend in 2013.

8

Risks include claims by large classes of claimants.

We are periodically involved in litigation arising in the ordinary course of business. In addition, we are currently, and have been in the past, subject to claims and litigation from large classes of claimants seeking substantial damages not arising in the ordinary course of business. Material pending legal proceedings, if any, not in the ordinary course of business, are disclosed in Item 3—Legal Proceedings included elsewhere in this report. To date, the impact of the outcome of these proceedings has not been material to our consolidated financial condition or results of operations. However, an unfavorable outcome in any litigation, claim or investigation against us could have an adverse effect on our consolidated financial condition or results of operations.

Anti-takeover provisions in our certificate of incorporation and by-laws may make a takeover of us difficult. This may reduce the opportunity for our stockholders to obtain a takeover premium for their shares of our Common Stock.

Our certificate of incorporation and by-laws, as well as Delaware corporation law and the insurance laws of various states, all contain provisions that could have the effect of discouraging a prospective acquirer from making a tender offer for our shares, or that may otherwise delay, defer or prevent a change in control of Stewart.

The holders of our Class B Common Stock have the right to elect four of our nine directors. Pursuant to our by-laws, the vote of six directors is required to constitute an act by the Board of Directors. Accordingly, the affirmative vote of at least one of the directors elected by the holders of the Class B Common Stock is required for any action to be taken by the Board of Directors. The foregoing provision of our by-laws may not be amended or repealed without the affirmative vote of at least a majority of the outstanding shares of each class of our capital stock, voting as separate classes.

The voting rights of the holders of our Class B Common Stock may have the effect of rendering more difficult or discouraging unsolicited tender offers, merger proposals, proxy contests or other takeover proposals to acquire control of Stewart.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease under a non-cancelable operating lease expiring in 2016 approximately 242,000 square feet in an office building in Houston, Texas, which is used for our corporate offices and for offices of several of our subsidiaries. In addition, we lease offices at approximately 495 additional locations that are used for branch offices, production, administrative and technology centers. These additional locations include significant leased facilities in Austin, Los Angeles, New York, Dallas, Toronto, San Diego and Denver.

Our leases expire from 2013 through 2021 and have an average term of four years, although our typical lease term ranges from three to five years. We believe we will not have any difficulty obtaining renewals of leases as they expire or, alternatively, leasing comparable properties. The aggregate annual rent expense under all leases was approximately $39.1 million in 2012.

We also own several office buildings located in Arizona, Colorado, New York and Texas. These owned properties are not material to our consolidated financial condition. We consider all buildings and equipment that we own or lease to be well maintained, adequately insured and generally sufficient for our purposes.

9

Item 3. Legal Proceedings

See discussion of legal proceedings in Note 19 to the Consolidated Financial Statements included in Item 15 of Part IV of this Report, which is incorporated by reference into this Part I, Item 3 of this Annual Report on Form 10-K for the year ended December  31, 2012.

Item 4. Mine Safety Disclosures

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issue Purchases of Equity Securities

Our Common Stock is listed on the New York Stock Exchange (NYSE) under the symbol “STC”. The following table sets forth the high and low sales prices of our Common Stock for each fiscal period indicated, as reported by the NYSE.

	High		Low
2012:
First quarter	$	14.27	$	11.54
Second quarter		16.28		12.99
Third quarter		20.85		13.19
Fourth quarter		28.35		19.95
2011:
First quarter	$	12.74	$	10.00
Second quarter		11.13		9.25
Third quarter		11.02		8.31
Fourth quarter		12.16		8.13

As of March 1, 2013, the number of stockholders of record was approximately 6,400 and the price of one share of our Common Stock was $23.64.

The Board of Directors declared an annual cash dividend of $0.10 and $0.05 per share payable December 28, 2012 and December 29, 2011, respectively, to Common stockholders of record on December 14, 2012 and December 15, 2011, respectively. Our certificate of incorporation provides that no cash dividends may be paid on our Class B Common Stock.

We had a book value per share of $29.91 and $24.01 at December 31, 2012 and 2011, respectively. As of December 31, 2012, book value per share was based on approximately $580.4 million in stockholders’ equity and 19,403,765 shares of Common and Class B Common Stock outstanding, excluding the effects of possible conversion of senior convertible notes into common shares. As of December 31, 2011, book value per share was based on approximately $463.5 million in stockholders’ equity and 19,303,844 shares of Common and Class B Common Stock outstanding, excluding the effects of possible conversion of senior convertible notes into common shares.

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Performance graph

The following graph compares the yearly percentage change in our cumulative total stockholder return on Common Stock with the cumulative total return of the Russell 2000 Index and the Russell 2000 Financial Services Sector Index for the five years ended December 31, 2012. The graph assumes that the value of the investment in our Common Stock and each index was $100 at December 31, 2007 and that all dividends were reinvested.

	2007		2008		2009		2010		2011		2012
Stewart		100.00		90.42		43.61		44.77		45.04		101.79
Russell 2000		100.00		66.21		84.20		106.81		102.35		119.04
Russell 2000 Financial Services Sector		100.00		74.88		74.82		90.06		87.46		106.39

The performance graph above and the related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

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Item 6. Selected Financial Data

The following table sets forth selected consolidated financial data, which were derived from our consolidated financial statements and should be read in conjunction with our audited consolidated financial statements, including the Notes thereto, beginning on page F-1 of this Report. See also Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	2012		2011		2010			2009			2008
	($ millions, except share and per share data)
Total revenues		1,910.4		1,634.9		1,672.4			1,707.3			1,555.3
Title operating revenues		1,726.2		1,505.0		1,540.5			1,610.0			1,507.2
Mortgage services revenues		162.8		112.1		91.7			69.1			47.2
Investment income		13.8		15.5		18.4			20.8			29.1
Investment gains (losses)		7.6		2.3		21.8			7.4			(28.2	)
Title loss provisions		140.0		142.1		148.4			182.8			169.4
% title operating revenues		8.1		9.4		9.6			11.3			11.2
Pretax earnings (loss)(1)		89.3		18.0		2.9			(62.2	)		(237.5	)
Net earnings (loss) attributable to Stewart		109.2		2.3		(12.6	)		(51.0	)		(247.5	)
Cash provided (used) by operations		120.5		23.4		41.2			(17.0	)		(104.8	)
Total assets		1,291.2		1,156.1		1,141.2			1,369.2			1,448.4
Long-term debt		71.2		76.2		71.2			67.8			71.3
Stockholders’ equity		580.4		463.5		448.3			462.1			501.2
Per share data:
Average shares – dilutive (millions)		24.4		19.1		18.3			18.2			18.1
Basic earnings (loss) attributable to Stewart		5.66		0.12		(0.69	)		(2.80	)		(13.68	)
Diluted earnings (loss) attributable to Stewart		4.61		0.12		(0.69	)		(2.80	)		(13.68	)
Cash dividends		0.10		0.05		0.05			0.05			0.10
Stockholders’ equity		29.91		24.01		24.40			25.34			27.63
Market price:
High		28.35		12.74		14.93			23.75			36.42
Low		11.54		8.13		7.80			8.45			5.67
Year end		26.00		11.55		11.53			11.28			23.49

⁽¹⁾ Pretax figures are before noncontrolling interests

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S OVERVIEW

For the year ended December 31, 2012, net earnings attributable to Stewart of $109.2 million, or $4.61 per diluted share, represent an improvement of $106.8 million over the same period in 2011. Our strong operating results in 2012 allowed us to release in the fourth quarter $36.6 million ($1.50 per diluted share) of a tax asset valuation allowance (originally established in 2008), representing that portion of the allowance that had not been previously utilized to offset taxable income. The remaining valuation allowance of $12.1 million relates primarily to foreign tax credit carryforwards.

Total revenues in 2012 were $1.9 billion, an increase of 16.9 percent from $1.6 billion in 2011. Revenues from our title segment operations increased 14.6 percent, to $1.7 billion in 2012. Revenues from services provided by our mortgage services segment increased 44.0 percent to $178.0 million in 2012 from $123.6 million in 2011.

Cash provided by operations improved substantially in 2012 to $120.5 million compared to $23.4 million in 2011.

Mortgage services pretax earnings increased 45.7 percent to $48.6 million in 2012 compared to $33.4 million in 2011. The offerings in our mortgage services segment continue to expand, with new projects within the broad category of servicing support helping drive the increase in revenues over the last two quarters. As the real estate market recovers, the distressed servicing projects naturally retrench, and new service offerings have been introduced which allow our customers to outsource various other aspects of their servicing operations to us. Our focus is on providing mortgage process outsourcing services which are high-quality, flexible, and responsive. We expect these service offerings to be more sustainable over market cycles.

2012 title losses as a percentage of title revenues declined to 8.1 percent from 9.4 percent in 2011. Title losses, including adjustments to certain large claims in both periods, decreased 1.5 percent on the 14.7 percent increase in title operating revenues when compared to 2011. Our overall loss experience continued to improve relative to prior year periods and was in line with our actuarial expectations, which allowed us to maintain the lower loss provisioning rate adopted effective with policies issued in the third quarter 2012. Cash claim payments decreased 7.7 percent compared to 2011. Losses incurred on known claims decreased 12.2 percent compared to 2011. The decline in cash claim payments and losses incurred on known claims continues a trend noted for several quarters.

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CRITICAL ACCOUNTING ESTIMATES

Actual results can differ from our accounting estimates. While we do not anticipate significant changes in our estimates, there is a risk that such changes could have a material impact on our consolidated financial condition or results of operations for future periods.

Title loss reserves

Our most critical accounting estimate is providing for title loss reserves. Our liability for estimated title losses as of December 31, 2012 comprises both known claims ($137.9 million) and our estimate of claims that may be reported in the future ($382.5 million). The amount of the reserve represents the aggregate, non-discounted future payments (net of recoveries) that we expect to incur on policy and escrow losses and in costs to settle claims.

Provisions for title losses, as a percentage of title operating revenues, were 8.1%, 9.4% and 9.6% for the years ended December 31, 2012, 2011 and 2010, respectively. Actual loss payment experience, including the impact of large losses, is the primary reason for increases or decreases in our loss provision. A change of 100 basis points in this percentage, a reasonably likely scenario based on our historical loss experience, would have increased or decreased our provision for title losses and pretax operating results approximately $17.3 million for the year ended December 31, 2012.

Our method for recording the reserves for title losses on both an interim and annual basis begins with the calculation of our current loss provision rate, which is applied to our current premium revenues resulting in a title loss expense for the period. This loss provision rate is set to provide for losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, our recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that our management compares to its actuarially-based calculation of the ending reserve balance necessary to provide for future title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from our third-party actuaries. We also obtain input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While we are responsible for determining our loss reserves, we utilize this actuarial input to assess the overall reasonableness of our reserve estimation. If our recorded reserve amount is within a reasonable range (+/- 4.0%) of our actuarially-based reserve calculation and the actuary’s point estimate, but not at the point estimate, our management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of our recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in our claims management process. If the recorded amount is not within a reasonable range of our third-party actuary’s point estimate, we will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once our reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to our estimate of the overall level of required reserves.

Large claims (those exceeding $1.0 million on a single claim), including large title losses due to independent agency defalcations, are analyzed and reserved for separately due to the higher dollar amount of loss, lower volume of claims reported and sporadic reporting of such claims. Large title losses due to independent agency defalcations typically occur when the independent agency misappropriates funds from escrow accounts under its control. Such losses are usually discovered when the independent agency fails to pay off an outstanding mortgage loan at closing (or immediately thereafter) from the proceeds of the new loan. Once the previous lender determines that its loan has not been paid off timely, it will file a claim against the title insurer. It is at this point that the title insurance underwriter is alerted to the potential theft and begins its investigation. As is industry practice, these claims are considered a

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claim on the newly issued title insurance policy since such policy insures the holder (in this case, the new lender) that all previous liens on the property have been satisfied. Accordingly, these claim payments are charged to policy loss expense. These incurred losses are typically more severe in terms of dollar value compared with traditional title policy claims since the independent agency is often able, over time, to conceal misappropriation of escrow funds relating to more than one transaction through the constant volume of funds moving through its escrow accounts. As long as new funds continue to flow into escrow accounts, an independent agency can mask one or more defalcations. In declining real estate markets, lower transaction volumes result in a lower incoming volume of funds, making it more difficult to cover up the misappropriation with incoming funds. Thus, when the defalcation is discovered, it often relates to several transactions. In addition, the overall decline in an independent agency’s revenues, profits and cash flows increases the agency’s incentive to improperly utilize the escrow funds from real estate transactions.

Internal controls relating to independent agencies include, but are not limited to, pre-signing and periodic audits, site visits and reconciliations of policy inventories and premiums. The audits and site visits cover examination of the escrow account bank reconciliations and an examination of a sample of closed transactions. In some instances, the scope of our review is limited by attorney agencies that cite client confidentiality. Certain states have mandated annual reviews of all agencies by their underwriter. We also determine whether our independent agencies have appropriate internal controls as defined by the American Land Title Association and us. However, even with adequate internal controls in place, their effectiveness can be circumvented by collusion or improper override of the controls by management at the independent agencies. To aid in the selection of independent agencies to review, we have developed an agency risk model that aggregates data from different areas to identify possible problems. This is not a guarantee that all independent agencies with deficiencies will be identified. In addition, we are typically not the only underwriter for which an independent agency issues policies, and independent agencies may not always provide complete financial records for our review.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both our management and our third party actuaries in estimating reserves. As a consequence, our ultimate liability may be materially greater or less than current reserves and/or our third party actuary’s calculated estimate.

Agency revenues

We recognize revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to us. In addition, where reasonable estimates can be made, we accrue for revenues on policies issued but not reported until after period end. We believe that reasonable estimates can be made when recent and consistent policy issuance information is available. Our estimates are based on historical reporting patterns and other information about our agencies. We also consider current trends in our direct operations and in the title industry. In this accrual, we are not estimating future transactions; we are estimating revenues on policies that have already been issued by agencies but not yet reported to or received by us. We have consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Our accruals for revenues on unreported policies from agencies were not material to our consolidated assets or stockholders’ equity as of December 31, 2012 and 2011. The differences between the amounts our agencies have subsequently reported to us compared to our estimated accruals are substantially offset by any differences arising from prior years’ accruals and have been immaterial to consolidated assets and stockholders’ equity during each of the three prior years. We believe our process provides the most reliable estimate of the unreported revenues on policies and appropriately reflects the trends in agency policy activity.

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Goodwill and other long-lived assets

Our evaluation of goodwill is normally completed annually in the third quarter using June 30 balances, but an evaluation may also be made whenever events may indicate impairment. This evaluation is based on a combination of a discounted cash flow analysis (DCF) and market approaches that incorporate market multiples of comparable companies and our own market capitalization. The DCF model utilizes historical and projected operating results and cash flows, initially driven by estimates of changes in future revenue levels, and risk-adjusted discount rates. Our projected operating results are primarily driven by anticipated mortgage originations, which we obtain from projections by industry experts. Fluctuations in revenues, followed by our ability to appropriately adjust our employee count and other operating expenses, or large and unanticipated adjustments to title loss reserves, are the primary reasons for increases or decreases in our projected operating results. Our market-based valuation methodologies utilize (i) market multiples of earnings and/or other operating metrics of comparable companies and (ii) our market capitalization and a control premium based on market data and factors specific to our ownership and corporate governance structure (such as our Class B Common Stock). To the extent that our future operating results are below our projections, or in the event of adverse market conditions, an interim review for impairment may be required, which may result in an impairment of goodwill.

We evaluate goodwill based on five reporting units (direct operations, agency operations, international operations, mortgage services and corporate). Goodwill is assigned to these reporting units at the time the goodwill is initially recorded. Once assigned to a reporting unit, the goodwill is pooled and no longer attributable to a specific acquisition. All activities within a reporting unit are available to support the carrying value of the goodwill.

We also evaluate the carrying values of title plants and other long-lived assets when events occur that may indicate impairment. The process of determining impairment for our goodwill and other long-lived assets relies on projections of future cash flows, operating results, discount rates and overall market conditions, including our market capitalization. Uncertainties exist in these projections and they are subject to changes relating to factors such as interest rates and overall real estate and financial market conditions, our market capitalization and overall stock market performance. Actual market conditions and operating results may vary materially from our projections.

Based on these evaluations, we estimate and expense to current operations any loss in value of these assets. As part of our process, we have an option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we decide not to use a qualitative assessment or if we fail the qualitative assessment, then we obtain input from third-party appraisers regarding the fair value of our reporting units. While we are responsible for assessing whether an impairment of goodwill exists, we utilize the input from third-party appraisers to assess the overall reasonableness of our conclusions. We utilized a qualitative assessment for our annual goodwill impairment test and, based on our analysis, determined it was not more-likely-than-not that the fair value of our reporting units were less than their carrying amounts as of June 30, 2012. There were no impairment charges for goodwill or material impairment charges for other long-lived assets during the three years ended December 31, 2012.

Operations. Our business has three main operating segments: title insurance and related services, mortgage services and corporate.

Our primary business is title insurance and settlement-related services. We close transactions and issue title policies on homes, commercial and other real properties located in all 50 states, the District of Columbia and international markets through policy-issuing offices and agencies. We also provide loan origination and servicing support; loan review services; loss mitigation; REO asset management; home and personal insurance services; and technology to streamline the real estate process.

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Factors affecting revenues. The principal factors that contribute to changes in operating revenues for our title and mortgage services segments include:

• mortgage interest rates;

• availability of mortgage loans;

• ability of potential purchasers to qualify for loans;

• inventory of existing homes available for sale;

• ratio of purchase transactions compared with refinance transactions;

• ratio of closed orders to open orders;

• home prices;

• volume of distressed property transactions;

• consumer confidence;

• demand by buyers;

• number of households;

• premium rates;

• market share;

• opening of new offices and acquisitions;

• number of commercial transactions, which typically yield higher premiums;

• government or regulatory initiatives, including tax incentives; and

• number of REO and foreclosed properties and related debt.

To the extent inflation causes increases in the prices of homes and other real estate, premium revenues are also increased. Conversely, falling home prices cause premium revenues to decline. Premiums are determined in part by the insured values of the transactions we handle. These factors may override the seasonal nature of the title insurance business. Historically, our first quarter is the least active and our third and fourth quarters are the most active in terms of title insurance revenues.

Industry data. Published mortgage interest rates and other selected residential data for the years ended December 31, 2012, 2011 and 2010 follow (amounts shown for 2012 are preliminary and subject to revision). The amounts below may not relate directly to or provide accurate data for forecasting our operating revenues or order counts.

Our statements on home sales, mortgage interest rates and loan activity are based on published industry data from sources including Fannie Mae, the National Association of Realtors^®, the Mortgage Bankers Association and Freddie Mac.

	2012		2011		2010
Mortgage interest rates (30-year, fixed-rate) – %
Averages for the year		3.66		4.46		4.69
First quarter		3.92		4.85		5.00
Second quarter		3.80		4.66		4.91
Third quarter		3.55		4.31		4.45
Fourth quarter		3.36		4.01		4.41
Mortgage originations – $ billions		1,921		1,496		1,701
Refinancings – % of originations		73.0		65.7		67.9
New home sales – in millions		0.37		0.30		0.32
Existing home sales – in millions		4.65		4.26		4.19
Existing home sales – median sales price in $ thousands		176.6		166.1		172.9

The real estate market experienced increasing home prices in 2012 and is expected to provide an increasing contribution to GDP in 2013 and in coming years. Recent data indicate that the housing recovery has transitioned to a faster upward track, boosted by an improving labor market and low mortgage rates. Overall, home sales, home prices, and home building activity as well as homebuilder confidence appear to be on the upswing, having risen to multi-year highs during 2012.

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Trends and order counts. For the three years ended December 31, 2012, mortgage interest rates (30-year, fixed-rate) have fluctuated from a monthly high of 5.1% in April 2010 to a monthly low of 3.4% in November 2012. In 2012, total mortgage originations and refinancing mortgage originations increased 28.4% and 43.0%, respectively. During 2012, sales of new homes and existing homes increased 19.9% and 9.2%, respectively. In 2011, sales of new homes decreased 5.9%, while sales of existing homes increased 1.7%.

As a result of the above trends, our direct order levels increased from 2011 to 2012 and decreased from 2010 to 2011, which is consistent with the U.S. real estate market during those same periods.

The number of direct title orders opened follows:

	2012		2011		2010
	(in thousands)
First quarter		103		84		97
Second quarter		111		91		106
Third quarter		112		101		117
Fourth quarter		104		90		95
		430		366		415

The number of direct title orders closed follows:

	2012		2011		2010
	(in thousands)
First quarter		71		62		61
Second quarter		79		67		77
Third quarter		81		69		75
Fourth quarter		85		73		80
		316		271		293

RESULTS OF OPERATIONS

A comparison of our results of operations for 2012 with 2011 and 2011 with 2010 follows. Factors contributing to fluctuations in results of operations are presented in the order of their monetary significance, and we have quantified, when necessary, significant changes. Results from our mortgage services and corporate segments are included in year-to-year discussions and, when relevant, are discussed separately.

Title revenues. Revenues from direct title operations increased $91.0 million, or 14.5%, in 2012 and increased $1.1 million, or 0.2%, in 2011. The largest revenue increases in 2012 were in Texas, Utah, Colorado and Washington, partially offset by decreases in Nevada and Georgia. The largest revenue increases in 2011 were in California and Florida, partially offset by decreases in Maryland and Arizona. Revenues from commercial and other large transactions increased $8.5 million to $111.5 million in 2012 and increased $10.3 million to $103.0 million in 2011.

Direct orders closed increased 16.7%, while the average revenue per file closed (including large commercial policies) decreased 2.3% in 2012 compared to 2011 due to an increase in residential refinancing closings in the same periods. Direct operating revenues, excluding large commercial policies, increased 15.3%, while the average revenue per closing decreased 1.2% in 2012 compared to 2011. On average, refinance premium rates are 60% of the title premium revenue of a similarly priced sale transaction. In 2011 direct orders closed decreased 7.7%, while the average revenue per file closed (including large commercial policies) increased 8.7%

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compared to 2010 due to a decrease in residential refinancing closings in the same periods. Direct operating revenues, excluding large commercial policies, decreased 1.5%, while the average revenue per closing decreased 6.7% in 2011 compared to 2010.

Revenues from independent agencies increased $130.2 million, or 14.8%, in 2012 and decreased $37.4 million, or 4.1%, in 2011. The largest increases in revenues from independent agencies in 2012 were in New York, Texas, California and Pennsylvania, partially offset by decreases in Illinois, Maryland, and Minnesota. The largest increases in revenues from independent agencies in 2011 were in New York, Illinois, Michigan, and Minnesota, partially offset by decreases in California, Florida, New Jersey, and Utah. Revenues from independent agencies net of amounts retained by those agencies increased 16.3% in 2012 and declined 4.9% in 2011.

Title revenues by geographic location. The approximate amounts and percentages of consolidated title operating revenues for the last three years were as follows:

	Amounts ($ millions)						Percentages
	2012		2011		2010		2012		2011		2010
Texas		299		247		244		17		16		16
California		204		181		203		12		12		13
New York		190		165		136		11		11		9
International		117		109		98		7		7		6
Florida		71		58		71		4		4		5
All others		845		745		788		49		50		51
		1,726		1,505		1,540		100		100		100

Mortgage services revenues. Mortgage services operating revenues increased $50.8 million, or 45.3%, and $20.3 million, or 22.2%, in 2012 and 2011, respectively. The increases in 2012 and 2011 were primarily due to a significant rise in demand for our servicing support services, including loan modification services. The service offerings in our mortgage services segment continue to expand, with new servicing support projects driving the increase in revenues during 2012. The acquisition of PMH Financial in the third quarter 2011 also contributed to the 2011 increase in mortgage services revenues. Demand for mortgage services offerings are influenced by the number and scale of government programs and lender projects which may result in significant fluctuations in mortgage services revenues. Demand from lenders is increasingly being driven by their desire to more broadly outsource aspects of their servicing support operations, a trend that we expect will continue in 2013. As the real estate market recovers and distressed servicing projects naturally retrench, new service offerings have been introduced which allow our customers to outsource various aspects of their servicing operations to us. Our focus is on providing mortgage process outsourcing services which are high-quality, flexible and responsive. We expect these service offerings to be more sustainable over market cycles.

Investment income. Investment income decreased $1.7 million, or 10.9%, and $2.9 million, or 15.7%, in 2012 and 2011, respectively. The decrease in 2012 was primarily due to decreases in average yield. Certain investment gains and losses, which are included in our results of operations in investment and other gains – net, were realized as part of the ongoing management of our investment portfolio for the purpose of improving performance. The decrease in 2011 was primarily due to decreases in yield which were partially offset by a $1.2 million royalty payment.

In 2012, investment and other gains – net included realized gains of $8.0 million from the sale of debt securities and other investments available-for-sale and sale of fixed assets, partially offset by realized losses of $0.8 million for the impairment of cost-basis investments.

In 2011, investment and other gains – net included realized gains of $10.7 million from the sale of debt instruments and investments available-for-sale, which were offset by a $4.3 million loss on a third-party loan guarantee obligation, and a $3.5 million impairment of cost-basis investments.

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In 2010, investment and other gains – net included realized gains of $11.8 million from the sale of debt instruments and investments available-for-sale, $6.3 million primarily from a transfer of the rights to internally developed software, $1.2 million from the sale of interests in subsidiaries and $3.0 million from the sale of real estate.

Retention by agencies. Amounts retained by title agencies are based on agreements between the agencies and our title underwriters. On average, amounts retained by independent agencies, as a percentage of revenues generated by them, were 82.3%, 82.5% and 82.4% in the years 2012, 2011 and 2010, respectively. The average retention percentage may vary from year-to-year due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. Although general conditions in the real estate industry are improving nationwide, the recovery in specific markets has varied considerably. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80% and the markets in those states have recovered relatively faster than the nation as a whole, which has resulted in our average retention percentage remaining in the 82%—83% range. We expect our average retention rate to remain in this range over the near to medium term. However, we continue to adjust independent agency contracts in an economically sound manner, and we expect the mix of agency business to normalize as real estate markets continue to stabilize nationally resulting in lower average retention percentages in the aggregate. The slight increase in agent retention in 2011 was attributable to a shift in geographic mix of revenues from independent agents, as relatively more revenues were realized in states with lower remittance rates, thus lowering the overall average remittance rate. The fluctuations in 2010 were also affected by the uneven recovery of real estate markets across the nation; those states with higher agency retention percentages experienced a disproportionate increase in transaction activity in 2009.

We began the process of vetting our network of independent agencies several years ago with the emphasis on managing for quality and profitability. Since fourth quarter 2008, our average annual remittance rate per independent agency has increased more than 95 percent while we have reduced the number of independent agencies in our network by approximately 40 percent. Further, the policy loss ratio of our current independent agency network for the year ended December 31, 2012 is less than one-third of its level in the comparable 2008 period.

Selected cost ratios (by segment). The following table shows employee costs and other operating expenses as a percentage of related title insurance and mortgage services operating revenues.

	Employee costs (%)						Other operating (%)
	2012		2011		2010		2012		2011		2010
Title		19.7		20.4		19.8		14.8		15.2		15.2
Mortgage services		60.9		63.0		66.0		8.7		5.3		10.3

These two categories of expenses are discussed below in terms of year-to-year monetary changes.

Employee costs. Our employee costs and certain other operating expenses are sensitive to inflation. Employee costs for the combined business segments increased $72.6 million, or 15.5%, in 2012 and $2.3 million, or 0.5%, in 2011. The number of persons we employed at December 31, 2012, 2011 and 2010 was approximately 6,300, 5,600 and 5,700, respectively.

In 2012, we increased our employee headcount company-wide by approximately 691, or 12.3% including acquisitions. The increase in headcount was largely driven by new mortgage services contracts (see discussion below). Employee costs were also influenced by increased contract labor for the aforementioned mortgage services contracts as well as higher incentive compensation expense driven by the improvement in pretax earnings before noncontrolling interest.

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In 2011, we reduced our employee headcount company-wide by approximately 240, or 4.2% excluding acquisitions. This decrease was partially offset by the acquisition of PMH Financial in 2011, which added approximately 100 employees. Employee costs were also influenced by increased incentive compensation expense driven by the improvement in pretax earnings before noncontrolling interest.

In 2010, we reduced our employee headcount company-wide by 130, or 2.2%, excluding the effects of divestitures. In 2010, employee costs were reduced primarily due to the sale and deconsolidation of several subsidiaries, partially offset by increases in state unemployment tax rates in certain states.

In our mortgage services segment, total employee costs as a percentage of operating revenue fell to 61.1% from 62.9% in 2011. Actual costs increased $30.5 million, or 39.1%, in 2012, primarily due to increases in staffing requirements to support new contracts awarded in late 2011 and early 2012. In 2011, actual costs increased $4.4 million, or 5.9%, primarily due to increases in staffing driven by increased demand for our loan modification services.

Other operating expenses. Other operating expenses include costs that are fixed in nature, costs that follow, to varying degrees, changes in transaction volumes and revenues and costs that fluctuate independently of revenues. Costs that are fixed in nature include attorney fees, equipment rental, insurance, professional fees, rent and other occupancy expenses, repairs and maintenance, technology costs, telephone and title plant rent. Costs that follow, to varying degrees, changes in transaction volumes and revenues include fee attorney splits, bad debt expenses, certain mortgage services expenses, copy supplies, delivery fees, outside search fees, postage, premium taxes and title plant expenses. Costs that fluctuate independently of revenues include auto expenses, general supplies, litigation defense and settlement costs, promotion costs and travel.

In 2012, other operating expenses for the combined business segments increased $30.3 million, or 11.8%. Costs fixed in nature increased $3.6 million, or 3.1%, in 2012, primarily due to increases in audit, accounting and technology costs, partially offset by decreases in rent and other occupancy expenses. Costs that follow, to varying degrees, changes in transaction volumes and revenues increased $13.3 million, or 13.9%, in 2012 due to increases in outside search fees, bad debt expense and premium taxes. These increases were partially offset by decreases in certain mortgage service expenses. Costs that fluctuate independently of revenues increased $13.4 million, or 30.3%, in 2012 due primarily to litigation-related expenses.

In 2011, other operating expenses for the combined business segments decreased $17.1 million, or 6.2%. Costs fixed in nature decreased $3.6 million, or 3.0%, primarily due to decreases in rent and other occupancy expenses related to office closures and a decrease in telephone expenses. These reductions were offset primarily by an increase in professional fees primarily due to the outsourcing of our internal audit function. Costs that follow, to varying degrees, changes in transaction volumes and revenues decreased $6.6 million, or 6.4%, in 2011 due to decreases in bad debt expense, fee attorney splits and title plant expenses. These decreases were offset by increases in premium taxes and postage. Costs that fluctuate independently of revenues decreased $6.9 million, or 13.6%, in 2011 due to litigation and other expense reductions and were partially offset by an increase in travel costs.

Title losses. Provisions for title losses, as a percentage of title operating revenues, were 8.1%, 9.4% and 9.6% in 2012, 2011 and 2010, respectively.

The year ended December 31, 2012 included charges of $18.2 million (1.1% of title operating revenues) resulting from large title claims relating to policies issued in prior years. As anticipated, our overall loss experience continued to improve relative to prior year periods and was in line with our actuarial expectations, which allowed us to lower the overall loss provision rate effective with policies issued in the third quarter. Losses incurred on known claims for the year 2012 decreased 12.2% compared to the year 2011.

The year ended December 31, 2011 included charges of $24.6 million (1.6% of title operating revenues) resulting from large title claims relating to policies issued in prior years. These charges were partially offset by insurance recoveries of $2.4 million (0.2% of title operating revenues) on previously recognized title losses. Losses incurred on known claims for the year 2011 decreased 11.3%

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compared to the year 2010. During the fourth quarter of 2011, we resolved a significant number of large claims from prior policy years. Although some large claims remain outstanding, significant progress was made in resolving existing large claim inventory which will reduce future risk for the company.

The year ended December 31, 2010 included a reserve strengthening adjustment of $4.8 million (0.03% of title operating revenues) relating to policy years 2007 and 2008 due to higher than expected loss payments and incurred loss experience for these policy years. Including this charge, the total strengthening charges recorded for these policy years are $77.0 million, substantially all of which was recorded in 2008 and 2009. Current losses that are higher than previously anticipated for any given policy year are an indication that total losses for such policy year may be higher than originally calculated. Changes in the total estimated future loss for prior policy years are recorded in the period in which the estimate changes, and thus negatively impact the provision for title loss ratios.

Provisions for title losses in 2010 also include charges of $13.3 million (0.09% of title operating revenues) resulting from changes in the estimated legal costs for several existing large title claims. These charges were partially offset by insurance recoveries of $2.8 million (0.01% of title operating revenues) on previously recognized title losses.

Excluding the impact of the reserve strengthening charges, large losses, and defalcations (net of recoveries), title losses as a percent of title operating revenues were 7.1%, 7.9% and 8.6% in 2012, 2011 and 2010, respectively.

Income taxes. Our effective tax rates were (37.3)%, 79.9% and (179.2)% for 2012, 2011 and 2010, respectively, based on earnings before taxes and after deducting noncontrolling interests, which were earnings (loss) of $79.5 million, $11.7 million and ($4.5) million in 2012, 2011 and 2010, respectively. Our effective income tax rate in 2012 was driven principally by the release of a valuation allowance of $36.6 million that had been established against U.S. deferred tax assets. As of December 31, 2012, our valuation allowance against deferred tax assets was $12.1 million, relating primarily to foreign tax credit carryforwards.

Our effective income tax rate in 2011 was driven by foreign and state taxes and income taxes associated with subsidiaries not included in our consolidated federal tax return, net of tax benefits from certain tax claims, and by a $7.2 million decrease in the valuation allowance against our deferred tax assets.

Contractual obligations. Our material contractual obligations at December 31, 2012 were:

	Payments due by period ($ millions)
	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Notes payable		2.0		3.9		0.6		—		6.5
Convertible senior notes		—		65.0		—		—		65.0
Operating leases		35.2		52.1		23.0		5.1		115.4
Estimated title losses		145.7		187.3		75.5		111.9		520.4
		182.9		308.3		99.1		117.0		707.3

Material contractual obligations consist primarily of notes payable, convertible senior notes, operating leases and estimated title losses. The timing above for payments of notes payable is based upon contractually stated payment terms of each debt agreement. The convertible senior notes will mature in 2014 unless converted into shares of common stock earlier.

Subsequent to year-end, we exchanged an aggregate of $20.7 million of the convertible senior notes for an aggregate of 1,691,074 shares of common stock plus cash for accrued and unpaid interest. Following these transactions, an aggregate of $44.3 million of convertible senior notes remain outstanding.

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Operating leases are primarily for office space and expire over the next nine years. The timing shown above for the payments of estimated title losses is not set by contract. Rather, it is projected based on historical payment patterns. The actual timing of estimated title loss payments may vary materially from the above projection since claims, by their nature, are complex and paid over long periods of time. Title losses paid were $124.0 million, $134.3 million and $158.3 million in 2012, 2011 and 2010, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources represent our ability to generate cash flow to meet our obligations to our shareholders, customers (payments to satisfy claims on title policies), vendors, employees, lenders and others. As of December 31, 2012, our cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $748.8 million. Cash and investments restricted due to statutory requirements aggregated $456.6 million at December 31, 2012.

A substantial majority of our consolidated cash and investments as of December 31, 2012 was held by Stewart Title Guaranty Company (Guaranty) and its subsidiaries. The use and investment of these funds, dividends to the holding company, and cash transfers between Guaranty and its subsidiaries and the holding company are subject to certain legal and regulatory restrictions. In general, Guaranty may use its cash and investments in excess of its legally-mandated statutory premium reserve (established in accordance with requirements under Texas law) to fund its insurance operations, including claims payments. Guaranty may also, subject to certain limitations and upon regulatory approval, pay dividends to the holding company and/or provide funds to its subsidiaries (whose operations consist principally of field title offices) for their operating and debt service needs.

Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner. As of December 31, 2012, the maximum dividend that could be paid in 2013 after such approval in 2013 is $85.8 million. Guaranty did not pay a dividend in 2012 or 2011. However, the maximum dividend permitted by law is not necessarily indicative of Guaranty’s actual ability to pay dividends, which may be constrained by business and regulatory considerations, such as the impact of dividends on surplus, which could affect its ratings or competitive position, the amount of insurance it can write and its ability to pay future dividends. Further, depending on business and regulatory conditions, we may in the future need to retain cash in Guaranty or even raise cash in the capital markets to contribute to it in order to maintain its ratings or statutory capital position. Such a requirement could be the result of investment losses, reserve charges, adverse operating conditions in the current economic environment or changes in interpretation of statutory accounting requirements by regulators.

Cash held at the parent company totaled $10.7 million at December 31, 2012. As noted above, as a holding company, the parent is funded principally by cash from its subsidiaries in the form of dividends, for operating and other administrative expense reimbursements, and pursuant to intercompany tax sharing agreements. The expense reimbursements are paid in accordance with the management agreements among us and our subsidiaries. As the parent company conducts no operations apart from its wholly-owned subsidiaries, the discussion below focuses on consolidated cash flows.

A summary of our net consolidated cash flows for the years ended December 31 follows:

	2012			2011			2010
	($ millions)
Net cash provided by operating activities		120.5			23.4			41.2
Net cash (used) provided by investing activities		(36.5	)		(29.2	)		235.2
Net cash used by financing activities		(18.1	)		(7.0	)		(238.8	)

Operating activities

Our principal sources of cash from operations are premiums on title policies and revenue from title service-related transactions, and mortgage servicing support services. Our independent agencies remit cash to us net of their contractual retention. Our principal cash expenditures for operations are employee costs, operating costs and title claims payments.

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Cash provided by operations in 2012 was $120.5 million, an improvement of $97.1 million from $23.4 million provided by operations in 2011. This improvement is primarily related to the $110.3 million increase in net earnings when comparing the same periods and a $12.9 million improvement in claims paid compared to loss provisions for the same periods. This improvement is partially offset by a $9.4 million increase in receivables relating primarily to the increase in revenues in our mortgage servicing support businesses. We expect to collect these receivables during the first quarter 2013.

Our business is labor intensive, although we continue to make progress in automating our services, which allows us to more easily adjust staffing levels as order volumes fluctuate. There are typically delays between changes in market conditions and changes in staffing levels; therefore, employee costs do not change at the same rate as revenues change.

Cash payments on title claims in 2012, 2011 and 2010 were $124.0 million, $134.3 million and $158.3 million, respectively. Claim payments made, net of insurance recoveries, during 2012, 2011, and 2010 include $28.8 million, $34.9 million and $32.8 million, respectively, on large title claims. As these losses are paid and newly reported prior policy year claims begin to decline, we expect the overall amount of cash paid on title claims to continue to decline.

The insurance regulators of the states in which our underwriters are domiciled require our statutory premium reserves to be fully funded, segregated and invested in high-quality securities and short-term investments. As of December 31, 2012, cash and investments funding the statutory premium reserve aggregated $456.6 million and our statutory estimate of claims that may be reported in the future totaled $382.4 million. In addition to this restricted cash and investments, we had unrestricted cash and investments (excluding equity method investments) of $147.1 million, which are available for underwriter operations, including claims payments.

Investing activities

Cash from investing activities was generated principally by proceeds from investments matured and sold in the amounts of $181.9 million, $339.7 million and $328.5 million in 2012, 2011 and 2010, respectively. We used cash for the purchases of investments in the amounts of $207.7 million, $336.1 million and $303.5 million in 2012, 2011 and 2010, respectively. The cash from sales and maturities not reinvested in prior years was used principally to fund operations.

Capital expenditures were $16.8 million, $17.7 million, and $16.3 million in 2012, 2011, and 2010, respectively. We maintain investment in capital expenditures at a level that enables us to implement technologies for increasing our operational and back-office efficiencies. Notwithstanding this, we also continue to aggressively manage cash flow and, therefore, overall capital spending will continue to be at reduced levels relative to our historical norms. During the year ended 2012, we sold assets and subsidiaries resulting in cash receipts of $5.1 million.

During the years ended 2012 and 2011, acquisitions resulted in additions to goodwill of $4.2 million and $7.6 million, respectively. We made no acquisitions in 2010.

Financing activities and capital resources

Total debt and stockholders’ equity were $71.2 million and $580.4 million, respectively, as of December 31, 2012. In 2012 and 2011, we repaid $5.7 million and $6.0 million, respectively, of debt in accordance with the underlying terms of the debt instruments. Included in total debt are $64.7 million of 6% Convertible Senior Notes due October 2014 (Notes), if not converted into shares of common stock. We also have available a $10.0 million bank line of credit commitment, which expires in June 2013, under which no borrowings were outstanding at December 31, 2012. Subsequent to December 31, 2012, we exchanged an aggregate of $20.7 million of Notes for an aggregate of 1,691,074 shares of common stock plus cash for accrued and unpaid interest. Following these transactions, an aggregate of $44.3 million of convertible debt remains outstanding.

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We paid $1.8 million and $0.9 million, respectively, in cash dividends to our shareholders representing $0.10 in 2012 and $0.05 in 2011 and 2010 per common share outstanding. Our dividend has remained relatively low due to our operating performance and our desire to conserve cash. In addition, the maximum dividend allowed under the terms of the Notes is $0.10 per share for as long as the Notes remain outstanding. The declaration of any future dividend is at the discretion of our Board of Directors.

As previously disclosed and in accordance with a settlement agreement in the amount of $7.6 million, we issued 635,863 shares of Common Stock in January 2011 to settle our “wage and hour” class action lawsuits filed in California state and federal courts against our subsidiary Stewart Title of California, Inc. We did not receive any proceeds from the issuance of these shares. Additionally in the second quarter of 2011, we satisfied a residual note balance of $1.3 million related to the acquisition of remaining interest in a subsidiary through the issuance of stock held in treasury.

Effect of changes in foreign currency rates

The effect of changes in foreign currency rates on the consolidated statements of cash flows was a net increase in cash and cash equivalents of $1.8 million in 2012, a net decrease of $0.8 million in 2011 and a net increase of $0.8 million in 2010. Our principal foreign operating unit is in Canada, and, on average, the value of the U.S. dollar relative to the Canadian dollar increased during 2012.

***********

We believe we have sufficient liquidity and capital resources to meet the cash needs of our ongoing operations. However, if we determine that supplemental debt, including additional convertible debentures, or equity funding is warranted to provide additional liquidity for unforeseen circumstances or strategic acquisitions, we may pursue those sources of cash. Other than scheduled maturities of debt, operating lease payments, purchase agreements and anticipated claims payments, we have no material commitments. We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, including claims payments. However, to the extent that these funds are not sufficient, we may be required to borrow funds on terms less favorable than we currently have, or seek funding from the equity market, which may not be successful or may be on terms that are dilutive to existing shareholders.

Other-than-temporary impairments of investments. We recorded other-than-temporary impairments of $0.8 million and $3.5 million in 2012 and 2011, respectively, relating to impairment of cost-basis investments.

Other comprehensive earnings (loss). Unrealized gains and losses on investments and changes in foreign currency exchange rates are reported net of deferred taxes in accumulated other comprehensive earnings, a component of stockholders’ equity, until realized. In 2012, net unrealized investment gains of $7.0 million, which increased our other comprehensive earnings, were primarily related to temporary increases in market values of corporate bond investments. Changes in foreign currency exchange rates, primarily related to our Canadian operations, increased other comprehensive earnings by $2.9 million, net of taxes, in 2012.

In 2011, net unrealized investment gains of $5.7 million were primarily related to temporary increases in market values of corporate, municipal, and government agency debt securities. These gains were partially offset by changes in deferred taxes resulting in a total increase to other comprehensive earnings related to the net change in unrealized investments of $4.9 million. Foreign currency exchange rates, primarily related to our Canadian operations, decreased comprehensive income by $1.8 million, net of taxes, in 2011.

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In 2010, net unrealized investment gains of $0.3 million, which increased our comprehensive income, were primarily related to temporary increases in market values of government bond investments, partially offset by decreases in municipal bond investments. Foreign currency exchange rates, primarily related to our Canadian operations, increased comprehensive income by $3.5 million, net of taxes, in 2010. Other comprehensive earnings included a $1.1 million provision for Canadian income taxes related to unrealized gains in 2010.

Off-balance sheet arrangements. We do not have any material source of liquidity or financing that involves off-balance sheet arrangements, other than our contractual obligations under operating leases. We also routinely hold funds in segregated escrow accounts pending the closing of real estate transactions and have qualified intermediaries in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can occur. In accordance with industry practice, these segregated accounts are not included on the balance sheet. See Note 18 to our accompanying consolidated financial statements.

Forward-looking statements. Certain statements in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance. These statements often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “will,” “foresee” or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things, the tenuous economic conditions; adverse changes in the level of real estate activity; changes in mortgage interest rates, existing and new home sales, and availability of mortgage financing; our ability to respond to and implement technology changes, including the completion of the implementation of our enterprise systems; the impact of unanticipated title losses on the need to strengthen our policy loss reserves; any effect of title losses on our cash flows and financial condition; the impact of vetting our agency operations for quality and profitability; changes to the participants in the secondary mortgage market and the rate of refinancings that affect the demand for title insurance products; regulatory non-compliance, fraud or defalcations by our title insurance agents or employees; our ability to timely and cost-effectively respond to significant industry changes and introduce new products and services; the outcome of pending litigation; the impact of changes in governmental and insurance regulations, including any future reductions in the pricing of title insurance products and services; our dependence on our operating subsidiaries as a source of cash flow; the continued realization of expense savings from our continual focus on aligning our operations to quickly adapt our costs to transaction volumes and market conditions; our ability to access the equity and debt financing markets when and if needed; our ability to grow our international operations; and our ability to respond to the actions of our competitors. We expressly disclaim any obligation to update any forward-looking statements contained in this report to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The discussion below about our risk management strategies includes forward-looking statements that are subject to risks and uncertainties. Management’s projections of hypothetical net losses in the fair values of our market rate-sensitive financial instruments, should certain potential changes in market rates occur, are presented below. While we believe that the potential market rate changes are possible, actual rate changes could differ from our projections.

Our only material market risk in investments in financial instruments is our debt securities portfolio. We invest primarily in municipal, corporate, utilities, foreign and U.S. Government debt securities. We do not invest in financial instruments of a derivative or hedging nature.

We have established policies and procedures to minimize our exposure to changes in the fair values of our investments. These policies include retaining an investment advisory firm, an emphasis upon credit quality, management of portfolio duration, maintaining or increasing investment income through high coupon rates and actively managing our profile and security mix depending upon market conditions. We have classified all of our investments as available-for-sale.

Investments in debt securities at December 31, 2012 mature, according to their contractual terms, as follows (actual maturities may differ because of call or prepayment rights):

	Amortized costs		Fair values
	($ thousands)
In one year or less		17,673		17,905
After one year through two years		69,820		69,954
After two years through three years		35,714		36,784
After three years through four years		30,676		32,697
After four years through five years		75,078		77,752
After five years		241,252		257,094
		470,213		492,186

We believe our investment portfolio is diversified and do not expect any material loss to result from the failure to perform by issuers of the debt securities we hold. Our investments are not collateralized. Foreign debt securities primarily include Canadian government and corporate bonds which aggregated $143.3 million as of December 31, 2012 and Canadian government bonds which aggregated $136.6 million as of December 31, 2011. Also included in foreign debt securities are United Kingdom treasury bonds as of December 31, 3012 and 2011.

Based on our debt securities portfolio and interest rates at December 31, 2012, a 100 basis-point increase (decrease) in interest rates would result in a decrease (increase) of approximately $22.6 million, or 4.6%, in the fair value of our portfolio. Changes in interest rates may affect the fair value of the debt securities portfolio and may result in unrealized gains or losses. Gains or losses would only be realized upon the sale of the investments. Any other-than-temporary declines in fair values of securities are charged to earnings.

Item 8. Financial Statements and Supplementary Data

The information required to be provided in this item is included in our audited Consolidated Financial Statements, including the Notes thereto, attached hereto as pages F-1 to F-29, and such information is incorporated in this report by reference.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Our principal executive officer and principal financial officer are responsible for establishing and maintaining disclosure controls and procedures. They evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2012, and have concluded that, as of such date, our disclosure controls and procedures are adequate and effective to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)). Our internal control over financial reporting is a process, under the supervision of our principal executive officer and principal financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, with the participation of our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on this assessment, management believes that, as of December 31, 2012, our internal control over financial reporting is effective based on those criteria.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Due to such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

See page F-2 for the Report of Independent Registered Public Accounting Firm on our effectiveness of internal control over financial reporting.

There has been no change in our internal control over financial reporting during the quarter ended December 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As a result, no corrective actions were required or undertaken.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information regarding our directors and executive officers will be included in our proxy statement for our 2012 Annual Meeting of Stockholders (Proxy Statement), to be filed within 120 days after December 31, 2012, and is incorporated in this report by reference.

Our Board of Directors and Executive Officers as of March 6, 2013 are:

Board of Directors:
Catherine A. Allen	Chairman and CEO, The Santa Fe Group
Thomas G. Apel	CEO of VLN, Inc.
Robert L. Clarke	Senior Partner, Bracewell & Giuliani, L.L.P.
Paul W. Hobby	Chairman and Founding Partner, Genesis Park, L.P.
Dr. E. Douglas Hodo	Chairman of the Board of the Company and President Emeritus, Houston Baptist University
Laurie C. Moore	Chief Executive Officer, The Institute for Luxury Home Marketing
Malcolm S. Morris	Vice Chairman of the Board
Stewart Morris, Jr.	Vice Chairman of the Board
Dr. W. Arthur Porter	Professor Emeritus, University of Oklahoma
Executive Officers:
Matthew W. Morris	Chief Executive Officer
J. Allen Berryman	Chief Financial Officer, Secretary, Treasurer and Principal Financial Officer
John L. Killea	Chief Legal Officer
John A. Arcidiacono	Chief Marketing Officer
Murshid S. Khan	Chief Information Officer
Susan C. McLauchlan	Chief Human Resources Officer
Steven M. Lessack	Group President, International Operations
Glenn Clements	Group President, Direct Operations
George Houghton	Group President, Agency Operations
Jason Nadeau	Group President, Mortgage and Title Services

The Board of Directors has adopted the Stewart Code of Business Conduct and Ethics and Guidelines on Corporate Governance, as well as the Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal Accounting Officer. Each of these documents can be found at our website, www.stewart.com.

Item 11. Executive Compensation

Information regarding compensation for our executive officers will be included in the Proxy Statement and is incorporated in this report by reference. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information regarding security ownership of certain beneficial owners and management and related stockholder matters will be included in the Proxy Statement and is incorporated in this report by reference.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

Information regarding certain relationships and related transactions and director independence will be included in the Proxy Statement and is incorporated in this report by reference.

Item 14. Principal Accounting Fees and Services

Information regarding fees paid to and services provided by our independent registered public accounting firm will be included in the Proxy Statement and is incorporated in this report by reference.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedules

The financial statements and financial statement schedules filed as part of this report are listed in the Index to Consolidated Financial Statements and Financial Statement Schedules on Page F-1 of this document. All other schedules are omitted, as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

(b) Exhibits

Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Index to Exhibits immediately preceding the exhibits filed herewith and such listing is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.

STEWART INFORMATION SERVICES CORPORATION (Registrant)
By:	/s/ Matthew W. Morris
	Matthew W. Morris, Chief Executive Officer
By:	/s/ J. Allen Berryman
	J. Allen Berryman, Chief Financial Officer, Secretary, Treasurer and Principal Financial Officer
By:	/s/ Brian K. Glaze
	Brian K. Glaze, Controller and Principal Accounting Officer

Date: March 6, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on our behalf on March 6, 2013 by the following Directors:

/s/ Catherine A. Allen	/s/ Paul W. Hobby	/s/ Malcolm S. Morris
(Catherine A. Allen)	(Paul W. Hobby)	(Malcolm S. Morris)
/s/ Thomas G. Apel	/s/ E. Douglas Hodo	/s/ Stewart Morris, Jr.
(Thomas G. Apel)	(E. Douglas Hodo)	(Stewart Morris, Jr.)
/s/ Robert L. Clarke	/s/ Laurie C. Moore	/s/ W. Arthur Porter
(Robert L. Clarke)	(Laurie C. Moore)	(W. Arthur Porter)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULES

Stewart Information Services Corporation and Subsidiaries’ Consolidated Financial Statements:
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Operations and Comprehensive Earnings (Loss) for the Years Ended December 31, 2012, 2011 and 2010	F-4
Consolidated Balance Sheets as of December 31, 2012 and 2011	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012, 2011 and 2010	F-6
Notes to Consolidated Financial Statements	F-8
Financial Statement Schedules:
Schedule I - Financial Information of the Registrant (Parent Company)	S-1
Schedule II - Valuation and Qualifying Accounts	S-5

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Stewart Information Services Corporation:

We have audited Stewart Information Services Corporation’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Stewart Information Services Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A. Controls and Procedures. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Stewart Information Services Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive earnings (loss), and cash flows for each of the years in the three-year period ended December 31, 2012, and the financial statement schedules as listed in the accompanying index, and our report dated March 6, 2013 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Houston, Texas

March 6, 2013

F-2

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Stewart Information Services Corporation:

We have audited the accompanying consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive earnings (loss), and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedules as listed in the accompanying index. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Stewart Information Services Corporation and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Stewart Information Services Corporation’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 6, 2013 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Houston, Texas

March 6, 2013

F-3

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS)

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted, except per share)
Revenues
Title insurance:
Direct operations		718,789			627,810			625,891
Agency operations		1,007,380			877,225			914,581
Mortgage services		162,856			112,064			91,739
Investment income		13,809			15,505			18,397
Investment and other gains – net		7,578			2,302			21,782
		1,910,412			1,634,906			1,672,390
Expenses
Amounts retained by agencies		829,070			723,943			753,438
Employee costs		542,461			469,839			467,491
Other operating expenses		286,496			256,194			273,253
Title losses and related claims		140,029			142,101			148,438
Depreciation and amortization		17,783			19,542			21,422
Interest		5,235			5,268			5,423
		1,821,074			1,616,887			1,669,465
Earnings before taxes and noncontrolling interests		89,338			18,019			2,925
Income tax (benefit) expense		(29,639	)		9,341			8,075
Net earnings (loss)		118,977			8,678			(5,150	)
Less net earnings attributable to noncontrolling interests		9,795			6,330			7,432
Net earnings (loss) attributable to Stewart		109,182			2,348			(12,582	)
Net earnings (loss)		118,977			8,678			(5,150	)
Other comprehensive earnings:
Foreign currency translation		3,880			(2,241	)		5,110
Change in unrealized gains and losses on investments		14,213			9,202			2,440
Reclassification of adjustment for gains in net earnings (loss)		(3,470	)		(3,465	)		(1,970	)
Other comprehensive earnings, before taxes		14,623			3,496			5,580
Income tax expense related to items of other comprehensive earnings		4,721			425			2,930
Other comprehensive earnings, net of taxes		9,902			3,071			2,650
Comprehensive earnings (loss)		128,879			11,749			(2,500	)
Less comprehensive earnings attributable to noncontrolling interests		9,795			6,330			7,432
Comprehensive earnings (loss) attributable to Stewart		119,084			5,419			(9,932	)
Basic average shares outstanding (000)		19,294			19,131			18,313
Basic earnings (loss) per share attributable to Stewart		5.66			0.12			(0.69	)
Dilutive average shares outstanding (000)		24,384			19,131			18,313
Diluted earnings (loss) per share attributable to Stewart		4.61			0.12			(0.69	)

See notes to consolidated financial statements.

F-4

CONSOLIDATED BALANCE SHEETS

	As of December 31,
	2012			2011
	($000 omitted)
Assets
Cash and cash equivalents		196,471			117,196
Cash and cash equivalents – statutory reserve funds		12,067			23,647
		208,538			140,843
Short-term investments		37,025			33,137
Investments in debt and equity securities available-for-sale, at fair value:
Statutory reserve funds		444,579			397,074
Other		58,680			63,911
		503,259			460,985
Receivables:
Notes		8,483			10,394
Premiums from agencies		45,458			47,351
Income taxes		3,259			7,412
Other		56,311			39,660
Allowance for uncollectible amounts		(12,823	)		(16,056	)
		100,688			88,761
Property and equipment, at cost:
Land		5,848			6,429
Buildings		26,887			23,823
Furniture and equipment		241,694			234,262
Accumulated depreciation		(219,715	)		(208,077	)
		54,714			56,437
Title plants, at cost		77,360			77,406
Real estate, at lower of cost or net realizable value		3,941			5,236
Investments in investees, on an equity method basis		13,891			18,055
Goodwill		220,955			214,492
Intangible assets, net of amortization		7,015			8,693
Deferred tax asset		7,562			—
Other assets		56,229			52,096
		1,291,177			1,156,141
Liabilities
Notes payable		6,481			11,722
Convertible senior notes		64,687			64,513
Accounts payable and accrued liabilities		116,617			86,389
Estimated title losses		520,375			502,611
Deferred income taxes		2,645			27,449
		710,805			692,684
Contingent liabilities and commitments
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 18,705,914 and 18,605,993; outstanding 18,353,753 and 18,253,832		18,706			18,606
Class B Common Stock – $1 par, authorized 1,500,000; issued and outstanding 1,050,012		1,050			1,050
Additional paid-in capital		133,685			132,446
Retained earnings		391,447			284,097
Accumulated other comprehensive earnings:
Foreign currency translation adjustments		12,169			9,250
Unrealized investment gains on investments		14,415			7,431
Treasury stock – 352,161 and 352,161 common shares, at cost		(2,666	)		(2,666	)
Total stockholders’ equity attributable to Stewart		568,806			450,214
Noncontrolling interests		11,566			13,243
Total stockholders’ equity		580,372			463,457
		1,291,177			1,156,141

See notes to consolidated financial statements.

F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted)
Reconciliation of net earnings (loss) to cash provided by operating activities:
Net earnings (loss)		118,977			8,678			(5,150	)
Add (deduct):
Depreciation and amortization		17,783			19,542			21,422
Provision for bad debt		3,201			1,318			4,186
Investment and other gains – net		(7,578	)		(2,302	)		(21,782	)
Provisions for title losses in excess of (less than) payments		15,248			2,383			(14,694	)
Insurance recoveries of title losses		706			5,082			8,260
(Increase) decrease in receivables – net		(16,133	)		(6,748	)		46,642
(Increase) decrease in other assets – net		(2,779	)		(189	)		308
Increase (decrease) in payables and accrued liabilities – net		29,278			(5,602	)		(11,871	)
(Decrease) increase in net deferred income taxes		(39,780	)		(1,212	)		10,544
Net earnings from equity investees		(4,253	)		(1,710	)		(2,427	)
Dividends received from equity investees		3,426			2,524			2,996
Other – net		2,426			1,645			2,760
Cash provided by operating activities		120,522			23,409			41,194
Investing activities:
Proceeds from investments available-for-sale matured and sold		181,938			339,697			328,460
Purchases of investments available-for-sale		(207,690	)		(336,118	)		(303,517	)
Proceeds from redemptions of investments – pledged		—			—			217,225
Purchases of property and equipment, title plants and real estate – net		(16,752	)		(17,704	)		(16,339	)
Proceeds from the sale of land, buildings, and furniture and equipment		4,713			—			6,425
Increases in notes receivable		(463	)		(291	)		(1,109	)
Collections on notes receivable		959			721			1,001
Change in cash and cash equivalents due to sale and deconsolidation of subsidiaries (see below)		1,566			—			(1,873	)
Cash paid for acquisition of subsidiary		(1,183	)		(8,262	)		—
Cash paid for loan guarantee obligation		—			(4,318	)		—
Cash received (paid) for other assets, cost-basis investments, equity investees and other – net		384			(2,944	)		4,887
Cash (used) provided by investing activities		(36,528	)		(29,219	)		235,160
Financing activities:
Payments on notes payable		(5,692	)		(5,988	)		(16,294	)
Proceeds from notes payable		450			6,000			5,834
Payments on line of credit		—			—			(216,141	)
Cash dividends paid		(1,832	)		(917	)		(868	)
Distributions to noncontrolling interests		(9,512	)		(6,142	)		(7,122	)
Purchase of remaining interest of consolidated subsidiary		(1,621	)		—			(4,199	)
Other—net		87			13			—
Cash used by financing activities		(18,120	)		(7,034	)		(238,790	)
Effect of changes in foreign currency exchange rates		1,821			(803	)		826
Increase (decrease) in cash and cash equivalents		67,695			(13,647	)		38,390
Cash and cash equivalents at beginning of year		140,843			154,490			116,100
Cash and cash equivalents at end of year		208,538			140,843			154,490

See notes to consolidated financial statements.

F-6

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted)
Supplemental information:
Receipt of partial building ownership in exchange for debt forgiveness		1,255			—			—
Settlement of wage and hour litigation through issuance of Common Stock		—			7,582			—
Settlement of note payable through issuance of Common Stock held in treasury		—			1,299			—
Changes in financial statement amounts due to purchase of subsidiary:
Goodwill acquired		4,183			7,631			—
Receivables and other assets acquired		(1,675	)		5,672			—
Intangible assets		—			1,988			—
Liabilities acquired		(1,325	)		(3,779	)		—
Debt assumed		—			(3,250	)		—
Cash paid for the acquisition of subsidiaries and other – net		1,183			8,262			—
Changes in financial statement amounts due to sale and deconsolidation of subsidiaries
Note receivable		156			—			2,433
Investments in investees, on an equity method basis		(1,203	)		—			5,315
Goodwill		(440	)		—			(5,902	)
Title plants		(491	)		—			(1,048	)
Property and equipment, net of accumulated depreciation		(9	)		—			(1,564	)
Intangible asset, net of amortization		—			—			2,928
Other – net		755			—			(814	)
Liabilities		37			—			1,390
Noncontrolling interests		473			—			336
Investment and other (gains) losses – net		(844	)		—			(1,201	)
Change in cash and cash equivalents due to sale and deconsolidation of subsidiaries		(1,566	)		—			1,873
Income taxes – net paid (refunded)		6,747			19,259			(41,528	)
Interest paid		4,427			4,557			4,775

See notes to consolidated financial statements.

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Years Ended December 31, 2012

NOTE 1

General. Stewart Information Services Corporation, through its subsidiaries (collectively, the Company), is primarily engaged in the business of providing title insurance and real estate related services. The Company operates through a network of production facilities, owned policy-issuing offices and independent agencies in the United States and international markets. Stewart Information Services Corporation is a customer-focused, global title insurance and real estate services company offering products and services through our direct operations, network of approved agencies and other companies within the Company. The Company provides these services to homebuyers and sellers; residential and commercial real estate professionals; mortgage lenders and servicers; title agencies and real estate attorneys; home builders; and United States and foreign governments. The Company also provides loan origination and servicing support; loan review services; loss mitigation; REO asset management; home and personal insurance services; and technology to streamline the real estate process. Approximately 51% of consolidated title revenues for the year ended December 31, 2012 were generated in Texas, California, New York, international operations and Florida.

A. Management’s responsibility. The accompanying consolidated financial statements were prepared by management, which is responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ from those estimates.

B. Reclassifications. Certain prior year amounts in these consolidated financial statements have been reclassified for comparative purposes. Net earnings (loss) attributable to Stewart and stockholders’ equity, as previously reported, were not affected.

C. Consolidation. The condensed consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the equity, are accounted for by the equity method.

D. Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by regulatory authorities. See Notes 2 and 3.

In conforming the statutory financial statements to GAAP, the statutory premium reserve and the reserve for reported title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1F). The net effect, after providing for income taxes, is included in the consolidated statements of operations and comprehensive earnings (loss).

E. Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to the Company. In addition, where reasonable estimates can be made, the Company accrues for policies issued but not reported until after period end. The Company believes that reasonable estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical reporting patterns and other information obtained about agencies, as well as current trends in direct operations and in the title industry. In this accrual, future transactions are not being estimated. The Company is estimating revenues on policies that have already been issued by agencies but not yet reported to or received by the Company. The Company has consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

F-8

Revenues generated by the mortgage services segment are generally considered earned at the time the service is performed or the product is delivered to the customer.

F. Title losses and related claims. The Company’s method for recording the reserves for title losses on both an interim and annual basis begins with the calculation of its current loss provision rate, which is applied to the Company’s current premiums resulting in a title loss expense for the period. This loss provision rate is set to provide for losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, the Company’s recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that management compares to its actuarially-based calculation of the ending reserve balance to provide for future reported title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from the Company’s third-party actuaries. The Company also obtains input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While the Company is responsible for determining its loss reserves, it utilizes this actuarial input to assess the overall reasonableness of its reserve estimation. If the Company’s recorded reserve amount is within a reasonable range (+/- 4.0%) of its actuarially-based reserve calculation and the actuary’s point estimate, but not at the point estimate, the Company’s management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of its recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in the Company’s claims management process. If the recorded amount is not within a reasonable range of the Company’s third-party actuary’s point estimate, it will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once the Company’s reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to the Company’s estimate of the overall level of required reserves.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both the Company’s management and its third party actuaries in estimating reserves. As a consequence, the Company’s ultimate liability may be materially greater or less than its current reserves and/or its third party actuary’s calculated estimate.

G. Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of three months or less at the time of acquisition.

H. Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations and other investments maturing in less than one year.

I. Investments in debt and equity securities. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments are determined using the specific identification method. Net unrealized gains and losses on investments available-for-sale, net of applicable deferred taxes, are included as a component of accumulated other comprehensive earnings within stockholders’ equity. At the time unrealized gains and losses become realized, they are reclassified from accumulated other comprehensive earnings using the specific identification method. Any other-than-temporary declines in fair values of investments available-for-sale are charged to earnings.

J. Property and equipment. Depreciation is principally computed using the straight-line method at the following rates: buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal.

F-9

K. Title plants. Title plants include compilations of a county’s official land records, prior examination files, copies of prior title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Title plants are not amortized since there is no indication of any loss of value over time but are subject to review for impairment. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of sale.

L. Goodwill. Goodwill is the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized but is reviewed annually and upon the occurrence of an event indicating an impairment may have occurred. If determined to be impaired, the impaired portion is expensed to current operations. The process of determining impairment relies on projections of future cash flows, operating results and market conditions. Uncertainties exist in these projections and are subject to changes relating to factors such as interest rates and overall real estate market conditions. As part of our process, we have an option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we decide not to use a qualitative assessment or if we fail the qualitative assessment, then we obtain input from third-party appraisers regarding the fair value of our reporting units. While we are responsible for assessing whether an impairment of goodwill exists, we utilize the input from third-party appraisers to assess the overall reasonableness of our conclusions. We utilized a qualitative assessment for our annual goodwill impairment test and, based on our analysis, determined it was not more-likely-than-not that the fair value of our reporting units were less than their carrying amounts as of June 30, 2012. There were no impairment charges for goodwill during the three years ended December 31, 2012. However, to the extent that the Company’s future operating results are below management’s projections, or in the event of continued adverse market conditions, a future impairment may occur.

M. Acquired intangibles. Intangible assets are comprised mainly of non-compete and underwriting agreements and are amortized over their estimated lives, which are primarily 3 to 10 years.

N. Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is determined by management, the recorded amounts are written down to fair values. There were no impairment write-offs of long-lived assets during the three years ended December 31, 2012.

The Company had cost-basis investments aggregating $7.1 million and $7.7 million at December 31, 2012 and 2011, respectively. Cost-basis investments are included in other assets on the Company’s consolidated balance sheets and are evaluated periodically for impairment. The Company recorded impairment charges of $0.8 million, $3.5 million and $0.6 million for cost-basis investments during the years ended December 31, 2012, 2011 and 2010, respectively.

O. Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes receivable, notes payable and accounts payable, are determined by the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair values of these financial instruments approximate their carrying values, except for the fair value of the Notes which approximated $135.3 million at December 31, 2012. Investments in debt and equity securities and certain financial instruments are carried at their fair values (Notes 4 and 5).

P. Leases. The Company recognizes rent expense under non-cancelable operating leases, which generally expire over the next 10 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or escalating lease payments.

F-10

Q. Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax basis and the book carrying values of certain assets and liabilities. To the extent that the Company does not believe its deferred tax assets meet the more likely than not realization criteria, it establishes a valuation allowance. When it establishes a valuation allowance, or increases (decreases) the allowance during the year, it records a tax expense (benefit) in its consolidated statements of operations and comprehensive earnings (loss). Enacted tax rates are used in calculating amounts.

The Company also specifies the accounting for uncertainties in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

NOTE 2

Restrictions on cash and investments. Investments restricted for statutory reserve funds of $444.6 million and $397.1 million and cash and cash equivalents of $12.1 million and $23.6 million at December 31, 2012 and 2011, respectively, were maintained to comply with legal requirements requiring fully-funded statutory premium reserves and state deposits. These funds are not available for any other purpose. In the event that insurance regulators adjust the determination of the statutory premium reserves of the Company’s title insurers, these restricted funds as well as statutory surplus would correspondingly increase or decrease.

A substantial majority of consolidated cash and investments at each year end was held by the Company’s title insurance subsidiaries. Generally, the types of investments a title insurer can make are subject to legal restrictions. Furthermore, the transfer of funds by a title insurer to its parent or subsidiary operations, as well as other related party transactions, is restricted by law and generally requires the approval of state insurance authorities.

NOTE 3

Dividend restrictions. Substantially all of the consolidated retained earnings at each year end were represented by Guaranty, which owns directly or indirectly all of the subsidiaries included in the consolidation.

Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner. The maximum dividend that can be paid after such approval in 2013 is $85.8 million. Guaranty did not pay a dividend in 2012, 2011 or 2010.

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels and to demonstrate significant claims payment ability. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer.

Surplus as regards policyholders for Guaranty was $429.2 million and $371.8 million at December 31, 2012 and 2011, respectively. Statutory net income for Guaranty was $10.5 million in 2012 and net losses were $4.2 million and $2.0 million in 2011 and 2010, respectively.

F-11

NOTE 4

Investments in debt and equity securities. The amortized costs and fair values at December 31 follow:

	2012				2011
	Amortized costs		Fair values		Amortized costs		Fair values
	($000 omitted)
Debt securities:
Municipal		18,012		19,011		26,721		27,801
Corporate and utilities		268,874		287,528		237,912		244,123
Foreign		168,084		169,009		162,384		164,268
U.S. Government		15,243		16,638		17,530		19,350
Equity securities		10,870		11,073		5,005		5,443
		481,083		503,259		449,552		460,985

Gross unrealized gains and losses at December 31 were:

	2012				2011
	Gains		Losses		Gains		Losses
	($000 omitted)
Debt securities:
Municipal		1,006		7		1,080		—
Corporate and utilities		19,141		486		9,184		2,973
Foreign		1,210		286		1,937		53
U.S. Government		1,395		—		1,820		—
Equity securities		278		75		442		4
		23,030		854		14,463		3,030

Debt securities at December 31, 2012 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs		Fair values
	($000 omitted)
In one year or less		17,673		17,905
After one year through five years		211,288		217,187
After five years through ten years		208,966		222,499
After ten years		32,286		34,595
		470,213		492,186

F-12

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2012, were:

	Less than 12 months				More than 12 months				Total
	Losses		Fair values		Losses		Fair values		Losses		Fair values
	($000 omitted)
Debt securities:
Municipal		7		697		—		—		7		697
Corporate and utilities		486		30,538		—		—		486		30,538
Foreign		168		41,056		118		59,538		286		100,594
Equity securities:		75		2,197		—		—		75		2,197
		736		74,488		118		59,538		854		134,026

The number of investments in an unrealized loss position as of December 31, 2012 was 30. Since the Company does not intend to sell and will more likely than not maintain each debt security until its anticipated recovery, and no significant credit risk is deemed to exist, these investments are not considered other-than-temporarily impaired.

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011, were:

	Less than 12 months				More than 12 months				Total
	Losses		Fair values		Losses		Fair values		Losses		Fair values
	($000 omitted)
Debt securities:
Corporate and utilities		1,944		42,851		1,029		24,830		2,973		67,681
Foreign		53		59,708		—		—		53		59,708
Equity securities:		4		1,247		—		—		4		1,247
		2,001		103,806		1,029		24,830		3,030		128,636

The number of investments in an unrealized loss position as of December 31, 2011 was 52. Since the Company did not intend to sell and was more likely than not maintain each debt security until its anticipated recovery, and no significant credit risk was deemed to exist, these investments were not considered other-than-temporarily impaired.

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. Foreign debt securities primarily include Canadian government bonds and corporate bonds which aggregated $143.3 million as of December 31, 2012 and Canadian government bonds which aggregated $136.6 million as of December 31, 2011. Also included in foreign debt securities are United Kingdom treasury bonds as of December 31, 3012 and 2011.

NOTE 5

Fair value measurements. The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The Fair Values Measurements and Disclosures Topic establishes a three-level

F-13

fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows:

• Level 1 – quoted prices in active markets for identical assets or liabilities;

• Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

• Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

At December 31, 2012, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Fair value measurements
	($000 omitted)
Short-term investments		37,025		—		—		37,025
Investments available-for-sale:
Debt securities:
Municipal		—		19,011		—		19,011
Corporate and utilities		—		287,528		—		287,528
Foreign		—		169,009		—		169,009
U.S. Government		—		16,638		—		16,638
Equity securities:		11,073		—		—		11,073
		48,098		492,186		—		540,284

At December 31, 2011, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Fair value measurements
	($000 omitted)
Short-term investments		33,137		—		—		33,137
Investments available-for-sale:
Debt securities:
Municipal		—		27,801		—		27,801
Corporate and utilities		—		244,123		—		244,123
Foreign		—		164,268		—		164,268
U.S. Government		—		19,350		—		19,350
Equity securities:		5,443		—		—		5,443
		38,580		455,542		—		494,122

F-14

At December 31, 2012, Level 1 financial instruments consist of short-term investments and equity securities. Level 2 financial instruments consist of governmental, corporate and utilities bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines, the Company’s third party, registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. All municipal bonds are valued using a third-party pricing service, and the corporate bonds are valued using the market approach, which includes three to ten inputs from relevant market sources, including Financial Industry Regulatory Authority’s (FINRA) Trade Reporting and Compliance Engine (TRACE) and independent broker/dealer quotes, bids and offerings, as well as other relevant market data, such as securities with similar characteristics (i.e. sector, rating, maturity, etc.). Broker/dealer quotes, bids and offerings mentioned above are gathered (typically three to ten) and a consensus risk premium spread (credit spread) over risk-free Treasury yields is developed from the inputs obtained, which is then used to calculate the resulting fair value.

As of December 31, 2012, assets measured at fair value on a nonrecurring basis are summarized below:

	Level 3		Impairment loss recorded
	($000 omitted)
Cost-basis investments		1,640		753

The carrying amount of certain cost-basis investments exceeded their fair value and an impairment charge of $0.8 million was recorded in investment and other gains (losses) – net in 2012. The valuations were based on the values of the underlying assets of the investee.

As of December 31, 2011, assets measured at fair value on a nonrecurring basis are summarized below:

	Level 3		Impairment loss recorded
	($000 omitted)
Cost-basis investments		1,167		2,685

The carrying amount of certain cost-basis investments exceeded their fair value and an impairment charge of $2.7 million was recorded in investment and other gains (losses) – net in 2011. The valuations were based on the values of the underlying assets of the investee.

NOTE 6

Investment income. Income from investments and gross realized investment and other gains and losses follow:

	2012			2011			2010
	($000 omitted)
Investment income:
Debt securities		12,399			13,860			15,014
Short-term investments, cash equivalents and other		1,410			1,645			3,383
		13,809			15,505			18,397
Investment and other gains (losses):
Realized gains		9,417			12,151			24,055
Realized losses		(1,839	)		(9,849	)		(2,273	)
		7,578			2,302			21,782

F-15

Proceeds from the sales of investments available-for-sale were $134.8 million, $292.0 million and $280.9 million for the years ended December 31, 2012, 2011 and 2010, respectively. Expenses assignable to investment income were insignificant. There were no significant investments at December 31, 2012 that did not produce income during the year.

In 2012, investment and other gains (losses) – net included realized gains of $8.0 million from the sale of debt and investments available-for-sale and sale of fixed assets, partially offset by realized losses of $0.8 million for the impairment of cost-basis investments.

In 2011, investment and other gains (losses) – net included realized gains of $10.7 million from the sale of debt and investments available-for-sale, partially offset by realized losses of $3.5 million for the impairment of cost-basis investments and $4.3 million from a loss on a third-party loan guarantee obligation.

In 2010, investment and other gains (losses) – net included realized gains of $11.8 million from the sale of debt and investments available-for-sale, $6.3 million primarily from a transfer of the rights to internally developed software, $1.2 million from the sale of interests in subsidiaries and $3.0 million from the sale of real estate.

NOTE 7

Income taxes. The income tax provision consists of the following:

	2012			2011			2010
	($000 omitted)
Current:
Federal		(430	)		(678	)		(4,305	)
State		1,674			1,444			1,188
Foreign		9,024			9,221			337
Deferred:
Federal		(35,989	)		4,450			(1,197	)
State		(527	)		397			—
Foreign		(3,391	)		(5,493	)		12,052
Income tax (benefit) expense		(29,639	)		9,341			8,075

F-16

The following reconciles federal income taxes computed at the statutory rate with income taxes as reported.

	2012			2011			2010
	($000 omitted)
Expected income tax expense (benefit) at 35% (1)		27,842			4,091			(1,577	)
Foreign tax rate differential		(2,688	)		(764	)		613
Taxable income (non-consolidated subsidiaries for tax)		768			946			832
Intercompany dividends		921			572			738
Research and development credit		—			(74	)		(1,223	)
State income tax expense (benefit) – net of taxes		1,147			884			(178	)
Tax-exempt interest		(216	)		(342	)		(561	)
Non-deductible expenses		5,861			2,624			2,261
Loss carrybacks		(1,442	)		(1,829	)		—
Adjustments to deferred tax liabilities		9,371			10,781			8,716
Dividends received deductions on investments		(634	)		(500	)		(656	)
Valuation allowance		(71,106	)		(7,163	)		(1,146	)
Other – net		537			115			256
Income tax (benefit) expense		(29,639	)		9,341			8,075
Effective income tax rates (%) (1)		(37.3	)		79.9			(179.2	)

⁽¹⁾  Calculated using income (loss) before taxes and after noncontrolling interests.

Deferred income taxes at December 31, 2012 and 2011 were as follows:

	2012			2011
	($000 omitted)
Deferred tax assets:
Accrued expenses		15,630			12,684
Allowance for uncollectible amounts		4,575			5,784
Fixed assets		4,683			7,502
Investments		—			10,390
Net operating loss carryforwards		3,926			32,122
Tax credit carryforwards		27,072			18,727
Title loss provisions		8,479			11,235
Other		484			4,195
		64,849			102,639
Valuation allowance		(12,136	)		(84,771	)
		52,713			17,868
Deferred tax liabilities:
Amortization – goodwill and other intangibles		(27,528	)		(23,701	)
Unrealized gains on investments		(7,802	)		(4,003	)
Cash surrender value of insurance policies		(2,998	)		(4,431	)
Foreign currency translation adjustments		(5,753	)		(4,999	)
Accrued expenses Investments		(2,781 (477	)  )		(6,592 —	)
Fixed assets		(345	)		(139	)
Other		(112	)		(1,452	)
		(47,796	)		(45,317	)
Net deferred income taxes		4,917			(27,449	)

F-17

Net deferred tax assets for U.S. federal tax paying components totaled approximately $7.6 million and net deferred tax liabilities for foreign tax paying components totaled approximately $2.7 million.

During 2008, the Company recorded valuation allowances against U.S. deferred tax assets, net of definite-lived deferred tax liabilities, for which realization could not be assured based on a more-likely-than-not standard. The Company retained that valuation allowance for all subsequent periods through December 31, 2011 principally due to the Company’s cumulative three-year operating loss history as of the end of each period. The Company routinely evaluates the extent to which the valuation allowance may be reversed. During 2012, the Company utilized approximately $87.2 million of U.S. federal net operating loss carry forwards (NOL). Remaining NOLs will begin to expire in 2030, if not utilized. During 2012, the Company released approximately $72.6 million of its valuation allowance, $36.6 million of which is included in the Company’s deferred tax benefit.

The Company is routinely subject to income tax examinations by U.S. federal, international and state and local tax authorities. The Company is currently under examination by the Internal Revenue Service for calendar years 2005 through 2008. The Company also is involved in routine examinations by state and local tax jurisdictions for calendar years 2007 and 2008. The Company expects no material adjustment from any examination.

NOTE 8

Goodwill and acquired intangibles. A summary of goodwill follows:

	Title		Mortgage Services		Total
	($000 omitted)
Balances at December 31, 2010		192,670		14,191		206,861
Acquisitions		—		7,631		7,631
Balances at December 31, 2011		192,670		21,822		214,492
Acquisitions		6,029		434		6,463
Balances at December 31, 2012		198,699		22,256		220,955

Amortization expense for acquired intangibles was $1.7 million, $1.5 million and $1.1 million in 2012, 2011 and 2010, respectively. Accumulated amortization of intangibles was $27.5 million and $25.8 million at December 31, 2012 and 2011, respectively. In each of the years 2013 through 2017, amortization expense is expected to be less than $1.7 million.

F-18

NOTE 9

Equity investees. Certain summarized aggregate financial information for equity investees (in which the Company typically owns 20% through 50% of the equity) follows:

	2012		2011		2010
	($000 omitted)
For the year:
Revenues		66,145		70,896		73,450
Net earnings		11,037		4,326		6,976
At December 31:
Total assets		52,500		57,972		31,767
Notes payable		23,681		23,533		1,119
Stockholders’ equity		12,758		12,524		16,027

Net premium revenues from policies issued by equity investees were approximately $6.0 million, $6.4 million and $6.9 million in 2012, 2011 and 2010, respectively. Earnings related to equity investees were $4.3 million, $1.7 million and $2.4 million in 2012, 2011 and 2010, respectively. These amounts are included in title insurance – direct operations in the consolidated statements of operations and comprehensive earnings (loss).

Goodwill related to equity investees was $9.1 million and $12.1 million at December 31, 2012 and 2011, respectively, and these balances are included in investments in investees in the consolidated balance sheets. Equity investments, including the related goodwill balances, are reviewed for impairment annually and upon the occurrence of an event indicating an impairment may have occurred.

NOTE 10

Notes payable, convertible senior notes and line of credit.

A summary of notes payable follows:

	2012		2011
	($000 omitted)
Banks – primarily secured, varying payments and rates(1)		6,031		7,863
Other than banks		450		3,859
		6,481		11,722

⁽¹⁾  Average interest rates were 3.07% and 3.49% at December 31, 2012 and 2011, respectively.

Principal payments on the notes, based upon the contractual maturities, are due in the amounts of $2.0 million in 2013, $2.0 million in 2014, $1.9 million in 2015 and $.6 million in 2016.

In October 2009, the Company entered into an agreement providing for the sale of $65.0 million aggregate principal amount of 6.0% Convertible Senior Notes due 2014 (Notes) to an initial purchaser for resale to certain qualified institutional buyers in compliance with Rule 144A under the Securities Act of 1933, as amended. The Notes will mature in 2014 unless converted into the Company’s common stock earlier and are guaranteed by certain wholly-owned domestic subsidiaries of the Company. In January 2013, the Company converted approximately $20.7 million of Notes into 1,691,074 shares of Common Stock.

F-19

The Notes are convertible into shares of the Company’s Common Stock at a conversion rate of 77.6398 shares per $1,000 principal amount of Notes (equal to a conversion price of $12.88 per share), which will be adjusted for certain antidilutive provisions such as a dividend or distribution of shares of Common Stock, split or combination of shares of Common Stock; the issuance of rights or warrants entitling all or substantially all holders of Common Stock to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Last Reported Sale Prices of Common Stock (as defined in the Indenture); the distribution of shares of any class of capital stock of the Company, evidences of its indebtedness, other assets or property of the Company or rights or warrants to acquire the Company’s capital stock or other securities to all or substantially all holders of its Common Stock; or any cash dividend or distribution made to all or substantially all holders of Common Stock during any annual fiscal period that exceeds $0.10 per share of Common Stock.

The Company incurred $3.3 million of debt issuance costs related to the Notes. The issuance costs were primarily related to discounts, commissions and offering expenses payable by the Company. The Company recorded the issuance costs in other assets and is amortizing them over the term of the Notes using the effective interest method. The amortization of the debt issuance costs was $0.6 million, $0.5 million and $0.5 million and interest expense on the Notes was $4.2 million, $4.2 million and $4.2 million in 2012, 2011, and 2010, respectively.

As of December 31, 2012, the Company also had available a $10.0 million bank line of credit commitment, which expires in June 2013, under which no borrowings were outstanding.

NOTE 11

Estimated title losses.

	2012			2011			2010
	($000 omitted)
Balances at January 1		502,611			495,849			503,475
Provisions:
Current year		100,406			94,115			97,559
Previous policy years		39,623			47,986			50,879
Total provisions		140,029			142,101			148,438
Payments:
Current year		(16,782	)		(22,404	)		(24,118	)
Previous policy years		(107,194	)		(111,915	)		(134,191	)
Total payments		(123,976	)		(134,319	)		(158,309	)
Effects of changes in foreign currency exchange rates		1,711			(1,020	)		2,245
Balances at December 31		520,375			502,611			495,849

Provisions for title losses, as a percentage of title operating revenues, were 8.1%, 9.4% and 9.6% in 2012, 2011 and 2010, respectively. The total provisions included charges (above the annual provisioning rate) of $18.2 million, $24.6 million and $13.3 million for large title claims, including defalcations, in 2012, 2011 and 2010, respectively. The charges were reduced by insurance recoveries received of $0.5 million, $2.4 million and $2.8 million in 2012, 2011 and 2010, respectively.

The years ended 2012, 2011 and 2010 included $14.9 million, $15.0 million and $26.7 million, respectively, related to maintaining a high provisioning rate for title losses due to continued elevated claims payment experience and $24.3 million, $32.8 million and $19.2 million, respectively, related to large title losses. During 2012 our overall loss experience continued to improve relative to prior year periods and was generally in line with our actuarial expectations, which allowed us to lower the overall loss provision rate effective with policies issued in the third quarter 2012. The previous policy years’ title loss provision amounts in 2010 included a reserve strengthening adjustment of $4.8 million, related to higher than expected loss payment experience for policy years 2005 through 2008.

F-20

NOTE 12

Common Stock and Class B Common Stock. Holders of Common and Class B Common Stock have the same rights except no cash dividends may be paid on Class B Common Stock. The two classes of stock vote separately when electing directors and on any amendment to the Company’s certificate of incorporation that affects the two classes unequally.

A provision of the by-laws requires an affirmative vote of at least two-thirds of the directors to elect officers or to approve any proposal that may come before the directors. This provision cannot be changed without a majority vote of each class of stock.

Holders of Class B Common Stock may, with no cumulative voting rights, elect four of nine directors if 1,050,000 or more shares of Class B Common Stock are outstanding; three directors if between 600,000 and 1,050,000 shares are outstanding; and none if less than 600,000 shares of Class B Common Stock are outstanding. Holders of Common Stock, with cumulative voting rights, elect the balance of the nine directors.

Class B Common Stock may be converted by its stockholders into Common Stock on a share-for-share basis, although the holders of Class B Common Stock have agreed among themselves not to convert their stock. The agreement may be extended or terminated by them at any time. Such conversion is mandatory on any transfer to a person who is not a lineal descendant (or spouse or trustee of such descendant) of William H. Stewart, founder of Stewart Title Guaranty Company.

At December 31, 2012 and 2011, there were 145,820 shares of Common Stock held by a subsidiary of the Company which are considered treasury shares.

F-21

NOTE 13

Changes in stockholders’ equity.

	Common and Class B Common  Stock ($1 par value)		Additional paid-in capital			Accumulated other comprehensive earnings			Retained Earnings			Treasury stock			Noncontrolling interests
	($000 omitted)
Balances at December 31, 2009		18,708		126,822			10,960			296,116			(4,330	)		13,790
Net (loss) attributable to Stewart		—		—			—			(12,582	)		—			—
Cash dividends on common stock ($0.05 per share)		—		—			—			(868	)		—			—
Stock bonuses and other		143		1,284			—			—			—			—
Purchase of remaining interest of consolidated subsidiary		—		(3,693	)		—			—			—			(506	)
Provision for Canadian taxes		—		—			(1,185	)		—			—			—
Net change in unrealized gains and losses on investments		—		—			1,448			—			—			—
Net realized gain reclassification		—		—			(1,142	)		—			—			—
Foreign currency translation		—		—			3,529			—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			7,432
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(7,122	)
Net effect of changes in ownership and other		—		—			—			—			—			(471	)
Balances at December 31, 2010		18,851		124,413			13,610			282,666			(4,330	)		13,123
Net earnings attributable to Stewart		—		—			—			2,348			—			—
Cash dividends on common stock ($0.05 per share)		—		—			—			(917	)		—			—
Stock bonuses and other		169		1,452			—			—			—			—
Settlement of wage and hour litigation through issuance of Common Stock		636		6,946			—			—			—			—
Settlement of note payable through issuance of Common Stock held in treasury		—		(365	)		—			—			1,664			—
Net change in unrealized gains and losses on investments		—		—			7,245			—			—			—
Net realized gain reclassification		—		—			(2,331	)		—			—			—
Foreign currency translation		—		—			(1,843	)		—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			6,330
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(6,142	)
Net effect of changes in ownership and other		—		—			—			—			—			(68	)
Balances at December 31, 2011		19,656		132,446			16,681			284,097			(2,666	)		13,243
Net earnings attributable to Stewart		—		—			—			109,182			—			—
Cash dividends on common stock ($0.10 per share)		—		—			—			(1,832	)		—			—
Stock bonuses and other		50		935			—			—			—			—
Exercise of stock options		50		1,044			—			—			—			—
Purchase of remaining interest of consolidated subsidiary		—		(740	)		—			—			—			—
Net change in unrealized gains and losses on investments		—		—			9,240			—			—			—
Net realized gain reclassification		—		—			(2,256	)		—			—			—
Foreign currency translation		—		—			2,919			—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			9,795
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(9,512	)
Net effect of changes in ownership and other		—		—			—			—			—			(1,960	)
Balances at December 31, 2012		19,756		133,685			26,584			391,447			(2,666	)		11,566

F-22

NOTE 14

Share-based incentives. The Company granted restricted Common Stock with a fair value of $1.3 million in October 2012. These restricted Common Stock awards vest over three years. In March 2011, the Company granted 51,000 shares of fully vested, unrestricted Common Stock with a fair value of $0.6 million, which was recorded as compensation expense. Also in March 2011, the Company granted 37,000 shares of restricted Common Stock with a fair value of $0.4 million. The restricted Common Stock awards vest 20% over five years beginning in March 2011. Compensation expense associated with restricted stock awards will be recognized over the vesting period.

In March 2010, the Company granted 51,000 shares of fully vested, unrestricted Common Stock with a fair value of $0.7 million, which was recorded as compensation expense. Also in March 2010, the Company granted 37,000 shares of restricted Common Stock with a fair value of $0.5 million. The restricted Common Stock awards vest 20% over five years beginning in March 2010. Compensation expense associated with restricted stock awards will be recognized over this vesting period.

NOTE 15

Earnings per share. The Company’s basic earnings per share is calculated by dividing net earnings (loss) by the weighted-average number of shares of Common Stock and Class B Common Stock outstanding during the reporting period.

To calculate diluted earnings per share, net income and number of shares are adjusted for the effects of any dilutive shares. Using the if-converted method, net earnings are adjusted for interest expense, net of any tax effects, applicable to the Convertible Senior Notes discussed in Note 10. The number of shares is adjusted by adding the number of dilutive shares, assuming they are issued, during the same reporting period. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s stock option plan.

For the three years ended December 31, 2012, the Company did not have any dilutive shares under the treasury stock method mentioned above since the exercise prices of the options were greater than the weighted-average market value of the shares, which excludes them from the diluted earnings calculation.

There were no calculations of diluted earnings per share for the year ended December 31, 2011 using the if-converted method, as the add back of the tax affected interest expense on the convertible debt resulted in antidilution. Additionally, since the Company reported a net loss for the year ended December 31, 2010, there was no calculation of diluted earnings per share under the if-converted method.

F-23

The calculation of the diluted earnings per share using the if-converted method is as follows:

	For the Years Ended December 31,
	2012		2011		2010
	($000 omitted)
Numerator:
Net earnings (loss) attributable to Stewart		109,182		2,348		(12,582	)
Interest expense, net of tax effects		3,139		—		—
If-converted net earnings (loss) attributable to Stewart		112,321		2,348		(12,582	)
Denominator (000):
Basic average shares outstanding		19,294		19,131		18,313
Dilutive average number of shares relating to convertible senior notes		5,047		—		—
Dilutive average number of shares relating to restricted shares grant		43		—		—
Dilutive average shares outstanding		24,384		19,131		18,313
Diluted earnings per share attributable to Stewart		4.61		0.12		(0.69	)

NOTE 16

Reinsurance. As is industry practice, the Company cedes risks to other title insurance underwriters and reinsurers on certain transactions. However, the Company remains liable if the reinsurer should fail to meet its obligations. The Company also assumes risks from other underwriters on a transactional basis as well as on certain reinsurance treaties. Payments and recoveries on reinsured losses were insignificant during each of the years ended December 31, 2012, 2011, and 2010. The total amount of premiums for assumed and ceded risks was less than 1% of consolidated title revenues in each of the last three years.

NOTE 17

Leases. Lease expense was $39.1 million, $41.4 million and $45.2 million in 2012, 2011 and 2010, respectively. The future minimum lease payments are summarized as follows (in thousands of dollars):

2013	35,232
2014	28,549
2015	23,549
2016	16,004
2017	6,961
2018 and after	5,053
	115,348

NOTE 18

Contingent liabilities and commitments. The Company routinely holds third-party funds in segregated escrow accounts pending the closing of real estate transactions resulting in a contingent liability to the Company of approximately $731.6 million at December 31, 2012. In addition, the Company is contingently liable for disbursements of escrow funds held by agencies in those cases where specific insured closing guarantees have been issued.

F-24

The Company owns a qualified intermediary in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can occur. This resulted in a contingent liability to the Company of approximately $448.9 million at December 31, 2012. As is industry practice, these escrow and Section 1031 exchanger fund accounts are not included in the consolidated balance sheets.

In the ordinary course of business, the Company guarantees the third-party indebtedness of certain of its consolidated subsidiaries. As of December 31, 2012, the maximum potential future payments on the guarantees are not more than the related notes payable recorded in the consolidated balance sheets (Note 10). The Company also guarantees the indebtedness related to lease obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related guarantees are not more than the Company’s future minimum lease payments (Note 17). In addition, as of December 31, 2012, the Company had guarantees of indebtedness owed by certain third parties related to business expansion and unused letters of credit aggregating to $4.1 million, primarily related to workers’ compensation coverage.

The Notes are guaranteed by certain wholly-owned domestic subsidiaries of the Company (Note 10).

NOTE 19

Regulatory and legal developments. Stewart Title Guaranty Company (STGC) and Stewart Title Guaranty de Mexico, S.A. de C.V. (STGM) were defendants in a lawsuit in the State District Court of Harris County, Texas, Citigroup Global Markets Realty Corp. v. Stewart Title Guaranty Company. The lawsuit was filed in 2008 and concerns 16 owners’ and 16 lenders’ title insurance policies on 16 parcels of land in Mexico issued by STGM and reinsurance agreements by STGC. Citigroup Global Markets Realty Corp. asserted claims against STGC under reinsurance of the lenders’ policies as well as extra-contractual claims under Texas law. K.R. Playa VI, S de R.L. de C.V., the owner of the parcels, asserted claims against STGC and separate claims against STGM under the owners’ policies as well as extra-contractual claims under Texas law. The State District Court dismissed the extra-contractual claims against STGC and STGM based on application of Mexican law.

The jury returned a verdict of no damages, favorable to STGC and STGM, on April 29, 2011. Judgment was entered on June 30, 2011. Both Citigroup Global Markets Realty Corp. and K.R. Playa VI, S de R.L. de C.V. subsequently filed motions for new trial and motions for judgment notwithstanding the verdict, which the State District Court denied by orders dated September 12, 2011. Citigroup Global Markets Realty Corp. and K.R. Playa VI, S de R.L. de C.V. have appealed the Judgment to the Houston Court of Appeals, and oral argument originally scheduled for February 14, 2013 has been postponed by agreement of the parties and order of the Court. The parties are awaiting notification of a new date for the oral argument. The Company does not believe that the ultimate outcome will materially affect its consolidated financial condition or results of operations.

* * *

In January 2009, an action was filed by individuals against STGC, Stewart Title of California, Inc., Cuesta Title Company and others in the Superior Court of California for the County of San Luis Obispo alleging that the plaintiffs have suffered damages relating to loans they made through Hurst Financial Corporation to an individual named Kelly Gearhart and entities controlled by Gearhart. Thereafter, several other lawsuits making similar allegations, including a lawsuit filed by several hundred individuals, were filed in San Luis Obispo Superior Court, and one such lawsuit was removed to the United States District Court for the Central District of California. The defendants vary from case to case, but Stewart Information Services Corporation, Stewart Title Company and Stewart Title Insurance Company have also each been sued in at least one of the cases. Each of the complaints alleges some combination of the following purported causes of action: breach of contract, negligence, fraud, aiding and abetting fraud, constructive fraud, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, financial elder abuse, violation of California Business and Professions Code Section 17200, negligent misrepresentation, conversion, conspiracy, alter ego and declaratory relief. The San Luis Obispo Superior Court has sustained demurrers by the Company with regard to certain causes of action and has overruled the

F-25

demurrers as to certain causes of action. The United States District Court for the Central District of California granted the Company’s motion to dismiss the First Amended Complaint as to the claim for violation of the Racketeer Influenced and Corrupt Organizations Act, with prejudice, and remanded the remainder of that case to the San Luis Obispo Superior Court. Thereafter, the San Luis Obispo Superior Court issued (i) an order assigning all the cases to a single judge, (ii) an Order Coordinating Related Cases for Pre-Trial Purposes, and (iii) a First Case Management Order for the Related Cases. Discovery is ongoing. On December 11, 2012, the Court denied the Company’s motion for summary judgment and summary adjudication seeking the dismissal of certain plaintiffs’ claims. On December 14, 2012, the Court issued a Ruling and Order Regarding Selection of Discovery Pool, Trial Group and Pre-Trial Deadlines (amended on January 8, 2013), in which it established a mechanism for the selection of eight plaintiffs for whom all discovery and dispositive motions would be completed and a trial held starting on July 29, 2013. The December 14, 2012 Ruling and Order also set forth deadlines for discovery activities, designating experts, depositions and motions for summary judgment. There may be additional discovery, motions and trials subsequent to the July 29^th trial. Although the Company cannot predict the outcome of these actions, it is vigorously defending itself against the allegations and does not believe that the ultimate outcome will materially affect its consolidated financial condition or results of operations.

* * *

In February 2008, an antitrust class action was filed in the United States District Court for the Eastern District of New York against Stewart Title Insurance Company, Monroe Title Insurance Corporation, Stewart Information Services Corporation, several other unaffiliated title insurance companies and the Title Insurance Rate Service Association, Inc. (TIRSA). The complaint alleges that the defendants violated Section 1 of the Sherman Antitrust Act by collectively filing proposed rates for title insurance in New York through TIRSA, a state-authorized and licensed rate service organization.

Complaints were subsequently filed in the United States District Courts for the Eastern and Southern Districts of New York and in the United States District Courts in Pennsylvania, New Jersey, Ohio, Florida, Massachusetts, Arkansas, California, Washington, West Virginia, Texas and Delaware. All of the complaints make similar class action allegations, except that certain of the complaints also allege violations of the Real Estate Settlement Procedures Act (RESPA) and various state antitrust and consumer protection laws. The complaints generally request treble damages in unspecified amounts, declaratory and injunctive relief and attorneys’ fees. To date, 78 such complaints have been filed, each of which names the Company and/or one or more of its affiliates as a defendant (and have been consolidated in the aforementioned states), of which seven have been voluntarily dismissed.

As of July 25, 2012, the Company has obtained dismissals of the claims in Arkansas, California, Delaware, Florida, Massachusetts, New Jersey, New York, Ohio, Pennsylvania (where the court dismissed the damages claims and granted defendants summary judgment on the injunctive claims), Texas and Washington. The Company filed a motion to dismiss in West Virginia (where all proceedings have been stayed and the docket closed). The dismissals in New York and Texas have been affirmed by the United States Courts of Appeals for the Second and Fifth Circuits, respectively, and on October 4, 2010, the United States Supreme Court denied the plaintiffs’ petitions for review of those decisions. The United States Court of Appeals for Sixth Circuit has affirmed the dismissal of the Ohio complaints, the Court of Appeals for the Third Circuit has affirmed the dismissals of the Delaware and New Jersey complaints, and the Court of Appeals for the Second Circuit has affirmed the dismissal of the RESPA claims in New York. On October 25, 2012, the plaintiffs in the Delaware action petitioned the United States Supreme Court to review the decision of the Third Circuit; and the Company filed an opposition to the petition on January 14, 2013. Although the Company cannot predict the outcome of these actions, it is vigorously defending itself against the allegations and does not believe that the outcome will materially affect its consolidated financial condition or results of operations.

* * *

F-26

Van Buren Estates, LLC, Van Buren Estates LLC II, and Van Buren Estates, LP commenced an action in the Superior Court of California, County of Riverside on or about March 26, 2010 against Stewart Title of California, Inc. and STGC alleging among other things, negligence, breach of contract, breach of the implied covenant of good faith and fair dealing, specific performance, promissory estoppel and punitive damages. Stewart Title of California, Inc. settled prior to trial. STGC filed a motion for summary judgment which was granted in part. Subsequent to the summary judgment motion, Van Buren Estates, LP was the sole remaining plaintiff. A jury trial commenced on January 30, 2012. Among the issues involved was STGC’s position that no title policy had been issued in favor of the remaining plaintiff. The trial concluded on March 5, 2012 with a jury verdict in favor of the plaintiff on the issues of liability and damages in the aggregate amount of approximately $6.5 million. The parties had stipulated at trial that the cost to cure the title defect at issue in the case was $0.4 million, less than the amount previously paid by Stewart Title of California, Inc. Judgment was entered on April 10, 2012. STGC filed motions for new trial and for judgment notwithstanding the verdict. The court granted the motion for judgment notwithstanding the verdict in part and reduced the judgment to approximately $4.2 million. An amended judgment was entered on July 10, 2012. STGC filed its notice of appeal of the $4.2 million amended judgment on July 19, 2012. During the course of the appeal, STGC and the Van Buren entities agreed to settle the case. Although they have approved of the settlement between STGC and the Van Buren entities, two secured creditors of the Van Buren entities are disputing between themselves entitlement to the settlement proceeds. STGC will disburse the settlement proceeds as directed by the court and file a dismissal with prejudice, thereby finally resolving this matter.

* * *

The Company is also subject to other claims and lawsuits arising in the ordinary course of its business, most of which involve disputed policy claims. In some of these lawsuits, the plaintiff seeks exemplary or treble damages in excess of policy limits. The Company does not expect that any of these proceedings will have a material adverse effect on its consolidated financial condition or results of operations. Along with the other major title insurance companies, the Company is party to a number of class action lawsuits concerning the title insurance industry. The Company believes that it has adequate reserves for the various litigation matters and contingencies discussed above and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations.

The Company is subject to administrative actions and litigation relating to the basis on which premium taxes are paid in certain states. Additionally, the Company has received various other inquiries from governmental regulators concerning practices in the insurance industry. Many of these practices do not concern title insurance. The Company believes that it has adequately reserved for these matters and does not anticipate that the outcome of these inquiries will materially affect its consolidated financial condition or results of operations.

The Company is also subject to various other administrative actions and inquiries into its business conduct in certain of the states in which it operates. While the Company cannot predict the outcome of the various regulatory and administrative matters, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of any of these matters will materially affect its consolidated financial condition or results of operations.

NOTE 20

Segment information. Subsequent to the appointment of a new Chief Executive Officer, the Company reorganized the senior management team and updated its long-term business strategy in fiscal 2012. As a result of these events, we have revised our reportable operating segments to align with the current management of the business. The segment information for prior periods presented has been restated. The Company’s three reportable operating segments are title insurance and related services (title), mortgage services and corporate.

The title segment provides services needed to transfer the title in a real estate transaction. These services include searching, examining, closing and insuring the condition of the title to real property. The title segment also includes home and personal insurance services and Internal Revenue Code Section 1031 tax-deferred exchanges.

F-27

The mortgage services segment includes a diverse group of products and services serving multiple markets. Mortgage services provides loan origination and servicing support; loan review services; loss mitigation; REO asset management; and technology to support the real estate process. The single largest customer of the mortgage services segment accounted for 71.1%, 62.9%, and 50.0% of mortgage services revenues in 2012, 2011 and 2010, respectively.

The corporate segment consists of the expenses relating to the parent holding company and certain other unallocated corporate overhead expenses.

The Company does not provide asset information by reportable operating segment as it does not routinely evaluate the asset position by segment.

	Title		Mortgage Services		Corporate			Total
	($000 omitted)
2012:
Revenues		1,713,082		178,015		19,315			1,910,412
Intersegment revenues		—		8,158		3,836			11,994
Depreciation and amortization		6,143		4,107		7,533			17,783
Earnings (loss) before taxes and noncontrolling interests		147,628		48,633		(106,923	)		89,338
2011:
Revenues		1,494,557		123,601		16,748			1,634,906
Intersegment revenues		—		15,675		3,025			18,700
Depreciation and amortization		7,691		4,774		7,077			19,542
Earnings (loss) before taxes and noncontrolling interests		89,438		33,386		(104,805	)		18,019
2010:
Revenues		1,523,742		114,328		34,320			1,672,390
Intersegment revenues		—		15,922		3,244			19,166
Depreciation and amortization		9,682		4,250		7,490			21,422
Earnings (loss) before taxes and noncontrolling interests		82,062		22,059		(101,196	)		2,925

Revenues for the years ended December 31 in the United States and all international operations follow:

	2012		2011		2010
	($000 omitted)
United States		1,791,316		1,515,378		1,564,057
International		119,096		119,528		108,333
		1,910,412		1,634,906		1,672,390

F-28

NOTE 21

Quarterly financial information (unaudited).

	Mar 31			June 30			Sept 30			Dec 31		Total
	($000 omitted, except per share)
Revenues:
2012		384,987			483,712			520,741			520,972		1,910,412
2011		366,417			404,883			418,529			445,077		1,634,906
Net earnings (loss) attributable to Stewart:
2012		(12,157	)		24,911			34,668			61,760		109,182
2011		(10,293	)		5,940			4,542			2,159		2,348
Diluted earnings (loss) per share attributable to Stewart(1):
2012		(0.63	)		1.05			1.45			2.56		4.61
2011		(0.55	)		0.28	(2)		0.22	(2)		0.11		0.12

⁽¹⁾  Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

⁽²⁾  The diluted earnings per share attributable to Stewart was primarily due to dilutive effects of the Convertible Senior Notes (Note 10) using the if-converted method (Note 15).

F-29

SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted)
Revenues
Investment income, including $0, $0 and $22 from affiliates		579			74			86
Other (losses) gains		(3,358	)		(3,770	)		3,109
Other income		380			235			68
		(2,399	)		(3,461	)		3,263
Expenses
Employee costs		5,192			2,168			1,388
Other operating expenses, including $305, $177 and $144 to affiliates		1,674			451			5,796
Depreciation and amortization		802			893			862
Interest		4,615			4,639			4,658
		12,283			8,151			12,704
Loss before tax expense (benefit) and loss from subsidiaries		(14,682	)		(11,612	)		(9,441	)
Income tax expense (benefit)		34			79			(277	)
Less (earnings) loss from subsidiaries		(123,898	)		(14,039	)		3,418
Net income (loss)		109,182			2,348			(12,582	)
Retained earnings at beginning of year		284,097			282,666			296,116
Cash dividends on Common Stock ($0.10 per share in 2012 and $0.05 per share in 2011 and 2010)		(1,832	)		(917	)		(868	)
Retained earnings at end of year		391,447			284,097			282,666

See accompanying note to financial statement information.

S-1

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEETS

	As of December 31,
	2012			2011
	($000 omitted)
Assets
Cash and cash equivalents		10,725			4,170
Receivables:
Notes		14			15
Other, including $3 and $191 from affiliates		43			476
Allowance for uncollectible amounts		(14	)		(15	)
		43			476
Property and equipment, at cost:
Buildings		—			2,287
Furniture and equipment		3,109			3,209
Accumulated depreciation		(2,347	)		(2,429	)
		762			3,067
Title plant, at cost		48			48
Investments in subsidiaries, on an equity method basis		626,994			504,897
Goodwill		8,470			8,470
Other assets		16,797			17,136
		663,839			538,264
Liabilities
Convertible senior notes		64,687			64,513
Accounts payable and accrued liabilities, including $3 and $104 from affiliates		30,346			23,537
		95,033			88,050
Contingent liabilities and commitments
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 18,705,914 and 18,605,993; outstanding 18,353,753 and 18,253,832		18,706			18,606
Class B Common Stock– $1 par, authorized 1,500,000; issued and outstanding 1,050,012		1,050			1,050
Additional paid-in capital		133,685			132,446
Retained earnings(1)		391,447			284,097
Accumulated other comprehensive earnings:
Foreign currency translation adjustments		12,169			9,250
Unrealized investment gains		14,415			7,431
Treasury stock – 352,161 and 352,161 common shares, at cost		(2,666	)		(2,666	)
Total stockholders’ equity		568,806			450,214
		663,839			538,264

⁽¹⁾  Includes undistributed earnings of subsidiaries of $466,442 in 2012 and $344,376 in 2011.

See accompanying note to financial statement information.

S-2

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted)
Reconciliation of net earnings (loss) to cash provided (used) by operating activities:
Net earnings (loss)		109,182			2,348			(12,582	)
Add (deduct):
Depreciation and amortization		802			893			862
Provision for bad debt		(1	)		(2	)		(96	)
Other losses (gains)		3,358			3,770			(3,109	)
Decrease (increase) in receivables – net		433			(218	)		1,173
Increase in other assets – net		(229	)		(1,171	)		(130	)
Increase (decrease) in payables and accrued liabilities – net		16,747			3,941			(1,007	)
(Earnings) loss from subsidiaries		(123,898	)		(14,039	)		3,418
Other – net		1,899			3,213			2,735
Cash provided (used) by operating activities		8,293			(1,265	)		(8,736	)
Investing activities:
Cash paid for loan guarantee obligation		—			(4,318	)		—
Proceeds from the sale of (purchases of) property and equipment – net		1,593			3,070			(3,016	)
Collections on notes receivables		1			9			12,842
Proceeds from the sale of land and buildings		—			—			6,323
Contributions to subsidiaries		(1,500	)		—			—
Cash provided (used) by investing activities		94			(1,239	)		16,149
Financing activities:
Dividends paid		(1,832	)		(917	)		(868	)
Cash (used) provided by financing activities		(1,832	)		(917	)		(868	)
Increase (decrease) in cash and cash equivalents		6,555			(3,421	)		6,545
Cash and cash equivalents at beginning of year		4,170			7,591			1,046
Cash and cash equivalents at end of year		10,725			4,170			7,591
Supplemental information:
Income taxes paid		149			82			—
Interest paid		—			3,900			3,900

See accompanying note to financial statement information.

S-3

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

NOTE TO FINANCIAL STATEMENT INFORMATION

The Parent Company operates as a holding company, transacting substantially all of its business through its subsidiaries. Its consolidated financial statements are included in Part II, Item 8 of Form 10-K. The Parent Company financial statements should be read in conjunction with the aforementioned consolidated financial statements and notes thereto and financial statement schedules.

Certain prior year amounts in the Parent Company financial statements have been reclassified for comparative purposes. Net earnings and stockholders’ equity, as previously reported, were not affected.

Interest of $3.9 million on the convertible senior notes was paid by a subsidiary in 2012. In addition, a portion of the senior convertible notes was converted subsequent to December 31, 2012 as discussed in Note 10 to the consolidated financial statements.

S-4

SCHEDULE II

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2012

Col. A	Col. B		Col. C Additions					Col. D Deductions				Col. E
Description	Balance at beginning of period		Charged to costs and expenses			Charged to other accounts (describe)		(Describe)				Balance At end of period
	($000 omitted)
Stewart Information Services Corporation and subsidiaries:
Year ended December 31, 2010:
Estimated title losses		503,475		148,438			—		156,064	(A	)		495,849
Valuation allowance for deferred tax assets		93,080		(1,146	)		—		—				91,934
Allowance for uncollectible amounts		20,501		4,186			—		5,249	(B	)		19,438
Year ended December 31, 2011:
Estimated title losses		495,849		142,101			—		135,339	(A	)		502,611
Valuation allowance for deferred tax assets		91,934		(7,163	)		—		—				84,771
Allowance for uncollectible amounts		19,438		1,318			—		4,700	(B	)		16,056
Year ended December 31, 2012:
Estimated title losses		502,611		140,029			—		122,265	(A	)		520,375
Valuation allowance for deferred tax assets		84,771		(72,635	)		—		—				12,136
Allowance for uncollectible amounts		16,056		3,201			—		6,434	(B	)		12,823
Stewart Information Services Corporation – Parent Company:
Year ended December 31, 2010:
Allowance for uncollectible amounts		635		(96	)		—		462	(B	)		77
Year ended December 31, 2011:
Allowance for uncollectible amounts		77		—			—		62	(B	)		15
Year ended December 31, 2012:
Allowance for uncollectible amounts		15		1			—		2	(B	)		14

(A) Represents primarily payments of policy and escrow losses and loss adjustment expenses.

(B) Represents uncollectible accounts written off.

S-5

INDEX TO EXHIBITS

Exhibit
3.1	—	Amended and Restated Certificate of Incorporation of the Registrant, dated May 1, 2009 (incorporated by reference in this report from Exhibit 3.1 of the Current Report on Form 8-K filed May 5, 2009)
3.2	—	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant, dated April 30, 2010 (incorporated by reference in this report from Exhibit 3.2 of the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010)
3.3	—	Amended and Restated By-Laws of the Registrant, as of January 17, 2012 (incorporated by reference in this report from Exhibit 3.1 of the Current Report on Form 8-K filed January 20, 2012)
4.1	—	Rights of Common and Class B Common Stockholders (incorporated by reference to Exhibits 3.1 and 3.2 hereto)
4.2	—	Indenture related to 6.0% Convertible Senior Notes due 2014, dated as of October 15, 2009, by and between the Registrant, the Guarantors party thereto, and Wells Fargo Bank N.A., as trustee (incorporated by reference from Exhibit 4.1 to the Current Report on Form 8-K filed October 15, 2009)
4.3	—	Form of 6.00% Convertible Senior Note due 2014 (incorporated by reference to Exhibit 4.2 hereto)
10.1 †	—	Deferred Compensation Agreements dated March 10, 1986, amended July 24, 1990 and October 30, 1992, between the Registrant and certain executive officers (incorporated by reference in this report from Exhibit 10.2 of the Annual Report on Form 10-K for the year ended December 31, 1997)
10.2 †	—	Stewart Information Services Corporation 1999 Stock Option Plan (incorporated by reference in this report from Exhibit 10.3 of the Annual Report on Form 10-K for the year ended December 31, 1999)
10.3 †	—	Stewart Information Services Corporation 2002 Stock Option Plan for Region Managers (incorporated by reference in this report from Exhibit 10.4 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2002)
10.4 †	—	Stewart Information Services Corporation 2005 Long-Term Incentive Plan, as amended and restated May 1, 2009 (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed May 5, 2009)
10.5 †	—	Stewart Information Services Corporation 2008 Strategic Incentive Pool Plan (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed May 14, 2008)
10.6 †	—	Employment Agreement entered into as of October 1, 2012 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Matthew W. Morris (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed October 5, 2012)

Exhibit
10.7 †	—	Employment Agreement entered into as of October 1, 2012 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Joseph Allen Berryman (incorporated by reference in this report from Exhibit 10.2 of the Current Report on Form 8-K filed October 5, 2012)
10.8 †*	—	Employment Agreement entered into as of October 1, 2012 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Steven M. Lessack
10.9 †*	—	Employment Agreement entered into as of October 12, 2012 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Jason R. Nadeau
10.10 †*	—	Employment Agreement entered into as of October 16, 2012 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Glenn H. Clements
10.11 †*	—	Employment Agreement entered into as of February 21, 2013 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Stewart Morris, Jr.
10.12 †*	—	Employment Agreement entered into as of February 21, 2013 and effective as of January 1, 2012, by and between Stewart Information Services Corporation and Malcolm S. Morris
14.1	—	Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal Accounting Officer (incorporated by reference in this report from Exhibit 14.1 of the Annual Report on Form 10-K for the year ended December 31, 2004)
21.1 *	—	Subsidiaries of the Registrant
23.1 *	—	Consent of KPMG LLP, including consent to incorporation by reference of their reports into previously filed Securities Act registration statements
31.1 *	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *	—	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 *	—	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 *	—	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS **	—	XBRL Instance Document
101.SCH **	—	XBRL Taxonomy Extension Schema Document
101.CAL **	—	XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit
101.DEF **	—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **	—	XBRL Taxonomy Extension Label Linkbase Document
101.PRE **	—	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

† Management contract or compensatory plan

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.

Exhibits have been omitted. A complete copy of this Annual Report on Form 10-K,

including these exhibits, can be viewed at www.stewart.com.

EX-10.8

EXHIBIT 10.8

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of January 1, 2012 (the “Effective Date”), by and between Stewart Information Services Corp. (the “Company”), and Steven M. Lessack (the “Executive”).

The parties agree as follows:

1. Employment, Duties and Acceptance.

1.1 Term of Employment by the Company. The Company hereby agrees to employ the Executive for a term commencing on the Effective Date and expiring on the third anniversary of such date (such date, or later date to which this Agreement is extended in accordance with the terms hereof, the “Scheduled Termination Date”), unless earlier terminated as provided in Section 4 or unless extended as provided herein (the “Term”). The Term shall be automatically extended commencing on the Scheduled Termination Date and on each Scheduled Termination Date thereafter (each such date being a “Renewal Date”), so as to terminate one (1) year from such Renewal Date, unless and until at least ninety (90) days prior to a Renewal Date either party hereto gives written notice to the other that the Term should not be further extended after the next Renewal Date (a “Notice of Non-Renewal”), in which event the Scheduled Termination Date shall be the Renewal Date next following receipt of the Notice of Non-Renewal.

1.2 Duties. During the Term, the Executive shall serve as Group President, International Operations of the Company, with such duties and responsibilities as are commensurate with such position and such other functions consistent with the foregoing as the Chief Executive Officer (“CEO”) may assign, in CEO’s discretion, from time to time. The Executive shall report to the Chief Executive Officer and also serve in those offices and directorships of affiliates of the Company to which the Executive may from time to time be appointed or elected. During the Term, the Executive shall devote all reasonable efforts and all of the Executive’s business time and services to the Company, subject to the direction of the CEO.

1.2.1 Executive shall not directly or indirectly render any services of a business, commercial, or professional nature to any other person, firm, corporation, or organization, whether for compensation or otherwise, without the prior written consent of the CEO. However, Executive shall have the right to engage in such activities as may be appropriate in order to manage his personal investments so long as such activities do not materially interfere or conflict with the performance of his duties to the Company hereunder. The conduct of such activity shall not be deemed to materially interfere or conflict with Executive’s performance of his duties until Executive has been notified in writing thereof and given a reasonable period in which to cure the same.

1.2.2 Fiduciary Duty. Executive acknowledges and agrees that he owes a fiduciary duty to the Company and further agrees to make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not act for his own benefit concerning the subject matter of his fiduciary relationship.

1.2.3 Compliance. Executive agrees that he will not take any action in violation of United States laws or other laws applicable to Executive’s employment, including, but not limited to the Securities Exchange Act of 1934.

1.3 Acceptance of Employment by the Executive. The Executive hereby accepts such employment and shall render the services and perform the duties described above.

2. Compensation and Other Benefits.

2.1 Annual Salary. The Company shall pay to the Executive an annual salary at a rate of not less than Four Hundred Thousand Dollars ($400,000) per year (the “Annual Salary”), subject to increase at the sole discretion of the Board of Directors of Stewart Information Services Corporation (the “Board of Directors” or the “Board”). The Annual Salary shall be payable in accordance with the payroll policies of the Company as from time to time in effect, but in no event less frequently than twice each month, less such deductions as shall be required to be withheld by applicable law and regulations and less any Executive voluntary deductions.

2.2 Incentive Payments.

2.2.1 Short Term Incentives. The Executive shall be eligible to receive an annual short term incentive cash payment, the incentive plan to be determined by the Board in its sole discretion. The terms of the short term incentive plan (“STI Plan”) are set out in Exhibit A hereto, which is incorporated herein for all purposes. The terms and conditions of the STI Plan are subject to change from year to year. The payment made pursuant to this Section 2.2.1 shall be paid to the Executive in the succeeding calendar year for which it is earned and shall be paid by March 31 of such year. The Executive must be actually employed on the date that any short term incentive plan payment is made in order to be eligible and entitled to any such short term incentive plan payment. In addition, beginning effective January 1, 2013, provided that the Executive is otherwise eligible to participate in the Company STI plan, the Executive, upon his written request, shall be entitled to receive an advance payment against the applicable STI Plan, but in no case to exceed $25,000 per calendar quarter. Such requested advances shall be available to the Executive only during the months of April, July, October, for the then current calendar year STI Plan, and in January for the preceding STI Plan year. Such requested advances shall be provided to the Executive only if the quarterly STI Plan report projects that such STI Plan payment to the Executive will exceed such draw when paid in the succeeding STI calendar year for which it is earned. Any such advances requested by the Executive shall be deducted from any final STI Plan payment obligation due to the Executive; and, in the event that the requested advances exceed the STI actual bonus due to the Executive in any given calendar year , the Executive shall fully reimburse the Company the actual difference between the actual STI Plan payment to the Executive and the requested advances within 90 days following the final STI calculation for the applicable calendar year. In the event of the Executive’s termination of employment by reason of Disability, Death, Voluntary Retirement, Good Reason, or for Cause, the Executive shall promptly reimburse the Company for any actual difference between the STI Plan target and the requested advances, if such requested advances exceed any final STI Plan payment obligation due to the Executive.

2.2.2 Long Term Incentives. The Executive shall be eligible to participate in the Company’s Long Term Incentive Plan (“LTI Plan”), as such plan shall be in effect and amended and/or superseded from time to time. The Company reserves the right to terminate the LTI Plan in its sole discretion in accordance with the terms of the LTI Plan, and the terms and conditions of the Plan are subject to change from year to year. The terms of the LTI Plan are set out in Exhibit B hereto, which is incorporated herein for all purposes. The Executive must be actually employed on the date that any long term incentive plan payment is made in order to be eligible and entitled to any such long term incentive plan payment.

2.2.3 Special Vesting Terms for Stock Grants and Awards. All unvested stock grants and other awards, including, but not limited to, restricted performance units and restricted stock awards, granted pursuant to any specific terms and metrics in the employment agreement, including, but not limited to, the LTI Plan referred to in Section 2.2.2 above or the Stewart Information Services Corp. Amended and Restated 2005 Long Term Incentive Plan (the “Incentive Plan”) (collectively, “Stock Grants”) shall vest on a pro-rata basis, only in accordance with the terms and methods provided below in Sections 2.2.3.1. through 2.2.3.4 (i) in the event of the Company’s termination of the Executive’s employment without Cause during the Term, (ii) in the event of the Executive’s resignation during the Term for Good Reason (as hereinafter defined) pursuant to Section 4.7, (iii) in the event of termination of the Executive’s employment due to the Executive’s Death or Disability (as hereinafter defined); or, (iv) in the event of the Executive’s Voluntary Retirement during the Term.

2.2.3.1 The pro-rata vesting of the Incentive Plan and Stock Grants as specified in Section 2.2.3 above shall be based on the number of full, completed months worked by the participating Executive during the applicable performance-based incentive period (as set forth in Exhibit B), but only if the Executive was actively employed for at least twenty-five percent (25%) of the applicable performance-based incentive period. Performance-based incentive awards and Stock Grants shall be based on actual results compared to the target objectives at the end of the incentive period, as determined by the Company, and shall be vested to the eligible Executive as described in the preceding sentence, if the Executive satisfies the requirement of active employment for at least twenty-five percent (25%) of the completed months of the performance-based incentive period. Any pro-rata vesting or release of restrictions on long-term incentive awards or Stock Grants shall be effective only following expiration of the revocation period applicable to the Release of Claims, if required by the Company, and provided there has been no revocation or attempted revocation thereof (“Release Effective Date”) and following the end of the applicable performance-based incentive period and certification of results by the Company.

2.2.3.2 If the Executive should terminate employment during the Term of this Agreement for any reasons other than those specified in this Section 2.2.3 above or due to Change of Control (defined hereafter), or if the Executive shall violate the confidentiality, non-competition, conflicts of interest, or non-solicitation provisions of Section 3 of this Agreement, the special pro-rata terms specified in this Section, as well as the terms specified in Section 2.2.3.5, shall not apply to the Executive, and the Executive shall forfeit any unvested awards, Stock Grants and Incentive Plan benefits accumulated by the Executive as of the time of the breach of this Agreement or of termination from employment.

2.2.3.3 Calculation of Pro-Rata Special Vesting. The calculation of pro-rata Special Vesting of awards and Stock Grants shall be determined as a percent of the total possible vested award that would have been vested to the Executive had the Executive remained employed during the entire performance-based incentive period, measured in whole months, through termination of employment, multiplied by a fraction whose numerator is the percentage of the number of months of completed employment during the entire performance-based incentive period plus 100% and whose denominator is 2. Any such pro-rata vesting shall occur at the same time and in the same manner as the vesting of active executives participating in the incentive program in and shall, in no event, become vested or delivered prior to such time.

2.2.3.4. Hypothetical Example. For the purpose of the avoidance of any confusion, by way of hypothetical example only: if an executive shall terminate employment during the twenty-fourth (24^th) month of a thirty-six (36) month performance-based incentive program for the permitted reasons specified in Section 2.2.3 above and is otherwise entitled to participate in the performance-based incentive program, and if the performance-based incentives are achieved and certified by the Company in full satisfaction of the incentive targets, the executive shall receive (81.94%) pro-rata vesting of the applicable awards and Stock Grants at the designated time. The formula: % of the number of complete months of employment (23 ÷ 36 = 63.88%) + 100% = 163.88% ÷ 2 = 81.94% pro-rata award.

2.2.3.5. Vesting Upon Change in Control. In the event of a Change in Control (as defined hereafter), Executive’s unvested Stock Grant award shall immediately and fully vest at target performance level. In the event that Executive is subject to the pro-rata Special Vesting provisions above at the time of the occurrence of a Change in Control, by reason of the Executive’s resignation during the Term for Good Reason (as hereinafter defined), Death or Disability (as hereinafter defined); or the Executive’s Voluntary Retirement during the Term, prior to the Change of Control event, the unvested portion of the Executive’s Stock Grant award shall immediately and fully vest notwithstanding the pro-rata Special Vesting provisions.

2.2.4 Upon the Executive’s termination without Cause, resignation for Good Reason, Voluntary Retirement or due to the Executive’s death or Disability, any vested Stock Grants held by the Executive on the Date of Termination or that vest thereafter may be exercised at any time until the earlier of (A) the third anniversary of the Date of Termination and (B) the expiration date of the Stock Grants.

2.2.5 Notwithstanding the foregoing provisions of this Section 2.2, if the Executive dies after the Executive’s employment by the Company is terminated but while any of the Stock Grants applicable to the Executive remain exercisable as set forth above, such Stock Grants may be exercised at any time until the later of (A) the earlier of (1) the first anniversary of the date of such death and (2) the expiration date of such Stock Grants and (B) the last date on which such Stock Grants would have been exercisable, absent this Section 2.2.5.

2.2.6 Notwithstanding the foregoing provisions of this Section 2.2, upon the termination of the Executive’s employment with the Company for any reason, other than termination for Cause by the Company, during the 24-month period following any Change of Control Effective Date, any Stock Grants held by the Executive as of the Change of Control Effective Date that remain outstanding as of the Date of Termination may thereafter be exercised, until the later of (A) the last date on which such Stock Grants would be exercisable in the absence of this Section 2.2 and (B) the earlier of (1) the third anniversary of the Change of Control Effective Date and (2) the expiration date of such Stock Grants.

2.2.7 Notwithstanding anything in this Agreement to the contrary, express or implied, the provisions of this Agreement are in addition to and not in limitation of the Executive’s rights under the Incentive Plan and any other plan, program, policy or practice provided by the Company or any affiliate and for which the Executive may qualify. Where a conflict between the Incentive Plan and this Agreement may arise, the terms more favorable to the Executive shall control.

2.2.8 In addition to the provisions specified above, Executive shall assume the obligations provided in Exhibit “D” attached hereto.

2.2.9 Executive shall not be entitled to overtime pay should the responsibilities of Executive’s position require, from time-to-time, that work exceeds the customary work week.

2.3 Prerequisites. Executive shall be entitled to receive the prerequisites provided for on Exhibit “C” and “D” hereto.

2.4 Vacation Policy. The Executive shall be entitled to four (4) weeks of paid vacation during each calendar year of the Term which shall accrue in accordance with Company policy.

2.5 Participation in Employee Benefit Plans. The Company agrees to permit the Executive during the Term to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other so called “fringe benefits” of the Company (collectively, “Benefits”). The Executive shall cooperate with the Company in applying for such coverage, including submitting to a physical exam and providing all relevant health and personal data. The Company shall not make any changes in any plans or arrangements provided pursuant to this Section 2.5 which would adversely affect the Executive’s right to benefits thereunder unless such changes occur pursuant to a program applicable to all executives of the Company and which does not result in a proportionally greater reduction in the rights and benefits to Executive as compared to any other executives of the Company.

2.6 General Business Expenses. The Company shall pay or reimburse the Executive for all business expenses reasonably and necessarily incurred by the Executive during the Term in the performance of the Executive’s services under this Agreement. Such payment shall be made upon presentation of such documentation as the Company customarily requires of its executives prior to making such payments or reimbursements.

2.7 Other Benefits. Executive shall be entitled to participate in or receive benefits under any compensatory employee benefit plan or other arrangement made available by the Company now or in the future (“Other Benefits”) to its senior executive officers and key

management employees, subject to and on a basis consistent with the terms, conditions, and overall administration of such plan or arrangement. Nothing paid to Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary payable to Executive pursuant to Section 2.1 of this Agreement. The Company shall not make any changes in any employee benefit plans or other arrangements in effect on the date hereof or subsequently in effect in which Executive currently or in the future participates (including, without limitation, each pension and retirement plan, supplemental pension and retirement plan, savings and profit sharing plan, stock or unit ownership plan, stock or unit purchase plan, stock or unit option plan, life insurance plan, medical insurance plan, disability plan, dental plan, health and accident plan, or any other similar plan or arrangement) that would adversely affect Executive’s rights or benefits there under, unless such change occurs pursuant to a program applicable to substantially all executives of the Company and does not result in a proportionately greater reduction in the rights of or benefits to Executive as compared with any other executive of the Company.

3. Confidentiality and Company Property; Non-Competition and Non-Solicitation.

3.1 Covenants of Executive. The Executive acknowledges that (i) the Company is currently engaged in the business of providing real estate support services, including without limitation title insurance, real estate information services, escrow services and related transaction services (the “Company Business”); (ii) the Company will give the Executive access to trade secrets of and Confidential Information (defined in Section 3.2.1 below) concerning the Company in connection with the Executive’s work for the Company; and (iii) the agreements and covenants contained in this Agreement are essential to protect the business and goodwill of the Company.

3.2 The covenants of the Executive contained in this Section will be construed as independent of any other provision in this Agreement; and the existence of any claim or cause of action by the Executive against the Company will not constitute a defense to the enforcement by the Company of said covenants. The Executive has been advised to consult with counsel in order to be informed in all respects concerning the reasonableness and propriety of this Section and its provisions with the specific regard to the nature of the business conducted by the Company, and the Executive acknowledges that this Section and its provisions are reasonable in all respects.

3.2.1 Confidential Information. The Executive acknowledges that the Company has a legitimate and continuing proprietary interest in the protection of its Confidential Information (and that of its affiliates) and that it has invested substantial sums and will continue to invest substantial sums to develop, maintain and protect Confidential Information. The Company agrees to provide the Executive access to Confidential Information in conjunction with the Executive’s duties, including, without limitation, information of a technical and business nature regarding the past, current or anticipated business of the Company and its affiliates that may encompass financial information, financial figures, trade secrets, customer lists, details of client or consultant contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans, employee information, organizational charts, new personnel acquisition plans, technical processes, inventions and research projects, ideas, discoveries, inventions, improvements, trade secrets,

writings and other works of authorship (collectively, “Confidential Information”. In exchange, as an independent covenant, the Executive agrees not to make any unauthorized use, publication, or disclosure, during or subsequent to the Executive’s employment by the Company, of any Confidential Information generated or acquired by the Executive during the course of the Executive’s employment, except to the extent that the disclosure of such Confidential Information is necessary to fulfill the Executive’s responsibilities as an employee of the Company. The Executive understands that Confidential Information includes information not generally known by or available to the public about or belonging to the Company, its divisions and affiliates, or belonging to other companies to whom the Company, its divisions and affiliates, may have an obligation to maintain information in confidence, and that authorization for public disclosure may only be obtained through the Company’s written consent.

3.2.2 Property of the Company. All memoranda, notes, lists, records, and other documents or papers (and all copies thereof) relating to the Company, including such items stored in computer memories, microfiche or by any other means, made or compiled by or on behalf of the Executive after the date hereof, or made available to the Executive after the date hereof relating to the Company, its affiliates or any entity which may hereafter become an affiliate thereof, shall be the property of the Company, and shall be delivered to the Company promptly upon the termination of the Executive’s employment with the Company or at any other time upon request; provided, however, that the Executive’s address books, diaries, chronological correspondence files and rolodex files (including digital formats) shall be deemed to be property of the Executive.

3.2.3 Original Material. The Executive agrees that any inventions, discoveries, improvements, ideas, concepts or original works of authorship relating directly to the Company Business, including without limitation information of a technical or business nature such as ideas, discoveries, inventions, trade secrets, know-how, writings and other works of authorship, computer programs, financial figures, marketing plans, customer lists and data, business plans or methods and the like, which relate in any manner to the actual or anticipated business or the actual or anticipated areas of business of the Company and its divisions and affiliates, whether or not protectable by patent or copyright, that have been originated, developed or reduced to practice by the Executive alone or jointly with others during the Executive’s employment with the Company shall be the property of and belong exclusively to the Company. The Executive shall promptly and fully disclose to the Company the origination or development by the Executive of any such material and shall provide the Company with any information that it may reasonably request about such material. Either during or subsequent to the Executive’s employment, upon the request and at the expense of the Company or its nominee, and for no remuneration in addition to that due the Executive pursuant to the Executive’s employment by the Company, but at no expense to the Executive, the Executive agrees to execute, acknowledge, and deliver to the Company or its attorneys any and all instruments which, in the judgment of the Company or its attorneys, may be necessary or desirable to secure or maintain for the benefit of the Company adequate patent, copyright, and other property rights in the United States and foreign countries with respect to any such inventions, improvements, ideas, concepts, or original works of authorship embraced within this Agreement.

3.2.4 Non-Competition During Employment. Executive agrees during his employment under this Agreement, he will not compete with the Company by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which the Company provides, and that he will not work for, in any capacity, assist, or became affiliated with as an owner, partner, etc., either directly or indirectly, any individual or business which offer or performs services, or offers or provides products substantially similar to the services and products provided by Company.

3.2.5 Conflicts of Interest. Executive agrees that during his employment under this Agreement, he will not engage, either directly or indirectly, in any activity (a “Conflict of Interest”) which might adversely affect the Company or its affiliates, including ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or accepting any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that Executive will promptly inform the Chief Executive Officer of the Company as to each offer received by Executive to engage in any such activity. Executive further agrees to disclose to the Company any other facts of which Executive becomes aware which might in Executive’s good faith judgment reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.

3.3 Non-Competition. In consideration of the Company’s promise to provide the Executive with the confidential and trade secret information of the Company, the Executive hereby agrees that, during the Term and for a period of twelve (12) months thereafter, (the “Restricted Period”) the Executive shall not in the United States directly or indirectly, (i) engage in as principal, consultant, or employee in any segment of a business of a company, partnership, firm or other entity that is directly competitive with the Company or (ii) hold an interest (except as a holder of less than 5% interest in a publicly traded firm or mutual funds) in a company, partnership, firm or other entity that directly or indirectly engages in the business of the Company.

3.3.1 Non-Solicitation of Customers. The Executive also agrees to refrain during the Restricted Period from, directly or indirectly, diverting, taking, soliciting and/or accepting on the Executive’s own behalf or on the behalf of another person, the business of any past or present customer of the Company, its divisions and/or affiliates, or any identified prospective or potential customer of the Company, its divisions and/or affiliates, whose identity became known to the Executive through the Executive’s employment by the Company.

3.3.2 Non-Solicitation of Employees of the Company and its Affiliates. The Executive agrees to refrain during the Restricted Period from, directly or indirectly, inducing or attempting to influence any employee of the Company, its divisions and/or affiliates or any person who was employed in the twelve (12) months preceding the Termination Date to terminate their employment with the Company to become employed or engaged in work for another employer or entity.

3.4 Rights and Remedies Upon Breach. If the Executive breaches, any of the provisions contained in Section 3 of this Agreement (the “Restrictive Covenants”), the Company shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

3.4.1 Specific Performance. The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

3.4.2 Accounting. The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any action constituting a breach of the Restrictive Covenants.

3.4.3 Tolling of Restrictive Periods. If the Executive violates any of the restrictions contained in Section 3, the restrictive periods shall be suspended and will not run in favor of the Executive until such time as the Executive cures the violation to the satisfaction of Company.

3.4.4 Remedies For Violation of Non-Competition or Confidentiality Provisions. Without limiting the right of the Company to pursue all other legal and equitable rights available to it for violation of any of the obligations and covenants made by Executive herein, it is agreed that: the skills, experience and contacts of Executive are of a special, unique, unusual and extraordinary character which give them a peculiar value; because of the business of the Company, the restrictions agreed to by Executive as to time and area contained in the Agreement are reasonable; and the injury suffered by the Company by a violation of any obligation or covenant in the Agreement resulting from loss of profits created by (i) the competitive use of such skills, experience contacts and otherwise and/or (ii) the use or communication of any information deemed confidential herein will be difficult to calculate in damages in an action at law and cannot fully compensate the Company for any violation of any obligation or covenant in the Agreement, accordingly: (a) the Company shall be entitled to injunctive relief to prevent violations thereof and prevent Executive from rendering any services to any person, firm or entity in breach of such obligation or covenant and to prevent Executive from divulging any confidential information; and (b) compliance with the Agreement is a condition precedent to the Company’s obligation to make payments of any nature to Executive, subject to the other provisions hereof.

3.4.5 Breach. Executive agrees that any breach of restrictive covenants above cannot be remedied solely by money damages, and that in addition to any other remedies Company may have, Company is entitled to obtain injunctive relief against Executive. Nothing herein, however, shall be construed as limiting Company’s right to pursue any other available remedy at law or in equity, including recovery of damages and termination of this Agreement and/or any payments that may be due pursuant to this Agreement.

3.5 Materiality and Conditionality of Section 3. The covenants contained in Sections 3 are material to this Agreement. Executive’s agreement to strictly comply with Sections 3 are a precondition for Executive’s receipt of payments and vesting of Restricted Stock and Stock Grants pursuant to Section 2 of this Agreement. Whether or not Section 3 or any

portion thereof has been held or found invalid or unenforceable for any reason whatsoever by a court or other constituted legal authority of competent jurisdiction, upon any violation of Section 3 or any portion thereof, or upon a finding that a violation would have occurred if such Section or any portion thereof were enforceable, the Executive and Company agree that (i) the Executive’s interest in the Restricted Stock and Stock Grants pursuant to Section 2 and 4 of this Agreement shall automatically lapse and be forfeited; and (ii) Company shall have no obligation to make any further payments to Executive under this Agreement.

3.6 Severability, Modification of Covenants. The Executive and Company agree that all of the covenants contained in Section 3 shall survive the termination or expiration of this Agreement, and agree further that in the event any of the covenants contained in Section 3 shall be held by any court to be effective in any particular area or jurisdiction only if said covenant is modified to be limited in its duration or scope, then, at the sole option of Company, the provisions of Section 3.5 may be deemed to have been triggered, and the rights, liabilities and obligations set forth therein shall apply. In the event Company does not elect to trigger application of Section 3.5, then the court shall have such authority to so reform the covenants and the parties hereto shall consider such covenants and/or other provisions of Section 3 to be amended and modified with respect to that particular area or jurisdiction so as to comply with the order of such court and, as to all other jurisdictions, the covenants contained herein shall remain in full force and effect as originally written. Should any court hold that the covenants in Section 3 are void and otherwise unenforceable in a particular area or jurisdiction, then notwithstanding the foregoing provisions of this Section 3.6, the provisions of Section 3.5 shall be applicable and the rights, liabilities and obligations of the parties set forth therein shall apply. Alternatively, at the sole option of Company, Company may consider such covenants to be amended and modified so as to eliminate therefrom the particular area or jurisdictions as to which such covenants are so held void or otherwise unenforceable and, as to all other areas and jurisdictions covered herein, the covenants contained herein shall remain in full force and effect as originally written.

4. Termination.

4.1 As used in this Agreement, “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, the date of receipt of the notice of termination or any later date specified therein within ninety (90) days of such notice, as the case may be, (ii) if the Executive’s employment is terminated by the Executive for Good Reason pursuant to Section 4.7, the effective date of such termination pursuant to Section 4.7, (iii) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the date on which the Company notifies the Executive of such termination, (iv) if the Executive voluntarily resigns other than for Good Reason pursuant to Section 4.7, the date on which the Executive notifies the Company of such resignation, (v) if the Executive’s employment is terminated by reason of death, the date of death of the Executive, (vi) if the Executive’s employment is terminated by the Company due to Disability, the date ninety (90) days after the Company’s written notice to the Executive, or (vii) if the Executive’s employment is terminated by the Executive or the Company as a result of a Notice of Non-Renewal, the Scheduled Termination Date.

4.2 Termination Upon Death. If the Executive dies during the Term, this Agreement shall terminate; provided, however, that in any such event, the Company shall pay to the Executive’s estate (i) in a lump sum within thirty (30) days of the Date of Termination, any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by the Executive prior to the termination but not yet paid; (ii) at the same time payable pursuant to Section 2.2.1 and 2.2.2, any short term incentive and long term incentive payments for the prior fiscal year that shall have been earned by the Executive prior to the termination and not yet paid; and (iii) any Benefits that have vested in the Executive as of the Date of Termination as a result of the Executive’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which the Executive is entitled to reimbursement pursuant to this Agreement (collectively, the “Accrued Amounts”). In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.3 Termination With Cause. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate the Executive’s employment under this Agreement and discharge the Executive with Cause. If such right is exercised, the Company’s obligation to the Executive shall be limited solely to the payment of the Accrued Amounts excluding the Prorated Short Term Incentives and accrued but unpaid vacation. As used in this Agreement, the term “Cause” shall mean, in the good faith determination of the Board any: (A) willful failure to substantially perform Executive’s duties with the Company (other than by reason of Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation within thirty (30) days of such written notice from the Company; (B) Gross negligence in the performance of the Executive’s duties; (C) Conviction of, or plea of guilty or nolo contendre to any felony or any crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company; (D) Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including without limitation Executive’s breach of fiduciary duties owed to the Company; (E) Willful violation of any material provision of the Company’s code of conduct; (F) Willful violation of any of the material covenants contained in Section 3, as applicable; (G) Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or (H) Engaging in any material act that is intended or may be reasonably expected to harm the reputation, business prospects, or operations of the Company.

4.4 Termination Due to Voluntary Retirement. The Executive has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to terminate his/her employment under this Agreement due to Voluntary Retirement. Voluntary Retirement is the termination of employment after age 65 with no expectation of returning to the industry. The provisions of Section 3 remain in full force and effect upon Voluntary Retirement.

Upon Voluntary Retirement, in exchange for the Executive executing and delivering a Release as described in Section 4.5.2, Executive shall be entitled to receive:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2); and

(B) An amount equal to fifteen (15) months of Executive’s then current salary, payable in bi-monthly installments, beginning on the sixtieth day after Voluntary Retirement (the “Retirement Payment”). The Retirement Payment shall be made in accordance with the company’s payroll practices.

(C) The Company shall have the right to cease or terminate the Retirement Payment in the event the Executive breaches, in the Company’s sole discretion, any covenant contained in Section 3 of this Agreement.

(D) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of twelve (12) months after the Date of Termination, (B) the date the Executive first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of the Executive, the Company shall, via proper COBRA election by the Executive, continue medical and dental benefits to the Executive (and, if applicable, to the spouse and dependents of the Executive who received such benefits under the Executive’s coverage immediately prior to the Date of Termination) equal to those that were in effect for the Executive as of the Date of Termination (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company had the Executive remained actively employed, provided that the Executive makes all required COBRA payments to the Company, and the Company shall immediately reimburse the Executive for each such COBRA payment (collectively, the “Continuation of Benefits”). Executive shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination.

(E) In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.5 Termination Without Cause or For Good Reason. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause. If the Executive is terminated during the Term without Cause including any termination by the Executive which is deemed to be for Good Reason under Section 4.7 hereof, the Company’s obligation to the Executive shall be limited solely to the following:

4.5.1 Severance Payments.

The Company shall pay to the Executive, in exchange for the Executive executing and delivering a Release as described in Section 4.5.2, as follows:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2); and

(B) An amount equal to fifteen (15) months of Executive’s then current salary, payable in bi-monthly installments, beginning on the sixtieth day after the Date of Termination. Severance payment shall be made in accordance with the company’s payroll practices[ with a lump sum payment due to Executive of any remaining severance amounts containing the complete remainder of all severance due to Executive within thirty days of the end of the Restricted Period].

(C) The Company shall have the right to cease or terminate the severance payments in the event the Executive breaches, in the Company’s sole discretion, any covenant contained in Section 3 of this Agreement.

(D) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of twelve (12) months after the Date of Termination, (B) the date the Executive first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of the Executive, the Company shall, via proper COBRA election by the Executive, continue medical and dental benefits to the Executive (and, if applicable, to the spouse and dependents of the Executive who received such benefits under the Executive’s coverage immediately prior to the Date of Termination) equal to those that were in effect for the Executive as of the Date of Termination (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company had the Executive remained actively employed, provided that the Executive makes all required COBRA payments to the Company, and the Company shall immediately reimburse the Executive for each such COBRA payment (collectively, the “Continuation of Benefits”). Executive shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination and for any additional coverage not effective at the Date of Termination. Any reduction of coverage will be treated appropriately.

(E) Outplacement Services provided by a firm selected by the Company in its sole discretion for a period of twelve months and in an amount not to exceed $10,000.

(F) In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.5.2 Release. As a condition to the Executive’s receipt of payments and/or benefits described under Sections 4.4 and 4.5, the Executive must execute and deliver to the Company, within the time period stated in the Release, and not subsequently revoke, a full release of all claims that the Executive may have against the Company, its affiliates, and all of their officers, employees, directors, and agents, in a form mutually and reasonably agreeable to the parties hereunder. The Company shall provide the Executive with a form of release within ten (10) days from the Date of Termination.

4.6 Termination upon Disability. If during the Term the Executive becomes physically or mentally disabled, whether totally or partially, as defined by the Company’s Long-Term Disability Plan then in effect, the Company shall, by written notice to the Executive,

terminate the Executive’s employment hereunder and discontinue payments of the Annual Salary, Annual Bonus and Benefits accruing from and after the date of such termination. Upon the Company’s termination of the Executive’s employment by reason of the Executive’s Disability, the Company’s obligation to the Executive shall be limited solely to the payment of the Accrued Amounts (at the same time and in the same manner as set forth in Section 4.2) and provision of the Continuation of Benefits. In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.7 Good Reason. Notwithstanding any other provision of this Agreement, the Executive’s employment under this Agreement may be terminated during the Term by the Executive, which shall be deemed to be constructive termination by the Company without Cause, if one of the following events constituting “Good Reason” shall occur unless the Executive has consented in writing thereto: (i) the occurrence of any material breach of this Agreement by the Company or any of its affiliates; (ii) any material failure by the Company after a Change of Control of the Company to comply with Section 2 hereof; (iii) following a Change of Control of the Company, the failure to obtain the assumption in writing of all of the Company’s material obligations under this Agreement by any successor to all or substantially all of the assets of the Company or any affiliate within fifteen (15) days after a reorganization, merger, consolidation, sale or other disposition of assets of the Company or such affiliate; (iv) the Company’s assignment to the Executive of any duties materially inconsistent with Executive’s position, including any other action which results in a material diminution in such status, title, authority, duties or responsibility; or (v) the relocation of Executive’s office to a location other than in the U.K. or Canada without his consent. Any such termination pursuant to this Section 4.7 shall be made by the Executive providing written notice to the Company specifying the event relied upon for such termination and given within sixty (60) days after such event. Any termination for Good Reason pursuant to this Section 4.7 shall be effective sixty (60) days after the date the Executive has given the Company such written notice setting forth the grounds for such termination with specificity; provided, however, that the Executive shall not be entitled to terminate this Agreement in respect of any of the grounds set forth above if within sixty (60) days after such notice the action constituting such ground for termination has been cured and is no longer continuing. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the date sixty (60) days following a Change of Control of the Company shall be deemed to be termination for Good Reason for all purposes under this Agreement, shall be effective upon written notice by the Executive to the Company during such 30-day period, shall be conclusive and shall not be subject to any cure by the Company.

4.8 Change of Control. For the purposes hereof, a “Change of Control of the Company” shall be deemed to have occurred if, (i) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; (ii) there occurs a proxy contest or a consent solicitation, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event thereafter constitute less than a majority of the Board of Directors; or (iii) there occurs a reverse merger involving the Company

in which the Company is the surviving corporation but the shares of common stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (iv) there is a sale of other disposition of all or substantially all of the assets of the Company; or (v) there is an adoption of any plan or proposal for the liquidation or dissolution of the Company; or Stewart Title Guaranty Company is placed in supervision, receivership, conservatorship, or special administrative action by the Texas Department of Insurance.

4.9 Notwithstanding the foregoing provisions of this definition of Change of Control, to the extent that any payment (or acceleration of payment) hereunder is (A) considered to be deferred compensation that is subject to, and not exempt under, Code Section 409A, and (B) payable due to the Change of Control, then the term Change of Control hereunder shall be construed to have the meaning as set forth in Code Section 409A with respect to the payment (or acceleration of payment) of such deferred compensation, but only to the extent inconsistent with the foregoing provisions of the Change of Control definition as determined by the Incumbent Board.

5. Other Provisions.

5.1 Stock Ownership. Executive shall reach and maintain ownership of a number of shares of SISCO stock within five (5) years of the Effective Date that are equivalent to a total share trading price of .50 times the Annual Salary listed in Section 2.1 on the Effective Date.

5.2 Section 409A.

5.2.1 Separation from Service. Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Executive under this Agreement in connection with a termination of Executive’s employment that would be considered “non-qualified deferred compensation” under Section 409A of the Internal Revenue Code (hereafter “Code”), in no event shall a termination of employment be considered to have occurred under this Agreement unless such termination constitutes Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h), and any successor provision thereto (“Separation from Service”).

5.2.2 Section 409A Compliance. Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, any severance payments payable to Executive under this Agreement shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-term deferrals). However, to the extent any such payments are treated as “non-qualified deferred compensation” subject to Section 409A of the Code, and if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of

Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section shall be paid in a lump sum to Executive (or Executive’s estate). The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by Company in accordance with the terms of Section 409A of the Code, and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

5.2.3 Section 409A; Separate Payments. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Executive may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.

5.2.4 Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if the Executive is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Executive has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Executive from the Company and its affiliates will be one dollar ($1.00) less than three times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 3.4.5. shall require the Company to be responsible for, or have any liability or obligation with respect to, the Executive’s excise tax liabilities under Section 4999 of the Code.

5.2.5 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement or in any Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive as soon as administratively practicable following such submission in accordance with the Company’s policies regarding reimbursements, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.

5.2.6 Mitigation. Executive shall not be required to mitigate damages with respect to the termination of his employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due Executive under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to Executive under this Agreement shall not be offset by any claims the Company may have against the Executive, and the Company’s obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

5.3 Indemnification.

5.3.1 General. The Company agrees that if Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Executive is or was a trustee, director or officer of the Company, or any predecessor to the Company (including any sole proprietorship owned by the Executive) or any of their affiliates or is or was serving at the request of the Company, any predecessor to the Company (including any sole proprietorship owned by the Executive), or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Texas or Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by Executive in connection therewith, and such indemnification shall continue as to Executive even if Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

5.3.2 Expenses. As used in this Section, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

5.3.3 Enforcement. If a claim or request under this Section 5 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Executive may at any time thereafter bring an arbitration claim against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Texas or Delaware law.

5.3.4 Partial Indemnification. If Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Executive for the portion of such Expenses to which Executive is entitled.

5.3.5 Advances of Expenses. Expenses incurred by Executive in connection with any Proceeding shall be paid by the Company in advance upon request of Executive that the Company pay such Expenses, but only in the event that Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

5.3.6 Notice of Claim. Executive shall give to the Company notice of any claim made against the Executive for which indemnification will or could be sought under this Agreement. In addition, Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within the Executive’s power and at such times and places as are convenient for the Executive.

5.3.7 Defense of Claim. With respect to any Proceeding as to which Executive notifies the Company of the commencement thereof:

(A) The Company will be entitled to participate therein at its own expense;

(B) Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Executive, which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. Executive also shall have the right to employ his own counsel in such action, suit or proceeding if she reasonably concludes that failure to do so would involve a conflict of interest between the Company and the Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

(C) The Company shall not be liable to indemnify Executive under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on Executive without the Executive’s written consent. Neither the Company nor Executive will unreasonably withhold or delay their consent to any proposed settlement.

5.3.8 Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 5 shall not be exclusive of any other right which Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

5.4 Legal Fees and Expenses. If any contest or dispute shall arise between the Company and Executive regarding any provision of this Agreement, the Company shall reimburse Executive for all legal fees and expenses reasonably incurred by Executive in connection with such contest or dispute, but only if Executive prevails to a substantial extent with respect to the Executive’s claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

5.5 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by courier service, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or sent by facsimile transmission or, if mailed or sent by courier service, on the date of actual receipt thereof, as follows:

(i) if to the Company, to:

Chief Executive Officer,

1980 Post Oak Blvd., Suite 800

Houston, Texas 77056

(ii) if to the Executive, to:

Steven M. Lessack

P.O. Box 651

Cazenovia, New York 13035

Any party may change its address for notice hereunder by notice to the other party hereto.

5.6 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (including but not limited to prior employment agreements and incentive plans and agreements), written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect, and if any conflict between this agreement and the terms of such plans arises, the terms of the plan shall control.

5.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

5.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof).

5.9 Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company only to a successor by merger or purchasers of substantially all of the assets of the Company or its affiliates.

5.10 Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.11 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

5.12 No Presumption Against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision arising directly or indirectly herefrom shall be construed against any party as being drafted by said party.

5.13 No Duty to Mitigate. The Executive shall have no obligation to mitigate damages suffered as a result of termination of the Executive’s employment with the Company.

5.14 Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the breach thereof, the Executive and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, the Executive and the Company agree to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within thirty (30) days of a written demand for mediation, any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration before one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in English and held in Houston, Harris County, Texas, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration

clause. The award shall be a reasoned award and rendered within thirty (30) days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section, the Company may seek injunctive relief from a court of competent jurisdiction located in Harris County, Texas, in the event of a breach or threatened breach of any covenant contained in Section 3.

5.15 Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and the Executive and the Executive’s legal representatives.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

EXECUTIVE	COMPANY
	STEWART INFORMATION SERVICES CORP.
By: /s/ Steve M. Lessack	By: /s/ Matthew W. Morris
Date: October 1, 2012	Date: October 1, 2012
Name: Steve M. Lessack Title: Group President, International Operations	Name: Matthew W. Morris Title: Chief Executive Officer

EXHIBIT A

ANNUAL SHORT TERM INCENTIVE PLAN

(“STI PLAN”)

Executive shall be eligible to participate in the Company’s Annual Bonus Payment Program, also known as the Short Term Incentive Plan (“STI Plan”). The STI Plan shall be determined by the Board of Directors (“Board”), in its sole discretion.

Payout amount will be determined by the attainment towards metrics which are both specific to your position as well as reflective of corporate performance.

As part of its analysis, the Board shall consider the following targets in determining the amount of the STI payment to the Executive:

Short Term Incentive (STI)

Target Payout:	60% of Base Pay	240,000
Maximum Target Payout:	200% of Target	480,000

Metrics Used to Determine STI

	Maximum			Target			Threshold			Weighting
Corporate Performance
Corporate EBITDA Improvement		140.0	%		50.0	%		25.0	%		20	%
Corporate Modified Return on Equity		11.0	%		6.0	%		3.0	%		16	%
Corporate Total Shareholder Return Ranking		80.0	%		50.0	%		30.0	%		4	%
Operational Performance
Modified EBITDA		18.0	%		5.0	%		0.0	%		30	%
Modified EBITDA Margin		20.0	%		15.0	%		10.0	%		22	%
Policy Loss Ratio (Canada)		25.0	%		28.0	%		29.0	%		8	%

STI will be delivered as a cash bonus, paid annually after the conclusion of the fiscal year, before the end of the first quarter of the succeeding fiscal year. STI payout is expressed as a percentage of your base pay.

Target Annual STI payout is the equivalent of 60% of your base pay.

Maximum Annual STI payout is the equivalent of 200% of your target payout.

Specific terms and calculations related to the Short Term Incentive (STI) Plan

The following terms are in relation to our global STI Plan. Individual metrics may or may not apply to your specific agreement.

Periodically, components of metrics may be adjusted, which may impact comparability between measurement periods. In such cases, prior period components of metrics will be restated to conform to the current measurements.

Term/Calculation	Definition
Base Pay	This is the annual base salary.
Budget Attainment	Budget attainment measures the variance between actual expenses and budget expenses for service center executives. The variance is expressed as a percent variance. The metric is calculated by taking the actual annual expenses minus the budgeted annual expenses. The difference is then divided by the budgeted annual expenses.
Company	The Company is Stewart Information Services Corporation and its subsidiaries.
Cost Control Initiative	Cost Control Initiative are specific goals established for each service center executive. This metric is measured by determining how much of the annual goals were completed on a percentage basis.
Customer Service Index	Customer Service Index is an internal survey conducted at least annually. The initial benchmark is the survey completed in first half of 2012. A subsequent survey is then measured against the benchmark. The metric is calculated by taking the subsequent survey score minus the benchmark survey score. The difference is then divided by the benchmark survey score.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	EBITDA metric is calculated by adding back interest expense, depreciation expense and amortization expense to pretax earnings. The source of data is the System of Record.
Employee Costs	Employee Costs Ratio metric is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes salaries, bonuses, commissions, payroll taxes, group insurance, profit sharing and other employee costs. The source of data is the System of Record.
Employee Costs Ratio	Employee Costs Ratio metric is calculated by dividing the Employee Costs by Operating Revenues. The source of data is the System of Record.

Term/Calculation	Definition
Investment and Other Gains (Losses) – Net	Investment and Other Gains (Losses) – Net is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes, but not limited to, realized earnings (losses) from the sale of various types of financial and non-financial instruments; sale of subsidiaries, equity basis investments, and cost-basis investments; impairment of equity and cost-basis investments; and other types of non-operating transactions. The source of data is the System of Record.
Investment Income	Investment Income is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes, but not limited to, interest income, dividends, royalties and certain rental income less any fees incurred from investments. The source of data is the System of Record.
Maximum (Performance Level)	See Performance Level.
Maximum Target Payout	The Maximum Target Payout is the maximum annual cash bonus that can be earned and paid under the STI. It is calculated by multiplying the Target Payout by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Modified Average Shareholders’ Equity	Modified Average Shareholders’ Equity is calculated by subtracting cumulative other comprehensive income and noncontrolling interest from shareholders’ equity. This calculation is done as of the beginning of the year and the end of the year. The average is then calculated by adding the beginning of the year and ending of the year calculations and then dividing by two.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA)	The Modified EBITDA metric is calculated by subtracting Investment Income, Investment and Other Gains (Losses) – Net, and other unique or unusual items including, but not limited to, certain claims exceeding $1.0 million as determined by the Board of Directors of the Company, from EBITDA. The source of data is the System of Record.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization Margin (Modified EBITDA Margin)	Modified Earnings Before Interest, Taxes, Depreciation and Amortization Margin metric is calculated by dividing Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA) by Operating Revenues. The source of data is the System of Record.

Term/Calculation	Definition
Modified Net Earnings Attributable to Company	Modified Net Earnings Attributable to Company is calculated by subtracting certain items including, but not limited to, certain unusual income tax expense or benefit as determined by the Board of Directors of the Company from Net Earnings Attributable to Company. The source of data is the System of Record.
Modified Return on Equity (Modified ROE)	Modified Return on Equity metric is calculated by dividing Modified Net Earnings Attributable to Company by Modified Average Shareholders’ Equity. The source of data is the System of Record.
National Production Services (NPS) Expenses Ratio	National Production Services (NPS) Expenses Ratio metric is calculated by dividing NPS expenses by the sum of (1) Operating Revenues less the Company’s portion of earnings from equity investees from the Direct Operations Segment and (2) external Operating Revenues less the Company’s portion of earnings from equity investees from NPS. The source of data is the System of Record.
Operating Revenues	Operating Revenues is calculated by deducting Investment Income and Investment and Other Gains (Losses) – Net from total gross revenues. The Company’s portion of earnings from equity investees is included in the calculation. The source of data is the System of Record.
Performance Level	Performance Level represents the range of possible payout depending on performance driver for each metric. The payout range is defined as the Threshold (50%), Target (100%) and Maximum (200%).
Policy Loss Ratio	Policy Loss Ratio metric is calculated by dividing Title Losses and Claims by Title Insurance Revenues from Direct Operations and Agency Operations. The source of data is the System of Record.
Premium Remittance Per Agency Ratio	Premium Remittance Per Agency Ratio metric is calculated by dividing premium revenues remitted by active independent agencies by the number of active independent agencies. The source of the data is STNET, which is the primary source for policy remittances, along with the number of agencies.
System of Record	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
Target (Performance Level)	See Performance Level.

Term/Calculation	Definition
Target Payout	Target Payout is the annual cash bonus that can be earned and paid under the STI. Target Payout is calculated by multiplying Base Pay by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Threshold (Performance Level)	See Performance Level.
Title Insurance Revenues	Title Insurance Revenues are revenues earned from title insurance and escrow and other related fees. The source of data is the System of Record.
Title Losses and Claims	Title Losses and Claims is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that is defined in the Company’s Annual Report filed with the Securities Exchange Commission on the Form 10-K. The source of data is the System of Record.
Total Shareholder Return (TSR)	Total Shareholder Return is calculated by taking the difference between the Company’s end of year price per share and the beginning of year price per share and adding the Company dividend per share. Next, divide that sum by the Company’s beginning of year price per share.
Total Shareholder Return (TSR) Ranking	Total Shareholder Return Ranking is determined by calculating the Company’s percentile ranking for Total Shareholder Return relative to the Russell 2000 Financial Services Index. The source of data is Bloomberg, which is provided by Vaughn Nelson, the Company’s investment portfolio manager.
Weighting	Weighting is a calculation that applies a percentage to each metric. The aggregation of the percentages is 100%.

EXHIBIT B

LONG TERM INCENTIVE PLAN

(“LTI PLAN”)

Executive shall be eligible to participate in the Company’s Long Term Incentive Plan (“LTI Plan”), as such plan shall be in effect and amended and/or superseded from time to time.

The actual value of the LTI shall be determined by the Board of Directors (“Board”), in its sole discretion. The Board shall consider the overall performance of the Company in awarding the LTI. As part of its analysis, the Board shall consider the following targets in determining the value of the LTI payable to the Executive:

Long Term Incentive (LTI)

Target Payout:	50% of Base Pay
60% paid as a Restricted Stock Award (RSA)		120,000
40% paid as Restricted Performance Units (RPU)		80,000
		200,000
Potential RPU Max Payout	200% of RPU Target	160,000
Total Max Potential Value Payout		280,000

Metrics Used to Determine LTI

Corporate Performance

RSA (Restricted Stock Award): Annualized Total Shareholder Return at the 50th percentile ranking over the three year performance period or Annualized Total Shareholder Return (TSR) is at least positive over the three year performance period.

RPU (Restricted Performance Units): SISCO Total Shareholder Return compared to the Russell 2000 Financial Services Index (Percentile Ranking) with a Circuit Breaker (positive EBITDA initially over 2 years and subsequently 3 years)

Performance Levels (Payout) : 50%-200%

Performance Goals: 30%-75% Max

Target LTI grant is the equivalent of 50% of your base pay.

Potential RPU Max payout is 200% of RPU Target.

LTI will be delivered as both a RSA (60% of LTI grant) and RPUs (40% of LTI grant). (Each RPU = $1).

LTI will be granted annually. It is 100% granted, but vests depending on metrics. Grants will be restricted by a 3-year cliff vest, with the exception of RPU, which will vest over 2 years initially.

Corporate Payout (% of Target): RSAs will vest at the end of the three years following grant if either the TSR is at least positive or the TSR is in the 50th percentile ranking over the 3-year performance period.

RPUs will vest depending on SISCO Total Shareholder Return compared to the Russell 2000 Financial Services Index (Percentile Ranking) with a Circuit Breaker (positive in EBITDA initially over 2 years and subsequently 3 years). Payout depends on percentile ranking in comparison to % of target.

Specific terms and calculations related to the Long-Term Incentive (LTI)

The following terms are in relation to our global LTI Plan. Individual metrics may or may not apply to your specific agreement.

Periodically, components of metrics may be adjusted, which may impact comparability between measurement periods. In such cases, prior period components of metrics will be restated to conform to the current measurements.

Term/Calculation	Definition
Base Pay	This is the annual base salary.
Company	The Company is Stewart Information Services Corporation and its subsidiaries.
Circuit Breaker	Circuit Breaker is the minimum corporate performance that must be achieved in order to receive the specified compensation.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	EBITDA metric is calculated by adding back interest expense, depreciation expense and amortization expense to pretax earnings. The source of data is the System of Record.
Maximum (Performance Level)	See Performance Level.
Maximum Target Payout	The Maximum Target Payout is the maximum annual cash bonus that can be earned and paid under the LTI. It is calculated by multiplying the Target Payout by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Performance Goals	Performance Goals provide the threshold, target and maximum measurements that must be achieved in order to receive the related level of compensation.
Performance Level	Performance Level represents the range of possible payout depending on performance driver for each metric. The payout range is defined as the Threshold (50%), Target (100%) and Maximum (200%).

Term/Calculation	Definition
Restricted Performance Unit (RPU)	Restricted Performance Unit is cash compensation that is restricted by time of service and corporate performance.
Restricted Stock Award (RSA)	Restricted Stock Award is share-based compensation that is restricted by time of service and corporate performance.
System of Record	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
Target (Performance Level)	See Performance Level.
Target Payout	Target Payout is the share-based cash bonus that can be earned under the LTI. Target Payout is distributed over two years initially (then three years). Target Payout is calculated by multiplying Base Pay by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Threshold (Performance Level)	See Performance Level.
Total Shareholder Return (TSR)	Total Shareholder Return is calculated by taking the difference between the Company’s end of year price per share and the beginning of year price per share and adding the Company dividend per share. Next, divide that sum by the Company’s beginning of year price per share.
Total Shareholder Return (TSR) Ranking	Total Shareholder Return Ranking is determined by calculating the Company’s percentile ranking for Total Shareholder Return relative to the Russell 2000 Financial Services Index. The source of data is Bloomberg, which is provided by Vaughn Nelson, the Company’s investment portfolio manager.

EXHIBIT C

PERQUISITES

Executive shall be eligible to participate in the additional perquisites:

• Executive Long Term Disability Plan (Company paid)

• Non-Qualified Deferred Compensation Plan provided through the Company

• Paid Association/Membership Dues as needed for the position and with Management approval

• Executive Development as needed for the position up to $5,000 and with Management approval

• Executive Life Insurance (your current Split-Dollar Policy will be maintained)

EXHIBIT “D”

SPECIAL WORKING CONDITIONS

1. TAX EQUALIZATION.

A hypothetical U.S. income tax and FICA contribution will be deducted from your total compensation at an annual base salary of Four Hundred Thousand ($400,000.00) U.S. Dollars.

Income Tax Filing Assistance. The Company will assist in the preparation and filing of your annual income tax return and will determine the tax liability on your Company-earned income. Your tax liability will be paid from the hypothetical tax withheld from your annual base salary and guaranteed bonus. Any additional tax owed as a result of Company-earned income shall be paid by the Company, but any additional tax owed as a result of income received unrelated to the Company provided income shall be your sole responsibility. If you elect an outside accounting firm to prepare and file your income tax return, the Company shall provide one for that purpose.

Settlement. Termination under any circumstances shall require immediate settlement and/or repayment of all outstanding taxes owed, travel advances, and other amounts owed to the Company.

2. GOODS AND SERVICES DIFFERENTIAL.

The Company shall pay a Goods and Services Differential based on provided by ORC, calculated by multiplying a goods and services index by the amount that an individual of your income level and family size would spend on goods and services in the U.S. The present Goods and Services index for a U.S. resident assigned to the U.K. is 64.2541. The Goods and Services Differential shall be reviewed semi-annually in January and June of each calendar year and recalculated, if necessary.

3. METHOD OF PAYMENT.

The Goods and Services Differential shall be paid to you in U.S. Dollars in equivalent British Pounds.

4. REPATRIATION.

In the event of your termination of employment while on overseas assignment, you shall be paid normal and reasonable moving expenses for your household goods from the U.K. to Punta Gorda, Florida, provided, however, you return to such location within thirty (30) days of your termination and provided that you do not accept employment with another employer in the U.K. or the U.S.

Upon your repatriation to the U.S., you shall no longer receive the premiums, allowances and differentials provided herein.

5. COMPANY PROVIDED HOUSING.

In the event of your termination of employment while on overseas assignment by the Company, the Company shall provide you with at least ninety (90) days’ notice (or as otherwise mutually agreed), and you agree to vacate the Company provided housing within thirty (30) days of notice of termination.

6. COMPLIANCE WITH LAWS.

You shall comply with the Foreign Corrupt Practices Act (U.S.) and the U.K. Bribery Act of 2010, the Company’s Code of Business Conduct, and any other business bribery laws of Canada and of the U.K.

7. PRIOR AGREEMENTS.

This Agreement supersedes and replaces all prior agreements related to Executive’s employment, including, but not limited to, Executive’s Letters of Understanding for Ongoing Foreign Employment dated June 16, 2010 and July 1, 2010 agreements. The parties shall have no further rights or obligations under such agreements.

8. OVERTIME PAY.

You will not be entitled to overtime pay should the responsibilities of your position require, from time-to-time, that your work exceeds this schedule.

9. GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof). In the event that it is determined that Directive 96/71 of the European Parliament and of the Council of December 16, 1996 applies, Executive agrees to waive such application of governing law and agrees that Article 6(1) of the Rome Convention on the Law Applicable to Contractual obligations of June 19, 1980, and “Rome I” Regulation law principles shall apply.

10. ARBITRATION PROCEEDINGS.

To the extent that the provisions in this Agreement for arbitration are determined to be in conflict with the European Convention for the Protection of Human Rights and Fundamental Freedoms, Article VI, the parties agree that this Agreement shall be governed by the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly called the “New York Convention.”

11. JURISDICTION AND VENUE.

With respect to any litigation regarding this Agreement, Executive agrees to venue in the state or federal courts in Harris County, Texas and agrees to waive and does hereby waive any defenses and/or arguments based upon improper venue and/or lack of personal jurisdiction. By entering into this Agreement, Executive agrees to personal jurisdiction in the state and federal courts in Harris County, Texas, notwithstanding the Brussels Convention on Enforcement of Judgments in Civil and Commercial Matters of September 27, 1968, Brussels I Regulation, and the EU Regulation No. 44/2001.

12. ACQUIRED RIGHTS

The “acquired rights doctrine” shall not apply in the event that you are transferred to a different company due to merger or acquisition during your overseas assignment.

13. NON-COMPETITION.

In consideration of the Company’s promise to provide the Executive with the confidential and trade secret information of the Company, the Executive hereby agrees that, during the Term and for a period of one (1) year thereafter, (the “Restricted Period”) the Executive shall not in the U.K. or Canada, directly or indirectly, (i) engage in as principal, consultant, or employee in any segment of a business of a company, partnership, firm or other entity that is directly competitive with the Company or (ii) hold an interest (except as a holder of less than 5% interest in a publicly traded firm or mutual funds) in a company, partnership, firm or other entity that directly or indirectly engages in the business of the Company.

EX-10.9

EXHIBIT 10.9

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of January 1, 2012 (the “Effective Date”), by and between Stewart Information Services Corp. (the “Company”), and Jason Nadeau (the “Executive”).

The parties agree as follows:

1. Employment, Duties and Acceptance.

1.1 Term of Employment by the Company. The Company hereby agrees to employ the Executive for a term commencing on the Effective Date and expiring on the third anniversary of such date (such date, or later date to which this Agreement is extended in accordance with the terms hereof, the “Scheduled Termination Date”), unless earlier terminated as provided in Section 4 or unless extended as provided herein (the “Term”). The Term shall be automatically extended commencing on the Scheduled Termination Date and on each Scheduled Termination Date thereafter (each such date being a “Renewal Date”), so as to terminate one (1) year from such Renewal Date, unless and until at least ninety (90) days prior to a Renewal Date either party hereto gives written notice to the other that the Term should not be further extended after the next Renewal Date (a “Notice of Non-Renewal”), in which event the Scheduled Termination Date shall be the Renewal Date next following receipt of the Notice of Non-Renewal.

1.2 Duties. During the Term, the Executive shall serve as Group President, Mortgage and Titles Services of the Company, with such duties and responsibilities as are commensurate with such position and such other functions consistent with the foregoing as the Chief Executive Officer (“CEO”) may assign, in CEO’s discretion, from time to time. The Executive shall report to the CEO and also serve in those offices and directorships of affiliates of the Company to which the Executive may from time to time be appointed or elected. During the Term, the Executive shall devote all reasonable efforts and all of the Executive’s business time and services to the Company, subject to the direction of the CEO.

1.2.1 Executive shall not directly or indirectly render any services of a business, commercial, or professional nature to any other person, firm, corporation, or organization, whether for compensation or otherwise, without the prior written consent of the CEO. Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) serving, with the prior written consent of the CEO, as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity ) of non-competing businesses, (ii) engaging in charitable activities and community affairs, and (iii) managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), and (iii) shall be limited by Executive so as not to materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder.

1.2.2 Fiduciary Duty. Executive acknowledges and agrees that he owes a fiduciary duty to the Company and further agrees to make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not act for his own benefit concerning the subject matter of his fiduciary relationship.

1.2.3 Compliance. Executive agrees that he will not take any action in violation of United States laws or other laws applicable to Executive’s employment, including, but not limited to the Securities Exchange Act of 1934. If Executive acts upon advice of the General Counsel or Company policy, any material adverse impact on the Company’s operations by reason of the Executives reliance on such advise shall not constitute a breach of the agreement.

1.3 Acceptance of Employment by the Executive. The Executive hereby accepts such employment and shall render the services and perform the duties described above.

2. Compensation and Other Benefits.

2.1 Annual Salary. The Company shall pay to the Executive an annual salary at a rate of not less than Three Hundred Fifty Thousand Dollars ($350,000) per year (the “Annual Salary”), subject to increase at the sole discretion of the Board of Directors of Stewart Information Services Corporation (the “Board of Directors” or the “Board”). The Annual Salary shall be payable in accordance with the payroll policies of the Company as from time to time in effect, but in no event less frequently than twice each month, less such deductions as shall be required to be withheld by applicable law and regulations and less any Executive voluntary deductions.

2.2 Incentive Payments.

2.2.1 Short Term Incentives. The Executive shall be eligible to receive an annual short term incentive cash payment, under a short term incentive plan to be determined by the Board in its sole discretion. The terms of the short term incentive plan (“STI Plan”) are set out in Exhibit A hereto, which is incorporated herein for all purposes. The terms and conditions of the STI Plan are subject to change from year to year. The payment made pursuant to this Section 2.2.1 shall be paid to the Executive in the succeeding calendar year for which it is earned and shall be paid by March 31 of such year. Except as set forth in Section 4, the Executive must be actually employed on the date that any short term incentive plan payment is made in order to be eligible and entitled to any such short term incentive plan payment.

2.2.2 Long Term Incentives. The Executive shall be eligible to participate in the Company’s Long Term Incentive Plan (“LTI Plan”), as such plan shall be in effect and amended and/or superseded from time to time. The Company reserves the right to terminate the LTI Plan in its sole discretion in accordance with the terms of the LTI Plan, and the terms and conditions of the Plan are subject to change from year to year. The terms of the LTI Plan are set out in Exhibit B hereto, which is incorporated herein for all purposes. Except as set forth in Section 4, the Executive must be actually employed on the date that any long term incentive plan payment is made in order to be eligible and entitled to any such long term incentive plan payment.

2.2.3 Special Vesting Terms for Stock Grants and Awards. All unvested stock grants and other awards, including, but not limited to, restricted performance units and restricted stock awards, granted pursuant to any specific terms and metrics in this employment Agreement, including, but not limited to, the LTI Plan referred to in Section 2.2.2 above or the Stewart Information Services Corp. Amended and Restated 2005 Long Term Incentive Plan (the “Incentive Plan”) (collectively, “Stock Grants”) shall vest on a pro-rata basis, only in accordance with the terms and methods provided below in Sections 2.2.3.1. through 2.2.3.4 (i) in the event of the Company’s termination of the Executive’s employment without Cause during the Term, (ii) in the event of the Executive’s resignation during the Term for Good Reason (as hereinafter defined) pursuant to Section 4.7, (iii) in the event of termination of the Executive’s employment due to the Executive’s Death or Disability (as hereinafter defined); or, (iv) in the event of the Executive’s Voluntary Retirement during the Term.

2.2.3.1 The pro-rata vesting of the Incentive Plan and Stock Grants as specified in Section 2.2.3 above shall be based on the number of full, completed months worked by the participating Executive during the applicable performance-based incentive period (as set forth in Exhibit B), but only if the Executive was actively employed for at least twenty-five percent (25%) of the applicable performance-based incentive period, with the exception of Termination Without Cause (described further in the agreement) which will be paid if Executive was actively employed for at least ten percent (10%) of the applicable performance-based period. Performance-based incentive awards and Stock Grants shall be based on actual results compared to the target objectives at the end of the incentive period, as determined by the Company, and shall be vested to the eligible Executive as described in the preceding sentence, if the Executive satisfies the requirement of active employment for the specified time period stated above. Any pro-rata vesting or release of restrictions on long-term incentive awards or Stock Grants shall be effective only following expiration of the revocation period applicable to the Release of Claims, if required by the Company, and provided there has been no revocation or attempted revocation thereof (“Release Effective Date”) and following the end of the applicable performance-based incentive period and certification of results by the Company.

2.2.3.2 If the Executive should terminate employment during the Term of this Agreement for any reasons other than those specified in this Section 2.2.3 above or due to Change of Control (defined hereafter), or if the Executive shall violate the confidentiality, non-competition, conflicts of interest, or non-solicitation provisions of Section 3 of this Agreement, the special pro-rata terms specified in this Section, as well as the terms specified in Section 2.2.3.5, shall not apply to the Executive, and the Executive shall forfeit any unvested awards, Stock Grants and Incentive Plan benefits accumulated by the Executive as of the time of the breach of this Agreement or of termination from employment.

2.2.3.3 Calculation of Pro-Rata Special Vesting. The calculation of pro-rata special vesting of awards and Stock Grants shall be determined as a percent of the total possible vested award that would have been vested to the Executive had the Executive remained employed during the entire performance-based incentive period, measured in whole months, through termination of employment, multiplied by a fraction whose numerator is the percentage of the number of months of completed employment during the entire performance-based incentive period plus 100% and whose denominator is 2. Any such pro-rata vesting shall occur at the same time and in the same manner as the vesting of active executives participating in the incentive program in and shall, in no event, become vested or delivered prior to such time.

2.2.3.4. Hypothetical Example. For the purpose of the avoidance of any confusion, by way of hypothetical example only: if an executive shall terminate employment during the twenty-fourth (24^th) month of a thirty-six (36) month performance-based incentive program for the permitted reasons specified in Section 2.2.3 above and is otherwise entitled to participate in the performance-based incentive program, and if the performance-based incentives are achieved and certified by the Company in full satisfaction of the incentive targets, the executive shall receive (81.94%) pro-rata vesting of the applicable awards and Stock Grants at the designated time. The formula: % of the number of complete months of employment (23 ÷ 36 = 63.88%) + 100% = 163.88% ÷ 2 = 81.94% pro-rata award.

2.2.3.5. Vesting Upon Change in Control. In the event of a Change in Control (as defined hereafter), Executive’s unvested Stock Grant award shall immediately and fully vest at target performance level. In the event that Executive is subject to the pro-rata Special Vesting provisions above at the time of the occurrence of a Change in Control, by reason of the Executive’s resignation during the Term for Good Reason (as hereinafter defined), Death or Disability (as hereinafter defined); or the Executive’s Voluntary Retirement during the Term, prior to the Change of Control event, the unvested portion of the Executive’s Stock Grant award shall immediately and fully vest notwithstanding the pro-rata Special Vesting provisions.

2.2.3 Upon the Executive’s termination without Cause, resignation for Good Reason, Voluntary Retirement or due to the Executive’s death or Disability, any vested Stock Grants held by the Executive on the Date of Termination or that vest thereafter may be exercised at any time until the earlier of (A) the third anniversary of the Date of Termination and (B) the expiration date of the Stock Grants.

2.2.4 Notwithstanding the foregoing provisions of this Section 2.2, if the Executive dies after the Executive’s employment by the Company is terminated but while any of the Stock Grants applicable to the Executive remain exercisable as set forth above, such Stock Grants may be exercised at any time until the later of (A) the earlier of (1) the first anniversary of the date of such death and (2) the expiration date of such Stock Grants and (B) the last date on which such Stock Grants would have been exercisable, absent this Section 2.2.5.

2.2.5 Notwithstanding the foregoing provisions of this Section 2.2, upon the termination of the Executive’s employment with the Company for any reason, other than termination for Cause by the Company, during the 24-month period following any Change of Control Effective Date, any Stock Grants held by the Executive as of the Change of Control Effective Date that remain outstanding as of the Date of Termination may thereafter be exercised, until the later of (A) the last date on which such Stock Grants would be exercisable in the absence of this Section 2.2 and (B) the earlier of (1) the third anniversary of the Change of Control Effective Date and (2) the expiration date of such Stock Grants.

Notwithstanding anything in this Agreement to the contrary, express or implied, the provisions of this Agreement are in addition to and not in limitation of the Executive’s rights

under the Incentive Plan and any other plan, program, policy or practice provided by the Company or any affiliate and for which the Executive may qualify. Where a conflict between the Incentive Plan and this Agreement may arise, the terms more favorable to the Executive shall control.

2.3 Prerequisites. Executive shall be entitled to receive the prerequisites provided for on Exhibit C hereto.

2.4 Vacation Policy. The Executive shall be entitled to four (4) weeks of paid vacation during each calendar year of the Term which shall accrue in accordance with Company policy.

2.5 Participation in Employee Benefit Plans. The Company agrees to permit the Executive during the Term to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other so called “fringe benefits” of the Company (collectively, “Benefits”). The Executive shall cooperate with the Company in applying for such coverage, including submitting to a physical exam and providing all relevant health and personal data. The Company shall not make any changes in any plans or arrangements provided pursuant to this Section 2.5 which would adversely affect the Executive’s right to benefits thereunder unless such changes occur pursuant to a program applicable to all executives of the Company and which does not result in a proportionally greater reduction in the rights and benefits to Executive as compared to any other executives of the Company.

2.6 General Business Expenses. The Company shall pay or reimburse the Executive for all business expenses reasonably and necessarily incurred by the Executive during the Term in the performance of the Executive’s services under this Agreement. Such payment shall be made upon presentation of such documentation as the Company customarily requires of its executives prior to making such payments or reimbursements.

2.7 Other Benefits. Executive shall be entitled to participate in or receive benefits under any compensatory employee benefit plan or other arrangement made available by the Company now or in the future (“Other Benefits”) to its senior executive officers and key management employees, subject to and on a basis consistent with the terms, conditions, and overall administration of such plan or arrangement. Nothing paid to Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary payable to Executive pursuant to Section 2.1 of this Agreement. The Company shall not make any changes in any employee benefit plans or other arrangements in effect on the date hereof or subsequently in effect in which Executive currently or in the future participates (including, without limitation, each pension and retirement plan, supplemental pension and retirement plan, savings and profit sharing plan, stock or unit ownership plan, stock or unit purchase plan, stock or unit option plan, life insurance plan, medical insurance plan, disability plan, dental plan, health and accident plan, or any other similar plan or arrangement) that would adversely affect Executive’s rights or benefits there under, unless such change occurs pursuant to a program applicable to substantially all executives of the Company and does not result in a proportionately greater reduction in the rights of or benefits to Executive as compared with any other executive of the Company.

3. Confidentiality and Company Property; Non-Competition and Non-Solicitation.

3.1 Covenants of Executive. The Executive acknowledges that (i) the Company is currently engaged in the business of providing real estate support services, including without limitation title insurance, real estate information services, escrow services and related transaction services (the “Company Business”); (ii) the Company will give the Executive access to trade secrets of and Confidential Information (defined in Section 3.2.1 below) concerning the Company in connection with the Executive’s work for the Company; and (iii) the agreements and covenants contained in this Agreement are essential to protect the business and goodwill of the Company.

3.2 The covenants of the Executive contained in this Section will be construed as independent of any other provision in this Agreement; and the existence of any claim or cause of action by the Executive against the Company will not constitute a defense to the enforcement by the Company of said covenants. The Executive has been advised to consult with counsel in order to be informed in all respects concerning the reasonableness and propriety of this Section and its provisions with the specific regard to the nature of the business conducted by the Company, and the Executive acknowledges that this Section and its provisions are reasonable in all respects.

3.2.1 Confidential Information. The Executive acknowledges that the Company has a legitimate and continuing proprietary interest in the protection of its Confidential Information (and that of its affiliates) and that it has invested substantial sums and will continue to invest substantial sums to develop, maintain and protect Confidential Information. The Company agrees to provide the Executive access to Confidential Information in conjunction with the Executive’s duties, including, without limitation, information of a technical and business nature regarding the past, current or anticipated business of the Company and its affiliates that may encompass financial information, financial figures, trade secrets, customer lists, details of client or consultant contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans, employee information, organizational charts, new personnel acquisition plans, technical processes, inventions and research projects, ideas, discoveries, inventions, improvements, trade secrets, writings and other works of authorship (collectively, “Confidential Information”. In exchange, as an independent covenant, the Executive agrees not to make any unauthorized use, publication, or disclosure, during or subsequent to the Executive’s employment by the Company, of any Confidential Information generated or acquired by the Executive during the course of the Executive’s employment, except to the extent that the disclosure of such Confidential Information is necessary to fulfill the Executive’s responsibilities as an employee of the Company. The Executive understands that Confidential Information includes information not generally known by or available to the public about or belonging to the Company, its divisions and affiliates, or belonging to other companies to whom the Company, its divisions and affiliates, may have an obligation to maintain information in confidence, and that authorization for public disclosure may only be obtained through the Company’s written consent.

3.2.2 Property of the Company. All memoranda, notes, lists, records, and other documents or papers (and all copies thereof) relating to the Company, including such items stored in computer memories, microfiche or by any other means, made or compiled by or

on behalf of the Executive after the date hereof, or made available to the Executive after the date hereof relating to the Company, its affiliates or any entity which may hereafter become an affiliate thereof, shall be the property of the Company, and shall be delivered to the Company promptly upon the termination of the Executive’s employment with the Company or at any other time upon request; provided, however, that the Executive’s address books, diaries, chronological correspondence files and rolodex files (including digital formats) shall be deemed to be property of the Executive.

3.2.3 Original Material. The Executive agrees that any inventions, discoveries, improvements, ideas, concepts or original works of authorship relating directly to the Company Business, including without limitation information of a technical or business nature such as ideas, discoveries, inventions, trade secrets, know-how, writings and other works of authorship, computer programs, financial figures, marketing plans, customer lists and data, business plans or methods and the like, which relate in any manner to the actual or anticipated business or the actual or anticipated areas of business of the Company and its divisions and affiliates, whether or not protectable by patent or copyright, that have been originated, developed or reduced to practice by the Executive alone or jointly with others during the Executive’s employment with the Company shall be the property of and belong exclusively to the Company. The Executive shall promptly and fully disclose to the Company the origination or development by the Executive of any such material and shall provide the Company with any information that it may reasonably request about such material. Either during or subsequent to the Executive’s employment, upon the request and at the expense of the Company or its nominee, and for no remuneration in addition to that due the Executive pursuant to the Executive’s employment by the Company, but at no expense to the Executive, the Executive agrees to execute, acknowledge, and deliver to the Company or its attorneys any and all instruments which, in the judgment of the Company or its attorneys, may be necessary or desirable to secure or maintain for the benefit of the Company adequate patent, copyright, and other property rights in the United States and foreign countries with respect to any such inventions, improvements, ideas, concepts, or original works of authorship embraced within this Agreement.

3.2.4 Non-Competition During Employment. Executive agrees during his employment under this Agreement, he will not compete with the Company by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which the Company provides, and that he will not work for, in any capacity, assist, or became affiliated with as an owner, partner, etc., either directly or indirectly, any individual or business which offer or performs services, or offers or provides products substantially similar to the services and products provided by Company.

3.2.5 Conflicts of Interest. Executive agrees that during his employment under this Agreement, he will not engage, either directly or indirectly, in any activity (a “Conflict of Interest”) which might adversely affect the Company or its affiliates, including ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or accepting any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that Executive will promptly inform the Chief Executive Officer of the Company as to each offer received by Executive to engage in any such activity. Executive further agrees to disclose to the Company any other facts of which Executive becomes aware which might in Executive’s good faith judgment reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.

3.3 Non-Competition. In consideration of the Company’s promise to provide the Executive with the confidential and trade secret information of the Company, the Executive hereby agrees that, during the Term and for a period of twelve (12) months thereafter, (the “Restricted Period”) the Executive shall not in the United States directly or indirectly, (i) engage in as principal, consultant, or employee in any segment of a business of a company, partnership, firm or other entity that is directly competitive with the Company Business or (ii) hold an interest (except as a holder of less than 5% interest in a publicly traded firm or mutual funds) in a company, partnership, firm or other entity that directly or indirectly engages in the Company Business.

3.3.1 Non-Solicitation of Customers. The Executive also agrees to refrain during the Restricted Period from, directly or indirectly, diverting, taking, soliciting and/or accepting on the Executive’s own behalf or on the behalf of another person, the business of any past or present customer of the Company, its divisions and/or affiliates, or any identified prospective or potential customer of the Company, its divisions and/or affiliates, whose identity became known to the Executive through the Executive’s employment by the Company.

3.3.2 Non-Solicitation of Employees of the Company and its Affiliates. The Executive agrees to refrain during the Restricted Period from, directly or indirectly, inducing or attempting to influence any employee of the Company, its divisions and/or affiliates or any person who was employed in the twelve (12) months preceding the Termination Date to terminate their employment with the Company to become employed or engaged in work for another employer or entity.

3.4 Rights and Remedies Upon Breach. If the Executive breaches, any of the provisions contained in Section 3 of this Agreement (the “Restrictive Covenants”), the Company shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

3.4.1 Specific Performance. The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

3.4.2 Accounting. The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any action constituting a breach of the Restrictive Covenants.

3.4.3 Tolling of Restrictive Periods. If the Executive violates any of the restrictions contained in Section 3, the Restrictive Periods shall be suspended and will not run in favor of the Executive until such time as the Executive cures the violation to the satisfaction of Company.

3.4.4 Remedies For Violation of Non-Competition or Confidentiality Provisions. Without limiting the right of the Company to pursue all other legal and equitable rights available to it for violation of any of the obligations and covenants made by Executive herein, it is agreed that: the skills, experience and contacts of Executive are of a special, unique, unusual and extraordinary character which give them a peculiar value; because of the business of the Company, the restrictions agreed to by Executive as to time and area contained in the Agreement are reasonable; and the injury suffered by the Company by a violation of any obligation or covenant in the Agreement resulting from loss of profits created by (i) the competitive use of such skills, experience contacts and otherwise and/or (ii) the use or communication of any information deemed confidential herein will be difficult to calculate in damages in an action at law and cannot fully compensate the Company for any violation of any obligation or covenant in the Agreement, accordingly: (a) the Company shall be entitled to injunctive relief to prevent violations thereof and prevent Executive from rendering any services to any person, firm or entity in breach of such obligation or covenant and to prevent Executive from divulging any confidential information; and (b) compliance with the Agreement is a condition precedent to the Company’s obligation to make payments of any nature to Executive, subject to the other provisions hereof.

3.4.5 Breach. Executive agrees that any breach of restrictive covenants above cannot be remedied solely by money damages, and that in addition to any other remedies Company may have, Company is entitled to obtain injunctive relief against Executive. Nothing herein, however, shall be construed as limiting Company’s right to pursue any other available remedy at law or in equity, including recovery of damages and termination of this Agreement and/or any payments that may be due pursuant to this Agreement.

3.5 Materiality and Conditionality of Section 3. The covenants contained in Sections 3 are material to this Agreement. Executive’s agreement to strictly comply with Sections 3 are a precondition for Executive’s receipt of payments and vesting of Stock Grants pursuant to Section 2 of this Agreement. Whether or not Section 3 or any portion thereof has been held or found invalid or unenforceable for any reason whatsoever by a court or other constituted legal authority of competent jurisdiction, upon any violation of Section 3 or any portion thereof, or upon a finding that a violation would have occurred if such Section or any portion thereof were enforceable, the Executive and Company agree that (i) the Executive’s interest in the Stock Grants pursuant to Section 2 and 4 of this Agreement shall automatically lapse and be forfeited; and (ii) Company shall have no obligation to make any further payments to Executive under this Agreement.

3.6 Severability, Modification of Covenants. The Executive and Company agree that all of the covenants contained in Section 3 shall survive the termination or expiration of this Agreement, and agree further that in the event any of the covenants contained in Section 3 shall be held by any court to be effective in any particular area or jurisdiction only if said covenant is modified to be limited in its duration or scope, then, at the sole option of Company, the provisions of Section 3.5 may be deemed to have been triggered, and the rights, liabilities and obligations set forth therein shall apply. In the event Company does not elect to trigger

application of Section 3.5, then the court shall have such authority to so reform the covenants and the parties hereto shall consider such covenants and/or other provisions of Section 3 to be amended and modified with respect to that particular area or jurisdiction so as to comply with the order of such court and, as to all other jurisdictions, the covenants contained herein shall remain in full force and effect as originally written. Should any court hold that the covenants in Section 3 are void and otherwise unenforceable in a particular area or jurisdiction, then notwithstanding the foregoing provisions of this Section 3.6, the provisions of Section 3.5 shall be applicable and the rights, liabilities and obligations of the parties set forth therein shall apply. Alternatively, at the sole option of Company, Company may consider such covenants to be amended and modified so as to eliminate therefrom the particular area or jurisdictions as to which such covenants are so held void or otherwise unenforceable and, as to all other areas and jurisdictions covered herein, the covenants contained herein shall remain in full force and effect as originally written.

4. Termination.

4.1 As used in this Agreement, “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, the date of receipt of the notice of termination or any later date specified therein within ninety (90) days of such notice, as the case may be, (ii) if the Executive’s employment is terminated by the Executive for Good Reason pursuant to Section 4.7, the effective date of such termination pursuant to Section 4.7, (iii) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the date on which the Company notifies the Executive of such termination, (iv) if the Executive voluntarily resigns other than for Good Reason pursuant to Section 4.7, the date on which the Executive notifies the Company of such resignation, (v) if the Executive’s employment is terminated by reason of death, the date of death of the Executive, (vi) if the Executive’s employment is terminated by the Company due to Disability, the date ninety (90) days after the Company’s written notice to the Executive, or (vii) if the Executive’s employment is terminated by the Executive or the Company as a result of a Notice of Non-Renewal, the Scheduled Termination Date.

4.2 Termination Upon Death. If the Executive dies during the Term, this Agreement shall terminate; provided, however, that in any such event, the Company shall pay to the Executive’s estate (i) in a lump sum within thirty (30) days of the Date of Termination, any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by the Executive prior to the termination but not yet paid; (ii) at the same time payable pursuant to Section 2.2.1 and 2.2.2, any short term incentive and long term incentive payments for the prior fiscal year that shall have been earned by the Executive prior to the termination and not yet paid; and (iii) any Benefits that have vested in the Executive as of the Date of Termination as a result of the Executive’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which the Executive is entitled to reimbursement pursuant to this Agreement (collectively, the “Accrued Amounts”). In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.3 Termination With Cause. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate the Executive’s

employment under this Agreement and discharge the Executive with Cause. If such right is exercised, the Company’s obligation to the Executive shall be limited solely to the payment of the Accrued Amounts excluding the prorated short term incentives and accrued but unpaid vacation. As used in this Agreement, the term “Cause” shall mean, in the good faith determination of the Board any: (A) willful failure to substantially perform Executive’s duties with the Company (other than by reason of Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation within thirty (30) days of such written notice from the Company; (B) Gross negligence in the performance of the Executive’s duties; (C) Conviction of, or plea of guilty or nolo contendre to any felony or any crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company; (D) Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including without limitation Executive’s breach of fiduciary duties owed to the Company; (E) Willful violation of any material provision of the Company’s code of conduct; (F) Willful violation of any of the material covenants contained in Section 3, as applicable; (G) Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or (H) Engaging in any material act that is intended or may be reasonably expected to harm the reputation, or operations of the Company.

4.4 Termination Due to Voluntary Retirement. The Executive has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to terminate his/her employment under this Agreement due to Voluntary Retirement. Voluntary Retirement is the termination of employment after age 65 with no expectation of returning to the industry. The provisions of Section 3 remain in full force and effect upon Voluntary Retirement.

Upon Voluntary Retirement, in exchange for the Executive executing and delivering a Release as described in Section 4.5.2, Executive shall be entitled to receive:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2); and

(B) An amount equal to twelve (12) months of Executive’s then current salary, payable in bi-monthly installments, beginning on the sixtieth day after Voluntary Retirement (the “Retirement Payment”). The Retirement Payment shall be made in accordance with the company’s payroll practices.

(C) The Company shall have the right to cease or terminate the Retirement Payment in the event the Executive breaches, in the Company’s sole discretion, any covenant contained in Section 3 of this Agreement.

(D) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of twelve (12) months after the Date of Termination, (B) the date the Executive first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of

the Executive, the Company shall, via proper COBRA election by the Executive, continue medical and dental benefits to the Executive (and, if applicable, to the spouse and dependents of the Executive who received such benefits under the Executive’s coverage immediately prior to the Date of Termination) equal to those that were in effect for the Executive as of the Date of Termination (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company had the Executive remained actively employed, provided that the Executive makes all required COBRA payments to the Company, and the Company shall immediately reimburse the Executive for each such COBRA payment (collectively, the “Continuation of Benefits”). Executive shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination.

(E) In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.5 Termination Without Cause or For Good Reason. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause. If the Executive is terminated during the Term without Cause including any termination by the Executive which is deemed to be for Good Reason under Section 4.7 hereof, the Company’s obligation to the Executive shall be limited solely to the following:

4.5.1 Severance Payments.

The Company shall pay to the Executive, in exchange for the Executive executing and delivering a Release as described in Section 4.5.2, as follows:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2); and

(B) An amount equal to twelve (12) months of Executive’s then current salary, payable in bi-monthly installments, beginning on the sixtieth day after the Date of Termination. Severance payment shall be made in accordance with the company’s payroll practices [with a lump sum payment due to Executive of any remaining severance amounts containing the complete remainder of all severance due to Executive within thirty days of the end of the Restricted Period].

(C) The Company shall have the right to cease or terminate the severance payments in the event the Executive breaches, in the Company’s sole discretion, any covenant contained in Section 3 of this Agreement.

(D) Assuming Executive works a minimum of 90 days in the year in which termination occurs, Executive will also receive the pro-rated target STI Plan amount for the year in which termination occurs, pro-rated through the last full quarter the Executive worked prior to such termination. This amount shall be paid to the Executive in the succeeding calendar year for which it is earned and shall be paid by March 31 of such year.

(E) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of twelve (12) months after the Date of Termination, (B) the date the Executive first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of the Executive, the Company shall, via proper COBRA election by the Executive, continue medical and dental benefits to the Executive (and, if applicable, to the spouse and dependents of the Executive who received such benefits under the Executive’s coverage immediately prior to the Date of Termination) equal to those that were in effect for the Executive as of the Date of Termination (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company had the Executive remained actively employed, provided that the Executive makes all required COBRA payments to the Company, and the Company shall immediately reimburse the Executive for each such COBRA payment (collectively, the “Continuation of Benefits”). Executive shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination and for any additional coverage not effective at the Date of Termination. Any reduction of coverage as selected by the Executive will be treated appropriately.

(F) Outplacement Services provided by a firm selected by the Company in its sole discretion for a period of twelve months and in an amount not to exceed $10,000.

(G) In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.5.2 Release. As a condition to the Executive’s receipt of payments and/or benefits described under Sections 4.4 and 4.5, the Executive must execute and deliver to the Company, within the time period stated in the Release, and not subsequently revoke, a full release of all claims that the Executive may have against the Company, its affiliates, and all of their officers, employees, directors, and agents, in a form mutually and reasonably agreeable to the parties hereunder. The Company shall provide the Executive with a form of release within ten (10) days from the Date of Termination.

4.6 Termination upon Disability. If during the Term the Executive becomes physically or mentally disabled, whether totally or partially, as defined by the Company’s Long-Term Disability Plan then in effect, the Company shall, by written notice to the Executive, terminate the Executive’s employment hereunder and discontinue payments of the Annual Salary, Annual Bonus and Benefits accruing from and after the date of such termination. Upon the Company’s termination of the Executive’s employment by reason of the Executive’s Disability, the Company’s obligation to the Executive shall be limited solely to the payment of the Accrued Amounts (at the same time and in the same manner as set forth in Section 4.2) and provision of the Continuation of Benefits. In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.7 Good Reason. Notwithstanding any other provision of this Agreement, the Executive’s employment under this Agreement may be terminated during the Term by the Executive, which shall be deemed to be constructive termination by the Company without Cause, if one of the following events constituting “Good Reason” shall occur unless the Executive has consented in writing thereto: (i) the occurrence of any material breach of this Agreement by the Company or any of its affiliates; (ii) any material failure by the Company after a Change of Control of the Company to comply with Section 2 hereof; (iii) following a Change of Control of the Company, the failure to obtain the assumption in writing of all of the Company’s material obligations under this Agreement by any successor to all or substantially all of the assets of the Company or any affiliate within fifteen (15) days after a reorganization, merger, consolidation, sale or other disposition of assets of the Company or such affiliate; (iv) the Company’s assignment to the Executive of any duties materially inconsistent with Executive’s position, including any other action which results in a material diminution in such status, title, authority, duties or responsibility; or (v) the relocation of Executive’s office to a location more than thirty five (35) miles outside Houston, Texas. Any such termination pursuant to this Section 4.7 shall be made by the Executive providing written notice to the Company specifying the event relied upon for such termination and given within sixty (60) days after such event. Any termination for Good Reason pursuant to this Section 4.7 shall be effective sixty (60) days after the date the Executive has given the Company such written notice setting forth the grounds for such termination with specificity; provided, however, that the Executive shall not be entitled to terminate this Agreement in respect of any of the grounds set forth above if within sixty (60) days after such notice the action constituting such ground for termination has been cured and is no longer continuing. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the date sixty (60) days following a Change of Control of the Company shall be deemed to be termination for Good Reason for all purposes under this Agreement, shall be effective upon written notice by the Executive to the Company during such 30-day period, shall be conclusive and shall not be subject to any cure by the Company.

4.8 Change of Control. For the purposes hereof, a “Change of Control of the Company” shall be deemed to have occurred if, (i) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; (ii) there occurs a proxy contest or a consent solicitation, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event thereafter constitute less than a majority of the Board of Directors; or (iii) there occurs a reverse merger involving the Company in which the Company is the surviving corporation but the shares of common stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (iv) there is a sale of other disposition of all or substantially all of the assets of the Company; or (v) there is an adoption of any plan or proposal for the liquidation or dissolution of the Company; or Stewart Title Guaranty Company is placed in supervision, receivership, conservatorship, or special administrative action by the Texas Department of Insurance.

4.9 Notwithstanding the foregoing provisions of this definition of Change of Control, to the extent that any payment (or acceleration of payment) hereunder is (A) considered to be deferred compensation that is subject to, and not exempt under, Code Section 409A, and (B) payable due to the Change of Control, then the term Change of Control hereunder shall be construed to have the meaning as set forth in Code Section 409A with respect to the payment (or acceleration of payment) of such deferred compensation, but only to the extent inconsistent with the foregoing provisions of the Change of Control definition as determined by the Incumbent Board.

5. Other Provisions.

5.1 Stock Ownership. Executive shall reach and maintain ownership of a number of shares of SISCO stock within five (5) years of the Effective Date that are equivalent to a total share trading price of one (1) times the Annual Salary listed in Section 2.1 on the Effective Date. Both vested, and granted stack, and granted, but unvested stock, shall be counted toward this provision to reach and maintain stock ownership.

5.2 Section 409A.

5.2.1 Separation from Service. Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Executive under this Agreement in connection with a termination of Executive’s employment that would be considered “non-qualified deferred compensation” under Section 409A of the Internal Revenue Code (hereafter “Code”), in no event shall a termination of employment be considered to have occurred under this Agreement unless such termination constitutes Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h), and any successor provision thereto (“Separation from Service”).

5.2.2 Section 409A Compliance. Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, any severance payments payable to Executive under this Agreement shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-term deferrals). However, to the extent any such payments are treated as “non-qualified deferred compensation” subject to Section 409A of the Code, and if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section shall be paid in a lump sum to Executive (or Executive’s estate). The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by Company in accordance with the terms of Section 409A of the Code, and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

5.2.3 Section 409A; Separate Payments. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Executive may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.

5.2.4 Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if the Executive is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Executive has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Executive from the Company and its affiliates will be one dollar ($1.00) less than three times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 5.2.4 shall require the Company to be responsible for, or have any liability or obligation with respect to, the Executive’s excise tax liabilities under Section 4999 of the Code.

5.2.5 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement or in any Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive as soon as administratively practicable following such submission in accordance with the Company’s

policies regarding reimbursements, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.

5.2.6 Mitigation. Executive shall not be required to mitigate damages with respect to the termination of his employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due Executive under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to Executive under this Agreement shall not be offset by any claims the Company may have against the Executive, and the Company’s obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

5.3 Indemnification.

5.3.1 General. The Company agrees that if Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Executive is or was a trustee, director or officer of the Company, or any predecessor to the Company (including any sole proprietorship owned by the Executive) or any of their affiliates or is or was serving at the request of the Company, any predecessor to the Company (including any sole proprietorship owned by the Executive), or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Texas or Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by Executive in connection therewith, and such indemnification shall continue as to Executive even if Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

5.3.2 Expenses. As used in this Section, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

5.3.3 Enforcement. If a claim or request under this Section 5 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Executive may at any time thereafter bring an arbitration claim against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Texas or Delaware law.

5.3.4 Partial Indemnification. If Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Executive for the portion of such Expenses to which Executive is entitled.

5.3.5 Advances of Expenses. Expenses incurred by Executive in connection with any Proceeding shall be paid by the Company in advance upon request of Executive that the Company pay such Expenses, but only in the event that Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

5.3.6 Notice of Claim. Executive shall give to the Company notice of any claim made against the Executive for which indemnification will or could be sought under this Agreement. In addition, Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within the Executive’s power and at such times and places as are convenient for the Executive.

5.3.7 Defense of Claim. With respect to any Proceeding as to which Executive notifies the Company of the commencement thereof:

(A) The Company will be entitled to participate therein at its own expense;

(B) Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Executive, which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. Executive also shall have the right to employ his own counsel in such action, suit or proceeding if he reasonably concludes that failure to do so would involve a conflict of interest between the Company and the Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

(C) The Company shall not be liable to indemnify Executive under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on Executive without the Executive’s written consent. Neither the Company nor Executive will unreasonably withhold or delay their consent to any proposed settlement.

5.3.8 Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 5 shall not be exclusive of any other right which Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

5.4 Legal Fees and Expenses. If any contest or dispute shall arise between the Company and Executive regarding any provision of this Agreement, the Company shall reimburse Executive for all legal fees and expenses reasonably incurred by Executive in connection with such contest or dispute, but only if Executive prevails to a substantial extent with respect to the Executive’s claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

5.5 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by courier service, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or sent by facsimile transmission or, if mailed or sent by courier service, on the date of actual receipt thereof, as follows:

(i) if to the Company, to:

Chief Executive Officer,

1980 Post Oak Blvd., Suite 800

Houston, Texas 77056

(ii) if to the Executive, to:

Jason R. Nadeau

2719 Taylorcrest

Missouri City, Texas 77459

Any party may change its address for notice hereunder by notice to the other party hereto.

5.6 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (including but not limited to prior employment agreements and incentive plans and agreements), written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect, and if any conflict between this agreement and the terms of such plans arises, the terms of the plan shall control.

5.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

5.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof).

5.9 Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company only to a successor by merger or purchasers of substantially all of the assets of the Company or its affiliates.

5.10 Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.11 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

5.12 No Presumption Against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision arising directly or indirectly herefrom shall be construed against any party as being drafted by said party.

5.13 No Duty to Mitigate. The Executive shall have no obligation to mitigate damages suffered as a result of termination of the Executive’s employment with the Company.

5.14 Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the breach thereof, the Executive and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, the Executive and the Company agree to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within thirty (30) days of a written demand for mediation, any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration before one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in English and held in Houston, Harris County, Texas, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration clause. The award shall be a reasoned award and rendered within thirty (30) days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section, the Company may seek injunctive relief from a court of competent jurisdiction located in Harris County, Texas, in the event of a breach or threatened breach of any covenant contained in Section 3.

5.15 Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and the Executive and the Executive’s legal representatives.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

EXECUTIVE	COMPANY STEWART INFORMATION SERVICES CORP.
By:  /s/ Jason R.Nadeau		By: /s/ Matthew W. Morris
Date: October 12, 2012		Date: October 12, 2012
Name: Jason R. Nadeau		Name: Matthew W. Morris
Title: Group President,		Title: Chief Executive Officer
Mortgage and Title Services

EXHIBIT A

ANNUAL SHORT TERM INCENTIVE PLAN

(“STI PLAN”)

Executive shall be eligible to participate in the Company’s Annual Bonus Payment Program, also known as the Short Term Incentive Plan (“STI Plan”). The STI Plan shall be determined by the Board of Directors (“Board”), in its sole discretion.

Payout amount will be determined by the attainment towards metrics which are both specific to your position as well as reflective of corporate performance.

As part of its analysis, the Board shall consider the following targets in determining the amount of the STI payment to the Executive:

Short Term Incentive (STI)

Target Payout:	100% of Base Pay	350,000
Maximum Target Payout:	200% of Target	700,000

Metrics Used to Determine STI

	Maximum			Target	Threshold			Weighting
Corporate Performance
Corporate EBITDA Improvement		140.0	%	50.0%		25.0	%		20	%
Corporate Modified Return on Equity		11.0	%	6.0%		3.0	%		16	%
Corporate Total Shareholder Return Ranking		80.0	%	50.0%		30.0	%		4	%
Operational Performance
Modified EBITDA Improvement		10.0	%	7.5%		0.0	%		22	%
Modified EBITDA Margin		30.0	%	20.0%		10.0	%		16	%
Employee Costs Ratio		60.0	%	65.0%		70.0	%		14	%
NPS Expenses Ratio		6.30	%	6.65%		7.00	%		8	%

STI payment amounts will be delivered as a cash bonus, paid annually after the conclusion of the fiscal year, before the end of the first quarter of the succeeding fiscal year. STI payout is expressed as a percentage of your base pay.

Target Annual STI payout is the equivalent of 100% of your base pay.

Maximum Annual STI payout is the equivalent of 200% of your target payout.

Specific terms and calculations related to the Short Term Incentive (STI) Plan

The following terms are in relation to our global STI Plan. Individual metrics may or may not apply to your specific agreement.

Periodically, components of metrics may be adjusted, which may impact comparability between measurement periods. In such cases, prior period components of metrics will be restated to conform to the current measurements.

Term/Calculation	Definition
Base Pay	This is the annual base salary.
Budget Attainment	Budget Attainment metric measures the variance between actual expenses and budget expenses for service center executives. The variance is expressed as a percent variance. The metric is calculated by taking the actual annual expenses minus the budgeted annual expenses. The difference is then divided by the budgeted annual expenses. Payout for this metric is based on variance percentage.
Company	The Company is Stewart Information Services Corporation and its subsidiaries.
Corporate	Corporate is the same as Company.
Corporate Performance	Corporate Performance is the set of metrics for the Company.
Cost Control Initiative	Cost Control Initiative metric is specific goals established for each service center executive. This metric is measured by determining how much of the annual goals were completed on a percentage basis. Payout for this metric is based on completion percentage.
Customer Service Index	Customer Service Index metric is an internal survey conducted at least annually. The initial benchmark is the survey completed in first half of 2012. A subsequent survey is then measured against the benchmark. The metric is calculated by taking the subsequent survey score minus the benchmark survey score. The difference is then divided by the benchmark survey score. Payout for this metric is based on percent improvement.

Term/Calculation	Definition
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	EBITDA metric is calculated by adding back interest expense, depreciation expense and amortization expense to pretax earnings. The source of data is the System of Record. Payout for this metric is based on percent improvement.
Employee Costs	Employee Costs is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes salaries, bonuses, commissions, payroll taxes, group insurance, profit sharing and other employee costs. The source of data is the System of Record.
Employee Costs Ratio	Employee Costs Ratio metric is calculated by dividing the Employee Costs by Operating Revenues. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
Investment and Other Gains (Losses) –Net	Investment and Other Gains (Losses) – Net is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes, but not limited to, realized earnings (losses) from the sale of various types of financial and non-financial instruments; sale of subsidiaries, equity basis investments, and cost-basis investments; impairment of equity and cost-basis investments; and other types of non-operating transactions. The source of data is the System of Record.
Investment Income	Investment Income is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes, but not limited to, interest income, dividends, royalties and certain rental income less any fees incurred from investments. The source of data is the System of Record.
Maximum (Performance Level)	See Performance Level.
Maximum Target Payout	The Maximum Target Payout is the maximum annual cash bonus that can be earned and paid under the STI. It is calculated by multiplying the Target Payout by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.

Term/Calculation	Definition
Modified Average Shareholders’ Equity	Modified Average Shareholders’ Equity is calculated by subtracting cumulative other comprehensive income and noncontrolling interest from shareholders’ equity. This calculation is done as of the beginning of the year and the end of the year. The average is then calculated by adding the beginning of the year and ending of the year calculations and then dividing by two.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA)	The Modified EBITDA metric is calculated by subtracting Investment Income, Investment and Other Gains (Losses) – Net, and other unique or unusual items including, but not limited to, certain claims exceeding $1.0 million as determined by the Board of Directors of the Company, from EBITDA. The source of data is the System of Record. Payout for this metric is based on percent improvement.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization Margin (Modified EBITDA Margin)	Modified Earnings Before Interest, Taxes, Depreciation and Amortization Margin metric is calculated by dividing Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA) by Operating Revenues. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
Modified Net Earnings Attributable to Company	Modified Net Earnings Attributable to Company is calculated by subtracting certain items including, but not limited to, certain unusual income tax expense or benefit as determined by the Board of Directors of the Company from Net Earnings Attributable to Company. The source of data is the System of Record.
Modified Return on Equity (Modified ROE)	Modified Return on Equity metric is calculated by dividing Modified Net Earnings Attributable to Company by Modified Average Shareholders’ Equity. The source of data is the System of Record. Payout for this metric is based on ratio attainment.

Term/Calculation	Definition
National Production Services (NPS) Expenses Ratio	National Production Services (NPS) Expenses Ratio metric is calculated by dividing NPS expenses by the sum of (1) Operating Revenues less the Company’s portion of earnings from equity investees from the Direct Operations Segment and (2) external Operating Revenues less the Company’s portion of earnings from equity investees from NPS. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
Operating Revenues	Operating Revenues is calculated by deducting Investment Income and Investment and Other Gains (Losses) – Net from total gross revenues. The Company’s portion of earnings from equity investees is included in the calculation. The source of data is the System of Record.
Operational Performance	Operational Performance is the set of metrics for an executives’ area of management.
Performance Level	Performance Level represents the range of possible payout depending on performance driver for each metric. The payout range is defined as the Threshold (50%), Target (100%) and Maximum (200%).
Policy Loss Ratio	Policy Loss Ratio metric is calculated by dividing Title Losses and Claims by Title Insurance Revenues from Direct Operations and Agency Operations. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
Premium Remittance Per Agency Ratio	Premium Remittance Per Agency Ratio metric is calculated by dividing premium revenues remitted by active independent agencies by the number of active independent agencies and excludes agencies who are zero dollar premium remitters. The source of the data is STNET, which is the primary source for policy remittances, along with the number of agencies. Payout for this metric is based on percent improvement.
System of Record	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
Target (Performance Level)	See Performance Level.

Term/Calculation	Definition
Target Payout	Target Payout is the annual cash bonus that can be earned and paid under the STI. Target Payout is calculated by multiplying Base Pay by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Threshold (Performance Level)	See Performance Level.
Title Insurance Revenues	Title Insurance Revenues are revenues earned from title insurance and escrow and other related fees. The source of data is the System of Record.
Title Losses and Claims	Title Losses and Claims is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that is defined in the Company’s Annual Report filed with the Securities Exchange Commission on the Form 10-K. The source of data is the System of Record.
Total Shareholder Return (TSR)	Total Shareholder Return is calculated by taking the difference between the Company’s end of year price per share and the beginning of year price per share and adding the Company dividend per share. Next, divide that sum by the Company’s beginning of year price per share.
Total Shareholder Return (TSR) Ranking	Total Shareholder Return Ranking metric is determined by calculating the Company’s percentile ranking for Total Shareholder Return relative to the Russell 2000 Financial Services Index. The source of data is Bloomberg, which is provided by Vaughn Nelson, the Company’s investment portfolio manager. Payout for this metric is based on percentile ranking.
Weighting	Weighting is a calculation that applies a percentage to each metric. The aggregation of the percentages is 100%.

EXHIBIT B

LONG TERM INCENTIVE PLAN

(“LTI PLAN”)

Executive shall be eligible to participate in the Company’s Long Term Incentive Plan (“LTI Plan”), as such plan shall be in effect and amended and/or superseded from time to time.

The actual value of the long term incentives (LTI) shall be determined by the Board of Directors (“Board”), in its sole discretion. The Board shall consider the overall performance of the Company in awarding the LTI. As part of its analysis, the Board shall consider the following targets in determining the value of the LTI payable to the Executive:

Long Term Incentive (LTI)

Target Payout:	100% of Base Pay
60% paid as a Restricted Stock Award (RSA)		210,000
40% paid as Restricted Performance Units (RPU)		140,000
		350,000
Potential RPU Max Payout	200% of RPU Target	280,000
Total Max Potential Value Payout		490,000

Metrics Used to Determine LTI

	Maximum			Target			Threshold			Weighting
Corporate Performance
RSA (Restricted Stock Award): Annualized Total Shareholder Return at the 50th percentile ranking over the three year performance period or Annualized Total Shareholder Return (TSR) is at least positive over the three year performance period.		100.0	%		100.0	%		100.0	%		60.0	%
RPU (Restricted Performance Units): SISCO Total Shareholder Return compared to the Russell 2000 Financial Services Index (Percentile Ranking) with a Circuit Breaker (positive EBITDA initially over 2 years and subsequently 3 years)		200.0	%		100.0	%		50.0	%		40.0	%
Performance Levels (Payout) : 50%-200%
Performance Goals: 30%-75% Max

Target LTI grant is the equivalent of 100% of your base pay.

LTI will be delivered as both a RSA (60% of LTI grant) and RPUs (40% of LTI grant). (Each RPU = $1).

LTI will be granted annually. It is 100% granted, but vests depending on metrics. Grants will be restricted by a 3-year cliff vest, with the exception of RPU, which will vest over 2 years initially.

Corporate Payout (% of Target):

RSA - Shares from RSA are granted annually and vest over the succeeding three years. Vesting consists of a time component and a performance component. RSA will vest at the end of the three years following grant if either the Total Shareholder Return (TSR) is at least positive over the three year performance period or the TSR is in the 50th percentile ranking relative to the Russell 2000 Financial Services Index (Percentile Ranking) over the three year performance period. This is an “all or nothing” payout depending on the results of TSR.

RPU - RPU will vest depending on Total Shareholder Return (TSR) compared to the Russell 2000 Financial Services Index (Percentile Ranking) with a Circuit Breaker (positive EBITDA initially over 2 years and subsequently 3 years).

RPU Performance Levels (payouts) range from 50% Threshold to 100% Target to 200% Maximum. RPU Performance Goals range from 30% Threshold to 50% Target to 75% Maximum. The payouts are on a sliding scale depending on where goal attainment falls in the range.

Both RSA and RPU are generally granted at the beginning of the fiscal year, with the exception of the 2012 grant which will be granted on October 1, 2012 or at the time of agreement execution if after October 1, 2012.

Specific terms and calculations related to the Long-Term Incentive (LTI)

The following terms are in relation to our global LTI Plan. Individual metrics may or may not apply to your specific agreement.

Periodically, components of metrics may be adjusted, which may impact comparability between measurement periods. In such cases, prior period components of metrics will be restated to conform to the current measurements.

Term/Calculation	Definition
Base Pay	This is the annual base salary.
Company	The Company is Stewart Information Services Corporation and its subsidiaries.
Circuit Breaker	Circuit Breaker is the minimum corporate performance that must be achieved in order to receive the specified compensation.
Earnings Before Interest, Taxes, Depreciation         and Amortization (EBITDA)	EBITDA metric is calculated by adding back interest expense, depreciation expense and amortization expense to pretax earnings. The source of data is the System of Record.
Maximum (Performance Level)	See Performance Level.

Term/Calculation	Definition
Maximum Target Payout	The Maximum Target Payout is the maximum annual cash bonus that can be earned and paid under the LTI. It is calculated by multiplying the Target Payout by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Performance Goals	Performance Goals provide the threshold, target and maximum measurements that must be achieved in order to receive the related level of compensation.
Performance Level	Performance Level represents the range of possible payout depending on performance driver for each metric. The payout range is defined as the Threshold (50%), Target (100%) and Maximum (200%).
Restricted Performance Unit (RPU)	Restricted Performance Unit is cash compensation that is restricted by time of service and corporate performance.
Restricted Stock Award (RSA)	Restricted Stock Award is share-based compensation that is restricted by time of service and corporate performance.
System of Record	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
Target (Performance Level)	See Performance Level.
Target Payout	Target Payout is the share-based cash bonus that can be earned under the LTI. Target Payout is distributed over two years initially (then three years). Target Payout is calculated by multiplying Base Pay by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Threshold (Performance Level)	See Performance Level.
Total Shareholder Return (TSR)	Total Shareholder Return is calculated by taking the difference between the Company’s end of year price per share and the beginning of year price per share and adding the Company dividend per share. Next, divide that sum by the Company’s beginning of year price per share.

Term/Calculation	Definition
Total Shareholder Return (TSR) Ranking	Total Shareholder Return Ranking is determined by calculating the Company’s percentile ranking for Total Shareholder Return relative to the Russell 2000 Financial Services Index. The source of data is Bloomberg, which is provided by Vaughn Nelson, the Company’s investment portfolio manager.

EXHIBIT C

PERQUISITES

Executive shall be eligible to participate in the additional perquisites:

• Executive Long Term Disability Plan (Company paid)

• Non-Qualified Deferred Compensation Plan provided through the Company

• Paid Association/Membership Dues as needed for the position and with Management approval

• Executive Development as needed for the position up to $5,000 and with Management approval

EX-10.10

EXHIBIT 10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of January 1, 2012 (the “Effective Date”), by and between Stewart Information Services Corp. (the “Company”), and Glenn H. Clements (the “Executive”).

The parties agree as follows:

1. Employment, Duties and Acceptance.

1.1 Term of Employment by the Company. The Company hereby agrees to employ the Executive for a term commencing on the Effective Date and expiring on the third anniversary of such date (such date, or later date to which this Agreement is extended in accordance with the terms hereof, the “Scheduled Termination Date”), unless earlier terminated as provided in Section 4 or unless extended as provided herein (the “Term”). The Term shall be automatically extended commencing on the Scheduled Termination Date and on each Scheduled Termination Date thereafter (each such date being a “Renewal Date”), so as to terminate one (1) year from such Renewal Date, unless and until at least ninety (90) days prior to a Renewal Date either party hereto gives written notice to the other that the Term should not be further extended after the next Renewal Date (a “Notice of Non-Renewal”), in which event the Scheduled Termination Date shall be the Renewal Date next following receipt of the Notice of Non-Renewal.

1.2 Duties. During the Term, the Executive shall serve as Group President, Direct Operations of the Company, with such duties and responsibilities as are commensurate with such position and such other functions consistent with the foregoing as the Chief Executive Officer (“CEO”) may assign, in CEO’s discretion, from time to time. The Executive shall report to the Chief Executive Officer and also serve in those offices and directorships of affiliates of the Company to which the Executive may from time to time be appointed or elected. During the Term, the Executive shall devote all reasonable efforts and all of the Executive’s business time and services to the Company, subject to the direction of the CEO.

1.2.1 Executive shall not directly or indirectly render any services of a business, commercial, or professional nature to any other person, firm, corporation, or organization, whether for compensation or otherwise, without the prior written consent of the CEO. However, Executive shall have the right to engage in such activities as may be appropriate in order to manage his personal investments so long as such activities do not materially interfere or conflict with the performance of his duties to the Company hereunder. The conduct of such activity shall not be deemed to materially interfere or conflict with Executive’s performance of his duties until Executive has been notified in writing thereof and given a reasonable period in which to cure the same.

1.2.2 Fiduciary Duty. Executive acknowledges and agrees that he owes a fiduciary duty to the Company and further agrees to make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not act for his own benefit concerning the subject matter of his fiduciary relationship.

1.2.3 Compliance. Executive agrees that he will not take any action in violation of United States laws or other laws applicable to Executive’s employment, including, but not limited to the Securities Exchange Act of 1934.

1.3 Acceptance of Employment by the Executive. The Executive hereby accepts such employment and shall render the services and perform the duties described above.

2. Compensation and Other Benefits.

2.1 Annual Salary. The Company shall pay to the Executive an annual salary at a rate of not less than Four Hundred Thousand Dollars ($400,000) per year (the “Annual Salary”), subject to increase at the sole discretion of the Board of Directors of Stewart Information Services Corporation (the “Board of Directors” or the “Board”). The Annual Salary shall be payable in accordance with the payroll policies of the Company as from time to time in effect, but in no event less frequently than twice each month, less such deductions as shall be required to be withheld by applicable law and regulations and less any Executive voluntary deductions.

2.2 Incentive Payments.

2.2.1 Short Term Incentives. The Executive shall be eligible to receive an annual short term incentive cash payment, the incentive plan to be determined by the Board in its sole discretion. The terms of the short term incentive plan (“STI Plan”) are set out in Exhibit A hereto, which is incorporated herein for all purposes. The terms and conditions of the STI Plan are subject to change from year to year. The payment made pursuant to this Section 2.2.1 shall be paid to the Executive in the succeeding calendar year for which it is earned and shall be paid by March 31 of such year. The Executive must be actually employed on the date that any short term incentive plan payment is made in order to be eligible and entitled to any such short term incentive plan payment.

2.2.2 Long Term Incentives. The Executive shall be eligible to participate in the Company’s Long Term Incentive Plan (“LTI Plan”), as such plan shall be in effect and amended and/or superseded from time to time. The Company reserves the right to terminate the LTI Plan in its sole discretion in accordance with the terms of the LTI Plan, and the terms and conditions of the Plan are subject to change from year to year. The terms of the LTI Plan are set out in Exhibit B hereto, which is incorporated herein for all purposes. The Executive must be actually employed on the date that any long term incentive plan payment is made in order to be eligible and entitled to any such long term incentive plan payment.

2.2.3 Special Vesting Terms for Stock Grants and Awards. All unvested stock grants and other awards, including, but not limited to, restricted performance units and restricted stock awards, granted pursuant to any specific terms and metrics in the employment agreement, including, but not limited to, the LTI Plan referred to in Section 2.2.2 above or the Stewart Information Services Corp. Amended and Restated 2005 Long Term

Incentive Plan (the “Incentive Plan”) (collectively, “Stock Grants”) shall vest on a pro-rata basis, only in accordance with the terms and methods provided below in Sections 2.2.3.1. through 2.2.3.4 (i) in the event of the Company’s termination of the Executive’s employment without Cause during the Term, (ii) in the event of the Executive’s resignation during the Term for Good Reason (as hereinafter defined) pursuant to Section 4.7, (iii) in the event of termination of the Executive’s employment due to the Executive’s Death or Disability (as hereinafter defined); or, (iv) in the event of the Executive’s Voluntary Retirement during the Term.

2.2.3.1 The pro-rata vesting of the Incentive Plan and Stock Grants as specified in Section 2.2.3 above shall be based on the number of full, completed months worked by the participating Executive during the applicable performance-based incentive period (as set forth in Exhibit B), but only if the Executive was actively employed for at least twenty-five percent (25%) of the applicable performance-based incentive period. Performance-based incentive awards and Stock Grants shall be based on actual results compared to the target objectives at the end of the incentive period, as determined by the Company, and shall be vested to the eligible Executive as described in the preceding sentence, if the Executive satisfies the requirement of active employment for at least twenty-five percent (25%) of the completed months of the performance-based incentive period. Any pro-rata vesting or release of restrictions on long-term incentive awards or Stock Grants shall be effective only following expiration of the revocation period applicable to the Release of Claims, if required by the Company, and provided there has been no revocation or attempted revocation thereof (“Release Effective Date”) and following the end of the applicable performance-based incentive period and certification of results by the Company.

2.2.3.2 If the Executive should terminate employment during the Term of this Agreement for any reasons other than those specified in this Section 2.2.3 above or due to Change of Control (defined hereafter), or if the Executive shall violate the confidentiality, non-competition, conflicts of interest, or non-solicitation provisions of Section 3 of this Agreement, the special pro-rata terms specified in this Section, as well as the terms specified in Section 2.2.3.5, shall not apply to the Executive, and the Executive shall forfeit any unvested awards, Stock Grants and Incentive Plan benefits accumulated by the Executive as of the time of the breach of this Agreement or of termination from employment.

2.2.3.3 Calculation of Pro-Rata Special Vesting. The calculation of pro-rata Special Vesting of awards and Stock Grants shall be determined as a percent of the total possible vested award that would have been vested to the Executive had the Executive remained employed during the entire performance-based incentive period, measured in whole months, through termination of employment, multiplied by a fraction whose numerator is the percentage of the number of months of completed employment during the entire performance-based incentive period plus 100% and whose denominator is 2. Any such pro-rata vesting shall occur at the same time and in the same manner as the vesting of active executives participating in the incentive program and shall, in no event, become vested or delivered prior to such time.

2.2.3.4. Hypothetical Example. For the purpose of the avoidance of any confusion, by way of hypothetical example only: if an executive shall terminate employment during the twenty-fourth (24^th) month of a thirty-six (36) month performance-based

incentive program for the permitted reasons specified in Section 2.2.3 above and is otherwise entitled to participate in the performance-based incentive program, and if the performance-based incentives are achieved and certified by the Company in full satisfaction of the incentive targets, the executive shall receive (81.94%) pro-rata vesting of the applicable awards and Stock Grants at the designated time. The formula: % of the number of complete months of employment (23 ÷ 36 = 63.88%) + 100% = 163.88% ÷ 2 = 81.94% pro-rata award.

2.2.3.5. Vesting Upon Change in Control. In the event of a Change in Control (as defined hereafter), Executive’s unvested Stock Grant award shall immediately and fully vest at target performance level. In the event that Executive is subject to the pro-rata Special Vesting provisions above at the time of the occurrence of a Change in Control, by reason of the Executive’s resignation during the Term for Good Reason (as hereinafter defined), Death or Disability (as hereinafter defined); or the Executive’s Voluntary Retirement during the Term, prior to the Change of Control event, the unvested portion of the Executive’s Stock Grant award shall immediately and fully vest notwithstanding the pro-rata Special Vesting provisions.

2.2.4 Upon the Executive’s termination without Cause, resignation for Good Reason, Voluntary Retirement or due to the Executive’s death or Disability, any vested Stock Grants held by the Executive on the Date of Termination or that vest thereafter may be exercised at any time until the earlier of (A) the third anniversary of the Date of Termination and (B) the expiration date of the Stock Grants.

2.2.5 Notwithstanding the foregoing provisions of this Section 2.2, if the Executive dies after the Executive’s employment by the Company is terminated but while any of the Stock Grants applicable to the Executive remain exercisable as set forth above, such Stock Grants may be exercised at any time until the later of (A) the earlier of (1) the first anniversary of the date of such death and (2) the expiration date of such Stock Grants and (B) the last date on which such Stock Grants would have been exercisable, absent this Section 2.2.5.

2.2.6 Notwithstanding the foregoing provisions of this Section 2.2, upon the termination of the Executive’s employment with the Company for any reason, other than termination for Cause by the Company, during the 24-month period following any Change of Control Effective Date, any Stock Grants held by the Executive as of the Change of Control Effective Date that remain outstanding as of the Date of Termination may thereafter be exercised, until the later of (A) the last date on which such Stock Grants would be exercisable in the absence of this Section 2.2 and (B) the earlier of (1) the third anniversary of the Change of Control Effective Date and (2) the expiration date of such Stock Grants.

Notwithstanding anything in this Agreement to the contrary, express or implied, the provisions of this Agreement are in addition to and not in limitation of the Executive’s rights under the Incentive Plan and any other plan, program, policy or practice provided by the Company or any affiliate and for which the Executive may qualify. Where a conflict between the Incentive Plan and this Agreement may arise, the terms more favorable to the Executive shall control.

2.3 Perquisites. Executive shall be entitled to receive the Perquisites provided for on Exhibit C hereto.

2.4 Vacation Policy. The Executive shall be entitled to four (4) weeks of paid vacation during each calendar year of the Term which shall accrue in accordance with Company policy.

2.5 Participation in Employee Benefit Plans. The Company agrees to permit the Executive during the Term to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, similar benefit plan or other so called “fringe benefits” of the Company (collectively, “Benefits”). The Executive shall cooperate with the Company in applying for such coverage, including submitting to a physical exam and providing all relevant health and personal data. The Company shall not make any changes in any plans or arrangements provided pursuant to this Section 2.5 which would adversely affect the Executive’s right to benefits thereunder unless such changes occur pursuant to a program applicable to all executives of the Company and which does not result in a proportionally greater reduction in the rights and benefits to Executive as compared to any other executives of the Company.

2.6 General Business Expenses. The Company shall pay or reimburse the Executive for all business expenses reasonably and necessarily incurred by the Executive during the Term in the performance of the Executive’s services under this Agreement. Such payment shall be made upon presentation of such documentation as the Company customarily requires of its executives prior to making such payments or reimbursements.

2.7 Other Benefits. Executive shall be entitled to participate in or receive benefits under any compensatory employee benefit plan or other arrangement made available by the Company now or in the future (“Other Benefits”) to its senior executive officers and key management employees, subject to and on a basis consistent with the terms, conditions, and overall administration of such plan or arrangement. Nothing paid to Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary payable to Executive pursuant to Section 2.1 of this Agreement. The Company shall not make any changes in any employee benefit plans or other arrangements in effect on the date hereof or subsequently in effect in which Executive currently or in the future participates (including, without limitation, each pension and retirement plan, supplemental pension and retirement plan, savings and profit sharing plan, stock or unit ownership plan, stock or unit purchase plan, stock or unit option plan, life insurance plan, medical insurance plan, disability plan, dental plan, health and accident plan, or any other similar plan or arrangement) that would adversely affect Executive’s rights or benefits there under, unless such change occurs pursuant to a program applicable to substantially all executives of the Company and does not result in a proportionately greater reduction in the rights of or benefits to Executive as compared with any other executive of the Company.

3. Confidentiality and Company Property; Non-Competition and Non-Solicitation.

3.1 Covenants of Executive. The Executive acknowledges that (i) the Company is currently engaged in the business of providing real estate support services, including without limitation title insurance, real estate information services, escrow services and related

transaction services (the “Company Business”); (ii) the Company will give the Executive access to trade secrets of and Confidential Information (defined in Section 3.2.1 below) concerning the Company in connection with the Executive’s work for the Company; and (iii) the agreements and covenants contained in this Agreement are essential to protect the business and goodwill of the Company.

3.2 The covenants of the Executive contained in this Section will be construed as independent of any other provision in this Agreement; and the existence of any claim or cause of action by the Executive against the Company will not constitute a defense to the enforcement by the Company of said covenants. The Executive has been advised to consult with counsel in order to be informed in all respects concerning the reasonableness and propriety of this Section and its provisions with the specific regard to the nature of the business conducted by the Company, and the Executive acknowledges that this Section and its provisions are reasonable in all respects.

3.2.1 Confidential Information. The Executive acknowledges that the Company has a legitimate and continuing proprietary interest in the protection of its Confidential Information (and that of its affiliates) and that it has invested substantial sums and will continue to invest substantial sums to develop, maintain and protect Confidential Information. The Company agrees to provide the Executive access to Confidential Information in conjunction with the Executive’s duties, including, without limitation, information of a technical and business nature regarding the past, current or anticipated business of the Company and its affiliates that may encompass financial information, financial figures, trade secrets, customer lists, details of client or consultant contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans, employee information, organizational charts, new personnel acquisition plans, technical processes, inventions and research projects, ideas, discoveries, inventions, improvements, trade secrets, writings and other works of authorship (collectively, “Confidential Information”). In exchange, as an independent covenant, the Executive agrees not to make any unauthorized use, publication, or disclosure, during or subsequent to the Executive’s employment by the Company, of any Confidential Information generated or acquired by the Executive during the course of the Executive’s employment, except to the extent that the disclosure of such Confidential Information is necessary to fulfill the Executive’s responsibilities as an employee of the Company. The Executive understands that Confidential Information includes information not generally known by or available to the public about or belonging to the Company, its divisions and affiliates, or belonging to other companies to whom the Company, its divisions and affiliates, may have an obligation to maintain information in confidence, and that authorization for public disclosure may only be obtained through the Company’s written consent.

3.2.2 Property of the Company. All memoranda, notes, lists, records, and other documents or papers (and all copies thereof) relating to the Company, including such items stored in computer memories, microfiche or by any other means, made or compiled by or on behalf of the Executive after the date hereof, or made available to the Executive after the date hereof relating to the Company, its affiliates or any entity which may hereafter become an affiliate thereof, shall be the property of the Company, and shall be delivered to the Company promptly upon the termination of the Executive’s employment with the Company or at any other time upon request; provided, however, that the Executive’s address books, diaries, chronological correspondence files and rolodex files (including digital formats) shall be deemed to be property of the Executive.

3.2.3 Original Material. The Executive agrees that any inventions, discoveries, improvements, ideas, concepts or original works of authorship relating directly to the Company Business, including without limitation information of a technical or business nature such as ideas, discoveries, inventions, trade secrets, know-how, writings and other works of authorship, computer programs, financial figures, marketing plans, customer lists and data, business plans or methods and the like, which relate in any manner to the actual or anticipated business or the actual or anticipated areas of business of the Company and its divisions and affiliates, whether or not protectable by patent or copyright, that have been originated, developed or reduced to practice by the Executive alone or jointly with others during the Executive’s employment with the Company shall be the property of and belong exclusively to the Company. The Executive shall promptly and fully disclose to the Company the origination or development by the Executive of any such material and shall provide the Company with any information that it may reasonably request about such material. Either during or subsequent to the Executive’s employment, upon the request and at the expense of the Company or its nominee, and for no remuneration in addition to that due the Executive pursuant to the Executive’s employment by the Company, but at no expense to the Executive, the Executive agrees to execute, acknowledge, and deliver to the Company or its attorneys any and all instruments which, in the judgment of the Company or its attorneys, may be necessary or desirable to secure or maintain for the benefit of the Company adequate patent, copyright, and other property rights in the United States and foreign countries with respect to any such inventions, improvements, ideas, concepts, or original works of authorship embraced within this Agreement.

3.2.4 Non-Competition During Employment. Executive agrees during his employment under this Agreement, he will not compete with the Company by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which the Company provides, and that he will not work for, in any capacity, assist, or became affiliated with as an owner, partner, etc., either directly or indirectly, any individual or business which offer or performs services, or offers or provides products substantially similar to the services and products provided by Company.

3.2.5 Conflicts of Interest. Executive agrees that during his employment under this Agreement, he will not engage, either directly or indirectly, in any activity (a “Conflict of Interest”) which might adversely affect the Company or its affiliates, including ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or accepting any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that Executive will promptly inform the Chief Executive Officer of the Company as to each offer received by Executive to engage in any such activity. Executive further agrees to disclose to the Company any other facts of which Executive becomes aware which might in Executive’s good faith judgment reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.

3.3 Non-Competition. In consideration of the Company’s promise to provide the Executive with the confidential and trade secret information of the Company, the Executive hereby agrees that, during the Term and for a period of twelve (12) months thereafter, (the “Restricted Period”) the Executive shall not in the United States directly or indirectly, (i) engage in as principal, consultant, or employee in any segment of a business of a company, partnership, firm or other entity that is directly competitive with the Company or (ii) hold an interest (except as a holder of less than 5% interest in a publicly traded firm or mutual funds) in a company, partnership, firm or other entity that directly or indirectly engages in the business of the Company.

3.3.1 Non-Solicitation of Customers. The Executive also agrees to refrain during the Restricted Period from, directly or indirectly, diverting, taking, soliciting and/or accepting on the Executive’s own behalf or on the behalf of another person, the business of any past or present customer of the Company, its divisions and/or affiliates, or any identified prospective or potential customer of the Company, its divisions and/or affiliates, whose identity became known to the Executive through the Executive’s employment by the Company.

3.3.2 Non-Solicitation of Employees of the Company and its Affiliates. The Executive agrees to refrain during the Restricted Period from, directly or indirectly, inducing or attempting to influence any employee of the Company, its divisions and/or affiliates or any person who was employed in the twelve (12) months preceding the Termination Date to terminate their employment with the Company to become employed or engaged in work for another employer or entity.

3.4 Rights and Remedies Upon Breach. If the Executive breaches, any of the provisions contained in Section 3 of this Agreement (the “Restrictive Covenants”), the Company shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

3.4.1 Specific Performance. The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

3.4.2 Accounting. The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any action constituting a breach of the Restrictive Covenants.

3.4.3 Tolling of Restrictive Periods. If the Executive violates any of the restrictions contained in Section 3, the restrictive periods shall be suspended and will not run in favor of the Executive until such time as the Executive cures the violation to the satisfaction of Company.

3.4.4 Remedies For Violation of Non-Competition or Confidentiality Provisions. Without limiting the right of the Company to pursue all other legal and equitable

rights available to it for violation of any of the obligations and covenants made by Executive herein, it is agreed that: the skills, experience and contacts of Executive are of a special, unique, unusual and extraordinary character which give them a peculiar value; because of the business of the Company, the restrictions agreed to by Executive as to time and area contained in the Agreement are reasonable; and the injury suffered by the Company by a violation of any obligation or covenant in the Agreement resulting from loss of profits created by (i) the competitive use of such skills, experience, contacts and otherwise and/or (ii) the use or communication of any information deemed confidential herein will be difficult to calculate in damages in an action at law and cannot fully compensate the Company for any violation of any obligation or covenant in the Agreement, accordingly: (a) the Company shall be entitled to injunctive relief to prevent violations thereof and prevent Executive from rendering any services to any person, firm or entity in breach of such obligation or covenant and to prevent Executive from divulging any confidential information; and (b) compliance with the Agreement is a condition precedent to the Company’s obligation to make payments of any nature to Executive, subject to the other provisions hereof.

3.4.5 Breach. Executive agrees that any breach of restrictive covenants above cannot be remedied solely by money damages, and that in addition to any other remedies Company may have, Company is entitled to obtain injunctive relief against Executive. Nothing herein, however, shall be construed as limiting Company’s right to pursue any other available remedy at law or in equity, including recovery of damages and termination of this Agreement and/or any payments that may be due pursuant to this Agreement.

3.5 Materiality and Conditionality of Section 3. The covenants contained in Sections 3 are material to this Agreement. Executive’s agreement to strictly comply with Sections 3 are a precondition for Executive’s receipt of payments and vesting of Restricted Stock and Stock Grants pursuant to Section 2 of this Agreement. Whether or not Section 3 or any portion thereof has been held or found invalid or unenforceable for any reason whatsoever by a court or other constituted legal authority of competent jurisdiction, upon any violation of Section 3 or any portion thereof, or upon a finding that a violation would have occurred if such Section or any portion thereof were enforceable, the Executive and Company agree that (i) the Executive’s interest in the Restricted Stock and Stock Grants pursuant to Section 2 and 4 of this Agreement shall automatically lapse and be forfeited; and (ii) Company shall have no obligation to make any further payments to Executive under this Agreement.

3.6 Severability, Modification of Covenants. The Executive and Company agree that all of the covenants contained in Section 3 shall survive the termination or expiration of this Agreement, and agree further that in the event any of the covenants contained in Section 3 shall be held by any court to be effective in any particular area or jurisdiction only if said covenant is modified to be limited in its duration or scope, then, at the sole option of Company, the provisions of Section 3.5 may be deemed to have been triggered, and the rights, liabilities and obligations set forth therein shall apply. In the event Company does not elect to trigger application of Section 3.5, then the court shall have such authority to so reform the covenants and the parties hereto shall consider such covenants and/or other provisions of Section 3 to be amended and modified with respect to that particular area or jurisdiction so as to comply with the order of such court and, as to all other jurisdictions, the covenants contained herein shall remain in full force and effect as originally written. Should any court hold that the covenants in Section

3 are void and otherwise unenforceable in a particular area or jurisdiction, then notwithstanding the foregoing provisions of this Section 3.6, the provisions of Section 3.5 shall be applicable and the rights, liabilities and obligations of the parties set forth therein shall apply. Alternatively, at the sole option of Company, Company may consider such covenants to be amended and modified so as to eliminate therefrom the particular area or jurisdictions as to which such covenants are so held void or otherwise unenforceable and, as to all other areas and jurisdictions covered herein, the covenants contained herein shall remain in full force and effect as originally written.

4. Termination.

4.1 As used in this Agreement, “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, the date of receipt of the notice of termination or any later date specified therein within ninety (90) days of such notice, as the case may be, (ii) if the Executive’s employment is terminated by the Executive for Good Reason pursuant to Section 4.7, the effective date of such termination pursuant to Section 4.7, (iii) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the date on which the Company notifies the Executive of such termination, (iv) if the Executive voluntarily resigns other than for Good Reason pursuant to Section 4.7, the date on which the Executive notifies the Company of such resignation, (v) if the Executive’s employment is terminated by reason of death, the date of death of the Executive, (vi) if the Executive’s employment is terminated by the Company due to Disability, the date ninety (90) days after the Company’s written notice to the Executive, or (vii) if the Executive’s employment is terminated by the Executive or the Company as a result of a Notice of Non-Renewal, the Scheduled Termination Date.

4.2 Termination Upon Death. If the Executive dies during the Term, this Agreement shall terminate; provided, however, that in any such event, the Company shall pay to the Executive’s estate (i) in a lump sum within thirty (30) days of the Date of Termination, any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by the Executive prior to the termination but not yet paid; (ii) at the same time payable pursuant to Section 2.2.1 and 2.2.2, any short term incentive and long term incentive payments for the prior fiscal year that shall have been earned by the Executive prior to the termination and not yet paid; and (iii) any Benefits that have vested in the Executive as of the Date of Termination as a result of the Executive’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which the Executive is entitled to reimbursement pursuant to this Agreement (collectively, the “Accrued Amounts”). In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.3 Termination With Cause. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate the Executive’s employment under this Agreement and discharge the Executive with Cause. If such right is exercised, the Company’s obligation to the Executive shall be limited solely to the payment of the Accrued Amounts excluding the Prorated Short Term Incentives and accrued but unpaid vacation. As used in this Agreement, the term “Cause” shall mean, in the good faith determination of the Board any: (A) willful failure to substantially perform Executive’s duties

with the Company (other than by reason of Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation within thirty (30) days of such written notice from the Company; (B) Gross negligence in the performance of the Executive’s duties; (C) Conviction of, or plea of guilty or nolo contendre to any felony or any crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company; (D) Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including without limitation Executive’s breach of fiduciary duties owed to the Company; (E) Willful violation of any material provision of the Company’s code of conduct; (F) Willful violation of any of the material covenants contained in Section 3, as applicable; (G) Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or (H) Engaging in any material act that is intended or may be reasonably expected to harm the reputation, business prospects, or operations of the Company.

4.4 Termination Due to Voluntary Retirement. The Executive has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to terminate his/her employment under this Agreement due to Voluntary Retirement. Voluntary Retirement is the termination of employment after age 65 with no expectation of returning to the industry. The provisions of Section 3 remain in full force and effect upon Voluntary Retirement.

Upon Voluntary Retirement, in exchange for the Executive executing and delivering a Release as described in Section 4.5.2, Executive shall be entitled to receive:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2); and

(B) An amount equal to twelve (12) months of Executive’s then current salary, payable in bi-monthly installments, beginning on the sixtieth day after Voluntary Retirement (the “Retirement Payment”). The Retirement Payment shall be made in accordance with the company’s payroll practices.

(C) The Company shall have the right to cease or terminate the Retirement Payment in the event the Executive breaches, in the Company’s sole discretion, any covenant contained in Section 3 of this Agreement.

(D) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of twelve (12) months after the Date of Termination, (B) the date the Executive first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of the Executive, the Company shall, via proper COBRA election by the Executive, continue medical and dental benefits to the Executive (and, if applicable, to the spouse and dependents of the Executive who received such benefits under the Executive’s coverage immediately prior to the Date of Termination) equal to those that were in effect for the Executive as of the Date of Termination (and to

any such dependent) in accordance with the plans, programs, practices and policies of the Company had the Executive remained actively employed, provided that the Executive makes all required COBRA payments to the Company, and the Company shall immediately reimburse the Executive for each such COBRA payment (collectively, the “Continuation of Benefits”). Executive shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination.

(E) In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.5 Termination Without Cause or For Good Reason. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to terminate the Executive’s employment under this Agreement and discharge the Executive without Cause. If the Executive is terminated during the Term without Cause including any termination by the Executive which is deemed to be for Good Reason under Section 4.7 hereof, the Company’s obligation to the Executive shall be limited solely to the following:

4.5.1 Severance Payments.

The Company shall pay to the Executive, in exchange for the Executive executing and delivering a Release as described in Section 4.5.2, as follows:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2); and

(B) An amount equal to twelve (12) months of Executive’s then current salary, payable in bi-monthly installments, beginning on the sixtieth day after the Date of Termination. Severance payment shall be made in accordance with the company’s payroll practices[ with a lump sum payment due to Executive of any remaining severance amounts containing the complete remainder of all severance due to Executive within thirty days of the end of the Restricted Period].

(C) The Company shall have the right to cease or terminate the severance payments in the event the Executive breaches, in the Company’s sole discretion, any covenant contained in Section 3 of this Agreement.

(D) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of twelve (12) months after the Date of Termination, (B) the date the Executive first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of the Executive, the Company shall, via proper COBRA election by the Executive, continue medical and dental benefits to the Executive (and, if applicable, to the spouse and dependents of the Executive who received such benefits under the Executive’s coverage immediately prior to the Date of Termination) equal to those that were in effect for the Executive as of the Date of Termination (and to

any such dependent) in accordance with the plans, programs, practices and policies of the Company had the Executive remained actively employed, provided that the Executive makes all required COBRA payments to the Company, and the Company shall immediately reimburse the Executive for each such COBRA payment (collectively, the “Continuation of Benefits”). Executive shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination and for any additional coverage not effective at the Date of Termination. Any reduction of coverage will be treated appropriately.

(E) Outplacement Services provided by a firm selected by the Company in its sole discretion for a period of twelve months and in an amount not to exceed $10,000.

(F) In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.5.2 Release. As a condition to the Executive’s receipt of payments and/or benefits described under Sections 4.4 and 4.5, the Executive must execute and deliver to the Company, within the time period stated in the Release, and not subsequently revoke, a full release of all claims that the Executive may have against the Company, its affiliates, and all of their officers, employees, directors, and agents, in a form mutually and reasonably agreeable to the parties hereunder. The Company shall provide the Executive with a form of release within ten (10) days from the Date of Termination.

4.6 Termination upon Disability. If during the Term the Executive becomes physically or mentally disabled, whether totally or partially, as defined by the Company’s Long-Term Disability Plan then in effect, the Company shall, by written notice to the Executive, terminate the Executive’s employment hereunder and discontinue payments of the Annual Salary, Annual Bonus and Benefits accruing from and after the date of such termination. Upon the Company’s termination of the Executive’s employment by reason of the Executive’s Disability, the Company’s obligation to the Executive shall be limited solely to the payment of the Accrued Amounts (at the same time and in the same manner as set forth in Section 4.2) and provision of the Continuation of Benefits. In addition, all unvested Stock Grants will become fully vested and unrestricted as allowed in Section 2.2.3.

4.7 Good Reason. Notwithstanding any other provision of this Agreement, the Executive’s employment under this Agreement may be terminated during the Term by the Executive, which shall be deemed to be constructive termination by the Company without Cause, if one of the following events constituting “Good Reason” shall occur unless the Executive has consented in writing thereto: (i) the occurrence of any material breach of this Agreement by the Company or any of its affiliates; (ii) any material failure by the Company after a Change of Control of the Company to comply with Section 2 hereof; (iii) following a Change of Control of the Company, the failure to obtain the assumption in writing of all of the Company’s material obligations under this Agreement by any successor to all or substantially all of the assets of the Company or any affiliate within fifteen (15) days after a reorganization, merger, consolidation, sale or other disposition of assets of the Company or such affiliate; (iv) the Company’s assignment to the Executive of any duties materially inconsistent with Executive’s position,

including any other action which results in a material diminution in such status, title, authority, duties or responsibility; or (v) the relocation of Executive’s office to a location more than thirty five (35) miles outside Houston, Texas. Any such termination pursuant to this Section 4.7 shall be made by the Executive providing written notice to the Company specifying the event relied upon for such termination and given within sixty (60) days after such event. Any termination for Good Reason pursuant to this Section 4.7 shall be effective sixty (60) days after the date the Executive has given the Company such written notice setting forth the grounds for such termination with specificity; provided, however, that the Executive shall not be entitled to terminate this Agreement in respect of any of the grounds set forth above if within sixty (60) days after such notice the action constituting such ground for termination has been cured and is no longer continuing. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the date sixty (60) days following a Change of Control of the Company shall be deemed to be termination for Good Reason for all purposes under this Agreement, shall be effective upon written notice by the Executive to the Company during such 30-day period, shall be conclusive and shall not be subject to any cure by the Company.

4.8 Change of Control. For the purposes hereof, a “Change of Control of the Company” shall be deemed to have occurred if, (i) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; (ii) there occurs a proxy contest or a consent solicitation, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event thereafter constitute less than a majority of the Board of Directors; or (iii) there occurs a reverse merger involving the Company in which the Company is the surviving corporation but the shares of common stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (iv) there is a sale of other disposition of all or substantially all of the assets of the Company; or (v) there is an adoption of any plan or proposal for the liquidation or dissolution of the Company; or Stewart Title Guaranty Company is placed in supervision, receivership, conservatorship, or special administrative action by the Texas Department of Insurance.

4.9 Notwithstanding the foregoing provisions of this definition of Change of Control, to the extent that any payment (or acceleration of payment) hereunder is (A) considered to be deferred compensation that is subject to, and not exempt under, Code Section 409A, and (B) payable due to the Change of Control, then the term Change of Control hereunder shall be construed to have the meaning as set forth in Code Section 409A with respect to the payment (or acceleration of payment) of such deferred compensation, but only to the extent inconsistent with the foregoing provisions of the Change of Control definition as determined by the Incumbent Board.

5. Other Provisions.

5.1 Stock Ownership. Executive shall reach and maintain ownership of a number of shares of SISCO stock within five (5) years of the Effective Date that are equivalent to a total share trading price of .75 times the Annual Salary listed in Section 2.1 on the Effective Date. Once Executive reaches the level of ownership required by this Section 5.1, his obligation to maintain the ownership level required by this Section 5.1 will be satisfied so long as he owns the same number of shares that he owned on the date that he reached the level of ownership required, regardless of the total value of the shares as affected by fluctuations in the price of the stock. Both granted and vested stock, as well as granted, but unvested stock, shall be considered as counted toward this provision to reach and maintain stock ownership goals.

5.2 Section 409A.

5.2.1 Separation from Service. Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Executive under this Agreement in connection with a termination of Executive’s employment that would be considered “non-qualified deferred compensation” under Section 409A of the Internal Revenue Code (hereafter “Code”), in no event shall a termination of employment be considered to have occurred under this Agreement unless such termination constitutes Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h), and any successor provision thereto (“Separation from Service”).

5.2.2 Section 409A Compliance. Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, any severance payments payable to Executive under this Agreement shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-term deferrals). However, to the extent any such payments are treated as “non-qualified deferred compensation” subject to Section 409A of the Code, and if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section shall be paid in a lump sum to Executive (or Executive’s estate). The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by Company in accordance with the terms of Section 409A of the Code, and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

5.2.3 Section 409A; Separate Payments. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the

imposition of Section 409A Penalties. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Executive may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.

5.2.4 Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if the Executive is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Executive has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Executive from the Company and its affiliates will be one dollar ($1.00) less than three times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 3.4.5. shall require the Company to be responsible for, or have any liability or obligation with respect to, the Executive’s excise tax liabilities under Section 4999 of the Code.

5.2.5 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement or in any Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive as soon as administratively practicable following such submission in accordance with the Company’s policies regarding reimbursements, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.

5.2.6 Mitigation. Executive shall not be required to mitigate damages with respect to the termination of his employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due Executive under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to Executive under this Agreement shall not be offset by any claims the Company may have against the Executive, and the Company’s obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

5.3 Indemnification.

5.3.1 General. The Company agrees that if Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Executive is or was a trustee, director or officer of the Company, or any predecessor to the Company (including any sole proprietorship owned by the Executive) or any of their affiliates or is or was serving at the request of the Company, any predecessor to the Company (including any sole proprietorship owned by the Executive), or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Texas or Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by Executive in connection therewith, and such indemnification shall continue as to Executive even if Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

5.3.2 Expenses. As used in this Section, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

5.3.3 Enforcement. If a claim or request under this Section 5 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Executive may at any time thereafter bring an arbitration claim against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Texas or Delaware law.

5.3.4 Partial Indemnification. If Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Executive for the portion of such Expenses to which Executive is entitled.

5.3.5 Advances of Expenses. Expenses incurred by Executive in connection with any Proceeding shall be paid by the Company in advance upon request of Executive that the Company pay such Expenses, but only in the event that Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

5.3.6 Notice of Claim. Executive shall give to the Company notice of any claim made against the Executive for which indemnification will or could be sought under this Agreement. In addition, Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within the Executive’s power and at such times and places as are convenient for the Executive.

5.3.7 Defense of Claim. With respect to any Proceeding as to which Executive notifies the Company of the commencement thereof:

(A) The Company will be entitled to participate therein at its own expense;

(B) Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Executive, which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. Executive also shall have the right to employ his own counsel in such action, suit or proceeding if he reasonably concludes that failure to do so would involve a conflict of interest between the Company and the Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

(C) The Company shall not be liable to indemnify Executive under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on Executive without the Executive’s written consent. Neither the Company nor Executive will unreasonably withhold or delay their consent to any proposed settlement.

5.3.8 Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 5 shall not be exclusive of any other right which Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

5.4 Legal Fees and Expenses. If any contest or dispute shall arise between the Company and Executive regarding any provision of this Agreement, the Company shall reimburse Executive for all legal fees and expenses reasonably incurred by Executive in connection with such contest or dispute, but only if Executive prevails to a substantial extent with respect to the Executive’s claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

5.5 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by courier service, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or sent by facsimile transmission or, if mailed or sent by courier service, on the date of actual receipt thereof, as follows:

(i) if to the Company, to:

Chief Executive Officer,

1980 Post Oak Blvd., Suite 800

Houston, Texas 77056

(ii) if to the Executive, to:

Glenn H. Clements

507 Hunterwood Drive

Houston, Texas 77024

Any party may change its address for notice hereunder by notice to the other party hereto.

5.6 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (including but not limited to prior employment agreements and incentive plans and agreements), written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect, and if any conflict between this agreement and the terms of such plans arises, the terms of the plan shall control.

5.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

5.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof).

5.9 Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company only to a successor by merger or purchasers of substantially all of the assets of the Company or its affiliates.

5.10 Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.11 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

5.12 No Presumption Against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision arising directly or indirectly herefrom shall be construed against any party as being drafted by said party.

5.13 No Duty to Mitigate. The Executive shall have no obligation to mitigate damages suffered as a result of termination of the Executive’s employment with the Company.

5.14 Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the breach thereof, the Executive and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, the Executive and the Company agree to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within thirty (30) days of a written demand for mediation, any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration before one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in English and held in Houston, Harris County, Texas, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration clause. The award shall be a reasoned award and rendered within thirty (30) days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section, the Company may seek injunctive relief from a court of competent jurisdiction located in Harris County, Texas, in the event of a breach or threatened breach of any covenant contained in Section 3.

5.15 Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and the Executive and the Executive’s legal representatives.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

EXECUTIVE		COMPANY
		STEWART INFORMATION SERVICES CORP.
By:	/s/ Glenn H. Clements	By:	/s/ Matthew W. Morris
Date:	October 16, 2012	Date:	October 16, 2012
Name:	Glenn H. Clements	Name:	Matthew W. Morris
Title:	Group President, Direct Operations	Title:	Chief Executive Officer

EXHIBIT A

ANNUAL SHORT TERM INCENTIVE PLAN

(“STI PLAN”)

Executive shall be eligible to participate in the Company’s Annual Bonus Payment Program, also known as the Short Term Incentive Plan (“STI Plan”). The STI Plan shall be determined by the Board of Directors (“Board”), in its sole discretion.

Payout amount will be determined by the attainment towards metrics which are both specific to your position as well as reflective of corporate performance.

As part of its analysis, the Board shall consider the following targets in determining the amount of the STI payment to the Executive:

Short Term Incentive (STI)

Target Payout:	100% of Base Pay	400,000
Maximum Target Payout:	200% of Target	800,000

Metrics Used to Determine STI

	Maximum			Target			Threshold			Weighting
Corporate Performance
Corporate EBITDA Improvement		140.0	%		50.0	%		25.0	%		20	%
Corporate Modified Return on Equity		11.0	%		6.0	%		3.0	%		16	%
Corporate Total Shareholder Return Ranking		80.0	%		50.0	%		30.0	%		4	%
Operational Performance
Modified EBITDA		75.0	%		50.0	%		25.0	%		22	%
Modified EBITDA Margin		20.0	%		15.0	%		10.0	%		16	%
Employee Costs Ratio		48.0	%		50.0	%		52.0	%		14	%
Policy Loss Ratio		6.8	%		7.0	%		7.2	%		8	%

STI will be delivered as a cash bonus, paid annually after the conclusion of the fiscal year, before the end of the first quarter of the succeeding fiscal year. STI payout is expressed as a percentage of your base pay.

The metrics used to determine STI for fiscal year 2012 will be applied to results for the entire fiscal year 2012, and the STI payout, if any, will be delivered before the end of the first quarter of 2013. Notwithstanding any other provision of the Agreement, this STI Plan or the LTI plan, no credit or deduction shall be applied by the Company against any amounts due the Executive

under this Agreement, the STI Plan, or the LTI Plan for any incentive compensation earned by the Executive prior to September 30, 2012 under his pre-existing compensation agreement or incentive compensation plan.

Target Annual STI payout is the equivalent of 100% of your base pay.

Maximum Annual STI payout is the equivalent of 200% of your target payout.

Specific terms and calculations related to the Short Term Incentive (STI) Plan

The following sets forth the definition of specific terms and calculations in relation to our global STI Plan. Individual metrics may or may not apply to your specific agreement.

Periodically, components of metrics may be adjusted, which may impact comparability between measurement periods. In such cases, prior period components of metrics will be restated to conform to the current measurements.

Term/Calculation	Definition
Base Pay	This is the annual base salary.
Budget Attainment	Budget Attainment metric measures the variance between actual expenses and budget expenses for service center executives. The variance is expressed as a percent variance. The metric is calculated by taking the actual annual expenses minus the budgeted annual expenses. The difference is then divided by the budgeted annual expenses. Payout for this metric is based on variance percentage.
Company	The Company is Stewart Information Services Corporation and its subsidiaries.
Corporate	Corporate is the same as Company.
Corporate Performance	Corporate Performance is the set of metrics for the Company.
Cost Control Initiative	Cost Control Initiative metric is specific goals established for each service center executive. This metric is measured by determining how much of the annual goals were completed on a percentage basis. Payout for this metric is based on completion percentage.

Term/Calculation	Definition
Customer Service Index	Customer Service Index metric is an internal survey conducted at least annually. The initial benchmark is the survey completed in first half of 2012. A subsequent survey is then measured against the benchmark. The metric is calculated by taking the subsequent survey score minus the benchmark survey score. The difference is then divided by the benchmark survey score. Payout for this metric is based on percent improvement.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	EBITDA metric is calculated by adding back interest expense, depreciation expense and amortization expense to pretax earnings. The source of data is the System of Record. Payout for this metric is based on percent improvement.
Employee Costs	Employee Costs is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes salaries, bonuses, commissions, payroll taxes, group insurance, profit sharing and other employee costs. The source of data is the System of Record.
Employee Costs Ratio	Employee Costs Ratio metric is calculated by dividing the Employee Costs by Operating Revenues. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
Investment and Other Gains (Losses) –Net	Investment and Other Gains (Losses) – Net is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes, but not limited to, realized earnings (losses) from the sale of various types of financial and non-financial instruments; sale of subsidiaries, equity basis investments, and cost-basis investments; impairment of equity and cost-basis investments; and other types of non-operating transactions. The source of data is the System of Record.

Term/Calculation	Definition
Investment Income	Investment Income is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that includes, but not limited to, interest income, dividends, royalties and certain rental income less any fees incurred from investments. The source of data is the System of Record.
Maximum (Performance Level)	See Performance Level.
Maximum Target Payout	The Maximum Target Payout is the maximum annual cash bonus that can be earned and paid under the STI. It is calculated by multiplying the Target Payout by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Modified Average Shareholders’ Equity	Modified Average Shareholders’ Equity is calculated by subtracting cumulative other comprehensive income and noncontrolling interest from shareholders’ equity. This calculation is done as of the beginning of the year and the end of the year. The average is then calculated by adding the beginning of the year and ending of the year calculations and then dividing by two.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA)	The Modified EBITDA metric is calculated by subtracting Investment Income, Investment and Other Gains (Losses) – Net, and other unique or unusual items including, but not limited to, certain claims exceeding $1.0 million as determined by the Board of Directors of the Company, from EBITDA. The source of data is the System of Record. Payout for this metric is based on percent improvement.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization Margin (Modified EBITDA Margin)	Modified Earnings Before Interest, Taxes, Depreciation and Amortization Margin metric is calculated by dividing Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA) by Operating Revenues. The source of data is the System of Record. Payout for this metric is based on ratio attainment.

Term/Calculation	Definition
Modified Net Earnings Attributable to Company	Modified Net Earnings Attributable to Company is calculated by subtracting certain items including, but not limited to, certain unusual income tax expense or benefit as determined by the Board of Directors of the Company from Net Earnings Attributable to Company. The source of data is the System of Record.
Modified Return on Equity (Modified ROE)	Modified Return on Equity metric is calculated by dividing Modified Net Earnings Attributable to Company by Modified Average Shareholders’ Equity. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
National Production Services (NPS) Expenses Ratio	National Production Services (NPS) Expenses Ratio metric is calculated by dividing NPS expenses by the sum of (1) Operating Revenues less the Company’s portion of earnings from equity investees from the Direct Operations Segment and (2) external Operating Revenues less the Company’s portion of earnings from equity investees from NPS. The source of data is the System of Record. Payout for this metric is based on ratio attainment.
Operating Revenues	Operating Revenues is calculated by deducting Investment Income and Investment and Other Gains (Losses) – Net from total gross revenues. The Company’s portion of earnings from equity investees is included in the calculation. The source of data is the System of Record.
Operational Performance	Operational Performance is the set of metrics for an executives’ area of management.
Performance Level	Performance Level represents the range of possible payout depending on performance driver for each metric. The payout range is defined as the Threshold (50%), Target (100%) and Maximum (200%).
Policy Loss Ratio	Policy Loss Ratio metric is calculated by dividing Title Losses and Claims by Title Insurance Revenues from Direct Operations and Agency Operations. The source of data is the System of Record. Payout for this metric is based on ratio attainment.

Term/Calculation	Definition
Premium Remittance Per Agency Ratio	Premium Remittance Per Agency Ratio metric is calculated by dividing premium revenues remitted by active independent agencies by the number of active independent agencies and excludes agencies who are zero dollar premium remitters. The source of the data is STNET, which is the primary source for policy remittances, along with the number of agencies. Payout for this metric is based on percent improvement.
System of Record	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
Target (Performance Level)	See Performance Level.
Target Payout	Target Payout is the annual cash bonus that can be earned and paid under the STI. Target Payout is calculated by multiplying Base Pay by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Threshold (Performance Level)	See Performance Level.
Title Insurance Revenues	Title Insurance Revenues are revenues earned from title insurance and escrow and other related fees. The source of data is the System of Record.
Title Losses and Claims	Title Losses and Claims is a line item on the Company’s Consolidated Statement of Operations, Retained Earnings and Comprehensive Earnings that is defined in the Company’s Annual Report filed with the Securities Exchange Commission on the Form 10-K. The source of data is the System of Record.
Total Shareholder Return (TSR)	Total Shareholder Return is calculated by taking the difference between the Company’s end of year price per share and the beginning of year price per share and adding the Company dividend per share. Next, divide that sum by the Company’s beginning of year price per share.

Term/Calculation	Definition
Total Shareholder Return (TSR) Ranking	Total Shareholder Return Ranking metric is determined by calculating the Company’s percentile ranking for Total Shareholder Return relative to the Russell 2000 Financial Services Index. The source of data is Bloomberg, which is provided by Vaughn Nelson, the Company’s investment portfolio manager. Payout for this metric is based on percentile ranking.
Weighting	Weighting is a calculation that applies a percentage to each metric. The aggregation of the percentages is 100%.

EXHIBIT B

LONG TERM INCENTIVE PLAN

(“LTI PLAN”)

Executive shall be eligible to participate in the Company’s Long Term Incentive Plan (“LTI Plan”), as such plan shall be in effect and amended and/or superseded from time to time.

The actual value of the LTI shall be determined by the Board of Directors (“Board”), in its sole discretion. The Board shall consider the overall performance of the Company in awarding the LTI. As part of its analysis, the Board shall consider the following targets in determining the value of the LTI payable to the Executive:

Long Term Incentive (LTI)

Target Payout:	75% of Base Pay
60% paid as a Restricted Stock Award (RSA)		180,000
40% paid as Restricted Performance Units (RPU)		120,000
		300,000
Potential RPU Max Payout	200% of RPU Target	240,000
Total Max Potential Value Payout		420,000

Metrics Used to Determine LTI

Corporate Performance

RSA (Restricted Stock Award): Annualized Total Shareholder Return at the 50th percentile ranking over the three year performance period or Annualized Total Shareholder Return (TSR) is at least positive over the three year performance period.

RPU (Restricted Performance Units): SISCO Total Shareholder Return compared to the Russell 2000 Financial Services Index (Percentile Ranking) with a Circuit Breaker (positive EBITDA initially over 2 years and subsequently 3 years)

Performance Levels (Payout) : 50%-200%

Performance Goals: 30%-75% Max

Target LTI grant is the equivalent of 75% of your base pay.

Potential RPU Max payout is 200% of RPU Target.

LTI will be delivered as both a RSA (60% of LTI grant) and RPUs (40% of LTI grant). (Each RPU = $1).

LTI will be granted annually. The initial grant for 2012 shall be made on the date of the execution of this Agreement. It is 100% granted, but vests depending on metrics. The performance period for the metrics used to determine vesting of the grants made in 2012, will begin on the grant date. Grants will be restricted by a 3-year cliff vest, with the exception of RPU, which will vest over 2 years initially.

Corporate Payout (% of Target): RSAs will vest at the end of the three years following grant if either the TSR is at least positive or the TSR is in the 50th percentile ranking over the 3-year performance period.

RPUs will vest depending on SISCO Total Shareholder Return compared to the Russell 2000 Financial Services Index (Percentile Ranking) with a Circuit Breaker (positive in EBITDA initially over 2 years and subsequently 3 years). Payout depends on percentile ranking in comparison to % of target.

Specific terms and calculations related to the Long-Term Incentive (LTI)

The following terms are in relation to our global LTI Plan. Individual metrics may or may not apply to your specific agreement.

Periodically, components of metrics may be adjusted, which may impact comparability between measurement periods. In such cases, prior period components of metrics will be restated to conform to the current measurements.

Term/Calculation	Definition
Base Pay	This is the annual base salary.
Company	The Company is Stewart Information Services Corporation and its subsidiaries.
Circuit Breaker	Circuit Breaker is the minimum corporate performance that must be achieved in order to receive the specified compensation.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	EBITDA metric is calculated by adding back interest expense, depreciation expense and amortization expense to pretax earnings. The source of data is the System of Record.
Maximum (Performance Level)	See Performance Level.
Maximum Target Payout	The Maximum Target Payout is the maximum annual cash bonus that can be earned and paid under the LTI. It is calculated by multiplying the Target Payout by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Performance Goals	Performance Goals provide the threshold, target and maximum measurements that must be achieved in order to receive the related level of compensation.

Term/Calculation	Definition
Performance Level	Performance Level represents the range of possible payout depending on performance driver for each metric. The payout range is defined as the Threshold (50%), Target (100%) and Maximum (200%).
Restricted Performance Unit (RPU)	Restricted Performance Unit is cash compensation that is restricted by time of service and corporate performance.
Restricted Stock Award (RSA)	Restricted Stock Award is share-based compensation that is restricted by time of service and corporate performance.
System of Record	Hyperion Financial Management (HFM) is the system of record for all financial data unless otherwise stated.
Target (Performance Level)	See Performance Level.
Target Payout	Target Payout is the share-based cash bonus that can be earned under the LTI. Target Payout is distributed over two years initially (then three years). Target Payout is calculated by multiplying Base Pay by an agreed upon percentage as indicated in the Executive Compensation Plan Summary.
Threshold (Performance Level)	See Performance Level.
Total Shareholder Return (TSR)	Total Shareholder Return is calculated by taking the difference between the Company’s end of year price per share and the beginning of year price per share and adding the Company dividend per share. Next, divide that sum by the Company’s beginning of year price per share.
Total Shareholder Return (TSR) Ranking	Total Shareholder Return Ranking is determined by calculating the Company’s percentile ranking for Total Shareholder Return relative to the Russell 2000 Financial Services Index. The source of data is Bloomberg, which is provided by Vaughn Nelson, the Company’s investment portfolio manager.

EXHIBIT C

PERQUISITES

Executive shall be eligible to participate in the additional perquisites:

• Executive Long Term Disability Plan (Company paid)

• Non-Qualified Deferred Compensation Plan provided through the Company

• Auto Allowance of $800 per month

• Paid Association/Membership Dues as needed for the position and with Management approval

• Executive Development as needed for the position up to $5,000 and with Management approval

• Paid Country Club dues as needed (taxable to the Executive) and with Management approval

• Executive Life Insurance (your current Split-Dollar Policy will be maintained)

EX-10.11

EXHIBIT 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of January 1, 2012 (the “Effective Date”), by and between Stewart Information Services Corp. (the “Company”), and Stewart Morris, Jr. (Mr. Morris, Jr.).

The parties agree as follows:

1. Employment, Duties and Acceptance.

1.1 Term of Employment by the Company. The Company hereby agrees to employ Mr. Morris, Jr. for a term commencing on the Effective Date and expiring on December 31, 2016 unless earlier terminated as provided in Section 4.

1.2 Duties. During the Term, Mr. Morris, Jr. shall perform advisory services for the Company with such non-operational duties and responsibilities as assigned by the Chief Executive Officer (“CEO”) or Board of Directors (the “Board’) which Mr. Morris, Jr. will make reasonable efforts to perform. Mr. Morris, Jr. shall report to the Board.

1.2.1 Fiduciary Duty. Mr. Morris, Jr. acknowledges and agrees that he owes a fiduciary duty to the Company and further agrees to make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not act for his own benefit concerning the subject matter of his fiduciary relationship.

1.2.2 Compliance. Mr. Morris, Jr. agrees that he will not take any action intentionally in violation of United States laws or other laws applicable to his employment, including, but not limited to the Securities Exchange Act of 1934.

1.3 Acceptance of Employment. Mr. Morris, Jr. hereby accepts such employment and shall render the services and perform the duties described above.

2. Compensation and Other Benefits.

2.1 Annual Salary. The Company shall pay to Mr. Morris, Jr. an annual salary at a rate of Two Hundred Seventy Five Thousand Dollars ($275,000) per year (the “Annual Salary”). The Annual Salary shall be payable in accordance with the payroll policies of the Company as from time to time in effect, but in no event less frequently than twice each month, less such deductions as shall be required to be withheld by applicable law and regulations and less any voluntary deductions.

2.2 Deferred Transition Incentive Plan.

2.2.1 Deferred Transition Incentive Payments. During the period of this agreement Mr. Morris, Jr. shall be eligible to receive annual Deferred Transition Incentive

Payments totaling $750,000. Annual payments in the amount of $150,000 will be made contingent upon the company achieving annual pretax earnings of thirty (30) million dollars or more. If annual pretax earnings of the Company are less than thirty (30) million dollars for a given calendar year, the annual Deferred Transition Incentive Payment will be reduced in proportion to the Company’s pretax profit below thirty (30) million dollars. If annual pretax earnings of the Company are zero or negative no Deferred Transition Incentive Payment will be made for that calendar year. The payments made pursuant to this Section 2.2.1 shall be paid to Mr. Morris, Jr. no later than March 31 of the year following the calendar year for which it is calculated. Upon termination other than with cause as specified in Section 4.3, if the aggregate amount of Deferred Transition Incentive Payments is less than $750,000, a payment equaling $750,000 less the total amount of Deferred Transition Incentive Payments already paid will be made no later than ninety (90) days following termination.

2.3 Vacation Policy. Mr. Morris, Jr. shall be entitled to four (4) weeks of paid vacation during each calendar year of the Term which shall accrue in accordance with Company policy.

2.4 Participation in Employee Benefit Plans. The Company agrees to permit Mr. Morris, Jr. during the Term to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, or other so called “fringe benefits” of the Company (collectively, “Benefits”). Mr. Morris, Jr. shall cooperate with the Company in applying for such coverage, including submitting to a physical exam and providing all relevant health and personal data. The Company shall not make any changes in any plans or arrangements provided pursuant to this Section 2.5 which would adversely affect Mr. Morris, Jr.’s right to benefits thereunder unless such changes occur pursuant to a program applicable to other employees of the Company and which does not result in a proportionally greater reduction in the rights and benefits him.

2.5 General Business Expenses. The Company shall pay or reimburse Mr. Morris, Jr. for all business expenses reasonably and necessarily incurred by him during the Term in hisperformance of services as requested by the CEO or Board under this Agreement. Such payment shall be made upon presentation of such documentation as the Company customarily requires prior to making such payments or reimbursements.

2.6 Office Space and Clerical Support. Mr. Morris, Jr. will be provided with office space, equipment and clerical support consistent with his position in the company and as it relates to community service and sufficient to carry out the duties and community and charitable services, the location of which will be at the sole discretion of the Company.

3. Confidentiality and Company Property; Non-Competition and Non-Solicitation.

3.1 Fair Dealing. Consistent with all members of the Board of Directors and the duties and responsibilities herewith, during the term of this Agreement, Mr. Morris, Jr. will be aware of and comply with standard covenants surrounding confidential information, conflicts of interest, non-solicitation of customers, non-competition and non-solicitation of employees.

4. Termination.

4.1 Date of Termination. As used in this Agreement, “Date of Termination” means (i) if Mr. Morris, Jr.’s employment is terminated by the Company for Cause, the date of receipt of the notice of termination or any later date specified therein within ninety (90) days of such notice, as the case may be, (ii) if Mr. Morris, Jr.’s employment is terminated by him pursuant to Section 4.4, the effective date of such termination pursuant to Section 4.4, (iii) if Mr. Morris, Jr.’s employment is terminated by reason of death, the date of his death., or (iv) if Mr. Morris, Jr.’s employment is terminated by the Company due to Permanent Disability, the date ninety (90) days after the Company’s written notice to Mr. Morris, Jr., or (v) the termination date of the Agreement is reached as set forth in Section 1.1.

4.2 Termination Upon Death. If Mr. Morris, Jr. dies during the Term, this Agreement shall terminate; provided, however, that in any such event, the Company shall pay to his estate (i) in a lump sum within thirty (30) days of the Date of Termination, any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by Mr. Morris, Jr. prior to the termination but not yet paid; (ii) at the same time payable pursuant to Section 2.2.1, any remaining unpaid amounts in accordance with the Deferred Transition Incentive Plan; and (iii) any Benefits that have vested as of the Date of Termination as a result of Mr. Morris, Jr.’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which Mr. Morris, Jr. is entitled to reimbursement pursuant to this Agreement (collectively, the “Accrued Amounts”).

4.3 Termination With Cause. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate Mr. Morris, Jr.’s employment under this Agreement and discharge him with Cause. If such right is exercised, the Company’s obligation to Mr. Morris, Jr. shall be limited solely to the payment of the Accrued Amounts and accrued but unpaid vacation. As used in this Agreement, the term “Cause” shall mean, in the good faith determination of the Board any: (A) willful failure to substantially perform duties with the Company (other than by reason of Permament Disability), after a written demand for substantial performance is delivered to Mr. Morris, Jr. that specifically identifies the manner in which the Company believes that Mr. Morris, Jr. has not substantially performed such duties, and Mr. Morris, Jr. has failed to remedy the situation within thirty (30) days of such written notice from the Company; (B) Gross negligence in the performance of his duties; (C) Conviction of, or plea of guilty to any felony or any crime involving moral turpitude or the personal enrichment of Mr. Morris, Jr. at the substantive expense of the Company; (D) Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including without limitation Mr. Morris, Jr.’s breach of fiduciary duties owed to the Company. ; (E) Willful violation of any material provision of the Company’s code of conduct; (F) Willful violation of any of the material covenants contained in Section 3, as applicable; (G) Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or (H) Engaging in any material act that is intended or may be reasonably expected to harm the reputation, business prospects, or operations of the Company.

4.3.1 Notice to Cure. Mr. Morris, Jr. may not be terminated for Cause unless and until there has been delivered to him written notice from the Board supplying the particulars of his acts or omissions that the Board believes constitute Cause and a reasonable period of time (not less than thirty (30) days) has been given to Mr. Morris, Jr. after such notice to cure the same.

4.4 Voluntary Termination. Mr. Morris, Jr. has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to voluntarily terminate his employment under this Agreement. The provisions of Section 3 remain in full force and effect upon Voluntary Termination.

4.4.1 Upon Voluntary Termination, in exchange for Mr. Morris, Jr. executing and delivering a Release as described in Section 4.4.2, he shall be entitled to receive:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2) in a lump sump within ninety (90) days of the Date of Voluntary Termination, (i) any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by Mr. Morris Jr. prior to the termination but not yet paid; (ii) any remaining unpaid amounts under the Deferred Transition Incentive Plan; (iii) any Benefits that have vested as of the Date of Voluntary Termination as a result of Mr. Morris, Jr.’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which Mr. Morris, Jr. is entitled to reimbursement for pursuant to this Agreement (collectively, the “Accrued Amounts”); and

(B) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of eighteen (18) months after the Date of Termination, (B) the date Mr. Morris, Jr. first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of Mr. Morris, Jr., the Company shall, via proper COBRA election by Mr. Morris, Jr., continue medical and dental benefits (and, if applicable, to the spouse and dependents of Mr. Morris, Jr. who received such benefits under his coverage immediately prior to the Date of Termination) equal to those that were in effect for Mr. Morris, Jr. as of the Date of Termination (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company had Mr. Morris, Jr. remained actively employed, provided that Mr. Morris, Jr. makes all required COBRA payments to the Company, and the Company shall immediately reimburse Mr. Morris, Jr. for each such COBRA payment (collectively, the “Continuation of Benefits”). Mr. Morris, Jr. shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination.

(C) Additional Medical Benefit Assistance. If, at the time of his Voluntary Termination, Mr. Morris, Jr. is not eligible to receive Company-provided Medical Benefits or is not covered by the Company’s Medical Benefits Plan, either as a Director or as an employee, then following the expiration of eighteen (18) months after the Date of Termination, the Company shall pay to Mr. Morris, Jr., under the terms provided in section 4.4.1(B) above, a lump sum

amount equal to twenty four (24) times the amount of Company’s monthly reimbursement payments for individual medical benefits provided to Company employees. The Company will also assist Mr. Morris, Jr. in his choosing of an individual medical benefit, vision, and dental insurance plan.

4.4.2 Release. As a condition to Mr. Morris, Jr.’s receipt of payments and/or benefits described under Section 4.4, he must execute and deliver to the Company, within the time period stated in the Release, and not subsequently revoke, a full release of all claims that he may have against the Company, its affiliates, and all of their officers, employees, directors, and agents, in a form mutually and reasonably agreeable to the parties hereunder (a current example of which is attached hereto as “Exhibit A”). The Company shall provide Mr. Morris, Jr. with a form of release within ten (10) days from the Date of Termination.

4.5 Termination upon Permanent Disability. If during the Term Mr. Morris, Jr. suffers a Permanent Disability, the Company may, by written notice to Mr. Morris, Jr., terminate his employment hereunder and discontinue payments of the Annual Salary, and Benefits accruing from and after the date of such termination. Upon the Company’s termination of Mr. Morris, Jr.’s employment by reason of his Disability, the Company’s obligation to Mr. Morris, Jr. shall be limited solely to the payment of the Accrued Amounts (at the same time and in the same manner as set forth in Section 4.2), payment of the aggregate amount of unpaid Deferred Transition Incentive Payments and provision of the Continuation of Benefits as set forth in 4.4. For purposes of this Agreement, “Permanent Disability” means permanent impairment of Mr. Morris, Jr.’s ability to substantially peform his duties under this Agreement. A determination of Permanent Disability will be confirmed by the written statement of an independent, competent, licensed physician, mutually acceptable to the Company and Mr. Morris, Jr. or his representitive.

4.6 Resignation of Position. Upon termination of the Agreement, Mr. Morris, Jr. shall be deemed to have voluntarily and permanently resigned from his position as an officer and Vice Chairman of the Board pursuant to Section 6.5 of the Company bylaws.

5. Other Provisions.

5.1 Section 409A.

5.1.1 Separation from Service. Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Mr. Morris, Jr. under this Agreement in connection with a termination of his employment that would be considered “non-qualified deferred compensation” under Section 409A of the Internal Revenue Code (hereafter “Code”), in no event shall a termination of employment be considered to have occurred under this Agreement unless such termination constitutes Mr. Morris, Jr.’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h), and any successor provision thereto (“Separation from Service”).

5.1.2 Section 409A Compliance. Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, any severance payments payable to Mr. Morris, Jr. under this Agreement shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-term deferrals). However, to the extent any such payments are treated as “non-qualified deferred compensation” subject to Section 409A of the Code, and if Mr. Morris, Jr. is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which he is entitled under this Agreement is required in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of the Code, such portion of Mr. Morris, Jr.’s termination benefits shall not be provided to him prior to the earlier of (i) the expiration of the six-month period measured from the date of Mr. Morris, Jr.’s Separation from Service or (ii) the date of Mr. Morris, Jr.’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section shall be paid in a lump sum to Mr. Morris, Jr. (or his estate). The determination of whether Mr. Morris, Jr. is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by Company in accordance with the terms of Section 409A of the Code, and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

5.1.3 Section 409A; Separate Payments. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b) (2)(iii), each payment that Mr. Morris, Jr. may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.

5.1.4 Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if Mr. Morris, Jr. is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Mr. Morris, Jr. has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Mr. Morris, Jr. from the Company and its affiliates will be one dollar ($1.00) less than three times Mr. Morris, Jr.’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Mr. Morris, Jr. shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Mr. Morris, Jr. (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such

reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Mr. Morris, Jr.’s base amount, then he shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 5.1.4 shall require the Company to be responsible for, or have any liability or obligation with respect to, Mr. Morris, Jr.’s excise tax liabilities under Section 4999 of the Code.

5.1.5 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement or in any Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Mr. Morris, Jr. shall not affect in-kind benefits or reimbursements to be provided in any other tax year and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Mr. Morris, Jr. and, if timely submitted, reimbursement payments shall be made to Mr. Morris, Jr. as soon as administratively practicable following such submission in accordance with the Company’s policies regarding reimbursements, but in no event later than the last day of Mr. Morris, Jr.’s taxable year following the taxable year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Mr. Morris, Jr.

5.1.6 Mitigation. Mr. Morris, Jr. shall not be required to mitigate damages with respect to the termination of his employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due Mr. Morris, Jr. under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to Mr. Morris, Jr. under this Agreement shall not be offset by any claims the Company may have against him, and the Company’s obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against Mr. Morris, Jr. or others.

5.2 Indemnification.

5.2.1 General. The Company agrees that if Mr. Morris, Jr. is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a trustee, director or officer of the Company, or any predecessor to the Company (including any sole proprietorship owned by Mr. Morris, Jr.) or any of their affiliates or is or was serving at the request of the Company, any predecessor to the Company (including any sole proprietorship owned by Mr. Morris, Jr.), or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a

trustee, director, officer, member, employee or agent, Mr. Morris, Jr. shall be indemnified and held harmless by the Company to the fullest extent authorized by Texas or Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by . him in connection therewith, and such indemnification shall continue as to Mr. Morris, Jr. even if he has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

5.2.2 Expenses. As used in this Section, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

5.2.3 Enforcement. If a claim or request under this Section 5 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Mr. Morris, Jr. may at any time thereafter bring an arbitration claim against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, he shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Texas or upon agreement of the Parties, under Delaware law.

5.2.4 Partial Indemnification. If Mr. Morris, Jr. is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify him for the portion of such Expenses to which he is entitled.

5.2.5 Advances of Expenses. Expenses incurred by Mr. Morris, Jr. in connection with any Proceeding shall be paid by the Company in advance upon his request that the Company pay such Expenses, but only in the event that he shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Mr. Morris, Jr. is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

5.2.6 Notice of Claim. Mr. Morris, Jr. shall give to the Company notice of any claim made against him for which indemnification will or could be sought under this Agreement. In addition, Mr. Morris, Jr. shall give the Company such information and cooperation as it may reasonably require and as shall be within his power and at such times and places as are convenient for Mr. Morris, Jr..

5.2.7 Defense of Claim. With respect to any Proceeding as to which Mr. Morris, Jr. notifies the Company of the commencement thereof:

(A) The Company will be entitled to participate therein at its own expense;

(B) Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Mr. Morris, Jr., which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. Mr. Morris, Jr. also shall have the right to employ his own counsel in such action, suit or proceeding if she reasonably concludes that failure to do so would involve a conflict of interest between the Company and Mr. Morris, Jr., and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

(C) The Company shall not be liable to indemnify Mr. Morris, Jr. under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on Mr. Morris, Jr. without his written consent. Neither the Company nor Mr. Morris, Jr. will unreasonably withhold or delay their consent to any proposed settlement.

5.2.8 Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 5 shall not be exclusive of any other right which Mr. Morris, Jr. may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

5.4 Legal Fees and Expenses. If any contest or dispute shall arise between the Company and Mr. Morris, Jr. regarding any provision of this Agreement, the Company shall reimburse him for all legal fees and expenses reasonably incurred by Mr. Morris, Jr. in connection with such contest or dispute, but only if he prevails to a substantial extent with respect to the claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

5.5 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by courier service, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or sent by facsimile transmission or, if mailed or sent by courier service, on the date of actual receipt thereof, as follows:

(i) if to the Company, to:

Chairman of the Board,

1980 Post Oak Blvd., Suite 800

Houston, Texas 77056

(ii) if to Mr. Morris, Jr., to:

8 West Rivercrest

Houston, Texas 77042

Any party may change its address for notice hereunder by notice to the other party hereto.

5.6 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (including but not limited to prior employment agreements and incentive plans and agreements), written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect, and if any conflict between this agreement and the terms of such plans arises, the terms of the plan shall control.

5.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

5.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof).

5.9 Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by Mr. Morris, Jr. but shall be binding upon any successor or assign of the Company whether by merger or purchase of substantially all of the assets of the Company or its affiliates, by law or otherwise. This Agreement shall inure to the benefit of and be enforceable by Mr. Morris, Jr.’s legal and/or personal representative.

5.10 Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.11 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

5.12 No Presumption Against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision arising directly or indirectly herefrom shall be construed against any party as being drafted by said party.

5.13 No Duty to Mitigate. Mr. Morris, Jr. shall have no obligation to mitigate damages suffered as a result of termination of his employment with the Company.

5.14 Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the breach thereof, Mr. Morris, Jr. and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, Mr. Morris, Jr. and the Company agree to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within thirty (30) days of a written demand for mediation, any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration before one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in English and held in Houston, Harris County, Texas, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration clause. The award shall be a reasoned award and rendered within thirty (30) days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section, the Company may seek injunctive relief from a court of competent jurisdiction located in Harris County, Texas, in the event of a breach or threatened breach of any covenant contained in Section 3.

5.15 Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and Mr. Morris, Jr. and Mr. Morris, Jr.’s legal representatives.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

EMPLOYEE	COMPANY
	STEWART INFORMATION SERVICES CORP.
By: /s/ Stewart Morris, Jr.	By: /s/ E. Douglas Hodo
Date: February 21, 2013	Date: February 21, 2013
Name: Stewart Morris, Jr.	Name: Dr. Edward Douglas Hodo
Title: Vice Chairman	Title: Chairman of the Board

EX-10.12

EXHIBIT 10.12

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of January 1, 2012 (the “Effective Date”), by and between Stewart Information Services Corp. (the “Company”), and Malcolm Morris (Mr. Morris).

The parties agree as follows:

1. Employment, Duties and Acceptance.

1.1 Term of Employment by the Company. The Company hereby agrees to employ Mr. Morris for a term commencing on the Effective Date and expiring on December 31, 2016 unless earlier terminated as provided in Section 4.

1.2 Duties. During the Term, Mr. Morris shall perform advisory services for the Company with such non-operational duties and responsibilities as assigned by the Chief Executive Officer (“CEO”) or Board of Directors (the “Board’) which Mr. Morris will make reasonable efforts to perform. Mr. Morris shall report to the Board.

1.2.1 Fiduciary Duty. Mr. Morris acknowledges and agrees that he owes a fiduciary duty to the Company and further agrees to make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not act for his own benefit concerning the subject matter of his fiduciary relationship.

1.2.2 Compliance. Mr. Morris agrees that he will not take any action intentionally in violation of United States laws or other laws applicable to his employment, including, but not limited to the Securities Exchange Act of 1934.

1.3 Acceptance of Employment. Mr. Morris hereby accepts such employment and shall render the services and perform the duties described above.

2. Compensation and Other Benefits.

2.1 Annual Salary. The Company shall pay to Mr. Morris an annual salary at a rate of Two Hundred Seventy Five Thousand Dollars ($275,000) per year (the “Annual Salary”). The Annual Salary shall be payable in accordance with the payroll policies of the Company as from time to time in effect, but in no event less frequently than twice each month, less such deductions as shall be required to be withheld by applicable law and regulations and less any voluntary deductions.

2.2 Deferred Transition Incentive Plan.

2.2.1 Deferred Transition Incentive Payments. During the period of this agreement Mr. Morris shall be eligible to receive annual Deferred Transition Incentive Payments

totaling $750,000. Annual payments in the amount of $150,000 will be made contingent upon the company achieving annual pretax earnings of thirty (30) million dollars or more. If annual pretax earnings of the Company are less than thirty (30) million dollars for a given calendar year, the annual Deferred Transition Incentive Payment will be reduced in proportion to the Company’s pretax profit below thirty (30) million dollars. If annual pretax earnings of the Company are zero or negative, no Deferred Transition Incentive Payment will be made for that calendar year. The payments made pursuant to this Section 2.2.1 shall be paid to Mr. Morris no later than March 31 of the year following the calendar year for which it is calculated. Upon termination other than with cause as specified in Section 4.3, if the aggregate amount of Deferred Transition Incentive Payments is less than $750,000, a payment equaling $750,000 less the total amount of Deferred Transition Incentive Payments already paid will be made no later than ninety (90) days following termination.

2.3 Vacation Policy. Mr. Morris shall be entitled to four (4) weeks of paid vacation during each calendar year of the Term which shall accrue in accordance with Company policy.

2.4 Participation in Employee Benefit Plans. The Company agrees to permit Mr. Morris during the Term to participate in any group life, hospitalization or disability insurance plan, health program, pension plan, or other so called “fringe benefits” of the Company (collectively, “Benefits”). Mr. Morris shall cooperate with the Company in applying for such coverage, including submitting to a physical exam and providing all relevant health and personal data. The Company shall not make any changes in any plans or arrangements provided pursuant to this Section 2.5 which would adversely affect Mr. Morris’s right to benefits thereunder unless such changes occur pursuant to a program applicable to other employees of the Company and which does not result in a proportionally greater reduction in the rights and benefits him.

2.5 General Business Expenses. The Company shall pay or reimburse Mr. Morris for all business expenses reasonably and necessarily incurred by him during the Term in hisperformance of services as requested by the CEO or Board under this Agreement. Such payment shall be made upon presentation of such documentation as the Company customarily requires prior to making such payments or reimbursements.

2.6 Office Space and Clerical Support. Mr. Morris will be provided with office space, equipment and clerical support consistent with his position in the company and as it relates to community service and sufficient to carry out the duties and community and charitable services, the location of which will be at the sole discretion of the Company.

3. Confidentiality and Company Property; Non-Competition and Non-Solicitation.

3.1 Fair Dealing. Consistent with all members of the Board of Directors and the duties and responsibilities herewith, during the term of this Agreement, Mr. Morris will be aware of and comply with standard covenants surrounding confidential information, conflicts of interest, non-solicitation of customers, non-competition and non-solicitation of employees.

4. Termination.

4.1 Date of Termination. As used in this Agreement, “Date of Termination” means (i) if Mr. Morris’s employment is terminated by the Company for Cause, the date of receipt of the notice of termination or any later date specified therein within ninety (90) days of such notice, as the case may be, (ii) if Mr. Morris’s employment is terminated by him pursuant to Section 4.4, the effective date of such termination pursuant to Section 4.4, (iii) if Mr. Morris’s employment is terminated by reason of death, the date of his death., or (iv) if Mr. Morris’s employment is terminated by the Company due to Permanent Disability, the date ninety (90) days after the Company’s written notice to Mr. Morris, or (v) the termination date of the Agreement is reached as set forth in Section 1.1.

4.2 Termination Upon Death. If Mr. Morris dies during the Term, this Agreement shall terminate; provided, however, that in any such event, the Company shall pay to his estate (i) in a lump sum within thirty (30) days of the Date of Termination, any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by Mr. Morris prior to the termination but not yet paid; (ii) at the same time payable pursuant to Section 2.2.1, any remaining unpaid amounts in accordance with the Deferred Transition Incentive Plan; and (iii) any Benefits that have vested as of the Date of Termination as a result of Mr. Morris’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which Mr. Morris is entitled to reimbursement pursuant to this Agreement (collectively, the “Accrued Amounts”).

4.3 Termination With Cause. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate Mr. Morris’s employment under this Agreement and discharge him with Cause. If such right is exercised, the Company’s obligation to Mr. Morris shall be limited solely to the payment of the Accrued Amounts and accrued but unpaid vacation. As used in this Agreement, the term “Cause” shall mean, in the good faith determination of the Board any: (A) willful failure to substantially perform duties with the Company (other than by reason of Permament Disability), after a written demand for substantial performance is delivered to Mr. Morris that specifically identifies the manner in which the Company believes that Mr. Morris has not substantially performed such duties, and Mr. Morris has failed to remedy the situation within thirty (30) days of such written notice from the Company; (B) Gross negligence in the performance of his duties; (C) Conviction of, or plea of guilty to any felony or any crime involving moral turpitude or the personal enrichment of Mr. Morris at the substantive expense of the Company; (D) Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including without limitation Mr. Morris’s breach of fiduciary duties owed to the Company. ; (E) Willful violation of any material provision of the Company’s code of conduct; (F) Willful violation of any of the material covenants contained in Section 3, as applicable; (G) Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or (H) Engaging in any material act that is intended or may be reasonably expected to harm the reputation, business prospects, or operations of the Company.

4.3.1 Notice to Cure. Mr. Morris may not be terminated for Cause unless and until there has been delivered to him written notice from the Board supplying the particulars of his acts or omissions that the Board believes constitute Cause and a reasonable period of time (not less than thirty (30) days) has been given to Mr. Morris after such notice to cure the same.

4.4 Voluntary Termination. Mr. Morris has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice of at least ninety (90) days, effective on or after the date of service of such notice as specified therein, to voluntarily terminate his employment under this Agreement. The provisions of Section 3 remain in full force and effect upon Voluntary Termination.

4.4.1 Upon Voluntary Termination, in exchange for Mr. Morris executing and delivering a Release as described in Section 4.4.2, he shall be entitled to receive:

(A) The Accrued Amounts (payable at the same time and in the same manner as set forth in Section 4.2) in a lump sump within ninety (90) days of the Date of Voluntary Termination, (i) any portion of the Annual Salary accrued but unpaid and accrued but unused vacation time that shall have been earned by Mr. Morris prior to the termination but not yet paid; (ii) any remaining unpaid amounts under the Deferred Transition Incentive Plan; (iii) any Benefits that have vested as of the Date of Voluntary Termination as a result of Mr. Morris’s participation in any of the Company’s benefit plans; and (iv) any expenses with respect to which Mr. Morris is entitled to reimbursement for pursuant to this Agreement (collectively, the “Accrued Amounts”); and

(B) The Extension of Medical Benefits. Until the earlier to occur of (A) the expiration of eighteen (18) months after the Date of Termination, (B) the date Mr. Morris first becomes eligible to receive health benefits under another employer-provided plan after the Date of Termination, or (C) the death of Mr. Morris, the Company shall, via proper COBRA election by Mr. Morris, continue medical and dental benefits (and, if applicable, to the spouse and dependents of Mr. Morris who received such benefits under his coverage immediately prior to the Date of Termination) equal to those that were in effect for Mr. Morris as of the Date of Termination (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company had Mr. Morris remained actively employed, provided that Mr. Morris makes all required COBRA payments to the Company, and the Company shall immediately reimburse Mr. Morris for each such COBRA payment (collectively, the “Continuation of Benefits”). Mr. Morris shall remain liable for any portion of such premiums for which he was liable as of the Date of Termination.

(C) Additional Medical Benefit Assistance. If, at the time of his Voluntary Termination, Mr. Morris is not eligible to receive Company-provided Medical Benefits or is not covered by the Company’s Medical Benefits Plan, either as a Director or as an employee, then following the expiration of eighteen (18) months after the Date of Termination, the Company shall pay to Mr. Morris, under the terms provided in section 4.4.1(B) above, a lump sum amount equal to twenty four (24) times the amount of Company’s monthly reimbursement payments for individual medical benefits provided to Company employees. The Company will also assist Mr. Morris in his choosing of an individual medical benefit, vision, and dental insurance plan.

4.4.2 Release. As a condition to Mr. Morris’s receipt of payments and/or benefits described under Section 4.4, he must execute and deliver to the Company, within the time period stated in the Release, and not subsequently revoke, a full release of all claims that he may have against the Company, its affiliates, and all of their officers, employees, directors, and agents, in a form mutually and reasonably agreeable to the parties hereunder (a current example of which is attached hereto as “Exhibit A”). The Company shall provide Mr. Morris with a form of release within ten (10) days from the Date of Termination.

4.5 Termination upon Permanent Disability. If during the Term Mr. Morris suffers a Permanent Disability, the Company may, by written notice to Mr. Morris, terminate his employment hereunder and discontinue payments of the Annual Salary, and Benefits accruing from and after the date of such termination. Upon the Company’s termination of Mr. Morris’s employment by reason of his Disability, the Company’s obligation to Mr. Morris shall be limited solely to the payment of the Accrued Amounts (at the same time and in the same manner as set forth in Section 4.2), payment of the aggregate amount of unpaid Deferred Transition Incentive Payments and provision of the Continuation of Benefits as set forth in 4.4. For purposes of this Agreement, “Permanent Disability” means permanent impairment of Mr. Morris’s ability to substantially peform his duties under this Agreement. A determination of Permanent Disability will be confirmed by the written statement of an independent, competent, licensed physician, mutually acceptable to the Company and Mr. Morris or his representitive.

4.6 Resignation of Position. Upon termination of the Agreement, Mr. Morris shall be deemed to have voluntarily and permanently resigned from his position as an officer and Vice Chairman of the Board pursuant to Section 6.5 of the Company bylaws.

5. Other Provisions.

5.1 Section 409A.

5.1.1 Separation from Service. Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Mr. Morris under this Agreement in connection with a termination of his employment that would be considered “non-qualified deferred compensation” under Section 409A of the Internal Revenue Code (hereafter “Code”), in no event shall a termination of employment be considered to have occurred under this Agreement unless such termination constitutes Mr. Morris’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h), and any successor provision thereto (“Separation from Service”).

5.1.2 Section 409A Compliance. Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, any severance payments payable to Mr. Morris under this Agreement shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-term deferrals). However, to the extent any such

payments are treated as “non-qualified deferred compensation” subject to Section 409A of the Code, and if Mr. Morris is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which he is entitled under this Agreement is required in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of the Code, such portion of Mr. Morris’s termination benefits shall not be provided to him prior to the earlier of (i) the expiration of the six-month period measured from the date of Mr. Morris’s Separation from Service or (ii) the date of Mr. Morris’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section shall be paid in a lump sum to Mr. Morris (or his estate). The determination of whether Mr. Morris is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by Company in accordance with the terms of Section 409A of the Code, and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

5.1.3 Section 409A; Separate Payments. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b) (2)(iii), each payment that Mr. Morris may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.

5.1.4 Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if Mr. Morris is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Mr. Morris has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Mr. Morris from the Company and its affiliates will be one dollar ($1.00) less than three times Mr. Morris’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Mr. Morris shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Mr. Morris (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or

benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Mr. Morris’s base amount, then he shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 5.1.4 shall require the Company to be responsible for, or have any liability or obligation with respect to, Mr. Morris’s excise tax liabilities under Section 4999 of the Code.

5.1.5 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement or in any Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Mr. Morris shall not affect in-kind benefits or reimbursements to be provided in any other tax year and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Mr. Morris and, if timely submitted, reimbursement payments shall be made to Mr. Morris as soon as administratively practicable following such submission in accordance with the Company’s policies regarding reimbursements, but in no event later than the last day of Mr. Morris’s taxable year following the taxable year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Mr. Morris

5.1.6 Mitigation. Mr. Morris shall not be required to mitigate damages with respect to the termination of his employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due Mr. Morris under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to Mr. Morris under this Agreement shall not be offset by any claims the Company may have against him, and the Company’s obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against Mr. Morris or others.

5.2 Indemnification.

5.2.1 General. The Company agrees that if Mr. Morris is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a trustee, director or officer of the Company, or any predecessor to the Company (including any sole proprietorship owned by Mr. Morris) or any of their affiliates or is or was serving at the request of the Company, any predecessor to the Company (including any sole proprietorship owned by Mr. Morris), or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, Mr. Morris shall be indemnified and held harmless by the Company to the fullest extent authorized by Texas or Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by . him in connection therewith, and such indemnification shall continue as to Mr. Morris even if he has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

5.2.2 Expenses. As used in this Section, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

5.2.3 Enforcement. If a claim or request under this Section 5 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Mr. Morris may at any time thereafter bring an arbitration claim against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, he shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Texas or upon agreement of the Parties, under Delaware law.

5.2.4 Partial Indemnification. If Mr. Morris is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify him for the portion of such Expenses to which he is entitled.

5.2.5 Advances of Expenses. Expenses incurred by Mr. Morris in connection with any Proceeding shall be paid by the Company in advance upon his request that the Company pay such Expenses, but only in the event that he shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Mr. Morris is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

5.2.6 Notice of Claim. Mr. Morris shall give to the Company notice of any claim made against him for which indemnification will or could be sought under this Agreement. In addition, Mr. Morris shall give the Company such information and cooperation as it may reasonably require and as shall be within his power and at such times and places as are convenient for Mr. Morris.

5.2.7 Defense of Claim. With respect to any Proceeding as to which Mr. Morris notifies the Company of the commencement thereof:

(A) The Company will be entitled to participate therein at its own expense;

(B) Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Mr. Morris, which in the Company’s sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. Mr. Morris also shall have the right to employ his own counsel in such action, suit or proceeding if she

reasonably concludes that failure to do so would involve a conflict of interest between the Company and Mr. Morris, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

(C) The Company shall not be liable to indemnify Mr. Morris under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on Mr. Morris without his written consent. Neither the Company nor Mr. Morris will unreasonably withhold or delay their consent to any proposed settlement.

5.2.8 Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 5 shall not be exclusive of any other right which Mr. Morris may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

5.4 Legal Fees and Expenses. If any contest or dispute shall arise between the Company and Mr. Morris regarding any provision of this Agreement, the Company shall reimburse him for all legal fees and expenses reasonably incurred by Mr. Morris in connection with such contest or dispute, but only if he prevails to a substantial extent with respect to the claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

5.5 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by courier service, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or sent by facsimile transmission or, if mailed or sent by courier service, on the date of actual receipt thereof, as follows:

(i) if to the Company, to:

Chairman of the Board,

1980 Post Oak Blvd., Suite 800

Houston, Texas 77056

(ii) if to Mr. Morris, to:

3992 Inverness

Houston, Texas 77019

Any party may change its address for notice hereunder by notice to the other party hereto.

5.6 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (including but not limited to prior employment agreements and incentive plans and agreements), written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect, and if any conflict between this agreement and the terms of such plans arises, the terms of the plan shall control.

5.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

5.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof).

5.9 Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by Mr. Morris but shall be binding upon any successor or assign of the Company whether by merger or purchase of substantially all of the assets of the Company or its affiliates, by law or otherwise. This Agreement shall inure to the benefit of and be enforceable by Mr. Morris’s legal and/or personal representative.

5.10 Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.11 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

5.12 No Presumption Against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision arising directly or indirectly herefrom shall be construed against any party as being drafted by said party.

5.13 No Duty to Mitigate. Mr. Morris shall have no obligation to mitigate damages suffered as a result of termination of his employment with the Company.

5.14 Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the breach thereof, Mr. Morris and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, Mr. Morris and the Company agree to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within thirty (30) days of a written demand for mediation, any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration before one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in English and held in Houston, Harris County, Texas, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration clause. The award shall be a reasoned award and rendered within thirty (30) days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section, the Company may seek injunctive relief from a court of competent jurisdiction located in Harris County, Texas, in the event of a breach or threatened breach of any covenant contained in Section 3.

5.15 Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and Mr. Morris and Mr. Morris’s legal representatives.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

EMPLOYEE	COMPANY
	STEWART INFORMATION SERVICES CORP.
By: /s/ Malcolm S. Morris	By: /s/ E. Douglas Hodo
Date: February 21, 2013	Date: February 21, 2013
Name: Malcolm Morris	Name: Dr. Edward Douglas Hodo
Title: Vice Chairman	Title: Chairman of the Board

EX-21.1

Exhibit 21.1

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

Name of Subsidiary	State, Territory or Country of Origin
Integrity Title Agency, LLC	Alaska
United Title Guaranty Agency, LLC	Alaska
Citizens Title Agency of Arizona, LLC	Arizona
Citizens Title & Trust	Arizona
F.A.S.B., Inc.	Arizona
Safe Harbor Funding, LLC	Arizona
Safford Title Agency, Inc.	Arizona
H/7 Corporation	Arizona
Stewart Title & Trust of Tucson	Arizona
Stewart Title of Arkansas, LLC	Arkansas
AmSac Rivers Escrow, Inc.	California
API Properties Corporation	California
Asset Preservation, Inc.	California
Intercity Capital Corporation	California
Intercity Escrow Services	California
Quantum Leap Realty Technologies, Inc.	California
Stewart Default Services	California
SIFS, LLC	California
Stewart Title of California, Inc.	California
Reveal Systems, Inc.	Colorado
SAB Holdings, LLC	Colorado
Stewart Water Information, LLC	Colorado
Electronic Closing Services, Inc.	Delaware
PMH Financial, LLC	Delaware
Stewart Title & Trust of Phoenix, Inc.	Delaware
Stewart Vacation Ownership Title Agency, Inc.	Florida
Stewart Title Services of Northwest Indiana, LLC	Indiana
Hannaford Abstract & Title Company, Inc.	Kansas
McPherson County Abstract and Title Company, Inc.	Kansas
Kemp Title Agency, LLC	Kentucky
Stewart Title of Louisiana, Inc.	Louisiana
Stewart Title Group, LLC	Maryland
Stewart Title of Maryland, Inc.	Maryland
Stewart Title of Minnesota, Inc.	Minnesota

Name of Subsidiary	State, Territory or Country of Origin
CBKC Title & Escrow, LLC	Missouri
CBKC Title Holdings, LLC	Missouri
Heart of America Title & Escrow, LLC	Missouri
Heart of America Title & Escrow Holdings, LLC	Missouri
Metropolitan Title & Escrow, LLC	Missouri
API Properties Nevada, Inc.	Nevada
Stewart Title of Albuquerque, LLC	New Mexico
Monroe—Gorman Title Agency, LLC	New York
Monroe—Tompkins-Watkins Title Agency, LLC	New York
Parked Properties NY, Inc.	New York
Stewart Title Insurance Company	New York
Red River Title Services, Inc.	North Dakota
Stewart New Homes Title Agency LLC	Ohio
Oklahoma Land Title Services, LLC	Oklahoma
Stewart Abstract & Title of Oklahoma, an Oklahoma Corporation	Oklahoma
Yankton Title Company, Inc.	South Dakota
Birchfield Title, LLC	Tennessee
Memorial Title, LLC	Tennessee
Summit Land Title, LLC	Tennessee
ABC Title, LLC	Texas
Advantage Title of Ft. Bend, LC	Texas
Advantage Title of Travis County, LC	Texas
Advantage Title Solutions, LLC	Texas
Chadco Builders, Inc.	Texas
Crown Title Company of Houston, LLC	Texas
DH Title Company, LLC	Texas
DHH Title Company	Texas
Dominion Title, LLC	Texas
Dominion Title of Dallas, LLC	Texas
Fulghum, Inc.	Texas
GESS Management, LLC	Texas
GESS Real Estate Investments, LP	Texas
Gracy Title Company, LC	Texas
Graystone Title Company, LLC	Texas
HMH Title Company, LLC	Texas
Home Retention Services, Inc.	Texas
I.H. Title Company, LLC	Texas
IT24 of Houston, LLC	Texas
Landata Research, Inc.	Texas
Landon Title Company, LLC	Texas
LCH Title Company, LLC	Texas

2

Name of Subsidiary	State, Territory or Country of Origin
Millennium Title of Houston, LC	Texas
Millennium Title Company of North Texas, LLC	Texas
MTH Title Company, LC	Texas
NETC Title Company, LLC	Texas
Paradigm Title, LLC	Texas
Priority Title Company of Dallas, LC	Texas
Priority Title Company of Houston, LC	Texas
Professional Real Estate Tax Service, LLC	Texas
Professional Real Estate Tax Service of North Texas, LLC	Texas
PropertyInfo Corporation	Texas
Psi-Fire, L.P.	Texas
S&S Title Company LLC	Texas
Stewart Financial Services, Inc.	Texas
Stewart Lender Services, Inc.	Texas
Stewart Solutions, LLC	Texas
Stewart Title Company	Texas
Stewart Title Guaranty Company	Texas
Stewart Title of Cameron County, Inc.	Texas
Stewart Title of Lubbock, Inc.	Texas
Stewart Title of the Coastal Bend, Inc.	Texas
Strategic Title Company, LLC	Texas
Texas State Title, LLC fka TexaPlex Title, LLC	Texas
Texarkana Title and Abstract Company, Inc.	Texas
U.S. Title Company of Wichita County I, Ltd.	Texas
Bonneville Superior Title Company, Inc.	Utah
Kanawha Land Title Services, LLC	Virginia
Richmond Settlement Solutions, LLC	Virginia
Signature & Stewart Settlement Services, Inc.	Virginia
Stewart Title & Escrow, Inc.	Virginia
Stewart Title & Settlement Services, Inc.	Virginia
Stewart Title of Shenandoah Valley, LC	Virginia
Stewart Title of Spokane, LLC	Washington
Stewart Title Co. of Gillette, Inc.	Wyoming
Lawyers Mortgage Network Inc.	Canada
Stewart Lender Services — Latin America, S.A.	Costa Rica
Stewart Title s.r.o.	Czech Republic
Stewart Title Guaranty de México, S.A. de C.V.	Mexico
CTO 24/7 (Private) Limited	Pakistan
Stewart Title Sp. Z.o.o.	Poland
Hato Rey Insurance Agency, Inc.	Puerto Rico

3

Name of Subsidiary	State, Territory or Country of Origin
San Juan Abstract Company, Inc.	Puerto Rico
Advantage Title Solutions, S.R.L.	Romania
Stewart Title Ltd.	United Kingdom

4

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Stewart Information Services Corporation:

We consent to the incorporation by reference in the registration statements (Nos. 333-159285, 333-124954, 333-88708, 333-77579 and 333-24075) on Form S-8 and the registration statement (No. 333-171716) on Form S-3 of Stewart Information Services Corporation of our reports dated March 6, 2013, with respect to the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive earnings (loss) and cash flows for each of the years in the three-year period ended December 31, 2012, and all related financial statement schedules, and the effectiveness of internal control over financial reporting as of December 31, 2012, which reports appear in the December 31, 2012 annual report on Form 10-K of Stewart Information Services Corporation.

/s/ KPMG LLP

Houston, Texas

March 6, 2013

EX-31.1

EXHIBIT 31.1

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Matthew W. Morris, certify that:

1. I have reviewed this annual report on Form 10-K of Stewart Information Services Corporation (registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 6, 2013	/s/ Matthew W. Morris
	Title:  Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, J. Allen Berryman, certify that:

1. I have reviewed this annual report on Form 10-K of Stewart Information Services Corporation (registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 6, 2013	/s/ J. Allen Berryman
	Title: Chief Financial Officer, Secretary, Treasurer, and Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew W. Morris, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 6, 2013

        /s/ Matthew W. Morris

Name: Matthew W. Morris

Title: Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Allen Berryman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 6, 2013

        /s/ J. Allen Berryman                                                 

Name: J. Allen Berryman

Title: Chief Financial Officer, Secretary, Treasurer

and Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Earnings per share (Tables)

12 Months Ended

Dec. 31, 2012

Diluted Earnings per Share using Converted Method

The calculation of the diluted earnings per share using the if-converted method is as follows:

	For the Years Ended December 31,
	2012		2011		2010
	($000 omitted)
Numerator:
Net earnings (loss) attributable to Stewart		109,182		2,348		(12,582	)
Interest expense, net of tax effects		3,139		—		—
If-converted net earnings (loss) attributable to Stewart		112,321		2,348		(12,582	)
Denominator (000):
Basic average shares outstanding		19,294		19,131		18,313
Dilutive average number of shares relating to convertible senior notes		5,047		—		—
Dilutive average number of shares relating to restricted shares grant		43		—		—
Dilutive average shares outstanding		24,384		19,131		18,313
Diluted earnings per share attributable to Stewart		4.61		0.12		(0.69	)

XML

Gross Realized Investment and Other Gains and Losses (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Available For Sale Securities [Line Items]
Investment income	$ 13,809	$ 15,505	$ 18,397
Realized gains	9,417	12,151	24,055
Realized losses	(1,839)	(9,849)	(2,273)
Investment and other gains (losses)	7,578	2,302	21,782
Debt securities
Available For Sale Securities [Line Items]
Investment income	12,399	13,860	15,014
Short-term investments
Available For Sale Securities [Line Items]
Investment income	$ 1,410	$ 1,645	$ 3,383

XML

Debt Securities According Contractual Terms (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Debt And Receivables Securitization [Line Items]
Amortized costs, In one year or less	$ 17,673
Amortized costs, After one year through five years	211,288
Amortized costs, After five years through ten years	208,966
Amortized costs, After ten years	32,286
Amortized costs, Total	470,213
Fair Values, In one year or less	17,905
Fair Values, After one year through five years	217,187
Fair Values, After five years through ten years	222,499
Fair Values, After ten years	34,595
Debt securities, fair values total	$ 492,186

XML

Common Stock and Class B Common Stock - Additional Information (Detail)	Dec. 31, 2012	Dec. 31, 2011
Components Of Common Stock [Line Items]
Number of directors stockholders entitle to elect	9
Subsidiary
Components Of Common Stock [Line Items]
Number of treasury shares held	145,820	145,820
If 1,050,000 or more shares of Class B Common Stock are outstanding
Components Of Common Stock [Line Items]
Number of directors stockholders entitle to elect	4
If between 600,000 and 1,050,000 shares are outstanding
Components Of Common Stock [Line Items]
Number of directors stockholders entitle to elect	3
If less than 600,000 shares of Class B Common Stock are outstanding
Components Of Common Stock [Line Items]
Number of directors stockholders entitle to elect	0

XML

Investment Income - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Investment And Other Income [Line Items]
Proceeds from the sales of investments available-for-sale	$ 134.8	$ 292.0	$ 280.9
Realized gain on sale of debt and equity investment available for sale	8.0	10.7	11.8
Realized losses on impairment of cost basis investments	0.8	3.5
Loan guarantee obligation		4.3
Software Development
Investment And Other Income [Line Items]
Realized gain on sale of debt and equity investment available for sale			6.3
Sale of Subsidiary Gain (Loss)
Investment And Other Income [Line Items]
Realized gain on sale of debt and equity investment available for sale			1.2
Real Estate
Investment And Other Income [Line Items]
Realized gain on sale of debt and equity investment available for sale			$ 3.0

XML

Contingent Liabilities and Commitments - Additional Information (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Commitment And Contingencies [Line Items]
Contingent liability	$ 520,375,000	$ 502,611,000	$ 495,849,000	$ 503,475,000
Contingent liabilities for guarantees of consolidated subsidiaries	4,100,000
Escrow Account Deposit
Commitment And Contingencies [Line Items]
Contingent liability	731,600,000
Exchange Traded Funds
Commitment And Contingencies [Line Items]
Contingent liability	$ 448,900,000

XML

Amortized Costs and Fair Values (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Equity securities, Amortized costs	$ 10,870	$ 5,005
Total, Amortized costs	481,083	449,552
Debt securities, Fair values	492,186
Equity securities, Fair values	11,073	5,443
Available for sale securities, Total	503,259	460,985
Municipal
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	18,012	26,721
Debt securities, Fair values	19,011	27,801
Corporate and utilities
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	268,874	237,912
Debt securities, Fair values	287,528	244,123
Foreign
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	168,084	162,384
Debt securities, Fair values	169,009	164,268
U.S. Government
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	15,243	17,530
Debt securities, Fair values	$ 16,638	$ 19,350

XML

Income taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Provision

The income tax provision consists of the following:

	2012			2011			2010
	($000 omitted)
Current:
Federal		(430	)		(678	)		(4,305	)
State		1,674			1,444			1,188
Foreign		9,024			9,221			337
Deferred:
Federal		(35,989	)		4,450			(1,197	)
State		(527	)		397			—
Foreign		(3,391	)		(5,493	)		12,052
Income tax (benefit) expense		(29,639	)		9,341			8,075

Reconcilation of Federal Income Taxes Computed at Statutory Rate with Income Taxes

The following reconciles federal income taxes computed at the statutory rate with income taxes as reported.

	2012			2011			2010
	($000 omitted)
Expected income tax expense (benefit) at 35% (1)		27,842			4,091			(1,577	)
Foreign tax rate differential		(2,688	)		(764	)		613
Taxable income (non-consolidated subsidiaries for tax)		768			946			832
Intercompany dividends		921			572			738
Research and development credit		—			(74	)		(1,223	)
State income tax expense (benefit) – net of taxes		1,147			884			(178	)
Tax-exempt interest		(216	)		(342	)		(561	)
Non-deductible expenses		5,861			2,624			2,261
Loss carrybacks		(1,442	)		(1,829	)		—
Adjustments to deferred tax liabilities		9,371			10,781			8,716
Dividends received deductions on investments		(634	)		(500	)		(656	)
Valuation allowance		(71,106	)		(7,163	)		(1,146	)
Other – net		537			115			256
Income tax (benefit) expense		(29,639	)		9,341			8,075
Effective income tax rates (%) (1)		(37.3	)		79.9			(179.2	)

⁽¹⁾  Calculated using income (loss) before taxes and after noncontrolling interests.

Deferred Income Taxes

Deferred income taxes at December 31, 2012 and 2011 were as follows:

	2012			2011
	($000 omitted)
Deferred tax assets:
Accrued expenses		15,630			12,684
Allowance for uncollectible amounts		4,575			5,784
Fixed assets		4,683			7,502
Investments		—			10,390
Net operating loss carryforwards		3,926			32,122
Tax credit carryforwards		27,072			18,727
Title loss provisions		8,479			11,235
Other		484			4,195
		64,849			102,639
Valuation allowance		(12,136	)		(84,771	)
		52,713			17,868
Deferred tax liabilities:
Amortization – goodwill and other intangibles		(27,528	)		(23,701	)
Unrealized gains on investments		(7,802	)		(4,003	)
Cash surrender value of insurance policies		(2,998	)		(4,431	)
Foreign currency translation adjustments		(5,753	)		(4,999	)
Accrued expenses		(2,781	)		(6,592	)
Investments		(477	)		—
Fixed assets		(345	)		(139	)
Other		(112	)		(1,452	)
		(47,796	)		(45,317	)
Net deferred income taxes		4,917			(27,449	)

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Regulatory and Legal Developments - Additional Information (Detail) (USD $)	1 Months Ended	12 Months Ended		12 Months Ended
	Dec. 31, 2012 Plaintiff	Dec. 31, 2012	Apr. 10, 2012	Dec. 31, 2012 Van Buren Estates Llc	Mar. 05, 2012 Van Buren Estates Llc
Legal Proceedings And Contingencies [Line Items]
Damage incurred due to the extra-contractual claims against STGC and STGM based on application of Mexican law		$ 0
Oral argument scheduled at Court of Appeals		2013-02
Number Of Plaintiffs	8
Number of complaints in company/its affiliates as a defendant		78
Number of complaints dismissed during the period		7
Total liability and damages concluded in the trial					6,500,000
Cost to cure the title defect at issue in the case					400,000
Motion granted under Judgment			$ 4,200,000
Action commencement date in the Superior Court of California				2010-03-26

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Share-Based Incentives - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended
	Oct. 31, 2012	Mar. 31, 2011	Mar. 31, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of restricted common stock award			5 years
Unrestricted Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted		51,000	51,000
Fair value of fully vested common stock		$ 0.6	$ 0.7
Restricted Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted	0	37,000	37,000
Fair value of fully vested common stock	$ 1.3	$ 0.4	$ 0.5
Percentage of vest in common stock		20.00%	20.00%
Period of restricted common stock award	3 years	5 years

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Schedule II - Valuation and Qualifying Accounts (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Stewart Information Services Corporation and subsidiaries | Estimated Title Losses
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the beginning of period	$ 502,611		$ 495,849		$ 503,475
Additions charged to costs and expenses	140,029		142,101		148,438
Additions charged to other accounts
Deductions	122,265	[1]	135,339	[1]	156,064	[1]
Balance at the end of period	520,375		502,611		495,849
Stewart Information Services Corporation and subsidiaries | Valuation allowance for deferred tax assets
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the beginning of period	84,771		91,934		93,080
Additions charged to costs and expenses	(72,635)		(7,163)		(1,146)
Additions charged to other accounts
Balance at the end of period	12,136		84,771		91,934
Stewart Information Services Corporation and subsidiaries | Allowance for uncollectible amounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the beginning of period	16,056		19,438		20,501
Additions charged to costs and expenses	3,201		1,318		4,186
Additions charged to other accounts
Deductions	6,434	[2]	4,700	[2]	5,249	[2]
Balance at the end of period	12,823		16,056		19,438
Stewart Information Services Corporation - Parent Company | Allowance for uncollectible amounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at the beginning of period	15		77		635
Additions charged to costs and expenses	1				(96)
Additions charged to other accounts
Deductions	2	[2]	62	[2]	462	[2]
Balance at the end of period	$ 14		$ 15		$ 77

[1] Represents primarily payments of policy and escrow losses and loss adjustment expenses.

[2] Represents uncollectible accounts written off.

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Reconciliation of Federal Income Taxes Computed at Statutory Rate with Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Component Of Net Income Tax Assets And Liabilities [Line Items]
Expected income tax expense (benefit) at 35%	$ 27,842	[1]	$ 4,091	[1]	$ (1,577)	[1]
Foreign tax rate differential	(2,688)		(764)		613
Taxable income (non-consolidated subsidiaries for tax)	768		946		832
Intercompany dividends	921		572		738
Research and development credit			(74)		(1,223)
State income tax expense (benefit) - net of taxes	1,147		884		(178)
Tax-exempt interest	(216)		(342)		(561)
Non-deductible expenses	5,861		2,624		2,261
Loss carrybacks	(1,442)		(1,829)
Adjustments to deferred tax liabilities	9,371		10,781		8,716
Dividends received deductions on investments	(634)		(500)		(656)
Valuation allowance	(71,106)		(7,163)		(1,146)
Other - net	537		115		256
Income tax (benefit) expense	$ (29,639)		$ 9,341		$ 8,075
Effective income tax rates (%)	(37.30%)	[1]	79.90%	[1]	(179.20%)	[1]

[1] Calculated using income (loss) before taxes and after noncontrolling interests.

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Leases - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Leases Disclosure [Line Items]
Lease expense	$ 39.1	$ 41.4	$ 45.2

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Schedule I - Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010	Dec. 31, 2009
Assets
Cash and cash equivalents	$ 196,471		$ 117,196
Receivables:
Notes	8,483		10,394
Other, including $3 and $191 from affiliates	56,311		39,660
Allowance for uncollectible amounts	(12,823)		(16,056)
Total receivables	100,688		88,761
Property and equipment, at cost:
Buildings	26,887		23,823
Furniture and equipment	241,694		234,262
Accumulated depreciation	(219,715)		(208,077)
Total property and equipment, at cost	54,714		56,437
Title plant, at cost	77,360		77,406
Investments in subsidiaries, on an equity method basis	13,891		18,055
Goodwill	220,955		214,492		206,861
Other assets	56,229		52,096
Total assets	1,291,177		1,156,141
Liabilities
Convertible senior notes	64,687		64,513
Accounts payable and accrued liabilities, including $3 and $104 from affiliates	116,617		86,389
Total Liabilities	710,805		692,684
Contingent liabilities and commitments
Stockholders' equity
Additional paid-in capital	133,685		132,446
Retained earnings	391,447		284,097
Accumulated other comprehensive earnings:
Foreign currency translation adjustments	12,169		9,250
Treasury stock - 352,161 and 352,161 common shares, at cost	(2,666)		(2,666)
Total stockholders' equity	580,372		463,457
Liabilities and Equity	1,291,177		1,156,141
Common Stock
Stockholders' equity
Common Stock	18,706		18,606
Class B Common Stock
Stockholders' equity
Common Stock	1,050		1,050
Stewart Information Services Corporation - Parent Company
Assets
Cash and cash equivalents	10,725		4,170
Receivables:
Notes	14		15
Other, including $3 and $191 from affiliates	43		476
Allowance for uncollectible amounts	(14)		(15)
Total receivables	43		476
Property and equipment, at cost:
Buildings			2,287
Furniture and equipment	3,109		3,209
Accumulated depreciation	(2,347)		(2,429)
Total property and equipment, at cost	762		3,067
Title plant, at cost	48		48
Investments in subsidiaries, on an equity method basis	626,994		504,897
Goodwill	8,470		8,470
Other assets	16,797		17,136
Total assets	663,839		538,264
Liabilities
Convertible senior notes	64,687		64,513
Accounts payable and accrued liabilities, including $3 and $104 from affiliates	30,346		23,537
Total Liabilities	95,033		88,050
Contingent liabilities and commitments
Stockholders' equity
Additional paid-in capital	133,685		132,446
Retained earnings	391,447	[1]	284,097	[1]	282,666	296,116
Accumulated other comprehensive earnings:
Foreign currency translation adjustments	12,169		9,250
Unrealized investment gains	14,415		7,431
Treasury stock - 352,161 and 352,161 common shares, at cost	(2,666)		(2,666)
Total stockholders' equity	568,806		450,214
Liabilities and Equity	663,839		538,264
Stewart Information Services Corporation - Parent Company | Common Stock
Stockholders' equity
Common Stock	18,706		18,606
Stewart Information Services Corporation - Parent Company | Class B Common Stock
Stockholders' equity
Common Stock	$ 1,050		$ 1,050

[1] Includes undistributed earnings of subsidiaries of $466,442 in 2012 and $344,376 in 2011.

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Summary of Segmental Revenues and Expenses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Information [Line Items]
Revenues	$ 520,972	$ 520,741	$ 483,712	$ 384,987	$ 445,077	$ 418,529	$ 404,883	$ 366,417	$ 1,910,412	$ 1,634,906	$ 1,672,390
Intersegment revenues									11,994	18,700	19,166
Depreciation and amortization									17,783	19,542	21,422
Earnings (loss) before taxes and noncontrolling interests									89,338	18,019	2,925
Title
Segment Information [Line Items]
Revenues									1,713,082	1,494,557	1,523,742
Depreciation and amortization									6,143	7,691	9,682
Earnings (loss) before taxes and noncontrolling interests									147,628	89,438	82,062
Mortgage Services
Segment Information [Line Items]
Revenues									178,015	123,601	114,328
Intersegment revenues									8,158	15,675	15,922
Depreciation and amortization									4,107	4,774	4,250
Earnings (loss) before taxes and noncontrolling interests									48,633	33,386	22,059
Corporate
Segment Information [Line Items]
Revenues									19,315	16,748	34,320
Intersegment revenues									3,836	3,025	3,244
Depreciation and amortization									7,533	7,077	7,490
Earnings (loss) before taxes and noncontrolling interests									$ (106,923)	$ (104,805)	$ (101,196)

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Schedule I - Balance Sheets (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Other	$ 56,311,000	$ 39,660,000
Accounts payable and accrued liabilities	116,617,000	86,389,000
Treasury stock, common shares	352,161	352,161
Stewart Information Services Corporation - Parent Company
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Other	43,000	476,000
Accounts payable and accrued liabilities	30,346,000	23,537,000
Treasury stock, common shares	352,161	352,161
Undistributed earnings of subsidiaries	466,442	344,376
Common Stock
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Common Stock, par value	$ 1	$ 1
Common stock, shares authorized	50,000,000	50,000,000
Common Stock, shares issued	18,705,914	18,605,993
Common Stock, shares outstanding	18,353,753	18,253,832
Common Stock | Stewart Information Services Corporation - Parent Company
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Common Stock, par value	$ 1	$ 1
Common stock, shares authorized	50,000,000	50,000,000
Common Stock, shares issued	18,705,914	18,605,993
Common Stock, shares outstanding	18,353,753	18,253,832
Class B Common Stock
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Common Stock, par value	$ 1	$ 1
Common stock, shares authorized	1,500,000	1,500,000
Common Stock, shares issued	1,050,012	1,050,012
Common Stock, shares outstanding	1,050,012	1,050,012
Class B Common Stock | Stewart Information Services Corporation - Parent Company
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Common Stock, par value	$ 1	$ 1
Common stock, shares authorized	1,500,000	1,500,000
Common Stock, shares issued	1,050,012	1,050,012
Common Stock, shares outstanding	1,050,012	1,050,012
Affiliates | Stewart Information Services Corporation - Parent Company
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Other	3,000	191,000
Accounts payable and accrued liabilities	$ 3,000	$ 104,000

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Summary of Future Minimum Lease Payments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Leases Future Minimum Payments [Line Items]
2013	$ 35,232
2014	28,549
2015	23,549
2016	16,004
2017	6,961
2018 and after	5,053
Operating Leases, Future Minimum Payments Due, Total	$ 115,348

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Changes in Stockholders' Equity (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended																		12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Common and Class B Common Stock	Dec. 31, 2011 Common and Class B Common Stock	Dec. 31, 2010 Common and Class B Common Stock	Dec. 31, 2012 Additional paid-in capital	Dec. 31, 2011 Additional paid-in capital	Dec. 31, 2010 Additional paid-in capital	Dec. 31, 2012 Accumulated other comprehensive earnings	Dec. 31, 2011 Accumulated other comprehensive earnings	Dec. 31, 2010 Accumulated other comprehensive earnings	Dec. 31, 2012 Retained Earnings	Dec. 31, 2011 Retained Earnings	Dec. 31, 2010 Retained Earnings	Dec. 31, 2011 Treasury stock	Dec. 31, 2012 Treasury stock	Dec. 31, 2009 Treasury stock	Dec. 31, 2012 Noncontrolling interests	Dec. 31, 2011 Noncontrolling interests	Dec. 31, 2010 Noncontrolling interests
Equity Note [Line Items]
Beginning balance				$ 463,457					$ 463,457			$ 19,656	$ 18,851	$ 18,708	$ 132,446	$ 124,413	$ 126,822	$ 16,681	$ 13,610	$ 10,960	$ 284,097	$ 282,666	$ 296,116	$ (4,330)	$ (2,666)	$ (4,330)	$ 13,243	$ 13,123	$ 13,790
Net earnings (loss) attributable to Stewart	61,760	34,668	24,911	(12,157)	2,159	4,542	5,940	(10,293)	109,182	2,348	(12,582)										109,182	2,348	(12,582)
Cash dividends on common stock ($0.10 in 2012, and $0.05 in 2011 and 2010)																					(1,832)	(917)	(868)
Stock bonuses and other												50	169	143	935	1,452	1,284
Exercise of stock options												50			1,044
Settlement of wage and hour litigation through issuance of Common Stock													636			6,946
Purchase of remaining interest of consolidated subsidiary															(740)		(3,693)												(506)
Settlement of note payable through issuance of Common Stock held in treasury																(365)								1,664
Provision for Canadian taxes																				(1,185)
Net change in unrealized gains and losses on investments																		9,240	7,245	1,448
Net realized gain reclassification																		(2,256)	(2,331)	(1,142)
Foreign currency translation																		2,919	(1,843)	3,529
Net earnings attributable to noncontrolling interests									(9,795)	(6,330)	(7,432)																9,795	6,330	7,432
Subsidiary dividends paid to noncontrolling interests																											(9,512)	(6,142)	(7,122)
Net effect of changes in ownership and other																											(1,960)	(68)	(471)
Ending balance	$ 580,372				$ 463,457				$ 580,372	$ 463,457		$ 19,756	$ 19,656	$ 18,851	$ 133,685	$ 132,446	$ 124,413	$ 26,584	$ 16,681	$ 13,610	$ 391,447	$ 284,097	$ 282,666	$ (2,666)	$ (2,666)	$ (4,330)	$ 11,566	$ 13,243	$ 13,123

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Segment information

12 Months Ended

Dec. 31, 2012

Segment information

NOTE 20

Segment information. Subsequent to the appointment of a new Chief Executive Officer, the Company reorganized the senior management team and updated its long-term business strategy in fiscal 2012. As a result of these events, we have revised our reportable operating segments to align with the current management of the business. The segment information for prior periods presented has been restated. The Company’s three reportable operating segments are title insurance and related services (title), mortgage services and corporate.

The title segment provides services needed to transfer the title in a real estate transaction. These services include searching, examining, closing and insuring the condition of the title to real property. The title segment also includes home and personal insurance services and Internal Revenue Code Section 1031 tax-deferred exchanges.

The mortgage services segment includes a diverse group of products and services serving multiple markets. Mortgage services provides loan origination and servicing support; loan review services; loss mitigation; REO asset management; and technology to support the real estate process. The single largest customer of the mortgage services segment accounted for 71.1%, 62.9%, and 50.0% of mortgage services revenues in 2012, 2011 and 2010, respectively.

The corporate segment consists of the expenses relating to the parent holding company and certain other unallocated corporate overhead expenses.

The Company does not provide asset information by reportable operating segment as it does not routinely evaluate the asset position by segment.

	Title		Mortgage Services		Corporate			Total
	($000 omitted)
2012:
Revenues		1,713,082		178,015		19,315			1,910,412
Intersegment revenues		—		8,158		3,836			11,994
Depreciation and amortization		6,143		4,107		7,533			17,783
Earnings (loss) before taxes and noncontrolling interests		147,628		48,633		(106,923	)		89,338
2011:
Revenues		1,494,557		123,601		16,748			1,634,906
Intersegment revenues		—		15,675		3,025			18,700
Depreciation and amortization		7,691		4,774		7,077			19,542
Earnings (loss) before taxes and noncontrolling interests		89,438		33,386		(104,805	)		18,019
2010:
Revenues		1,523,742		114,328		34,320			1,672,390
Intersegment revenues		—		15,922		3,244			19,166
Depreciation and amortization		9,682		4,250		7,490			21,422
Earnings (loss) before taxes and noncontrolling interests		82,062		22,059		(101,196	)		2,925

Revenues for the years ended December 31 in the United States and all international operations follow:

	2012		2011		2010
	($000 omitted)
United States		1,791,316		1,515,378		1,564,057
International		119,096		119,528		108,333
		1,910,412		1,634,906		1,672,390

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Investments in Debt and Equity Securities - Additional information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012 Investment	Dec. 31, 2011 Investment
Unrealized Losses On Investments [Line Items]
Number of investments in an unrealized loss position	30	52
Foreign Government Debt
Unrealized Losses On Investments [Line Items]
Foreign debt securities	143.3	136.6

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Quarterly financial information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Quarterly Fnancial Information

	Mar 31			June 30			Sept 30			Dec 31		Total
	($000 omitted, except per share)
Revenues:
2012		384,987			483,712			520,741			520,972		1,910,412
2011		366,417			404,883			418,529			445,077		1,634,906
Net earnings (loss) attributable to Stewart:
2012		(12,157	)		24,911			34,668			61,760		109,182
2011		(10,293	)		5,940			4,542			2,159		2,348
Diluted earnings (loss) per share attributable to Stewart(1):
2012		(0.63	)		1.05			1.45			2.56		4.61
2011		(0.55	)		0.28	(2)		0.22	(2)		0.11		0.12

⁽¹⁾  Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

⁽²⁾  The diluted earnings per share attributable to Stewart was primarily due to dilutive effects of the Convertible Senior Notes (Note 10) using the if-converted method (Note 15).

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Reinsurance - Additional Information (Detail) (Maximum)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Maximum
Reinsurance [Line Items]
Total amount of Premiums for assumed and ceded risks as a percentage of consolidated title revenue	1.00%	1.00%	1.00%

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Estimated title losses (Tables)

12 Months Ended

Dec. 31, 2012

Estimated Provision of Losses

	2012			2011			2010
	($000 omitted)
Balances at January 1		502,611			495,849			503,475
Provisions:
Current year		100,406			94,115			97,559
Previous policy years		39,623			47,986			50,879
Total provisions		140,029			142,101			148,438
Payments:
Current year		(16,782	)		(22,404	)		(24,118	)
Previous policy years		(107,194	)		(111,915	)		(134,191	)
Total payments		(123,976	)		(134,319	)		(158,309	)
Effects of changes in foreign currency exchange rates		1,711			(1,020	)		2,245
Balances at December 31		520,375			502,611			495,849

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Assets Measured at Fair Value on Nonrecurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Financial Instruments and Fair Value [Line Items]
Impairment loss recorded	$ 800	$ 3,500	$ 600
Cost-method investments
Financial Instruments and Fair Value [Line Items]
Impairment loss recorded	753	2,685
Level 3 | Cost-method investments
Financial Instruments and Fair Value [Line Items]
Cost-basis investments, at fair value	$ 1,640	$ 1,167

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Notes Payable Convertible Senior Notes and Line of Credit - Additional Information (Detail) (USD $)	12 Months Ended			1 Months Ended	12 Months Ended	1 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Oct. 31, 2009 Convertible Notes Payable	Dec. 31, 2012 Convertible Notes Payable	Jan. 31, 2013 Conversion of Debt Convertible Notes Payable
Debt Instrument [Line Items]
Principal payments on notes in 2013	$ 2,000,000
Principal payments on notes in 2014	2,000,000
Principal payments on notes in 2015	1,900,000
Principal payments on notes in 2016	600,000
Convertible senior notes, aggregate principal amount				65,000,000
Convertible senior notes, interest rate				6.00%
Convertible senior notes, maturity date				2014
Convertible senior notes, carrying amount						20,700,000
Convertible senior notes, conversion rate of shares issued					77.6398	1,691,074
Convertible senior notes, conversion rate of principal amount		1,299,000			1,000
Convertible senior notes, conversion price per share					$ 12.88
Convertible senior notes, conversion price dividend adjustment					$ 0.10
Notes payable, debt issuance cost	3,300,000
Notes payable, amortization of debt issuance costs	600,000	500,000	500,000
Notes payable, interest expense	4,200,000	4,200,000	4,200,000
Bank line of credit facility amount	$ 10,000,000
Bank line of credit facility, expiration date	2013-06

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Summary of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended				12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Title	Dec. 31, 2010 Title	Dec. 31, 2012 Mortgage Services	Dec. 31, 2011 Mortgage Services
Goodwill [Line Items]
Beginning balances	$ 214,492	$ 206,861	$ 192,670	$ 192,670	$ 21,822	$ 14,191
Acquisitions	6,463	7,631	6,029		434	7,631
Ending balances	$ 220,955	$ 214,492	$ 198,699	$ 192,670	$ 22,256	$ 21,822

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Gross Unrealized Gains and Losses (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized gains	$ 23,030	$ 14,463
Gross unrealized losses	854	3,030
Municipal
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized gains	1,006	1,080
Gross unrealized losses	7
Corporate and utilities
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized gains	19,141	9,184
Gross unrealized losses	486	2,973
Foreign
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized gains	1,210	1,937
Gross unrealized losses	286	53
U.S. Government
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized gains	1,395	1,820
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized gains	278	442
Gross unrealized losses	$ 75	$ 4

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Investments in debt and equity securities

12 Months Ended

Dec. 31, 2012

Investments in debt and equity securities

NOTE 4

Investments in debt and equity securities. The amortized costs and fair values at December 31 follow:

	2012				2011
	Amortized costs		Fair values		Amortized costs		Fair values
	($000 omitted)
Debt securities:
Municipal		18,012		19,011		26,721		27,801
Corporate and utilities		268,874		287,528		237,912		244,123
Foreign		168,084		169,009		162,384		164,268
U.S. Government		15,243		16,638		17,530		19,350
Equity securities		10,870		11,073		5,005		5,443
		481,083		503,259		449,552		460,985

Gross unrealized gains and losses at December 31 were:

	2012				2011
	Gains		Losses		Gains		Losses
	($000 omitted)
Debt securities:
Municipal		1,006		7		1,080		—
Corporate and utilities		19,141		486		9,184		2,973
Foreign		1,210		286		1,937		53
U.S. Government		1,395		—		1,820		—
Equity securities		278		75		442		4
		23,030		854		14,463		3,030

Debt securities at December 31, 2012 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs		Fair values
	($000 omitted)
In one year or less		17,673		17,905
After one year through five years		211,288		217,187
After five years through ten years		208,966		222,499
After ten years		32,286		34,595
		470,213		492,186

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2012, were:

	Less than 12 months				More than 12 months				Total
	Losses		Fair values		Losses		Fair values		Losses		Fair values
	($000 omitted)
Debt securities:
Municipal		7		697		—		—		7		697
Corporate and utilities		486		30,538		—		—		486		30,538
Foreign		168		41,056		118		59,538		286		100,594
Equity securities:		75		2,197		—		—		75		2,197
		736		74,488		118		59,538		854		134,026

The number of investments in an unrealized loss position as of December 31, 2012 was 30. Since the Company does not intend to sell and will more likely than not maintain each debt security until its anticipated recovery, and no significant credit risk is deemed to exist, these investments are not considered other-than-temporarily impaired.

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011, were:

	Less than 12 months				More than 12 months				Total
	Losses		Fair values		Losses		Fair values		Losses		Fair values
	($000 omitted)
Debt securities:
Corporate and utilities		1,944		42,851		1,029		24,830		2,973		67,681
Foreign		53		59,708		—		—		53		59,708
Equity securities:		4		1,247		—		—		4		1,247
		2,001		103,806		1,029		24,830		3,030		128,636

The number of investments in an unrealized loss position as of December 31, 2011 was 52. Since the Company did not intend to sell and was more likely than not maintain each debt security until its anticipated recovery, and no significant credit risk was deemed to exist, these investments were not considered other-than-temporarily impaired.

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. Foreign debt securities primarily include Canadian government bonds and corporate bonds which aggregated $143.3 million as of December 31, 2012 and Canadian government bonds which aggregated $136.6 million as of December 31, 2011. Also included in foreign debt securities are United Kingdom treasury bonds as of December 31, 3012 and 2011.

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Goodwill and Acquired Intangibles - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Intangible Assets And Goodwill [Line Items]
Amortization expense of acquired intangibles	$ 1.7	$ 1.5	$ 1.1
Accumulated amortization of intangibles	27.5	25.8
Maximum
Intangible Assets And Goodwill [Line Items]
Expected amortization expense in 2013	1.7
Expected amortization expense in 2014	1.7
Expected amortization expense in 2015	1.7
Expected amortization expense in 2016	1.7
Expected amortization expense in 2017	$ 1.7

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General - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Revenue major segments percentage	51.00%
Percentage of voting rights owned in electing directors	50.00%
Cash equivalents, maturity period	3 months
Cost-basis investments, aggregate amount	$ 7,100,000	$ 7,700,000
Cost-basis investments, impairment charges	800,000	3,500,000	600,000
Fair value of Notes	$ 135.3
Non-cancelable operating lease, expiration period	10 years
Minimum
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Intangible assets estimated life	3 years
Minimum | Buildings
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	30 years
Minimum | Furniture and equipment
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	3 years
Minimum | Stewart Information Services Corporation and subsidiaries
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Percentage of voting rights owned in electing directors	20.00%
Maximum
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Short-term investments, maturity period	1 year
Intangible assets estimated life	10 years
Maximum | Buildings
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	40 years
Maximum | Furniture and equipment
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	10 years
Maximum | Stewart Information Services Corporation and subsidiaries
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Percentage of voting rights owned in electing directors	50.00%

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General (Policies)

12 Months Ended

Dec. 31, 2012

Management's responsibility

A. Management’s responsibility. The accompanying consolidated financial statements were prepared by management, which is responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ from those estimates.

Reclassifications

B. Reclassifications. Certain prior year amounts in these consolidated financial statements have been reclassified for comparative purposes. Net earnings (loss) attributable to Stewart and stockholders’ equity, as previously reported, were not affected.

Consolidation

C. Consolidation. The condensed consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the equity, are accounted for by the equity method.

Statutory accounting

D. Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by regulatory authorities. See Notes 2 and 3.

In conforming the statutory financial statements to GAAP, the statutory premium reserve and the reserve for reported title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1F). The net effect, after providing for income taxes, is included in the consolidated statements of operations and comprehensive earnings (loss).

Revenue recognition

E. Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to the Company. In addition, where reasonable estimates can be made, the Company accrues for policies issued but not reported until after period end. The Company believes that reasonable estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical reporting patterns and other information obtained about agencies, as well as current trends in direct operations and in the title industry. In this accrual, future transactions are not being estimated. The Company is estimating revenues on policies that have already been issued by agencies but not yet reported to or received by the Company. The Company has consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Revenues generated by the mortgage services segment are generally considered earned at the time the service is performed or the product is delivered to the customer.

Title losses and related claims

F. Title losses and related claims. The Company’s method for recording the reserves for title losses on both an interim and annual basis begins with the calculation of its current loss provision rate, which is applied to the Company’s current premiums resulting in a title loss expense for the period. This loss provision rate is set to provide for losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, the Company’s recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that management compares to its actuarially-based calculation of the ending reserve balance to provide for future reported title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from the Company’s third-party actuaries. The Company also obtains input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While the Company is responsible for determining its loss reserves, it utilizes this actuarial input to assess the overall reasonableness of its reserve estimation. If the Company’s recorded reserve amount is within a reasonable range (+/- 4.0%) of its actuarially-based reserve calculation and the actuary’s point estimate, but not at the point estimate, the Company’s management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of its recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in the Company’s claims management process. If the recorded amount is not within a reasonable range of the Company’s third-party actuary’s point estimate, it will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once the Company’s reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to the Company’s estimate of the overall level of required reserves.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both the Company’s management and its third party actuaries in estimating reserves. As a consequence, the Company’s ultimate liability may be materially greater or less than its current reserves and/or its third party actuary’s calculated estimate.

Cash equivalents

G. Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of three months or less at the time of acquisition.

Short-term investments

H. Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations and other investments maturing in less than one year.

Investments in debt and equity securities

I. Investments in debt and equity securities. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments are determined using the specific identification method. Net unrealized gains and losses on investments available-for-sale, net of applicable deferred taxes, are included as a component of accumulated other comprehensive earnings within stockholders’ equity. At the time unrealized gains and losses become realized, they are reclassified from accumulated other comprehensive earnings using the specific identification method. Any other-than-temporary declines in fair values of investments available-for-sale are charged to earnings.

Property and equipment

J. Property and equipment. Depreciation is principally computed using the straight-line method at the following rates: buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal.

Title plants

K. Title plants. Title plants include compilations of a county’s official land records, prior examination files, copies of prior title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Title plants are not amortized since there is no indication of any loss of value over time but are subject to review for impairment. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of sale.

Goodwill

L. Goodwill. Goodwill is the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized but is reviewed annually and upon the occurrence of an event indicating an impairment may have occurred. If determined to be impaired, the impaired portion is expensed to current operations. The process of determining impairment relies on projections of future cash flows, operating results and market conditions. Uncertainties exist in these projections and are subject to changes relating to factors such as interest rates and overall real estate market conditions. As part of our process, we have an option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we decide not to use a qualitative assessment or if we fail the qualitative assessment, then we obtain input from third-party appraisers regarding the fair value of our reporting units. While we are responsible for assessing whether an impairment of goodwill exists, we utilize the input from third-party appraisers to assess the overall reasonableness of our conclusions. We utilized a qualitative assessment for our annual goodwill impairment test and, based on our analysis, determined it was not more-likely-than-not that the fair value of our reporting units were less than their carrying amounts as of June 30, 2012. There were no impairment charges for goodwill during the three years ended December 31, 2012. However, to the extent that the Company’s future operating results are below management’s projections, or in the event of continued adverse market conditions, a future impairment may occur.

Acquired intangibles

M. Acquired intangibles. Intangible assets are comprised mainly of non-compete and underwriting agreements and are amortized over their estimated lives, which are primarily 3 to 10 years.

Other long-lived assets

N. Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is determined by management, the recorded amounts are written down to fair values. There were no impairment write-offs of long-lived assets during the three years ended December 31, 2012.

The Company had cost-basis investments aggregating $7.1 million and $7.7 million at December 31, 2012 and 2011, respectively. Cost-basis investments are included in other assets on the Company’s consolidated balance sheets and are evaluated periodically for impairment. The Company recorded impairment charges of $0.8 million, $3.5 million and $0.6 million for cost-basis investments during the years ended December 31, 2012, 2011 and 2010, respectively.

Fair values

O. Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes receivable, notes payable and accounts payable, are determined by the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair values of these financial instruments approximate their carrying values, except for the fair value of the Notes which approximated $135.3 million at December 31, 2012. Investments in debt and equity securities and certain financial instruments are carried at their fair values (Notes 4 and 5).

Leases

P. Leases. The Company recognizes rent expense under non-cancelable operating leases, which generally expire over the next 10 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or escalating lease payments.

Income taxes

Q. Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax basis and the book carrying values of certain assets and liabilities. To the extent that the Company does not believe its deferred tax assets meet the more likely than not realization criteria, it establishes a valuation allowance. When it establishes a valuation allowance, or increases (decreases) the allowance during the year, it records a tax expense (benefit) in its consolidated statements of operations and comprehensive earnings (loss). Enacted tax rates are used in calculating amounts.

The Company also specifies the accounting for uncertainties in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2012

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2012

Col. A	Col. B		Col. C Additions					Col. D Deductions				Col. E
Description	Balance at beginning of period		Charged to costs and expenses			Charged to other accounts (describe)		(Describe)				Balance At end of period
	($000 omitted)
Stewart Information Services Corporation and subsidiaries:
Year ended December 31, 2010:
Estimated title losses		503,475		148,438			—		156,064	(A	)		495,849
Valuation allowance for deferred tax assets		93,080		(1,146	)		—		—				91,934
Allowance for uncollectible amounts		20,501		4,186			—		5,249	(B	)		19,438
Year ended December 31, 2011:
Estimated title losses		495,849		142,101			—		135,339	(A	)		502,611
Valuation allowance for deferred tax assets		91,934		(7,163	)		—		—				84,771
Allowance for uncollectible amounts		19,438		1,318			—		4,700	(B	)		16,056
Year ended December 31, 2012:
Estimated title losses		502,611		140,029			—		122,265	(A	)		520,375
Valuation allowance for deferred tax assets		84,771		(72,635	)		—		—				12,136
Allowance for uncollectible amounts		16,056		3,201			—		6,434	(B	)		12,823
Stewart Information Services Corporation – Parent Company:
Year ended December 31, 2010:
Allowance for uncollectible amounts		635		(96	)		—		462	(B	)		77
Year ended December 31, 2011:
Allowance for uncollectible amounts		77		—			—		62	(B	)		15
Year ended December 31, 2012:
Allowance for uncollectible amounts		15		1			—		2	(B	)		14

(A) Represents primarily payments of policy and escrow losses and loss adjustment expenses.

(B) Represents uncollectible accounts written off.

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Income Tax Provision (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Current:
Federal	$ (430)	$ (678)	$ (4,305)
State	1,674	1,444	1,188
Foreign	9,024	9,221	337
Deferred:
Federal	(35,989)	4,450	(1,197)
State	(527)	397
Foreign	(3,391)	(5,493)	12,052
Income tax (benefit) expense	$ (29,639)	$ 9,341	$ 8,075

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Restrictions on Cash and Investments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Restricted Cash and Cash Equivalents Items [Line Items]
Investments restricted for statutory reserve funds	$ 444.6	$ 397.1
Restricted Cash and cash equivalent	$ 12.1	$ 23.6

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Investments in debt and equity securities (Tables)

12 Months Ended

Dec. 31, 2012

Amortized Costs and Fair Values

The amortized costs and fair values at December 31 follow:

	2012				2011
	Amortized costs		Fair values		Amortized costs		Fair values
	($000 omitted)
Debt securities:
Municipal		18,012		19,011		26,721		27,801
Corporate and utilities		268,874		287,528		237,912		244,123
Foreign		168,084		169,009		162,384		164,268
U.S. Government		15,243		16,638		17,530		19,350
Equity securities		10,870		11,073		5,005		5,443
		481,083		503,259		449,552		460,985

Gross Unrealized Gains and Losses

Gross unrealized gains and losses at December 31 were:

	2012				2011
	Gains		Losses		Gains		Losses
	($000 omitted)
Debt securities:
Municipal		1,006		7		1,080		—
Corporate and utilities		19,141		486		9,184		2,973
Foreign		1,210		286		1,937		53
U.S. Government		1,395		—		1,820		—
Equity securities		278		75		442		4
		23,030		854		14,463		3,030

Debt Securities According to Contractual Terms

Debt securities at December 31, 2012 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs		Fair values
	($000 omitted)
In one year or less		17,673		17,905
After one year through five years		211,288		217,187
After five years through ten years		208,966		222,499
After ten years		32,286		34,595
		470,213		492,186

Gross Unrealized Losses on Investments and Fair Values of Related Securities

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2012, were:

	Less than 12 months				More than 12 months				Total
	Losses		Fair values		Losses		Fair values		Losses		Fair values
	($000 omitted)
Debt securities:
Municipal		7		697		—		—		7		697
Corporate and utilities		486		30,538		—		—		486		30,538
Foreign		168		41,056		118		59,538		286		100,594
Equity securities:		75		2,197		—		—		75		2,197
		736		74,488		118		59,538		854		134,026

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011, were:

	Less than 12 months				More than 12 months				Total
	Losses		Fair values		Losses		Fair values		Losses		Fair values
	($000 omitted)
Debt securities:
Corporate and utilities		1,944		42,851		1,029		24,830		2,973		67,681
Foreign		53		59,708		—		—		53		59,708
Equity securities:		4		1,247		—		—		4		1,247
		2,001		103,806		1,029		24,830		3,030		128,636

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Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2012

Financial Instruments Measured at Fair Value on Recurring Basis

At December 31, 2012, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Fair value measurements
	($000 omitted)
Short-term investments		37,025		—		—		37,025
Investments available-for-sale:
Debt securities:
Municipal		—		19,011		—		19,011
Corporate and utilities		—		287,528		—		287,528
Foreign		—		169,009		—		169,009
U.S. Government		—		16,638		—		16,638
Equity securities:		11,073		—		—		11,073
		48,098		492,186		—		540,284

At December 31, 2011, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Fair value measurements
	($000 omitted)
Short-term investments		33,137		—		—		33,137
Investments available-for-sale:
Debt securities:
Municipal		—		27,801		—		27,801
Corporate and utilities		—		244,123		—		244,123
Foreign		—		164,268		—		164,268
U.S. Government		—		19,350		—		19,350
Equity securities:		5,443		—		—		5,443
		38,580		455,542		—		494,122

Assets Measured at Fair Value on Nonrecurring Basis

As of December 31, 2012, assets measured at fair value on a nonrecurring basis are summarized below:

	Level 3		Impairment loss recorded
	($000 omitted)
Cost-basis investments		1,640		753

As of December 31, 2011, assets measured at fair value on a nonrecurring basis are summarized below:

	Level 3		Impairment loss recorded
	($000 omitted)
Cost-basis investments		1,167		2,685

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Dividend restrictions

12 Months Ended

Dec. 31, 2012

Dividend restrictions

NOTE 3

Dividend restrictions. Substantially all of the consolidated retained earnings at each year end were represented by Guaranty, which owns directly or indirectly all of the subsidiaries included in the consolidation.

Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner. The maximum dividend that can be paid after such approval in 2013 is $85.8 million. Guaranty did not pay a dividend in 2012, 2011 or 2010.

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels and to demonstrate significant claims payment ability. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer.

Surplus as regards policyholders for Guaranty was $429.2 million and $371.8 million at December 31, 2012 and 2011, respectively. Statutory net income for Guaranty was $10.5 million in 2012 and net losses were $4.2 million and $2.0 million in 2011 and 2010, respectively.

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Investment income (Tables)

12 Months Ended

Dec. 31, 2012

Gross Realized Investment and Other Gains and Losses

Income from investments and gross realized investment and other gains and losses follow:

	2012			2011			2010
	($000 omitted)
Investment income:
Debt securities		12,399			13,860			15,014
Short-term investments, cash equivalents and other		1,410			1,645			3,383
		13,809			15,505			18,397
Investment and other gains (losses):
Realized gains		9,417			12,151			24,055
Realized losses		(1,839	)		(9,849	)		(2,273	)
		7,578			2,302			21,782

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Revenues Financial Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2012		Sep. 30, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Revenue [Line Items]
Revenues	$ 520,972		$ 520,741		$ 483,712		$ 384,987		$ 445,077		$ 418,529		$ 404,883		$ 366,417		$ 1,910,412		$ 1,634,906		$ 1,672,390
Net (loss) earnings attributable to Stewart	$ 61,760		$ 34,668		$ 24,911		$ (12,157)		$ 2,159		$ 4,542		$ 5,940		$ (10,293)		$ 109,182		$ 2,348		$ (12,582)
Diluted (loss) earnings per share attributable to Stewart	$ 2.56	[1]	$ 1.45	[1]	$ 1.05	[1]	$ (0.63)	[1]	$ 0.11	[1]	$ 0.22	[1],[2]	$ 0.28	[1],[2]	$ (0.55)	[1]	$ 4.61	[1]	$ 0.12	[1]	$ (0.69)

[1] Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

[2] The diluted earnings per share attributable to Stewart was primarily due to dilutive effects of the Convertible Senior Notes (Note 10) using the if-converted method (Note 15).

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Leases (Tables)

12 Months Ended

Dec. 31, 2012

Future Minimum Lease Payments

The future minimum lease payments are summarized as follows (in thousands of dollars):

2013	35,232
2014	28,549
2015	23,549
2016	16,004
2017	6,961
2018 and after	5,053
	115,348

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Fair Value Measurements - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Fair Value Measurements [Line Items]
Impairment loss recorded	$ 800	$ 3,500	$ 600
Cost-method investments
Fair Value Measurements [Line Items]
Impairment loss recorded	$ 753	$ 2,685

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Changes in Stockholders' Equity (Parenthetical) (Detail) (Retained Earnings, USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Retained Earnings
Equity Note [Line Items]
Cash dividends on common stock	$ 0.10	$ 0.05	$ 0.05

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Revenues
Direct operations	$ 718,789		$ 627,810		$ 625,891
Agency operations	1,007,380		877,225		914,581
Mortgage services	162,856		112,064		91,739
Investment income	13,809		15,505		18,397
Investment and other gains - net	7,578		2,302		21,782
Total revenues	1,910,412		1,634,906		1,672,390
Expenses
Amounts retained by agencies	829,070		723,943		753,438
Employee costs	542,461		469,839		467,491
Other operating expenses	286,496		256,194		273,253
Title losses and related claims	140,029		142,101		148,438
Depreciation and amortization	17,783		19,542		21,422
Interest	5,235		5,268		5,423
Total expenses	1,821,074		1,616,887		1,669,465
Earnings before taxes and noncontrolling interests	89,338		18,019		2,925
Income tax (benefit) expense	(29,639)		9,341		8,075
Net earnings (loss)	118,977		8,678		(5,150)
Less net earnings attributable to noncontrolling interests	9,795		6,330		7,432
Net earnings (loss) attributable to Stewart	109,182		2,348		(12,582)
Net earnings (loss)	118,977		8,678		(5,150)
Other comprehensive earnings:
Foreign currency translation	3,880		(2,241)		5,110
Change in unrealized gains and losses on investments	14,213		9,202		2,440
Reclassification of adjustment for gains in net earnings (loss)	(3,470)		(3,465)		(1,970)
Other comprehensive earnings, before taxes	14,623		3,496		5,580
Income tax expense related to items of other comprehensive earnings	4,721		425		2,930
Other comprehensive earnings, net of taxes	9,902		3,071		2,650
Comprehensive earnings (loss)	128,879		11,749		(2,500)
Less comprehensive earnings attributable to noncontrolling interests	9,795		6,330		7,432
Comprehensive earnings (loss) attributable to Stewart	$ 119,084		$ 5,419		$ (9,932)
Basic average shares outstanding (000)	19,294		19,131		18,313
Basic earnings (loss) per share attributable to Stewart	$ 5.66		$ 0.12		$ (0.69)
Dilutive average shares outstanding (000)	24,384		19,131		18,313
Diluted earnings (loss) per share attributable to Stewart	$ 4.61	[1]	$ 0.12	[1]	$ (0.69)

[1] Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

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Dividend Restrictions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Dividends Payable [Line Items]
Maximum amount of dividend to be paid	$ 85.8
Surplus for guaranty	429.2	371.8
Statutory net income (losses)	$ 10.5	$ (4.2)	$ (2.0)

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General

12 Months Ended

Dec. 31, 2012

General

NOTE 1

General. Stewart Information Services Corporation, through its subsidiaries (collectively, the Company), is primarily engaged in the business of providing title insurance and real estate related services. The Company operates through a network of production facilities, owned policy-issuing offices and independent agencies in the United States and international markets. Stewart Information Services Corporation is a customer-focused, global title insurance and real estate services company offering products and services through our direct operations, network of approved agencies and other companies within the Company. The Company provides these services to homebuyers and sellers; residential and commercial real estate professionals; mortgage lenders and servicers; title agencies and real estate attorneys; home builders; and United States and foreign governments. The Company also provides loan origination and servicing support; loan review services; loss mitigation; REO asset management; home and personal insurance services; and technology to streamline the real estate process. Approximately 51% of consolidated title revenues for the year ended December 31, 2012 were generated in Texas, California, New York, international operations and Florida.

A. Management’s responsibility. The accompanying consolidated financial statements were prepared by management, which is responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ from those estimates.

B. Reclassifications. Certain prior year amounts in these consolidated financial statements have been reclassified for comparative purposes. Net earnings (loss) attributable to Stewart and stockholders’ equity, as previously reported, were not affected.

C. Consolidation. The condensed consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the equity, are accounted for by the equity method.

D. Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by regulatory authorities. See Notes 2 and 3.

In conforming the statutory financial statements to GAAP, the statutory premium reserve and the reserve for reported title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1F). The net effect, after providing for income taxes, is included in the consolidated statements of operations and comprehensive earnings (loss).

E. Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to the Company. In addition, where reasonable estimates can be made, the Company accrues for policies issued but not reported until after period end. The Company believes that reasonable estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical reporting patterns and other information obtained about agencies, as well as current trends in direct operations and in the title industry. In this accrual, future transactions are not being estimated. The Company is estimating revenues on policies that have already been issued by agencies but not yet reported to or received by the Company. The Company has consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Revenues generated by the mortgage services segment are generally considered earned at the time the service is performed or the product is delivered to the customer.

F. Title losses and related claims. The Company’s method for recording the reserves for title losses on both an interim and annual basis begins with the calculation of its current loss provision rate, which is applied to the Company’s current premiums resulting in a title loss expense for the period. This loss provision rate is set to provide for losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, the Company’s recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that management compares to its actuarially-based calculation of the ending reserve balance to provide for future reported title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from the Company’s third-party actuaries. The Company also obtains input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While the Company is responsible for determining its loss reserves, it utilizes this actuarial input to assess the overall reasonableness of its reserve estimation. If the Company’s recorded reserve amount is within a reasonable range (+/- 4.0%) of its actuarially-based reserve calculation and the actuary’s point estimate, but not at the point estimate, the Company’s management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of its recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in the Company’s claims management process. If the recorded amount is not within a reasonable range of the Company’s third-party actuary’s point estimate, it will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once the Company’s reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to the Company’s estimate of the overall level of required reserves.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both the Company’s management and its third party actuaries in estimating reserves. As a consequence, the Company’s ultimate liability may be materially greater or less than its current reserves and/or its third party actuary’s calculated estimate.

G. Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of three months or less at the time of acquisition.

H. Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations and other investments maturing in less than one year.

I. Investments in debt and equity securities. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments are determined using the specific identification method. Net unrealized gains and losses on investments available-for-sale, net of applicable deferred taxes, are included as a component of accumulated other comprehensive earnings within stockholders’ equity. At the time unrealized gains and losses become realized, they are reclassified from accumulated other comprehensive earnings using the specific identification method. Any other-than-temporary declines in fair values of investments available-for-sale are charged to earnings.

J. Property and equipment. Depreciation is principally computed using the straight-line method at the following rates: buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal.

K. Title plants. Title plants include compilations of a county’s official land records, prior examination files, copies of prior title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Title plants are not amortized since there is no indication of any loss of value over time but are subject to review for impairment. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of sale.

L. Goodwill. Goodwill is the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized but is reviewed annually and upon the occurrence of an event indicating an impairment may have occurred. If determined to be impaired, the impaired portion is expensed to current operations. The process of determining impairment relies on projections of future cash flows, operating results and market conditions. Uncertainties exist in these projections and are subject to changes relating to factors such as interest rates and overall real estate market conditions. As part of our process, we have an option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we decide not to use a qualitative assessment or if we fail the qualitative assessment, then we obtain input from third-party appraisers regarding the fair value of our reporting units. While we are responsible for assessing whether an impairment of goodwill exists, we utilize the input from third-party appraisers to assess the overall reasonableness of our conclusions. We utilized a qualitative assessment for our annual goodwill impairment test and, based on our analysis, determined it was not more-likely-than-not that the fair value of our reporting units were less than their carrying amounts as of June 30, 2012. There were no impairment charges for goodwill during the three years ended December 31, 2012. However, to the extent that the Company’s future operating results are below management’s projections, or in the event of continued adverse market conditions, a future impairment may occur.

M. Acquired intangibles. Intangible assets are comprised mainly of non-compete and underwriting agreements and are amortized over their estimated lives, which are primarily 3 to 10 years.

N. Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is determined by management, the recorded amounts are written down to fair values. There were no impairment write-offs of long-lived assets during the three years ended December 31, 2012.

The Company had cost-basis investments aggregating $7.1 million and $7.7 million at December 31, 2012 and 2011, respectively. Cost-basis investments are included in other assets on the Company’s consolidated balance sheets and are evaluated periodically for impairment. The Company recorded impairment charges of $0.8 million, $3.5 million and $0.6 million for cost-basis investments during the years ended December 31, 2012, 2011 and 2010, respectively.

O. Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes receivable, notes payable and accounts payable, are determined by the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair values of these financial instruments approximate their carrying values, except for the fair value of the Notes which approximated $135.3 million at December 31, 2012. Investments in debt and equity securities and certain financial instruments are carried at their fair values (Notes 4 and 5).

P. Leases. The Company recognizes rent expense under non-cancelable operating leases, which generally expire over the next 10 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or escalating lease payments.

Q. Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax basis and the book carrying values of certain assets and liabilities. To the extent that the Company does not believe its deferred tax assets meet the more likely than not realization criteria, it establishes a valuation allowance. When it establishes a valuation allowance, or increases (decreases) the allowance during the year, it records a tax expense (benefit) in its consolidated statements of operations and comprehensive earnings (loss). Enacted tax rates are used in calculating amounts.

The Company also specifies the accounting for uncertainties in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

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Deferred Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets:
Accrued expenses	$ 15,630	$ 12,684
Allowance for uncollectible amounts	4,575	5,784
Fixed assets	4,683	7,502
Investments		10,390
Net operating loss carryforwards	3,926	32,122
Tax credit carryforwards	27,072	18,727
Title loss provisions	8,479	11,235
Other	484	4,195
Deferred Tax Assets, Gross, Total	64,849	102,639
Valuation allowance	(12,136)	(84,771)
Deferred Tax Assets, Net of Valuation Allowance, Total	52,713	17,868
Deferred tax liabilities:
Amortization - goodwill and other intangibles	(27,528)	(23,701)
Unrealized gains on investments	(7,802)	(4,003)
Cash surrender value of insurance policies	(2,998)	(4,431)
Foreign currency translation adjustments	(5,753)	(4,999)
Accrued expenses	(2,781)	(6,592)
Investments	(477)
Fixed assets	(345)	(139)
Other	(112)	(1,452)
Deferred Tax Liabilities, Net	(47,796)	(45,317)
Net deferred income taxes	$ 4,917	$ (27,449)

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Equity investees (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Aggregate Financial Information for Equity Investees

Certain summarized aggregate financial information for equity investees (in which the Company typically owns 20% through 50% of the equity) follows:

	2012		2011		2010
	($000 omitted)
For the year:
Revenues		66,145		70,896		73,450
Net earnings		11,037		4,326		6,976
At December 31:
Total assets		52,500		57,972		31,767
Notes payable		23,681		23,533		1,119
Stockholders’ equity		12,758		12,524		16,027

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Summary of Notes Payable (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012		Dec. 31, 2011
Debt Instrument [Line Items]
Banks - primarily secured, varying payments and rates	$ 6,031	[1]	$ 7,863	[1]
Other than banks	450		3,859
Loans Payable, Total	$ 6,481		$ 11,722

[1] Average interest rates were 3.07% and 3.49% at December 31, 2012 and 2011, respectively.

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Leases

12 Months Ended

Dec. 31, 2012

Leases

NOTE 17

Leases. Lease expense was $39.1 million, $41.4 million and $45.2 million in 2012, 2011 and 2010, respectively. The future minimum lease payments are summarized as follows (in thousands of dollars):

2013	35,232
2014	28,549
2015	23,549
2016	16,004
2017	6,961
2018 and after	5,053
	115,348

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Notes payable, convertible senior notes and line of credit (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Notes Payable

A summary of notes payable follows:

	2012		2011
	($000 omitted)
Banks – primarily secured, varying payments and rates(1)		6,031		7,863
Other than banks		450		3,859
		6,481		11,722

⁽¹⁾  Average interest rates were 3.07% and 3.49% at December 31, 2012 and 2011, respectively.

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Regulatory and legal developments

12 Months Ended

Dec. 31, 2012

Regulatory and legal developments

NOTE 19

Regulatory and legal developments. Stewart Title Guaranty Company (STGC) and Stewart Title Guaranty de Mexico, S.A. de C.V. (STGM) were defendants in a lawsuit in the State District Court of Harris County, Texas, Citigroup Global Markets Realty Corp. v. Stewart Title Guaranty Company. The lawsuit was filed in 2008 and concerns 16 owners’ and 16 lenders’ title insurance policies on 16 parcels of land in Mexico issued by STGM and reinsurance agreements by STGC. Citigroup Global Markets Realty Corp. asserted claims against STGC under reinsurance of the lenders’ policies as well as extra-contractual claims under Texas law. K.R. Playa VI, S de R.L. de C.V., the owner of the parcels, asserted claims against STGC and separate claims against STGM under the owners’ policies as well as extra-contractual claims under Texas law. The State District Court dismissed the extra-contractual claims against STGC and STGM based on application of Mexican law.

The jury returned a verdict of no damages, favorable to STGC and STGM, on April 29, 2011. Judgment was entered on June 30, 2011. Both Citigroup Global Markets Realty Corp. and K.R. Playa VI, S de R.L. de C.V. subsequently filed motions for new trial and motions for judgment notwithstanding the verdict, which the State District Court denied by orders dated September 12, 2011. Citigroup Global Markets Realty Corp. and K.R. Playa VI, S de R.L. de C.V. have appealed the Judgment to the Houston Court of Appeals, and oral argument originally scheduled for February 14, 2013 has been postponed by agreement of the parties and order of the Court. The parties are awaiting notification of a new date for the oral argument. The Company does not believe that the ultimate outcome will materially affect its consolidated financial condition or results of operations.

* * *

In January 2009, an action was filed by individuals against STGC, Stewart Title of California, Inc., Cuesta Title Company and others in the Superior Court of California for the County of San Luis Obispo alleging that the plaintiffs have suffered damages relating to loans they made through Hurst Financial Corporation to an individual named Kelly Gearhart and entities controlled by Gearhart. Thereafter, several other lawsuits making similar allegations, including a lawsuit filed by several hundred individuals, were filed in San Luis Obispo Superior Court, and one such lawsuit was removed to the United States District Court for the Central District of California. The defendants vary from case to case, but Stewart Information Services Corporation, Stewart Title Company and Stewart Title Insurance Company have also each been sued in at least one of the cases. Each of the complaints alleges some combination of the following purported causes of action: breach of contract, negligence, fraud, aiding and abetting fraud, constructive fraud, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, financial elder abuse, violation of California Business and Professions Code Section 17200, negligent misrepresentation, conversion, conspiracy, alter ego and declaratory relief. The San Luis Obispo Superior Court has sustained demurrers by the Company with regard to certain causes of action and has overruled the demurrers as to certain causes of action. The United States District Court for the Central District of California granted the Company’s motion to dismiss the First Amended Complaint as to the claim for violation of the Racketeer Influenced and Corrupt Organizations Act, with prejudice, and remanded the remainder of that case to the San Luis Obispo Superior Court. Thereafter, the San Luis Obispo Superior Court issued (i) an order assigning all the cases to a single judge, (ii) an Order Coordinating Related Cases for Pre-Trial Purposes, and (iii) a First Case Management Order for the Related Cases. Discovery is ongoing. On December 11, 2012, the Court denied the Company’s motion for summary judgment and summary adjudication seeking the dismissal of certain plaintiffs’ claims. On December 14, 2012, the Court issued a Ruling and Order Regarding Selection of Discovery Pool, Trial Group and Pre-Trial Deadlines (amended on January 8, 2013), in which it established a mechanism for the selection of eight plaintiffs for whom all discovery and dispositive motions would be completed and a trial held starting on July 29, 2013. The December 14, 2012 Ruling and Order also set forth deadlines for discovery activities, designating experts, depositions and motions for summary judgment. There may be additional discovery, motions and trials subsequent to the July 29^th trial. Although the Company cannot predict the outcome of these actions, it is vigorously defending itself against the allegations and does not believe that the ultimate outcome will materially affect its consolidated financial condition or results of operations.

* * *

In February 2008, an antitrust class action was filed in the United States District Court for the Eastern District of New York against Stewart Title Insurance Company, Monroe Title Insurance Corporation, Stewart Information Services Corporation, several other unaffiliated title insurance companies and the Title Insurance Rate Service Association, Inc. (TIRSA). The complaint alleges that the defendants violated Section 1 of the Sherman Antitrust Act by collectively filing proposed rates for title insurance in New York through TIRSA, a state-authorized and licensed rate service organization.

Complaints were subsequently filed in the United States District Courts for the Eastern and Southern Districts of New York and in the United States District Courts in Pennsylvania, New Jersey, Ohio, Florida, Massachusetts, Arkansas, California, Washington, West Virginia, Texas and Delaware. All of the complaints make similar class action allegations, except that certain of the complaints also allege violations of the Real Estate Settlement Procedures Act (RESPA) and various state antitrust and consumer protection laws. The complaints generally request treble damages in unspecified amounts, declaratory and injunctive relief and attorneys’ fees. To date, 78 such complaints have been filed, each of which names the Company and/or one or more of its affiliates as a defendant (and have been consolidated in the aforementioned states), of which seven have been voluntarily dismissed.

As of July 25, 2012, the Company has obtained dismissals of the claims in Arkansas, California, Delaware, Florida, Massachusetts, New Jersey, New York, Ohio, Pennsylvania (where the court dismissed the damages claims and granted defendants summary judgment on the injunctive claims), Texas and Washington. The Company filed a motion to dismiss in West Virginia (where all proceedings have been stayed and the docket closed). The dismissals in New York and Texas have been affirmed by the United States Courts of Appeals for the Second and Fifth Circuits, respectively, and on October 4, 2010, the United States Supreme Court denied the plaintiffs’ petitions for review of those decisions. The United States Court of Appeals for Sixth Circuit has affirmed the dismissal of the Ohio complaints, the Court of Appeals for the Third Circuit has affirmed the dismissals of the Delaware and New Jersey complaints, and the Court of Appeals for the Second Circuit has affirmed the dismissal of the RESPA claims in New York. On October 25, 2012, the plaintiffs in the Delaware action petitioned the United States Supreme Court to review the decision of the Third Circuit; and the Company filed an opposition to the petition on January 14, 2013. Although the Company cannot predict the outcome of these actions, it is vigorously defending itself against the allegations and does not believe that the outcome will materially affect its consolidated financial condition or results of operations.

* * *

Van Buren Estates, LLC, Van Buren Estates LLC II, and Van Buren Estates, LP commenced an action in the Superior Court of California, County of Riverside on or about March 26, 2010 against Stewart Title of California, Inc. and STGC alleging among other things, negligence, breach of contract, breach of the implied covenant of good faith and fair dealing, specific performance, promissory estoppel and punitive damages. Stewart Title of California, Inc. settled prior to trial. STGC filed a motion for summary judgment which was granted in part. Subsequent to the summary judgment motion, Van Buren Estates, LP was the sole remaining plaintiff. A jury trial commenced on January 30, 2012. Among the issues involved was STGC’s position that no title policy had been issued in favor of the remaining plaintiff. The trial concluded on March 5, 2012 with a jury verdict in favor of the plaintiff on the issues of liability and damages in the aggregate amount of approximately $6.5 million. The parties had stipulated at trial that the cost to cure the title defect at issue in the case was $0.4 million, less than the amount previously paid by Stewart Title of California, Inc. Judgment was entered on April 10, 2012. STGC filed motions for new trial and for judgment notwithstanding the verdict. The court granted the motion for judgment notwithstanding the verdict in part and reduced the judgment to approximately $4.2 million. An amended judgment was entered on July 10, 2012. STGC filed its notice of appeal of the $4.2 million amended judgment on July 19, 2012. During the course of the appeal, STGC and the Van Buren entities agreed to settle the case. Although they have approved of the settlement between STGC and the Van Buren entities, two secured creditors of the Van Buren entities are disputing between themselves entitlement to the settlement proceeds. STGC will disburse the settlement proceeds as directed by the court and file a dismissal with prejudice, thereby finally resolving this matter.

* * *

The Company is also subject to other claims and lawsuits arising in the ordinary course of its business, most of which involve disputed policy claims. In some of these lawsuits, the plaintiff seeks exemplary or treble damages in excess of policy limits. The Company does not expect that any of these proceedings will have a material adverse effect on its consolidated financial condition or results of operations. Along with the other major title insurance companies, the Company is party to a number of class action lawsuits concerning the title insurance industry. The Company believes that it has adequate reserves for the various litigation matters and contingencies discussed above and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations.

The Company is subject to administrative actions and litigation relating to the basis on which premium taxes are paid in certain states. Additionally, the Company has received various other inquiries from governmental regulators concerning practices in the insurance industry. Many of these practices do not concern title insurance. The Company believes that it has adequately reserved for these matters and does not anticipate that the outcome of these inquiries will materially affect its consolidated financial condition or results of operations.

The Company is also subject to various other administrative actions and inquiries into its business conduct in certain of the states in which it operates. While the Company cannot predict the outcome of the various regulatory and administrative matters, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of any of these matters will materially affect its consolidated financial condition or results of operations.

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Estimated Title Losses (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Loss Contingencies [Line Items]
Beginning balances	$ 502,611	$ 495,849	$ 503,475
Total provisions	140,029	142,101	148,438
Total payments	(123,976)	(134,319)	(158,309)
Effects of changes in foreign currency exchange rates	1,711	(1,020)	2,245
Ending balances	520,375	502,611	495,849
Current year
Loss Contingencies [Line Items]
Total provisions	100,406	94,115	97,559
Total payments	(16,782)	(22,404)	(24,118)
Previous policy years
Loss Contingencies [Line Items]
Total provisions	39,623	47,986	50,879
Total payments	$ (107,194)	$ (111,915)	$ (134,191)

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Restrictions on cash and investments

12 Months Ended

Dec. 31, 2012

Restrictions on cash and investments

NOTE 2

Restrictions on cash and investments. Investments restricted for statutory reserve funds of $444.6 million and $397.1 million and cash and cash equivalents of $12.1 million and $23.6 million at December 31, 2012 and 2011, respectively, were maintained to comply with legal requirements requiring fully-funded statutory premium reserves and state deposits. These funds are not available for any other purpose. In the event that insurance regulators adjust the determination of the statutory premium reserves of the Company’s title insurers, these restricted funds as well as statutory surplus would correspondingly increase or decrease.

A substantial majority of consolidated cash and investments at each year end was held by the Company’s title insurance subsidiaries. Generally, the types of investments a title insurer can make are subject to legal restrictions. Furthermore, the transfer of funds by a title insurer to its parent or subsidiary operations, as well as other related party transactions, is restricted by law and generally requires the approval of state insurance authorities.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Assets
Cash and cash equivalents	$ 196,471	$ 117,196
Cash and cash equivalents - statutory reserve funds	12,067	23,647
Cash and cash equivalents at carrying value	208,538	140,843
Short-term investments	37,025	33,137
Investments in debt and equity securities available-for-sale, at fair value:
Statutory reserve funds	444,579	397,074
Other	58,680	63,911
Available for sale securities, Total	503,259	460,985
Receivables:
Notes	8,483	10,394
Premiums from agencies	45,458	47,351
Income taxes	3,259	7,412
Other	56,311	39,660
Allowance for uncollectible amounts	(12,823)	(16,056)
Total receivables	100,688	88,761
Property and equipment, at cost:
Land	5,848	6,429
Buildings	26,887	23,823
Furniture and equipment	241,694	234,262
Accumulated depreciation	(219,715)	(208,077)
Total property and equipment, at cost	54,714	56,437
Title plants, at cost	77,360	77,406
Real estate, at lower of cost or net realizable value	3,941	5,236
Investments in investees, on an equity method basis	13,891	18,055
Goodwill	220,955	214,492
Intangible assets, net of amortization	7,015	8,693
Deferred tax asset	7,562
Other assets	56,229	52,096
Total assets	1,291,177	1,156,141
Liabilities
Notes payable	6,481	11,722
Convertible senior notes	64,687	64,513
Accounts payable and accrued liabilities	116,617	86,389
Estimated title losses	520,375	502,611
Deferred income taxes	2,645	27,449
Total Liabilities	710,805	692,684
Contingent liabilities and commitments
Stockholders' equity
Additional paid-in capital	133,685	132,446
Retained earnings	391,447	284,097
Accumulated other comprehensive earnings:
Foreign currency translation adjustments	12,169	9,250
Unrealized investment gains on investments	14,415	7,431
Treasury stock, at cost	(2,666)	(2,666)
Total stockholders' equity attributable to Stewart	568,806	450,214
Noncontrolling interests	11,566	13,243
Total stockholders' equity	580,372	463,457
Liabilities and Equity, Total	1,291,177	1,156,141
Common Stock
Stockholders' equity
Common Stock	18,706	18,606
Class B Common Stock
Stockholders' equity
Common Stock	$ 1,050	$ 1,050

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Common Stock and Class B Common Stock

12 Months Ended

Dec. 31, 2012

Common Stock and Class B Common Stock

NOTE 12

Common Stock and Class B Common Stock. Holders of Common and Class B Common Stock have the same rights except no cash dividends may be paid on Class B Common Stock. The two classes of stock vote separately when electing directors and on any amendment to the Company’s certificate of incorporation that affects the two classes unequally.

A provision of the by-laws requires an affirmative vote of at least two-thirds of the directors to elect officers or to approve any proposal that may come before the directors. This provision cannot be changed without a majority vote of each class of stock.

Holders of Class B Common Stock may, with no cumulative voting rights, elect four of nine directors if 1,050,000 or more shares of Class B Common Stock are outstanding; three directors if between 600,000 and 1,050,000 shares are outstanding; and none if less than 600,000 shares of Class B Common Stock are outstanding. Holders of Common Stock, with cumulative voting rights, elect the balance of the nine directors.

Class B Common Stock may be converted by its stockholders into Common Stock on a share-for-share basis, although the holders of Class B Common Stock have agreed among themselves not to convert their stock. The agreement may be extended or terminated by them at any time. Such conversion is mandatory on any transfer to a person who is not a lineal descendant (or spouse or trustee of such descendant) of William H. Stewart, founder of Stewart Title Guaranty Company.

At December 31, 2012 and 2011, there were 145,820 shares of Common Stock held by a subsidiary of the Company which are considered treasury shares.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2012	Mar. 01, 2013 Common Stock	Mar. 01, 2013 Class B Common Stock
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Trading Symbol	STC
Entity Registrant Name	STEWART INFORMATION SERVICES CORP
Entity Central Index Key	0000094344
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding			20,045,307	1,050,012
Entity Public Float		$ 280,935,000

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Changes in stockholders' equity

12 Months Ended

Dec. 31, 2012

Changes in stockholders' equity

NOTE 13

Changes in stockholders’ equity.

	Common and Class B Common  Stock ($1 par value)		Additional paid-in capital			Accumulated other comprehensive earnings			Retained Earnings			Treasury stock			Noncontrolling interests
	($000 omitted)
Balances at December 31, 2009		18,708		126,822			10,960			296,116			(4,330	)		13,790
Net (loss) attributable to Stewart		—		—			—			(12,582	)		—			—
Cash dividends on common stock ($0.05 per share)		—		—			—			(868	)		—			—
Stock bonuses and other		143		1,284			—			—			—			—
Purchase of remaining interest of consolidated subsidiary		—		(3,693	)		—			—			—			(506	)
Provision for Canadian taxes		—		—			(1,185	)		—			—			—
Net change in unrealized gains and losses on investments		—		—			1,448			—			—			—
Net realized gain reclassification		—		—			(1,142	)		—			—			—
Foreign currency translation		—		—			3,529			—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			7,432
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(7,122	)
Net effect of changes in ownership and other		—		—			—			—			—			(471	)
Balances at December 31, 2010		18,851		124,413			13,610			282,666			(4,330	)		13,123
Net earnings attributable to Stewart		—		—			—			2,348			—			—
Cash dividends on common stock ($0.05 per share)		—		—			—			(917	)		—			—
Stock bonuses and other		169		1,452			—			—			—			—
Settlement of wage and hour litigation through issuance of Common Stock		636		6,946			—			—			—			—
Settlement of note payable through issuance of Common Stock held in treasury		—		(365	)		—			—			1,664			—
Net change in unrealized gains and losses on investments		—		—			7,245			—			—			—
Net realized gain reclassification		—		—			(2,331	)		—			—			—
Foreign currency translation		—		—			(1,843	)		—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			6,330
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(6,142	)
Net effect of changes in ownership and other		—		—			—			—			—			(68	)
Balances at December 31, 2011		19,656		132,446			16,681			284,097			(2,666	)		13,243
Net earnings attributable to Stewart		—		—			—			109,182			—			—
Cash dividends on common stock ($0.10 per share)		—		—			—			(1,832	)		—			—
Stock bonuses and other		50		935			—			—			—			—
Exercise of stock options		50		1,044			—			—			—			—
Purchase of remaining interest of consolidated subsidiary		—		(740	)		—			—			—			—
Net change in unrealized gains and losses on investments		—		—			9,240			—			—			—
Net realized gain reclassification		—		—			(2,256	)		—			—			—
Foreign currency translation		—		—			2,919			—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			9,795
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(9,512	)
Net effect of changes in ownership and other		—		—			—			—			—			(1,960	)
Balances at December 31, 2012		19,756		133,685			26,584			391,447			(2,666	)		11,566

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Segment Information - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2012 Segment	Dec. 31, 2011	Dec. 31, 2010
Segment Information [Line Items]
Number of reportable segments	3
Mortgage services revenue of the largest customer, percentage	71.10%	62.90%	50.00%

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Treasury stock, common shares	352,161	352,161
Common Stock
Common Stock, par value	1	1
Common Stock, authorized	50,000,000	50,000,000
Common Stock, shares issued	18,705,914	18,605,993
Common Stock, shares outstanding	18,353,753	18,253,832
Class B Common Stock
Common Stock, par value	1	1
Common Stock, authorized	1,500,000	1,500,000
Common Stock, shares issued	1,050,012	1,050,012
Common Stock, shares outstanding	1,050,012	1,050,012

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Income taxes

12 Months Ended

Dec. 31, 2012

Income taxes

NOTE 7

Income taxes. The income tax provision consists of the following:

	2012			2011			2010
	($000 omitted)
Current:
Federal		(430	)		(678	)		(4,305	)
State		1,674			1,444			1,188
Foreign		9,024			9,221			337
Deferred:
Federal		(35,989	)		4,450			(1,197	)
State		(527	)		397			—
Foreign		(3,391	)		(5,493	)		12,052
Income tax (benefit) expense		(29,639	)		9,341			8,075

The following reconciles federal income taxes computed at the statutory rate with income taxes as reported.

	2012			2011			2010
	($000 omitted)
Expected income tax expense (benefit) at 35% (1)		27,842			4,091			(1,577	)
Foreign tax rate differential		(2,688	)		(764	)		613
Taxable income (non-consolidated subsidiaries for tax)		768			946			832
Intercompany dividends		921			572			738
Research and development credit		—			(74	)		(1,223	)
State income tax expense (benefit) – net of taxes		1,147			884			(178	)
Tax-exempt interest		(216	)		(342	)		(561	)
Non-deductible expenses		5,861			2,624			2,261
Loss carrybacks		(1,442	)		(1,829	)		—
Adjustments to deferred tax liabilities		9,371			10,781			8,716
Dividends received deductions on investments		(634	)		(500	)		(656	)
Valuation allowance		(71,106	)		(7,163	)		(1,146	)
Other – net		537			115			256
Income tax (benefit) expense		(29,639	)		9,341			8,075
Effective income tax rates (%) (1)		(37.3	)		79.9			(179.2	)

⁽¹⁾  Calculated using income (loss) before taxes and after noncontrolling interests.

Deferred income taxes at December 31, 2012 and 2011 were as follows:

	2012			2011
	($000 omitted)
Deferred tax assets:
Accrued expenses		15,630			12,684
Allowance for uncollectible amounts		4,575			5,784
Fixed assets		4,683			7,502
Investments		—			10,390
Net operating loss carryforwards		3,926			32,122
Tax credit carryforwards		27,072			18,727
Title loss provisions		8,479			11,235
Other		484			4,195
		64,849			102,639
Valuation allowance		(12,136	)		(84,771	)
		52,713			17,868
Deferred tax liabilities:
Amortization – goodwill and other intangibles		(27,528	)		(23,701	)
Unrealized gains on investments		(7,802	)		(4,003	)
Cash surrender value of insurance policies		(2,998	)		(4,431	)
Foreign currency translation adjustments		(5,753	)		(4,999	)
Accrued expenses Investments		(2,781 (477	)  )		(6,592 —	)
Fixed assets		(345	)		(139	)
Other		(112	)		(1,452	)
		(47,796	)		(45,317	)
Net deferred income taxes		4,917			(27,449	)

Net deferred tax assets for U.S. federal tax paying components totaled approximately $7.6 million and net deferred tax liabilities for foreign tax paying components totaled approximately $2.7 million.

During 2008, the Company recorded valuation allowances against U.S. deferred tax assets, net of definite-lived deferred tax liabilities, for which realization could not be assured based on a more-likely-than-not standard. The Company retained that valuation allowance for all subsequent periods through December 31, 2011 principally due to the Company’s cumulative three-year operating loss history as of the end of each period. The Company routinely evaluates the extent to which the valuation allowance may be reversed. During 2012, the Company utilized approximately $87.2 million of U.S. federal net operating loss carry forwards (NOL). Remaining NOLs will begin to expire in 2030, if not utilized. During 2012, the Company released approximately $72.6 million of its valuation allowance, $36.6 million of which is included in the Company’s deferred tax benefit.

The Company is routinely subject to income tax examinations by U.S. federal, international and state and local tax authorities. The Company is currently under examination by the Internal Revenue Service for calendar years 2005 through 2008. The Company also is involved in routine examinations by state and local tax jurisdictions for calendar years 2007 and 2008. The Company expects no material adjustment from any examination.

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Investment income

12 Months Ended

Dec. 31, 2012

Investment income

NOTE 6

Investment income. Income from investments and gross realized investment and other gains and losses follow:

	2012			2011			2010
	($000 omitted)
Investment income:
Debt securities		12,399			13,860			15,014
Short-term investments, cash equivalents and other		1,410			1,645			3,383
		13,809			15,505			18,397
Investment and other gains (losses):
Realized gains		9,417			12,151			24,055
Realized losses		(1,839	)		(9,849	)		(2,273	)
		7,578			2,302			21,782

Proceeds from the sales of investments available-for-sale were $134.8 million, $292.0 million and $280.9 million for the years ended December 31, 2012, 2011 and 2010, respectively. Expenses assignable to investment income were insignificant. There were no significant investments at December 31, 2012 that did not produce income during the year.

In 2012, investment and other gains (losses) – net included realized gains of $8.0 million from the sale of debt and investments available-for-sale and sale of fixed assets, partially offset by realized losses of $0.8 million for the impairment of cost-basis investments.

In 2011, investment and other gains (losses) – net included realized gains of $10.7 million from the sale of debt and investments available-for-sale, partially offset by realized losses of $3.5 million for the impairment of cost-basis investments and $4.3 million from a loss on a third-party loan guarantee obligation.

In 2010, investment and other gains (losses) – net included realized gains of $11.8 million from the sale of debt and investments available-for-sale, $6.3 million primarily from a transfer of the rights to internally developed software, $1.2 million from the sale of interests in subsidiaries and $3.0 million from the sale of real estate.

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Contingent liabilities and commitments

12 Months Ended

Dec. 31, 2012

Contingent liabilities and commitments

NOTE 18

Contingent liabilities and commitments. The Company routinely holds third-party funds in segregated escrow accounts pending the closing of real estate transactions resulting in a contingent liability to the Company of approximately $731.6 million at December 31, 2012. In addition, the Company is contingently liable for disbursements of escrow funds held by agencies in those cases where specific insured closing guarantees have been issued.

The Company owns a qualified intermediary in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can occur. This resulted in a contingent liability to the Company of approximately $448.9 million at December 31, 2012. As is industry practice, these escrow and Section 1031 exchanger fund accounts are not included in the consolidated balance sheets.

In the ordinary course of business, the Company guarantees the third-party indebtedness of certain of its consolidated subsidiaries. As of December 31, 2012, the maximum potential future payments on the guarantees are not more than the related notes payable recorded in the consolidated balance sheets (Note 10). The Company also guarantees the indebtedness related to lease obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related guarantees are not more than the Company’s future minimum lease payments (Note 17). In addition, as of December 31, 2012, the Company had guarantees of indebtedness owed by certain third parties related to business expansion and unused letters of credit aggregating to $4.1 million, primarily related to workers’ compensation coverage.

The Notes are guaranteed by certain wholly-owned domestic subsidiaries of the Company (Note 10).

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Share-based incentives

12 Months Ended

Dec. 31, 2012

Share-based incentives

NOTE 14

Share-based incentives. The Company granted restricted Common Stock with a fair value of $1.3 million in October 2012. These restricted Common Stock awards vest over three years. In March 2011, the Company granted 51,000 shares of fully vested, unrestricted Common Stock with a fair value of $0.6 million, which was recorded as compensation expense. Also in March 2011, the Company granted 37,000 shares of restricted Common Stock with a fair value of $0.4 million. The restricted Common Stock awards vest 20% over five years beginning in March 2011. Compensation expense associated with restricted stock awards will be recognized over the vesting period.

In March 2010, the Company granted 51,000 shares of fully vested, unrestricted Common Stock with a fair value of $0.7 million, which was recorded as compensation expense. Also in March 2010, the Company granted 37,000 shares of restricted Common Stock with a fair value of $0.5 million. The restricted Common Stock awards vest 20% over five years beginning in March 2010. Compensation expense associated with restricted stock awards will be recognized over this vesting period.

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Schedule I - Statements of Operations and Retained Earnings (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended											12 Months Ended
	Dec. 31, 2012		Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012		Dec. 31, 2011		Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Revenues
Investment income, including $0, $0 and $22 from affiliates												$ 13,809		$ 15,505		$ 18,397
Other (losses) gains												7,578		2,302		21,782
Total revenues	520,972		520,741	483,712	384,987		445,077		418,529	404,883	366,417	1,910,412		1,634,906		1,672,390
Expenses
Employee costs												542,461		469,839		467,491
Other operating expenses, including $305, $177 and $144 to affiliates												286,496		256,194		273,253
Depreciation and amortization												17,783		19,542		21,422
Interest												5,235		5,268		5,423
Total expenses												1,821,074		1,616,887		1,669,465
Loss before tax expense (benefit) and loss from subsidiaries												89,338		18,019		2,925
Income tax expense (benefit)												29,639		(9,341)		(8,075)
Net earnings (loss) attributable to Stewart	61,760		34,668	24,911	(12,157)		2,159		4,542	5,940	(10,293)	109,182		2,348		(12,582)
Retained earnings at beginning of year					284,097							284,097
Retained earnings at end of year	391,447						284,097					391,447		284,097
Stewart Information Services Corporation - Parent Company
Revenues
Investment income, including $0, $0 and $22 from affiliates												579		74		86
Other (losses) gains												(3,358)		(3,770)		3,109
Other income												380		235		68
Total revenues												(2,399)		(3,461)		3,263
Expenses
Employee costs												5,192		2,168		1,388
Other operating expenses, including $305, $177 and $144 to affiliates												1,674		451		5,796
Depreciation and amortization												802		893		862
Interest												4,615		4,639		4,658
Total expenses												12,283		8,151		12,704
Loss before tax expense (benefit) and loss from subsidiaries												(14,682)		(11,612)		(9,441)
Income tax expense (benefit)												34		79		(277)
Less (earnings) loss from subsidiaries												(123,898)		(14,039)		3,418
Net earnings (loss) attributable to Stewart												109,182		2,348		(12,582)
Retained earnings at beginning of year					284,097	[1]					282,666	284,097	[1]	282,666		296,116
Cash dividends on Common Stock ($0.10 per share in 2012 and $0.05 per share in 2011 and 2010)												(1,832)		(917)		(868)
Retained earnings at end of year	$ 391,447	[1]					$ 284,097	[1]				$ 391,447	[1]	$ 284,097	[1]	$ 282,666

[1] Includes undistributed earnings of subsidiaries of $466,442 in 2012 and $344,376 in 2011.

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Notes payable, convertible senior notes and line of credit

12 Months Ended

Dec. 31, 2012

Notes payable, convertible senior notes and line of credit

NOTE 10

Notes payable, convertible senior notes and line of credit.

A summary of notes payable follows:

	2012		2011
	($000 omitted)
Banks – primarily secured, varying payments and rates(1)		6,031		7,863
Other than banks		450		3,859
		6,481		11,722

⁽¹⁾  Average interest rates were 3.07% and 3.49% at December 31, 2012 and 2011, respectively.

Principal payments on the notes, based upon the contractual maturities, are due in the amounts of $2.0 million in 2013, $2.0 million in 2014, $1.9 million in 2015 and $.6 million in 2016.

In October 2009, the Company entered into an agreement providing for the sale of $65.0 million aggregate principal amount of 6.0% Convertible Senior Notes due 2014 (Notes) to an initial purchaser for resale to certain qualified institutional buyers in compliance with Rule 144A under the Securities Act of 1933, as amended. The Notes will mature in 2014 unless converted into the Company’s common stock earlier and are guaranteed by certain wholly-owned domestic subsidiaries of the Company. In January 2013, the Company converted approximately $20.7 million of Notes into 1,691,074 shares of Common Stock.

The Notes are convertible into shares of the Company’s Common Stock at a conversion rate of 77.6398 shares per $1,000 principal amount of Notes (equal to a conversion price of $12.88 per share), which will be adjusted for certain antidilutive provisions such as a dividend or distribution of shares of Common Stock, split or combination of shares of Common Stock; the issuance of rights or warrants entitling all or substantially all holders of Common Stock to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Last Reported Sale Prices of Common Stock (as defined in the Indenture); the distribution of shares of any class of capital stock of the Company, evidences of its indebtedness, other assets or property of the Company or rights or warrants to acquire the Company’s capital stock or other securities to all or substantially all holders of its Common Stock; or any cash dividend or distribution made to all or substantially all holders of Common Stock during any annual fiscal period that exceeds $0.10 per share of Common Stock.

The Company incurred $3.3 million of debt issuance costs related to the Notes. The issuance costs were primarily related to discounts, commissions and offering expenses payable by the Company. The Company recorded the issuance costs in other assets and is amortizing them over the term of the Notes using the effective interest method. The amortization of the debt issuance costs was $0.6 million, $0.5 million and $0.5 million and interest expense on the Notes was $4.2 million, $4.2 million and $4.2 million in 2012, 2011, and 2010, respectively.

As of December 31, 2012, the Company also had available a $10.0 million bank line of credit commitment, which expires in June 2013, under which no borrowings were outstanding.

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Income Taxes - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Line Items]
Net deferred tax assets	$ 7,562,000
Net deferred tax liabilities	2,645,000	27,449,000
Federal net operating loss carry forwards	87,200,000
Federal net operating loss, valuation allowances released	72,600,000
Federal net operating loss, deferred tax benefit	$ 36,600,000

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Goodwill and acquired intangibles

12 Months Ended

Dec. 31, 2012

Goodwill and acquired intangibles

NOTE 8

Goodwill and acquired intangibles. A summary of goodwill follows:

	Title		Mortgage Services		Total
	($000 omitted)
Balances at December 31, 2010		192,670		14,191		206,861
Acquisitions		—		7,631		7,631
Balances at December 31, 2011		192,670		21,822		214,492
Acquisitions		6,029		434		6,463
Balances at December 31, 2012		198,699		22,256		220,955

Amortization expense for acquired intangibles was $1.7 million, $1.5 million and $1.1 million in 2012, 2011 and 2010, respectively. Accumulated amortization of intangibles was $27.5 million and $25.8 million at December 31, 2012 and 2011, respectively. In each of the years 2013 through 2017, amortization expense is expected to be less than $1.7 million.

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Equity investees

12 Months Ended

Dec. 31, 2012

Equity investees

NOTE 9

Equity investees. Certain summarized aggregate financial information for equity investees (in which the Company typically owns 20% through 50% of the equity) follows:

	2012		2011		2010
	($000 omitted)
For the year:
Revenues		66,145		70,896		73,450
Net earnings		11,037		4,326		6,976
At December 31:
Total assets		52,500		57,972		31,767
Notes payable		23,681		23,533		1,119
Stockholders’ equity		12,758		12,524		16,027

Net premium revenues from policies issued by equity investees were approximately $6.0 million, $6.4 million and $6.9 million in 2012, 2011 and 2010, respectively. Earnings related to equity investees were $4.3 million, $1.7 million and $2.4 million in 2012, 2011 and 2010, respectively. These amounts are included in title insurance – direct operations in the consolidated statements of operations and comprehensive earnings (loss).

Goodwill related to equity investees was $9.1 million and $12.1 million at December 31, 2012 and 2011, respectively, and these balances are included in investments in investees in the consolidated balance sheets. Equity investments, including the related goodwill balances, are reviewed for impairment annually and upon the occurrence of an event indicating an impairment may have occurred.

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Estimated title losses

12 Months Ended

Dec. 31, 2012

Estimated title losses

NOTE 11

Estimated title losses.

	2012			2011			2010
	($000 omitted)
Balances at January 1		502,611			495,849			503,475
Provisions:
Current year		100,406			94,115			97,559
Previous policy years		39,623			47,986			50,879
Total provisions		140,029			142,101			148,438
Payments:
Current year		(16,782	)		(22,404	)		(24,118	)
Previous policy years		(107,194	)		(111,915	)		(134,191	)
Total payments		(123,976	)		(134,319	)		(158,309	)
Effects of changes in foreign currency exchange rates		1,711			(1,020	)		2,245
Balances at December 31		520,375			502,611			495,849

Provisions for title losses, as a percentage of title operating revenues, were 8.1%, 9.4% and 9.6% in 2012, 2011 and 2010, respectively. The total provisions included charges (above the annual provisioning rate) of $18.2 million, $24.6 million and $13.3 million for large title claims, including defalcations, in 2012, 2011 and 2010, respectively. The charges were reduced by insurance recoveries received of $0.5 million, $2.4 million and $2.8 million in 2012, 2011 and 2010, respectively.

The years ended 2012, 2011 and 2010 included $14.9 million, $15.0 million and $26.7 million, respectively, related to maintaining a high provisioning rate for title losses due to continued elevated claims payment experience and $24.3 million, $32.8 million and $19.2 million, respectively, related to large title losses. During 2012 our overall loss experience continued to improve relative to prior year periods and was generally in line with our actuarial expectations, which allowed us to lower the overall loss provision rate effective with policies issued in the third quarter 2012. The previous policy years’ title loss provision amounts in 2010 included a reserve strengthening adjustment of $4.8 million, related to higher than expected loss payment experience for policy years 2005 through 2008.

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Equity Investees - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Subsidiary, Sale of Stock [Line Items]
Net premium revenues from policies issued by equity investees	$ 66,145	$ 70,896	$ 73,450
Earnings related to equity investees	11,037	4,326	6,976
Goodwill related to equity investees	220,955	214,492	206,861
Equity Method Investments
Subsidiary, Sale of Stock [Line Items]
Goodwill related to equity investees	9,100	12,100
Direct Operations
Subsidiary, Sale of Stock [Line Items]
Net premium revenues from policies issued by equity investees	6,000	6,400	6,900
Earnings related to equity investees	$ 4,300	$ 1,700	$ 2,400

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Schedule I - Statements of Operations and Retained Earnings (Parenthetical) (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Investment income	$ 13,809	$ 15,505	$ 18,397
Other operating expenses	286,496	256,194	273,253
Stewart Information Services Corporation - Parent Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Investment income	579	74	86
Other operating expenses	1,674	451	5,796
Cash dividends on Common Stock, per share	$ 0.10	$ 0.05	$ 0.05
Affiliates | Stewart Information Services Corporation - Parent Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Investment income	0	0	22
Other operating expenses	$ 305	$ 177	$ 144

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Summary of Notes Payable (Parenthetical) (Detail)	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Average interest rate	3.07%	3.49%

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Summarized Aggregate Financial Information for Equity Investees (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Subsidiary, Sale of Stock [Line Items]
Revenues	$ 66,145	$ 70,896	$ 73,450
Net earnings	11,037	4,326	6,976
Total assets	52,500	57,972	31,767
Notes payable	23,681	23,533	1,119
Stockholders' equity	$ 12,758	$ 12,524	$ 16,027

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Goodwill and acquired intangibles (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Goodwill

A summary of goodwill follows:

	Title		Mortgage Services		Total
	($000 omitted)
Balances at December 31, 2010		192,670		14,191		206,861
Acquisitions		—		7,631		7,631
Balances at December 31, 2011		192,670		21,822		214,492
Acquisitions		6,029		434		6,463
Balances at December 31, 2012		198,699		22,256		220,955

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Financial Instrument Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	$ 540,284	$ 494,122
Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	37,025	33,137
Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	19,011	27,801
Corporate and utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	287,528	244,123
Foreign
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	169,009	164,268
U.S. Government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	16,638	19,350
Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	11,073	5,443
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	48,098	38,580
Level 1 | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair value measurements	37,025	33,137
Level 1 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair value measurements	11,073	5,443
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair value measurements	492,186	455,542
Level 2 | Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair value measurements	19,011	27,801
Level 2 | Corporate and utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair value measurements	287,528	244,123
Level 2 | Foreign
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair value measurements	169,009	164,268
Level 2 | U.S. Government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair value measurements	$ 16,638	$ 19,350

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Reinsurance

12 Months Ended

Dec. 31, 2012

Reinsurance

NOTE 16

Reinsurance. As is industry practice, the Company cedes risks to other title insurance underwriters and reinsurers on certain transactions. However, the Company remains liable if the reinsurer should fail to meet its obligations. The Company also assumes risks from other underwriters on a transactional basis as well as on certain reinsurance treaties. Payments and recoveries on reinsured losses were insignificant during each of the years ended December 31, 2012, 2011, and 2010. The total amount of premiums for assumed and ceded risks was less than 1% of consolidated title revenues in each of the last three years.

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Quarterly financial information (unaudited)

12 Months Ended

Dec. 31, 2012

Quarterly financial information (unaudited)

NOTE 21

Quarterly financial information (unaudited).

	Mar 31			June 30			Sept 30			Dec 31		Total
	($000 omitted, except per share)
Revenues:
2012		384,987			483,712			520,741			520,972		1,910,412
2011		366,417			404,883			418,529			445,077		1,634,906
Net earnings (loss) attributable to Stewart:
2012		(12,157	)		24,911			34,668			61,760		109,182
2011		(10,293	)		5,940			4,542			2,159		2,348
Diluted earnings (loss) per share attributable to Stewart(1):
2012		(0.63	)		1.05			1.45			2.56		4.61
2011		(0.55	)		0.28	(2)		0.22	(2)		0.11		0.12

⁽¹⁾  Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

⁽²⁾  The diluted earnings per share attributable to Stewart was primarily due to dilutive effects of the Convertible Senior Notes (Note 10) using the if-converted method (Note 15).

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Gross Unrealized Losses on Investments and Fair Values of Related Securities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Schedule of Held-to-maturity Securities [Line Items]
Losses, Less than 12 months	$ 736	$ 2,001
Fair Values, Less than 12 months	74,488	103,806
Losses, More than 12 months	118	1,029
Fair Values, More than 12 months	59,538	24,830
Total Losses	854	3,030
Total Fair Values	134,026	128,636
Municipal
Schedule of Held-to-maturity Securities [Line Items]
Losses, Less than 12 months	7
Fair Values, Less than 12 months	697
Total Losses	7
Total Fair Values	697
Corporate and utilities
Schedule of Held-to-maturity Securities [Line Items]
Losses, Less than 12 months	486	1,944
Fair Values, Less than 12 months	30,538	42,851
Losses, More than 12 months		1,029
Fair Values, More than 12 months		24,830
Total Losses	486	2,973
Total Fair Values	30,538	67,681
Foreign
Schedule of Held-to-maturity Securities [Line Items]
Losses, Less than 12 months	168	53
Fair Values, Less than 12 months	41,056	59,708
Losses, More than 12 months	118
Fair Values, More than 12 months	59,538
Total Losses	286	53
Total Fair Values	100,594	59,708
Equity securities
Schedule of Held-to-maturity Securities [Line Items]
Losses, Less than 12 months	75	4
Fair Values, Less than 12 months	2,197	1,247
Total Losses	75	4
Total Fair Values	$ 2,197	$ 1,247

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Segment information (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Segmental Revenues and Expenses

	Title		Mortgage Services		Corporate			Total
	($000 omitted)
2012:
Revenues		1,713,082		178,015		19,315			1,910,412
Intersegment revenues		—		8,158		3,836			11,994
Depreciation and amortization		6,143		4,107		7,533			17,783
Earnings (loss) before taxes and noncontrolling interests		147,628		48,633		(106,923	)		89,338
2011:
Revenues		1,494,557		123,601		16,748			1,634,906
Intersegment revenues		—		15,675		3,025			18,700
Depreciation and amortization		7,691		4,774		7,077			19,542
Earnings (loss) before taxes and noncontrolling interests		89,438		33,386		(104,805	)		18,019
2010:
Revenues		1,523,742		114,328		34,320			1,672,390
Intersegment revenues		—		15,922		3,244			19,166
Depreciation and amortization		9,682		4,250		7,490			21,422
Earnings (loss) before taxes and noncontrolling interests		82,062		22,059		(101,196	)		2,925

Revenues generated in domestic and foreign country

Revenues for the years ended December 31 in the United States and all international operations follow:

	2012		2011		2010
	($000 omitted)
United States		1,791,316		1,515,378		1,564,057
International		119,096		119,528		108,333
		1,910,412		1,634,906		1,672,390

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Reconciliation of net earnings (loss) to cash provided by operating activities:
Net earnings (loss)	$ 118,977	$ 8,678	$ (5,150)
Add (deduct):
Depreciation and amortization	17,783	19,542	21,422
Provision for bad debt	3,201	1,318	4,186
Investment and other gains - net	(7,578)	(2,302)	(21,782)
Provisions for title losses in excess of (less than) payments	15,248	2,383	(14,694)
Insurance recoveries of title losses	706	5,082	8,260
(Increase) decrease in receivables - net	(16,133)	(6,748)	46,642
(Increase) decrease in other assets - net	(2,779)	(189)	308
Increase (decrease) in payables and accrued liabilities - net	29,278	(5,602)	(11,871)
(Decrease) increase in net deferred income taxes	(39,780)	(1,212)	10,544
Net earnings from equity investees	(4,253)	(1,710)	(2,427)
Dividends received from equity investees	3,426	2,524	2,996
Other - net	2,426	1,645	2,760
Cash provided (used) by operating activities	120,522	23,409	41,194
Investing activities:
Proceeds from investments available-for-sale matured and sold	181,938	339,697	328,460
Purchases of investments available-for-sale	(207,690)	(336,118)	(303,517)
Proceeds from redemptions of investments - pledged			217,225
Purchases of property and equipment, title plants and real estate - net	(16,752)	(17,704)	(16,339)
Proceeds from the sale of land, buildings, and furniture and equipment	4,713		6,425
Increases in notes receivable	(463)	(291)	(1,109)
Collections on notes receivable	959	721	1,001
Change in cash and cash equivalents due to sale and deconsolidation of subsidiaries (see below)	1,566		(1,873)
Cash paid for acquisition of subsidiary	(1,183)	(8,262)
Cash paid for loan guarantee obligation		(4,318)
Cash received (paid) for other assets, cost-basis investments, equity investees and other - net	384	(2,944)	4,887
Cash (used) provided by investing activities	(36,528)	(29,219)	235,160
Financing activities:
Payments on notes payable	(5,692)	(5,988)	(16,294)
Proceeds from notes payable	450	6,000	5,834
Payments on line of credit			(216,141)
Cash dividends paid	(1,832)	(917)	(868)
Distributions to noncontrolling interests	(9,512)	(6,142)	(7,122)
Purchase of remaining interest of consolidated subsidiary	(1,621)		(4,199)
Other-net	87	13
Cash (used) provided by financing activities	(18,120)	(7,034)	(238,790)
Effect of changes in foreign currency exchange rates	1,821	(803)	826
Increase (decrease) in cash and cash equivalents	67,695	(13,647)	38,390
Cash and cash equivalents at beginning of year	140,843	154,490	116,100
Cash and cash equivalents at end of year	208,538	140,843	154,490
Supplemental information:
Receipt of partial building ownership in exchange for debt forgiveness	1,255
Settlement of wage and hour litigation through issuance of Common Stock		7,582
Settlement of note payable through issuance of Common Stock held in treasury		1,299
Changes in financial statement amounts due to purchase of subsidiary:
Goodwill acquired	4,183	7,631
Receivables and other assets acquired	(1,675)	5,672
Intangible assets		1,988
Liabilities acquired	(1,325)	(3,779)
Debt assumed		(3,250)
Cash paid for the acquisition of subsidiaries and other - net	1,183	8,262
Changes in financial statement amounts due to sale and deconsolidation of subsidiaries
Note receivable	156		2,433
Investments in investees, on an equity method basis	(1,203)		5,315
Goodwill	(440)		(5,902)
Title plants	(491)		(1,048)
Property and equipment, net of accumulated depreciation	(9)		(1,564)
Intangible asset, net of amortization			2,928
Other - net	755		(814)
Liabilities	37		1,390
Noncontrolling interests	473		336
Investment and other (gains) losses - net	(844)		(1,201)
Change in cash and cash equivalents due to sale and deconsolidation of subsidiaries	(1,566)		1,873
Income taxes - net paid (refunded)	6,747	19,259	(41,528)
Interest paid	$ 4,427	$ 4,557	$ 4,775

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Schedule I - Statements of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Reconciliation of net earnings (loss) to cash provided (used) by operating activities:
Net earnings (loss)	$ 109,182	$ 2,348	$ (12,582)
Add (deduct):
Depreciation and amortization	17,783	19,542	21,422
Provision for bad debt	3,201	1,318	4,186
Other losses (gains)	(7,578)	(2,302)	(21,782)
Decrease (increase) in receivables - net	(16,133)	(6,748)	46,642
Increase in other assets - net	(2,779)	(189)	308
Increase (decrease) in payables and accrued liabilities - net	29,278	(5,602)	(11,871)
(Earnings) loss from subsidiaries	(4,253)	(1,710)	(2,427)
Other - net	2,426	1,645	2,760
Cash provided (used) by operating activities	120,522	23,409	41,194
Investing activities:
Cash paid for loan guarantee obligation		(4,318)
Collections on notes receivables	959	721	1,001
Cash (used) provided by investing activities	(36,528)	(29,219)	235,160
Financing activities:
Cash (used) provided by financing activities	(18,120)	(7,034)	(238,790)
Increase (decrease) in cash and cash equivalents	67,695	(13,647)	38,390
Cash and cash equivalents at beginning of year	140,843	154,490	116,100
Cash and cash equivalents at end of year	208,538	140,843	154,490
Supplemental information:
Income taxes paid	6,747	19,259	(41,528)
Interest paid	4,427	4,557	4,775
Stewart Information Services Corporation - Parent Company
Reconciliation of net earnings (loss) to cash provided (used) by operating activities:
Net earnings (loss)	109,182	2,348	(12,582)
Add (deduct):
Depreciation and amortization	802	893	862
Provision for bad debt	(1)	(2)	(96)
Other losses (gains)	3,358	3,770	(3,109)
Decrease (increase) in receivables - net	433	(218)	1,173
Increase in other assets - net	(229)	(1,171)	(130)
Increase (decrease) in payables and accrued liabilities - net	16,747	3,941	(1,007)
(Earnings) loss from subsidiaries	(123,898)	(14,039)	3,418
Other - net	1,899	3,213	2,735
Cash provided (used) by operating activities	8,293	(1,265)	(8,736)
Investing activities:
Cash paid for loan guarantee obligation		(4,318)
Proceeds from the sale of (purchases of) property and equipment - net	1,593	3,070	(3,016)
Collections on notes receivables	1	9	12,842
Proceeds from the sale of land and buildings			6,323
Contributions to subsidiaries	(1,500)
Cash (used) provided by investing activities	94	(1,239)	16,149
Financing activities:
Dividends paid	(1,832)	(917)	(868)
Cash (used) provided by financing activities	(1,832)	(917)	(868)
Increase (decrease) in cash and cash equivalents	6,555	(3,421)	6,545
Cash and cash equivalents at beginning of year	4,170	7,591	1,046
Cash and cash equivalents at end of year	10,725	4,170	7,591
Supplemental information:
Income taxes paid	149	82
Interest paid		$ 3,900	$ 3,900

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Fair value measurements

12 Months Ended

Dec. 31, 2012

Fair value measurements

NOTE 5

Fair value measurements. The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The Fair Values Measurements and Disclosures Topic establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows:

• Level 1 – quoted prices in active markets for identical assets or liabilities;

• Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

• Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

At December 31, 2012, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Fair value measurements
	($000 omitted)
Short-term investments		37,025		—		—		37,025
Investments available-for-sale:
Debt securities:
Municipal		—		19,011		—		19,011
Corporate and utilities		—		287,528		—		287,528
Foreign		—		169,009		—		169,009
U.S. Government		—		16,638		—		16,638
Equity securities:		11,073		—		—		11,073
		48,098		492,186		—		540,284

At December 31, 2011, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Fair value measurements
	($000 omitted)
Short-term investments		33,137		—		—		33,137
Investments available-for-sale:
Debt securities:
Municipal		—		27,801		—		27,801
Corporate and utilities		—		244,123		—		244,123
Foreign		—		164,268		—		164,268
U.S. Government		—		19,350		—		19,350
Equity securities:		5,443		—		—		5,443
		38,580		455,542		—		494,122

At December 31, 2012, Level 1 financial instruments consist of short-term investments and equity securities. Level 2 financial instruments consist of governmental, corporate and utilities bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines, the Company’s third party, registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. All municipal bonds are valued using a third-party pricing service, and the corporate bonds are valued using the market approach, which includes three to ten inputs from relevant market sources, including Financial Industry Regulatory Authority’s (FINRA) Trade Reporting and Compliance Engine (TRACE) and independent broker/dealer quotes, bids and offerings, as well as other relevant market data, such as securities with similar characteristics (i.e. sector, rating, maturity, etc.). Broker/dealer quotes, bids and offerings mentioned above are gathered (typically three to ten) and a consensus risk premium spread (credit spread) over risk-free Treasury yields is developed from the inputs obtained, which is then used to calculate the resulting fair value.

As of December 31, 2012, assets measured at fair value on a nonrecurring basis are summarized below:

	Level 3		Impairment loss recorded
	($000 omitted)
Cost-basis investments		1,640		753

The carrying amount of certain cost-basis investments exceeded their fair value and an impairment charge of $0.8 million was recorded in investment and other gains (losses) – net in 2012. The valuations were based on the values of the underlying assets of the investee.

As of December 31, 2011, assets measured at fair value on a nonrecurring basis are summarized below:

	Level 3		Impairment loss recorded
	($000 omitted)
Cost-basis investments		1,167		2,685

The carrying amount of certain cost-basis investments exceeded their fair value and an impairment charge of $2.7 million was recorded in investment and other gains (losses) – net in 2011. The valuations were based on the values of the underlying assets of the investee.

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Reconciliation of Federal Income Taxes Computed at Statutory Rate with Income Taxes (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Component Of Net Income Tax Assets And Liabilities [Line Items]
Income tax rate	35.00%	35.00%	35.00%

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Revenues Generated in Domestic and Foreign Country (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Net revenue	$ 520,972	$ 520,741	$ 483,712	$ 384,987	$ 445,077	$ 418,529	$ 404,883	$ 366,417	$ 1,910,412	$ 1,634,906	$ 1,672,390
United States
Segment Reporting Information [Line Items]
Net revenue									1,791,316	1,515,378	1,564,057
International
Segment Reporting Information [Line Items]
Net revenue									$ 119,096	$ 119,528	$ 108,333

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Estimated Title Losses - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Gain (Loss) on Investments [Line Items]
Provisions for title losses as a percentage of operating revenue	8.10%	9.40%	9.60%
Total provision	$ 140,029	$ 142,101	$ 148,438
Insurance recovery amount	706	5,082	8,260
Previous policy years
Gain (Loss) on Investments [Line Items]
Total provision	39,623	47,986	50,879
Previous policy years | Adjustments
Gain (Loss) on Investments [Line Items]
Total provision			4,800
Related to maintaining a high provisioning rate for title losses due to continued elevated claims payment experience
Gain (Loss) on Investments [Line Items]
Total provision	14,900	15,000	26,700
Related to large title losses
Gain (Loss) on Investments [Line Items]
Total provision	24,300	32,800	19,200
Insurance Claims
Gain (Loss) on Investments [Line Items]
Total provision	18,200	24,600	13,300
Insurance recovery amount	$ 500	$ 2,400	$ 2,800

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Schedule I - Parent Company Financial Information

12 Months Ended

Dec. 31, 2012

Schedule I - Parent Company Financial Information

SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted)
Revenues
Investment income, including $0, $0 and $22 from affiliates		579			74			86
Other (losses) gains		(3,358	)		(3,770	)		3,109
Other income		380			235			68
		(2,399	)		(3,461	)		3,263
Expenses
Employee costs		5,192			2,168			1,388
Other operating expenses, including $305, $177 and $144 to affiliates		1,674			451			5,796
Depreciation and amortization		802			893			862
Interest		4,615			4,639			4,658
		12,283			8,151			12,704
Loss before tax expense (benefit) and loss from subsidiaries		(14,682	)		(11,612	)		(9,441	)
Income tax expense (benefit)		34			79			(277	)
Less (earnings) loss from subsidiaries		(123,898	)		(14,039	)		3,418
Net income (loss)		109,182			2,348			(12,582	)
Retained earnings at beginning of year		284,097			282,666			296,116
Cash dividends on Common Stock ($0.10 per share in 2012 and $0.05 per share in 2011 and 2010)		(1,832	)		(917	)		(868	)
Retained earnings at end of year		391,447			284,097			282,666

See accompanying note to financial statement information.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEETS

	As of December 31,
	2012			2011
	($000 omitted)
Assets
Cash and cash equivalents		10,725			4,170
Receivables:
Notes		14			15
Other, including $3 and $191 from affiliates		43			476
Allowance for uncollectible amounts		(14	)		(15	)
		43			476
Property and equipment, at cost:
Buildings		—			2,287
Furniture and equipment		3,109			3,209
Accumulated depreciation		(2,347	)		(2,429	)
		762			3,067
Title plant, at cost		48			48
Investments in subsidiaries, on an equity method basis		626,994			504,897
Goodwill		8,470			8,470
Other assets		16,797			17,136
		663,839			538,264
Liabilities
Convertible senior notes		64,687			64,513
Accounts payable and accrued liabilities, including $3 and $104 from affiliates		30,346			23,537
		95,033			88,050
Contingent liabilities and commitments
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 18,705,914 and 18,605,993; outstanding 18,353,753 and 18,253,832		18,706			18,606
Class B Common Stock– $1 par, authorized 1,500,000; issued and outstanding 1,050,012		1,050			1,050
Additional paid-in capital		133,685			132,446
Retained earnings(1)		391,447			284,097
Accumulated other comprehensive earnings:
Foreign currency translation adjustments		12,169			9,250
Unrealized investment gains		14,415			7,431
Treasury stock – 352,161 and 352,161 common shares, at cost		(2,666	)		(2,666	)
Total stockholders’ equity		568,806			450,214
		663,839			538,264

⁽¹⁾  Includes undistributed earnings of subsidiaries of $466,442 in 2012 and $344,376 in 2011.

See accompanying note to financial statement information.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2012			2011			2010
	($000 omitted)
Reconciliation of net earnings (loss) to cash provided (used) by operating activities:
Net earnings (loss)		109,182			2,348			(12,582	)
Add (deduct):
Depreciation and amortization		802			893			862
Provision for bad debt		(1	)		(2	)		(96	)
Other losses (gains)		3,358			3,770			(3,109	)
Decrease (increase) in receivables – net		433			(218	)		1,173
Increase in other assets – net		(229	)		(1,171	)		(130	)
Increase (decrease) in payables and accrued liabilities – net		16,747			3,941			(1,007	)
(Earnings) loss from subsidiaries		(123,898	)		(14,039	)		3,418
Other – net		1,899			3,213			2,735
Cash provided (used) by operating activities		8,293			(1,265	)		(8,736	)
Investing activities:
Cash paid for loan guarantee obligation		—			(4,318	)		—
Proceeds from the sale of (purchases of) property and equipment – net		1,593			3,070			(3,016	)
Collections on notes receivables		1			9			12,842
Proceeds from the sale of land and buildings		—			—			6,323
Contributions to subsidiaries		(1,500	)		—			—
Cash provided (used) by investing activities		94			(1,239	)		16,149
Financing activities:
Dividends paid		(1,832	)		(917	)		(868	)
Cash (used) provided by financing activities		(1,832	)		(917	)		(868	)
Increase (decrease) in cash and cash equivalents		6,555			(3,421	)		6,545
Cash and cash equivalents at beginning of year		4,170			7,591			1,046
Cash and cash equivalents at end of year		10,725			4,170			7,591
Supplemental information:
Income taxes paid		149			82			—
Interest paid		—			3,900			3,900

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Diluted Earnings Per Share Using if- Converted Method (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2012		Sep. 30, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Numerator:
Net earnings (loss) attributable to Stewart	$ 61,760		$ 34,668		$ 24,911		$ (12,157)		$ 2,159		$ 4,542		$ 5,940		$ (10,293)		$ 109,182		$ 2,348		$ (12,582)
Interest expense, net of tax effects																	3,139
If-converted net earnings (loss) attributable to Stewart																	$ 112,321		$ 2,348		$ (12,582)
Denominator (000):
Basic average shares outstanding																	19,294		19,131		18,313
Dilutive average number of shares relating to convertible senior notes																	5,047
Dilutive average number of shares relating to restricted shares grant																	43
Dilutive average shares outstanding																	24,384		19,131		18,313
Diluted earnings per share attributable to Stewart	$ 2.56	[1]	$ 1.45	[1]	$ 1.05	[1]	$ (0.63)	[1]	$ 0.11	[1]	$ 0.22	[1],[2]	$ 0.28	[1],[2]	$ (0.55)	[1]	$ 4.61	[1]	$ 0.12	[1]	$ (0.69)

[1] Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

[2] The diluted earnings per share attributable to Stewart was primarily due to dilutive effects of the Convertible Senior Notes (Note 10) using the if-converted method (Note 15).

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Changes in stockholders' equity (Tables)

12 Months Ended

Dec. 31, 2012

Changes in Stockholders' Equity

Changes in stockholders’ equity.

	Common and Class B Common  Stock ($1 par value)		Additional paid-in capital			Accumulated other comprehensive earnings			Retained Earnings			Treasury stock			Noncontrolling interests
	($000 omitted)
Balances at December 31, 2009		18,708		126,822			10,960			296,116			(4,330	)		13,790
Net (loss) attributable to Stewart		—		—			—			(12,582	)		—			—
Cash dividends on common stock ($0.05 per share)		—		—			—			(868	)		—			—
Stock bonuses and other		143		1,284			—			—			—			—
Purchase of remaining interest of consolidated subsidiary		—		(3,693	)		—			—			—			(506	)
Provision for Canadian taxes		—		—			(1,185	)		—			—			—
Net change in unrealized gains and losses on investments		—		—			1,448			—			—			—
Net realized gain reclassification		—		—			(1,142	)		—			—			—
Foreign currency translation		—		—			3,529			—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			7,432
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(7,122	)
Net effect of changes in ownership and other		—		—			—			—			—			(471	)
Balances at December 31, 2010		18,851		124,413			13,610			282,666			(4,330	)		13,123
Net earnings attributable to Stewart		—		—			—			2,348			—			—
Cash dividends on common stock ($0.05 per share)		—		—			—			(917	)		—			—
Stock bonuses and other		169		1,452			—			—			—			—
Settlement of wage and hour litigation through issuance of Common Stock		636		6,946			—			—			—			—
Settlement of note payable through issuance of Common Stock held in treasury		—		(365	)		—			—			1,664			—
Net change in unrealized gains and losses on investments		—		—			7,245			—			—			—
Net realized gain reclassification		—		—			(2,331	)		—			—			—
Foreign currency translation		—		—			(1,843	)		—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			6,330
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(6,142	)
Net effect of changes in ownership and other		—		—			—			—			—			(68	)
Balances at December 31, 2011		19,656		132,446			16,681			284,097			(2,666	)		13,243
Net earnings attributable to Stewart		—		—			—			109,182			—			—
Cash dividends on common stock ($0.10 per share)		—		—			—			(1,832	)		—			—
Stock bonuses and other		50		935			—			—			—			—
Exercise of stock options		50		1,044			—			—			—			—
Purchase of remaining interest of consolidated subsidiary		—		(740	)		—			—			—			—
Net change in unrealized gains and losses on investments		—		—			9,240			—			—			—
Net realized gain reclassification		—		—			(2,256	)		—			—			—
Foreign currency translation		—		—			2,919			—			—			—
Net earnings attributable to noncontrolling interests		—		—			—			—			—			9,795
Subsidiary dividends paid to noncontrolling interests		—		—			—			—			—			(9,512	)
Net effect of changes in ownership and other		—		—			—			—			—			(1,960	)
Balances at December 31, 2012		19,756		133,685			26,584			391,447			(2,666	)		11,566

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Earnings per share

12 Months Ended

Dec. 31, 2012

Earnings per share

NOTE 15

Earnings per share. The Company’s basic earnings per share is calculated by dividing net earnings (loss) by the weighted-average number of shares of Common Stock and Class B Common Stock outstanding during the reporting period.

To calculate diluted earnings per share, net income and number of shares are adjusted for the effects of any dilutive shares. Using the if-converted method, net earnings are adjusted for interest expense, net of any tax effects, applicable to the Convertible Senior Notes discussed in Note 10. The number of shares is adjusted by adding the number of dilutive shares, assuming they are issued, during the same reporting period. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s stock option plan.

For the three years ended December 31, 2012, the Company did not have any dilutive shares under the treasury stock method mentioned above since the exercise prices of the options were greater than the weighted-average market value of the shares, which excludes them from the diluted earnings calculation.

There were no calculations of diluted earnings per share for the year ended December 31, 2011 using the if-converted method, as the add back of the tax affected interest expense on the convertible debt resulted in antidilution. Additionally, since the Company reported a net loss for the year ended December 31, 2010, there was no calculation of diluted earnings per share under the if-converted method.

The calculation of the diluted earnings per share using the if-converted method is as follows:

	For the Years Ended December 31,
	2012		2011		2010
	($000 omitted)
Numerator:
Net earnings (loss) attributable to Stewart		109,182		2,348		(12,582	)
Interest expense, net of tax effects		3,139		—		—
If-converted net earnings (loss) attributable to Stewart		112,321		2,348		(12,582	)
Denominator (000):
Basic average shares outstanding		19,294		19,131		18,313
Dilutive average number of shares relating to convertible senior notes		5,047		—		—
Dilutive average number of shares relating to restricted shares grant		43		—		—
Dilutive average shares outstanding		24,384		19,131		18,313
Diluted earnings per share attributable to Stewart		4.61		0.12		(0.69	)