Exhibit 10.1
EMPLOYEE SEVERANCE AND RELEASE AGREEMENT
This Employee Severance and Release Agreement (the "Agreement"), dated
this 15th day of September, 1999, by and between XXXXXXX X. XXXXXXXX (the
"Employee") and LANDAMERICA FINANCIAL GROUP, INC., a Virginia Corporation (the
"Company") provides:
1. Termination of Employment; Severance Benefits.
Employee's employment shall terminate effective September 15, 1999.
Employee agrees to resign from all current positions, including those of
employee, officer and director, of LandAmerica Financial Group, Inc.,
Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation,
Transnation Title Insurance Company and any other entities affiliated with the
Company. In consideration of Employee's resignation and acceptance and execution
of this Agreement, the Company will pay Employee the payments and benefits set
forth herein. The Company shall make to Employee within thirty (30) days of the
termination of his employment a lump sum payment of One Hundred Fifty Thousand
and No/100 Dollars ($150,000.00). The Company shall make to Employee a lump sum
payment of Seventy-Five Thousand and No/100 Dollars ($75,000.00) on February 29,
2000 provided that he has not breached any of the terms of this Agreement.
Employee understands that prior to the payment of any taxable payments
and benefits provided herein, the Company will deduct from these sums and
benefits all federal withholding taxes and other payroll deductions the Company
is required by law to make from such payments to employees. Employee further
understands and acknowledges that these payments and
benefits, along with the payments set forth in the Release Agreement, are all
the payments Employee is entitled to receive from the Company, except for any
outstanding payments for any accrued vacation and vested savings, pension or
other benefits to which Employee may be entitled under the Company's standard
retirement or other welfare benefit programs. The Employee's participation in
and terminating distributions and vested rights under any such retirement plans
of the Company and any of its affiliates shall be governed by the terms of those
respective plans and shall not be affected by this Agreement.
2. Unreimbursed Expenses
The Company agrees to reimburse Employee for all reasonable and
verifiable business expenses submitted on or before October 31, 1999 which are
compensable pursuant to the terms of the Company's normal policies and
procedures governing the reimbursement of such business expenses. The Company
additionally agrees to reimburse Employee for reasonable and verifiable
expenses, up to a maximum amount of Ten Thousand Dollars ($10,000.00), relating
to his relocation to Richmond, Virginia, provided that the expenses are
compensable pursuant to the Company's normal policies and procedures governing
the reimbursement of relocation expenses and are submitted on or before October
31, 1999. The Company agrees to reimburse the Employee for expenses incurred by
the Employee for the purpose of personal financial, tax and estate planning, up
to a maximum amount of Five Thousand Dollars ($5,000.00) for the fiscal year
1998 and up to a maximum amount of Two Thousand Five Hundred Dollars ($2500.00)
for fiscal year 1999 upon the presentation by Employee of proper documentation
for the expenses
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and otherwise in accordance with the Company's policies regarding such expenses
in effect at the time of the execution of this Agreement, provided that such
expenses are submitted on or before October 31, 1999.
3. Company Stock.
All stock options held by Employee shall vest upon the effective date
of this Agreement and shall be immediately exercisable. All shares of restricted
stock held by Employee pursuant to the Company's 1998 Restricted Stock Agreement
shall vest immediately upon the effective date of this Agreement.
4. Outplacement Services.
The Company shall, at its sole expense, provide Employee with
outplacement services. The Company shall provide Employee with two reputable
national outplacement firms from which to choose and shall pay up to Ten
Thousand and No/100 Dollars ($10,000.00) to the firm of Employee's choice to
provide the outplacement services.
5. Change of Control.
If the Company undergoes a "Change of Control," on or before June 15,
2000, the Company shall pay to Employee an amount equal to the sum of three
times Employee's current Annual Base Salary and three times Employee's Highest
Annual Bonus plus the monetary benefits set forth in paragraph 9 of the Change
of Control Agreement minus any monetary payments which Employee receives
pursuant to this Agreement or the Release Agreement.
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Employee shall not be entitled to any of the other benefits or monetary payments
of any type set forth in the parties' Change of Control Agreement.
If a Change of Control, as defined in paragraph 2 of the Change of
Control Agreement occurs subsequent to June 15, 2000, Employee shall not be
entitled to any of the benefits or monetary payments set forth in the parties'
Change of Control Agreement.
The foregoing terms "Change of Control," "Annual Base Salary," and
"Highest Annual Bonus" shall be defined as set forth in the Change of Control
Agreement executed between the Company and Employee, with the exception that it
shall not matter that the Employee is not an active employee of the Company at
the time of the Change of Control.
6. Health Insurance.
Employee may elect pursuant to the provisions of federal law (COBRA) to
continue group health care coverage beyond the date of the termination of his
employment at his expense.
7. No Obligation to Make Payment under Normal Policies.
Employee understands, acknowledges and agrees that the payments and
benefits provided herein provide more than the Company is required to pay under
its normal policies and procedures.
8. Complete Release.
Employee agrees to release the Company and all of its affiliated
companies and their subsidiaries, and the employees, officers, agents and
directors of any of them, from all claims, demands, causes of action,
liabilities and obligations of whatever nature or source, whether
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known or unknown, that Employee may have based on Employee's relationship with
the Company or any affiliated companies as an employee, officer or director or
the termination of that relationship. This includes, but is not limited to, a
release of any rights or claims Employee may have under Title VII of the Civil
Rights Act of 1964, which prohibits discrimination in employment based on race,
color, national origin, religion or sex; the Age Discrimination in Employment
Act of 1967, which prohibits discrimination in employment based on age; the
Equal Pay Act, which prohibits paying men and women unequal pay for equal work;
the Americans with Disabilities Act, which prohibits discrimination against
otherwise qualified disabled individuals, or any other federal, state or local
laws or regulations prohibiting employment discrimination. This also includes
but is not limited to a release by Employee of any claims for wrongful discharge
or breach of contract and any and all other claims which are a result of, based
upon or arise out of the Employee's relationship with the Company or its
affiliates and subsidiaries or the termination of that relationship. This
release covers both claims that Employee knows about and those the Employee may
not know about.
This release does not include, however, a release of Employee's rights
or claims, if any, to payment of ERISA or other benefits under or relating to
the Company's or its predecessors' Cash Balance Plan Account, pension plan,
standard savings, welfare and retirement benefit programs, and the right to
elect continuation in Company medical plans as provided under COBRA. The Company
agrees to work in good faith with Employee to resolve any disputes relating to
the Cash Benefit Plan Account.
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9. No Future Lawsuits.
Employee promises never to file a lawsuit, complaint or charge
asserting any claims that are released in this Agreement.
10. Disclaimer of Liability.
This Agreement, and the payments and performances provided for
hereunder, are made solely to assist Employee in making the transition from
employment with the Company, and are not and shall not be construed to be an
admission of any liability, an admission of the truth of any fact, or a
declaration against interest on the part of the Company.
11. Claim for Reinstatement.
Employee agrees to waive and abandon any claim to reinstatement with
the Company.
12. Non-Release of Future Claims.
This Agreement does not waive or release any rights or claims that
Employee may have under the Age Discrimination in Employment Act or other
statutory or common law which rights or claims arise after the date the Employee
signs this Agreement.
13. Relationship With Company.
Employee agrees not to make any derogatory statement with regard to the
performance, character or reputation of the Company, its personnel and any and
all related companies, or assert that any current or former employee, agent,
director or officer of same has acted improperly or unlawfully with respect to
Employee regarding employment, except as otherwise compelled by lawful subpoena
or court order. The Company, its Board of Directors, its Chairman, its
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President, its Senior and Executive Vice-Presidents based in the Company's
corporate headquarters in Richmond, Virginia agree not to make any derogatory
statement with regard to the performance, character or reputation of Employee or
assert that Employee has acted improperly or unlawfully, except as otherwise
compelled by lawful subpoena or court order. However, in the event the Company
discovers objective evidence of illegal conduct by Employee, the Company is
authorized to make truthful statements regarding Employee's conduct. The Company
agrees to provide Employee with the letter of reference attached hereto as
Exhibit A regarding the termination of Employee's employment. The Company also
agrees to release the press release attached hereto as Exhibit B. In the event
the Company is contacted regarding Employee, the Company's Chairman and Human
Resources Department shall keep its comments consistent with Exhibits A and B
hereto.
Employee further agrees to cooperate with and to assist the Company in
any litigation or other disputes about which he has knowledge. Employee's
cooperation shall include, but not be limited to, meeting with and discussing
such information with attorneys or other agents of the Company and testifying
truthfully in depositions or in Court, if deemed necessary by the Company. The
Company agrees to provide reasonable compensation to Employee for his time and
expenses incurred while cooperating or assisting the Company with litigation or
other disputes.
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14. Restrictive Covenants.
(a) Confidential Information. Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, their respective businesses, which shall have been obtained by
Employee during Employee's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
of Employee or representatives of Employee in violation of this Agreement).
Employee shall not, without the prior written consent of the Company or except
as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company or those
designated by it.
(b) Non-Competition. The Employee agrees that for six (6)
months after the termination of the Employee's employment with the Company, he
will not, without the prior written consent of the Company, directly or
indirectly, engage in or have an interest in (as owner, partner, shareholder,
employee, director, officer, consultant or otherwise), with or without
compensation, any business which is in competition with the Company's business
of title insurance underwriting. Nothing herein, however, will prohibit the
Employee from acquiring or holding not more than one percent (1%) of any class
of publicly traded securities of any such business, provided that such
securities entitle the Employee to no more than one percent (1%) of the total
outstanding votes entitled to be cast by security-holders of such business in
matters in which such security-holders are entitled to vote.
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(c) Non-Interference. (i) The Employee agrees and covenants
that, for a period of six (6) months after termination of Employee's employment
with the Company, the Employee shall not, without the prior written approval of
the Board of Directors of the Company, Interfere directly or indirectly in any
way with the Company or any of its affiliates.
(ii) For purposes of this Agreement, "Interfere" shall
mean, to solicit, entice, persuade, induce, influence or attempt to influence,
directly or indirectly, clients or Prospective Clients, employees, agents or
independent contractors of the Company or any of its affiliated companies to
restrict, reduce, sever or otherwise alter their relationship with the Company
or any of its affiliated companies.
(iii) For purposes of this Agreement, "Prospective
Clients" shall mean persons or entities identified by the Company as prospective
clients of the Company or any of its affiliated companies within twelve (12)
months prior to the Date of Termination and with whom the Company or such
affiliated companies have had contact.
(d) Severability and Reduction in Scope of Provisions. The
covenants and agreements of the Employee contained in paragraphs (a) through (c)
above are separate and distinct covenants and agreements of the Employee and if
any part of any such paragraph is void, invalid or unenforceable, such paragraph
shall be severed from this Agreement and shall not affect or impair any other
paragraph or the balance of this Agreement, and this Agreement with the void,
invalid or unenforceable paragraph stricken herefrom shall remain in full force
and effect. Further, the periods and scope of the restrictions set forth in any
such paragraph or
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subparagraph shall be reduced by the minimum amount necessary to reform such
paragraph or subparagraph to the maximum level of enforcement permitted to the
Company by the law governing this Agreement, if such reform is permitted.
(e) Remedy for Breach. The Employee acknowledges that the
Company and its affiliated companies or any one of them will be irrevocably
damaged if all of the provisions of this Section 14 are not specifically
enforced. Accordingly, the Employee agrees that, in addition to any other relief
to which the Company may be entitled, any one of the Company or its affiliated
companies will be entitled to seek and obtain injunctive relief from a court of
competent jurisdiction for the purpose of restraining the Employee from any
actual or threatened breach of this Section 14. Employee further agrees that in
the event of any non-compliance with this Agreement by the Employee (as
evidenced by a judicial finding of non-compliance), the Employee forfeits his
right to the payment of $75,000.00 referenced in paragraph 1 of this Agreement.
Nothing contained in this Agreement, however, shall prohibit the Company or the
Employee from pursuing damages for breach of this Agreement. In the event that
either party breaches this Agreement in any respect, the other party shall
recover its costs and expenses, including reasonable attorney's fees, incurred
in enforcing performance of the terms of this Agreement.
(f) Validity of Covenant. The Employee agrees that the
covenants contained in this Section 14 are reasonably necessary to protect the
legitimate interests of the Company and its affiliated companies, are reasonable
with respect to time and territory, and do not interfere
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with the interests of the public. The Employee further agrees that the
descriptions of the covenants contained in this Section 14 are sufficiently
accurate and definite to inform the Employee of the scope of the covenants.
Finally, the Employee agrees that the consideration provided for in this
Agreement is full, fair and adequate to support the Employee's obligations
hereunder.
15. Indemnification.
This Agreement does not in any manner restrict, change, modify, or
divest Employee of indemnification or other protections which currently exists
through insurance policies, corporate documents or statutory provisions.
16. Encouragement to Consult with Attorney.
Employee has been, and is, strongly encouraged to consult with an
attorney before signing this Agreement, and understands that whether or not to
do so is Employee's own decision. Employee acknowledges that he has had an
opportunity to consult with counsel of his own choice and obtain such further
advice as he may wish.
17. Acknowledgment.
Employee acknowledges that he has signed this Agreement freely and
voluntarily without duress of any kind.
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18. References To The Company.
As used in this Agreement, the "Company" shall refer to LandAmerica
Financial Group, Inc., Commonwealth land Title Insurance Company, Lawyers Title
Insurance Corporation and Transnation Title Insurance Company and any affiliated
companies, entities or subsidiaries.
19. Entire Agreement.
This Agreement is the entire Agreement between Employee and the Company
related to Employee's severance of employment. This Agreement extinguishes any
rights that the employee may have had pursuant to the Change of Control
Employment Agreement between Employee and the Company except as specifically
provided in paragraph 5 of this Agreement. The Company has made no promises to
Employee other than those in this Agreement. This Agreement in no way
extinguishes the rights and obligations created by the Release Agreement
presented to Employee his same date.
20. Successorship.
It is the intention of the parties that the provisions hereof be
binding upon the parties, their employees, affiliates, agents, heirs, successors
and assigns forever. In the event of Employee's death, any remaining payments
set forth in this Agreement shall be made to Employee's estate, provided that
employee is not in material breach of the Agreement at the time of his death.
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21. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Virginia.
EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS IT,
AND IS VOLUNTARILY ENTERING INTO IT. PLEASE READ THIS AGREEMENT CAREFULLY. IT
CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
EMPLOYEE
September 15, 1999 /s/ Xxxxxxx X. Xxxxxxxx
------------------------------- -------------------------------
Date Xxxxxxx X. Xxxxxxxx
LANDAMERICA FINANCIAL
GROUP, INC.
September 17, 1999 By: /s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------- ---------------------------
Date Xxxxxxx X. Xxxxxx, Xx.
Chairman and Chief Executive
Officer
Exhibit A
September 15, 1999
TO WHOM IT MAY CONCERN:
Xxxxxxx X. Xxxxxxxx served as the Executive Vice President and Chief
Financial Officer of LandAmerica Financial Group, Inc. for the period of
February 27, 1998 through September 15, 1999.
At the time of his departure, Xx. Xxxxxxxx was in good standing. During
his employment, Xx. Xxxxxxxx was a key member of executive management. His many
contributions included playing an important role in LandAmerica's highly
successful public offering, assisting in the efficient integration of
Commonwealth Land Title Insurance Company and Transnation Title Insurance
Company into the LandAmerica family of companies, and effectively dealing with
rating agencies to xxxxxx extremely favorable financial strength ratings for
LandAmerica's insurance companies.
Exhibit B
FOR IMMEDIATE RELEASE: CONTACT:
September 15, 1999 H. Xxxxxxxx Xxxxxx
Senior Vice President
Corporate Communications
804/267-8120
LANDAMERICA FINANCIAL GROUP, INC.
ELECTS NEW CHIEF FINANCIAL OFFICER
LandAmerica Financial Group, Inc. (NYSE-LFG) today announced the
election of G. Xxxxxxx Xxxxx to the position of Executive Vice President and
Chief Financial Officer of the Company effective immediately. Xx. Xxxxx replaces
Xxxxxxx X. Xxxxxxxx who has left the Company to pursue other interests. Xx.
Xxxxx had served as Executive Vice President - Information Technology of the
Company since February 27, 1998, and he was Vice President and Treasurer of the
Company from October 1991 to February 1998.
Xxxxxxx X. Xxxxxx, Xx., Chairman and Chief Executive Officer, said,
"Xxxx Xxxxxxxx has been a key member of executive management since joining us in
February 1998. His many contributions have included playing an important role in
our highly successful 1998 public offering, assisting in the efficient
integration of Commonwealth Land Title Insurance Company and Transnation Title
Insurance Company into the LandAmerica family of companies, and effectively
dealing with rating agencies to xxxxxx favorable financial strength ratings for
our insurance companies. We wish him well in his future endeavors."
Xx. Xxxxxx also commented, "For many years Xxxx Xxxxx has played a
major role in several important areas, including the Company's business
planning, its public stock offerings and finance transactions, its development
of advanced information technology systems, and its growth through acquisitions
such as the 1998 acquisition of Commonwealth Land Title Insurance Company and
Transnation Title Insurance Company. With Bill's prior experience as the
Company's principal financial officer and the talented management team that we
have in place, we are confident in our ability to execute the Company's
financial and strategic objectives."
LandAmerica Financial Group, Inc. is a premier provider of title
insurance and a broad range of real estate-related services. LandAmerica,
through its subsidiaries Commonwealth Land Title Insurance Company, Lawyers
Title Insurance Corporation and Transnation Title Insurance Company, services
its residential and commercial customers with more than 600 offices throughout
the United States, Canada and the Caribbean.
The Company cautions readers that the statements contained herein
regarding the Company's future operations and business prospects are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based upon management's current knowledge and assumptions about
future events and involve risks and uncertainties that could cause actual
results to differ materially from anticipated results. For more details on
factors that could affect expectations, see the Company's Annual Report on Form
10-K for the year ended December 31, 1998, as filed with the Securities and
Exchange Commission.
