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Exhibit 10.1.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of October
1, 1998 (the "Effective Date"), by and between FIDELITY NATIONAL FINANCIAL,
INC., a Delaware corporation (the "Company"), and XXXX X. XXXXXXX (the
"Employee"), and supersedes any and all prior employment agreements or
understandings entered into between the parties and/or Alamo Title Holding
Company, a Texas corporation ("Alamo"). In consideration of the mutual covenants
and agreements set forth herein, the parties agree as follows:
1. Employment and Duties. Subject to the terms and conditions of this
Agreement, the Company employs the Employee to serve in an executive and
managerial capacity as Executive Vice President -- Financial Operations of the
Company (or such other title as the Company may designate), and the Employee
accepts such employment and agrees to perform such reasonable responsibilities
and duties commensurate with the aforesaid positions as directed by the
Company's Board of Directors, its Chief Executive Officer or its President, or
as set forth in the Articles of Incorporation and the Bylaws of the Company.
2. Term. The term of this Agreement shall commence on the Effective Date
and shall continue for a period of three (3) years ending September 30, 2001,
subject to prior termination as set forth in Section 7, below (the "Term"). The
Term may be extended at any time upon mutual agreement of the parties.
3. Salary. During the Term, the Company shall pay the Employee a minimum
base annual salary, before deducting all applicable withholdings, of $225,000
per year, payable at the times and in the manner dictated by the Company's
standard payroll policies. Such minimum base annual salary may be periodically
reviewed and increased at the discretion of the Chief Executive Officer and/or
the Compensation Committee of the Board of Directors to reflect, among other
matters, cost of living increases and performance results.
4. Other Compensation and Fringe Benefits. In addition to any executive
bonus, pension, deferred compensation and stock option plans which the Company
may from time to time make available to the Employee upon mutual agreement, the
Employee shall be entitled to the following:
(a) The standard Company benefits enjoyed by the Company's other
top executives;
(b) Payment by the Company of the Employee's initiation and
membership dues in a social and/or recreational club as deemed necessary and
appropriate by the Employee (and pre-
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Xxxxxxx Employment Agreement (page 2)
approved by the Company) to maintain various business relationships on behalf of
the Company; provided, however, that the Company shall not be obligated to pay
for any of the Employee's personal purchases and expenses at such club;
(c) Provision by the Company during the Term and any extensions
thereof to the Employee and his dependents of the medical and other insurance
coverage provided by the Company to its other executives;
(d) Provision by the Company of supplemental disability insurance
sufficient to provide two-thirds of the Employee's pre-disability minimum base
annual salary;
(e) An annual bonus equal to $9,000 for each full percentage
point the Company's return on equity exceeds 10%. Return on equity shall be
determined by dividing net income before extraordinary items by stockholders'
equity as of the beginning of the year being measured. Any fractional percentage
point increase shall be applied to $9,000 to determine the amount of such bonus
(for example, an 11.5% return on equity would result in a $13,500 bonus). The
annual bonus shall be paid no later than March 31st of the following year and is
fully vested in the event of a non-renewal of this Agreement by the Company.
Subject to Section 7 below, the annual bonus shall be pro-rated for any partial
employment year (for example, the Employee shall only be entitled to 1/4 of the
1998 annual bonus he would otherwise have received if he had been employed by
the Company for the entire calendar year 1998). The Employee shall also be
entitled to receive his pro-rated bonus for the period commencing January 1,
1998 through September 30, 1998, under the terms and conditions of his prior
Employment Agreement with Alamo. In addition to the above, the Board of
Directors of the Company may, in its sole discretion, grant to the Employee an
annual merit bonus based upon the Employee's performance during the preceding
year and any other factors the Board deems relevant;
(f) A grant under the Company's Executive Stock Option Plan of
options to purchase 30,000 shares of the Company's Common Stock. The exercise
price for such options shall be the closing price on the Effective Date of the
Company's Common Stock traded on the New York Stock Exchange, as reported by the
Wall Street Journal. Such options shall vest as follows: (i) 10,000 shares on
the Effective Date; (ii) 10,000 shares on the first anniversary of the Effective
Date; and (iii) 10,000 shares on the second anniversary of the Effective Date;
(g) Payment by the Company of the expenses of moving the
Employee's personal belongings from San Antonio, Texas to Santa Barbara,
California, charged by a moving company selected by the Company; and
(h) Reimbursement by the Company of the Employee's (i) rental
payments on his apartment in San Antonio, Texas, for the months of October,
November, and December, 1998; and (ii) reasonable personal travel expenses for a
reasonable number of trips back and forth between
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Santa Barbara, California and San Antonio, Texas during the months of October,
November and December, 1998; provided, however, that the Employee shall use good
faith efforts to schedule such personal trips at such times as the Company's
corporate aircraft are traveling to and from Santa Xxxxxxx and San Antonio, and
to utilize such aircraft at such times.
The Company shall deduct from all compensation payable under this Agreement to
the Employee any taxes or withholdings the Company is required to deduct
pursuant to state and federal laws or by mutual agreement between the parties.
5. Vacation. For and during each year of the Term and any extensions
thereof, the Employee shall be entitled to reasonable paid vacation periods
consistent with his positions with the Company and in accordance with the
Company's standard policies, or as the Company's Board of Directors may approve.
In addition, the Employee shall be entitled to such holidays consistent with the
Company's standard policies or as the Company's Board of Directors may approve.
6. Expense Reimbursement. In addition to the compensation and benefits
provided herein, the Company shall, upon receipt of appropriate documentation,
reimburse the Employee each month for his reasonable travel, lodging,
entertainment, promotion and other ordinary and necessary business expenses.
7. Termination.
(a) For Cause. The Company may terminate this Agreement
immediately for cause upon written notice to the Employee, in which event the
Company shall be obligated to pay the Employee that portion of the minimum base
annual salary due him through the date of termination. Cause shall be limited to
(i) the failure to perform duties consistent with a commercially reasonable
standard of care; (ii) the willful neglect of duties; or (iii) criminal or other
illegal activities as determined by a court of competent jurisdiction.
(b) Without Cause. Either party may terminate this Agreement
immediately without cause by giving written notice to the other. If the Company
terminates under this Section 7(b), then it shall continue to pay to the
Employee an amount equal to the product of (i) the Employee's minimum annual
base salary in effect as of the date of termination, plus the total annual bonus
paid or payable to the Employee for the most recently ended calendar year,
multiplied by (ii) the number of years (including partial years) remaining in
the Term. Such payment to be made in a lump sum on or before the fifth day
following the date of termination, or as otherwise directed by the Employee. In
addition, the Company shall maintain in full force and effect for the continued
benefit of the Employee for the number of years (including partial years)
remaining in the Term, all employee benefit plans and programs in which the
Employee was entitled to participate immediately prior to the date of
termination, provided that the Employee's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that the Employee's
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participation in any such plan or program is prohibited, the Company shall, at
its expense, arrange to provide the Employee with benefits substantially similar
to those which the Employee would otherwise have been entitled to receive under
such plans and programs from which his continued participation is prohibited. If
the Employee terminates under this Section 7(b), then the Company shall be
obligated to pay the Employee the minimum annual base salary due him through the
date of termination.
(c) Disability. If the Employee fails to perform his duties
hereunder on account of illness or other incapacity for a period of six
consecutive months, then the Company shall have the right upon written notice to
the Employee to terminate this Agreement without further obligation by paying
the Employee the minimum base annual salary, without offset, for the remainder
of the Term in a lump sum or as otherwise directed by the Employee.
(d) Death. If the Employee dies during the Term, then this
Agreement shall terminate immediately and the Employee's legal representatives
shall be entitled to receive the minimum annual base salary for the remainder of
the Term in a lump sum or as otherwise directed by the Employee's legal
representative.
(e) Effect of Termination. Termination for any reason or for no
reason shall not constitute a waiver of the Company's rights under this
Agreement nor a release of the Employee from any obligation hereunder except his
obligation to perform his day-to-day duties as an employee.
8. Severance payment.
(a) The Employee may terminate his employment hereunder for "Good
Reason,"which for purposes of this Agreement shall mean a "change in control of
the Company." A "change in control of the Company" shall, for purposes of this
Agreement, be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation, or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation immediately
after the merger, or (y) any sale, lease exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, or (ii) the stockholders of the Company approve
any plan or proposal for the liquidation or dissolution of the Company, or (iii)
any "person" (such as that term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")), other than the Company or
any "person" who, on the date hereof, is a director or officer of the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities, or (iv)
during any period of two (2) consecutive years during the Term or any extensions
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thereof, individuals, who, at the beginning of such period, constitute the Board
of Directors, cease for any reason to constitute at least a majority thereof,
unless the election of each director who was not a director at the beginning of
such period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the period. The Employee may only terminate this Agreement due to a change in
control of the Company during the period commencing 60 days and expiring 365
days after such change in control.
(b) If the Employee terminates his employment for Good Reason,
or, if after a change in control of the Company, the Company shall terminate the
Employee's employment in breach of this Agreement or pursuant to Section 7(b),
then:
(i) the Company shall pay the Employee his minimum base
annual salary due him through the date of termination:
(ii) in lieu of any further salary and bonus payments or
other payments due to the Employee for periods subsequent to the date of
termination, the Company shall pay, as severance to the Employee, an amount
equal to the product of (A) the Employee's minimum base annual salary in effect
as of the date of termination plus the total bonus paid or payable to the
employee for the most recently ended calendar year, multiplied by (B) the number
2, such payment to be made in a lump sum on or before the fifth day following
the date of termination; and
(iii) the Company shall maintain in full force and effect,
for the continued benefit of the Employee for the number of years (including
partial years) remaining in the Term, all employee benefit plans and programs in
which the Employee was entitled to participate immediately prior to the date of
termination, provided that the Employee's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that the Employee's participation in any such plan or program is prohibited, the
Company shall, at it's expense, arrange to provide the Employee with benefits
substantially similar to those which the Employee would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is prohibited.
(c) The Employee shall not be required to mitigate the amount of
any payment provided for in this Section 8 or Section 7(b), above, by seeking
other employment or otherwise, nor shall any compensation or other payments
received by the Employee after the date of termination reduce any payments due
under this Section 8 or Section 7(b), above.
(d) Notwithstanding anything to the contrary herein, if any
payment pursuant to this Section 8 would be a "parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986, as amended), such payment
shall be limited to the largest portion of such payment as can be paid without
being deemed a "parachute payment."
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9. Non-Delegation of Employee's Rights. The obligations, rights and
benefits of the Employee hereunder are personal and may not be delegated,
assigned or transferred in any manner whatsoever, nor are such obligations,
rights or benefits subject to involuntary alienation, assignment or transfer.
10. Confidential Information. The Employee acknowledges that in his
capacity as an employee of the Company he will occupy a position of trust and
confidence and he further acknowledges that he will have access to and learn
substantial information about the Company and its operations that is
confidential or not generally known in the industry including, without
limitation, information that relates to purchasing, sales, customers, marketing,
and the Company's financial position and financing arrangements. The Employee
agrees that all such information is proprietary or confidential, or constitutes
trade secrets and is the sole property of the Company. The Employee will keep
confidential, and will not reproduce, copy or disclose to any other person or
firm, any such information or any documents or information relating to the
Company's methods, processes, customers, accounts, analyses, systems, charts,
programs, procedures, correspondence or records, or any other documents used or
owned by the Company, nor will the Employee advise, discuss with or in any way
assist any other person, firm or entity in obtaining or learning about any of
the items described in this Section 10. Accordingly, the Employee agrees that
during the Term and at all times thereafter he will not disclose, or permit or
encourage anyone else to disclose, any such information, nor will he utilize any
such information, either alone or with others, outside the scope of his duties
and responsibilities with the Company.
11. Non-Competition During Employment Term. The Employee agrees that,
during the Term and any extensions thereof, he will devote substantially all his
business time and effort, and give undivided loyalty, to the Company. He will
not engage in any way whatsoever, directly or indirectly, in any business that
is competitive with the Company or its affiliates, nor solicit, or in any other
manner work for or assist any business which is competitive with the Company or
its affiliates. In addition, during the Term and any extensions thereof, the
Employee will undertake no planning for or organization of any business activity
competitive with the work he performs as an employee of the Company, and the
Employee will not combine or conspire with any other employee of the Company or
any other person for the purpose of organizing any such competitive business
activity.
12. Non-Competition After Employment Term. The parties acknowledge that
the Employee will acquire substantial knowledge and information concerning the
business of the Company and its affiliates as a result of his employment. The
parties further acknowledge that the scope of business in which the Company is
engaged as of the Effective Date is national and very competitive and one in
which few companies can successfully compete. Competition by the Employee in
that business after this Agreement is terminated would severely injure the
Company. Accordingly, for a period of two years after this Agreement is
terminated or the Employee leaves the employment of the Company for any reason
whatsoever, except as otherwise stated hereinbelow,
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the Employee agrees (i) not to become an employee, consultant, advisor,
principal, partner or substantial shareholder of any firm or business that in
any way competes with the Company or its affiliates in any of their
presently-existing or then-existing products and markets; and (ii) not to
solicit any person or business that was at the time of such termination and
remains a customer or prospective customer, or an employee of the Company or any
of its affiliates. Notwithstanding any of the foregoing provisions to the
contrary, the Employee shall not be subject to the restrictions set forth in
this Section 12 under the following circumstances:
(a) If the Employee's employment with the Company is terminated
by the Company without cause;
(b) If the Employee's employment with the Company is terminated
as a result of the Company's unwillingness to extend the Term of this Agreement;
or
(c) If the Employee leaves the employment of the Company for Good
Reason pursuant to Section 8, above.
13. Return of Company Documents. Upon termination of this Agreement,
Employee shall return immediately to the Company all records and documents of or
pertaining to the Company and shall not make or retain any copy or extract of
any such record or document.
14. Location. Prior to October 1, 1998, the Employee shall move to Santa
Xxxxxxx County, California, to perform his duties hereunder. The Employee shall
not be required to move from Santa Xxxxxxx County, California, to perform his
duties hereunder during the Term without his written consent.
15. Improvements and Inventions. Any and all improvements or inventions
which the Employee may conceive, make or participate in during the period of his
employment shall be the sole and exclusive property of the Company. The Employee
will, whenever requested by the Company, execute and deliver any and all
documents which the Company shall deem appropriate in order to apply for and
obtain patents for improvements or inventions or in order to assign and convey
to the Company the sole and exclusive right, title and interest in and to such
improvements, inventions, patents or applications.
16. Actions. The parties agree and acknowledge that the rights conveyed
by this Agreement are of a unique and special nature and that the Company will
not have an adequate remedy at law in the event of a failure by the Employee to
abide by its terms and conditions nor will money damages adequately compensate
for such injury. It is therefore agreed between the parties that, in the event
of a breach by the Employee of any of his obligations contained in this
Agreement, the Company shall have the right, among other rights, to damages
sustained thereby and to obtain an injunction or decree of specific performance
from any court of competent jurisdiction to restrain
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or compel the Employee to perform as agreed herein. The Employee agrees that
this Section 16 shall survive the termination of his employment and he shall be
bound by its terms at all time subsequent to the termination of his employment
for so long a period as Company continues to conduct the same business or
businesses as conducted during the Term or any extensions thereof. Nothing
herein contained shall in any way limit or exclude any other right granted by
law or equity to the Company.
17. Amendment. This Agreement contains, and its terms constitute, the
entire agreement of the parties, and it may be amended only by a written
document signed by both parties to this Agreement.
18. Governing Law. California law shall govern the construction and
enforcement of this Agreement and the parties agree that any litigation
pertaining to this Agreement shall be adjudicated in courts located in
California.
19. Attorneys' Fees. If any party finds it necessary to employ legal
counsel or to bring an action at law or other proceedings against the other
party to enforce any of the terms hereof, the party prevailing in any such
action or other proceeding shall be paid by the other party its reasonable
attorneys' fees as well as court costs, all as determined by the court and not a
jury.
20. Severability. If any section, subsection or provision hereof is
found for any reason whatsoever, to be invalid or inoperative, that section,
subsection or provision shall be deemed severable and shall not affect the force
and validity of any other provision of this Agreement. If any covenant herein is
determined by a court to be overly broad thereby making the covenant
unenforceable, the parties agree and it is their desire that such court shall
substitute a reasonable judicially enforceable limitation in place of the
offensive part of the covenant and that as so modified the covenant shall be as
fully enforceable as if set forth herein by the parties themselves in the
modified form. The covenants of the Employee in this Agreement shall each be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of the Employee against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants in this Agreement.
21. Notices. Any notice, request, or instruction to be given hereunder
shall be in writing and shall be deemed given when personally delivered or three
(3) days after being sent by United States certified mail, postage prepaid, with
return receipt requested, to the parties at their respective addresses set for
the below:
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To the Company:
Fidelity National Financial, Inc.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, President
To the Employee:
Xxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx
22. Waiver of Breach. The waiver by any party of any provisions of this
Agreement shall not operate or be construed as a waiver of any prior or
subsequent breach by the other party.
IN WITNESS WHEREOF the parties have executed this Agreement to be
effective as of the date first set forth above.
FIDELITY NATIONAL FINANCIAL, INC.
By: Xxxxxxx X. Xxxxx, XX
Its: Chairman and Chief Executive
Officer
XXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxxx
