CHANGE OF CONTROL EMPLOYMENT AGREEMENT
Exhibit
10.1
AGREEMENT
by and between LandAmerica Financial Group, Inc., a Virginia corporation
(the
“Company”), and ____________ (the “Executive”), dated as of the ____ day of
__________________.
The
Board
of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company
will
have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable distraction
of
the Executive by virtue of the personal uncertainties and risks created by
a
pending or threatened Change of Control and to encourage the Executive’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company
to
enter into this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain
Definitions.
(a) “Board”
shall mean the Board of Directors of the Company. In the event the Company
is no
longer traded on an established securities market and any parent of the company
is publicly traded, Board shall mean the Board of Directors of the publicly
traded parent corporation.
(b) “Change
of Control Period” shall mean the period commencing on the date hereof and
ending on the date one year after the date hereof; provided, however, that
on
each annual anniversary of the date hereof (each annual anniversary shall
be
hereinafter referred to as the “Renewal Date”), unless previously terminated,
the Change of Control Period shall automatically extended so as to terminate
one
year from such Renewal Date, unless at least 60 days prior to the Renewal
Date
the Company shall give notice to the Executive that the Change of Control
Period
shall not be so extended.
(c) “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(d)
“Effective
Date” shall mean the first date during the Change of Control Period (as defined
in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs.
Anything in this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Executive’s employment with the Company is terminated
prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment (i) was
at the
request of a third party who has taken steps reasonably calculated to effect
a
Change of Control or (ii) otherwise arose in connection with or anticipation
of
a Change of Control, then for all purposes of this Agreement the “Effective
Date” shall mean the date immediately prior to the date of such termination of
employment.
(e) “Subsidiary”
shall mean any corporation that is directly, or indirectly though one or
more
intermediaries, controlled by the Company.
2. Change
of Control.
For the
purpose of this Agreement, a “Change of Control” shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the
then outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any
corporation controlled by the Company or (iv) any acquisition by any corporation
pursuant to a transaction, which complies with clauses (i), (ii) and (iii)
of
subsection (c) of this Section 2; or
(b) Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”), cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising
the
Incumbent Board shall be considered as though such individual were a member
of
the Incumbent Board, but excluding, for this purpose, any such individual
whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other
actual or threatened solicitation of proxies or con-sents by or on behalf
of a
Person other than the Board; or
(c) Consummation
of a reorganization, merger or consolidation or sale or other disposition
of all
or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election
of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation a corporation which as a result
of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of
the
then outstanding voting securities of such corporation except to the extent
that
such ownership existed prior to the Business Combination and (iii) at least
a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the
time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
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(d) Approval
by the shareholders of the Company of a complete liquidation or dissolution
of
the Company.
Notwithstanding
the foregoing, for purposes of subsection (a) of this Section 2, a Change
of
Control shall not be deemed to have taken place if, as a result of an
acquisition by the Company which reduces the Outstanding Company Common Stock
or
the Outstanding Company Voting Securities, the beneficial ownership of a
Person
increases to 20% or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities; provided, however, that if a Person
shall
become the beneficial owner of 20% or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities by reason of share purchases
by the Company and, after such share purchases by the Company, such Person
becomes the beneficial owner of any additional shares of the Outstanding
Company
Common Stock or the Outstanding Company Voting Stock, for purposes of subsection
(a) of this Section 2, a Change of Control shall be deemed to have taken
place.
3. Employment
Period.
If the
Executive is employed by the Company and/or a Subsidiary on the Effective
Date,
the Company hereby agrees to continue to employ and to cause such Subsidiary
to
continue to employ the Executive, and the Executive hereby agrees to remain
in
the employ of the Company and/or such Subsidiary, subject to the terms and
conditions of this Agreement, for the period commencing on the Effective
Date
and ending on the third anniversary of such date (the “Employment Period”). For
purposes of this Agreement, unless expressly limited to LandAmerica Financial
Group, Inc., “Company” hereinafter shall mean each of LandAmerica Financial
Group, Inc. and/or any of its Subsidiaries or affiliated companies that employ
the Executive. As used in this Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common control with
the
Company.
4. Terms
of Employment.
(a)
Position
and Duties.
(i) During
the Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall
be at least commensurate in all material respects with the most significant
of
those held, exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date and (B) the Executive’s services shall
be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 35 miles
from
such location.
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(ii) During
the Employment Period, and excluding any periods of paid time off to which
the
Executive is entitled, the Executive agrees to devote reasonable attention
and
time during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to
the
Executive hereunder, to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive to (A) serve
on
corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (C)
manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executive’s responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and
agreed
that to the extent that any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such activities (or
the
conduct of activities similar in nature and scope thereto) subsequent to
the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Executive’s responsibilities to the Company.
(b) Compensation.
(i) Base
Salary.
During
the Employment Period, the Executive shall receive an annual base salary
(“Annual Base Salary”), which shall be paid at a monthly rate, at least equal to
12 times the highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the Company
in
respect of the 12-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be reviewed no more than 12 months after the last salary increase awarded
to the Executive prior to the Effective Date and thereafter at least annually.
Any increase in Annual Base Salary shall not serve to limit or reduce any
other
obligation to the Executive under this Agreement. Annual Base Salary shall
not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased.
(ii) Annual
Bonus.
In
addition to Annual Base Salary, the Executive shall be awarded, for each
fiscal
year ending during the Employment Period, an annual bonus (the “Annual Bonus”)
in cash at least equal to the Executive’s highest bonus under annual incentive
plans of the Company or any comparable bonus under any predecessor or successor
plan, for the last three full fiscal years prior to the Effective Date
(annualized in the event that the Executive was not employed by the Company
for
the whole of such fiscal year) (the “Recent Annual Bonus”). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal
year
next following the fiscal year for which the Annual Bonus is awarded, unless
the
Executive shall elect to defer the receipt of such Annual Bonus.
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(iii) Incentive,
Savings and Retirement Plans.
During
the Employment Period, the Executive shall be entitled to participate in
all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company, but in no event
shall such plans, practices, policies and programs provide the Executive
with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities,
in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the
120-day period immediately preceding the Effective Date or if more favorable
to
the Executive, those provided generally at any time after the Effective Date
to
other peer executives of the Company.
(iv) Welfare
Benefit Plans.
During
the Employment Period, the Executive and/or the Executive’s family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by
the
Company (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other
peer
executives of the Company, but in no event shall such plans, practices, policies
and programs provide the Executive with benefits which are less favorable,
in
the aggregate, than the most favorable of such plans, practices, policies
and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
those provided generally at any time after the Effective Date to other peer
executives of the Company.
(v) Expenses.
During
the Employment Period the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of
the
Company in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to other peer
executives of the Company.
(vi) Fringe
Benefits.
During
the Employment Period, the Executive shall be entitled to fringe benefits,
including, without limitation, tax and financial planning services, payment
of
club dues, and, if applicable, use of an automobile and payment of related
expenses, in accordance with the most favorable plans, practices, programs
and
policies of the Company and its affiliated companies in effect for the Executive
at any time during the 120-day period immediately preceding the Effective
Date
or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company.
(vii) Office
and Support Staff.
During
the Employment Period, the Executive shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most favorable of
the
foregoing provided to the Executive by the Company and its affiliated companies
at any time during the 120-day period immediately preceding the Effective
Date
or, if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company.
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(viii) Paid
Time Off.
During
the Employment Period, the Executive shall be entitled to paid time off in
accordance with the most favorable plans, policies, programs and practices
of
the Company and its affiliated companies as in effect for the Executive at
any
time during the 120-day period immediately preceding the Effective Date or,
if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company.
5. Termination
of Employment.
(a) Death
or Disability.
The
Executive’s employment shall terminate automatically upon the Executive’s death
during the Employment Period. If the Company determines in good faith that
the
Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall mean that the Executive is
unable, by reason of physical or mental incapacity, to perform Executive’s
duties to the Company on a full-time basis for a period longer than 3
consecutive months or more than 6 months in any consecutive 12-month period.
The
existence of a Disability shall be determined by the Board of Directors of
the
Company, based upon due consideration of the opinion of the Executive’s personal
physician or physicians and of the opinion of any physician or physicians
selected by the Board of Directors for these purposes. If the Executive’s
personal physician disagrees with the physician retained by the Company,
the
Board of Directors will retain an impartial physician selected by the
Executive’s personal physician and the Company’s physician and the opinion of
the impartial physician shall be binding upon the Company and the Executive.
The
Executive shall submit to examination by any physician or physicians so selected
by the Board of Directors, and shall otherwise cooperate with the Board of
Directors in making the determination contemplated hereunder, such cooperation
to include, without limitation, consenting to the release of information
by any
such physician(s) to the Board of Directors.
(b) Cause.
The
Company may terminate the Executive’s employment during the Employment Period
for Cause. For purposes of this Agreement, “Cause” shall mean:
(i) the
willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board or the
Chief
Executive Officer of the Company which specifically identifies the manner
in
which the Board or Chief Executive Officer believes that the Executive has
not
substantially performed the Executive’s duties, or
(ii) the
willful engaging by the Executive in illegal conduct or gross misconduct,
which
is materially and demonstrably injurious to the Company.
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For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly
adopted by the Board or upon the instructions of the Chief Executive Officer
or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done,
by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless
and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held
for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the
Board), finding that, in the good faith opinion of the Board, the Executive
is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good
Reason; Window Period.
The
Executive’s employment may be terminated (i) during the Employment Period by the
Executive for Good Reason or (ii) during the Window Period by Executive without
any reason. For purposes of this Agreement, “Window Period” shall mean the
30-day period immediately following the first anniversary of the Effective
Date.
For purposes of this Agreement, “Good Reason” shall mean:
(i) the
assignment to the Executive of any duties inconsistent in any respect with
the
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
4(a) of this Agreement, or any other action by the Company, which results
in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken
in
bad faith and which is remedied by the Company promptly after receipt of
notice
thereof given by the Executive;
(ii) any
failure by the Company to comply with any of the provisions of Section 4(b)
of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly
after
receipt of notice thereof given by the Executive;
(iii) the
Company’s requiring the Executive to be based at any office or location other
than as provided in Section 4(a)(i)(B) hereof or the Company’s requiring the
Executive to travel on Company business to a substantially greater extent
than
required immediately prior to the Effective Date;
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(iv) any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement; or
(v) any
failure by the Company to comply with and satisfy Section 11(c) of this
Agreement.
For
purposes of this Section 5(c), any good faith determina-tion of “Good Reason”
made by the Executive shall be conclusive.
Executive’s
mental or physical incapacity following the occurrence of an event described
in
clauses (i) through (v) shall not affect Executive’s ability to terminate for
Good Reason and Executive’s eligibility for retirement shall not be a basis to
deny benefits payable to Executive under this Agreement following his
resignation for Good Reason if Executive otherwise has Good Reason to
resign.
(d) Notice
of Termination.
Any
termination by the Company for Cause, or by the Executive during the Window
Period or for Good Reason, shall be communicated by Notice of Termination to
the
other party hereto given in accordance with Section 12(b) of this Agreement.
For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement
relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts
and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after
the
giving of such notice). The failure by the Executive or the Company to set
forth
in the Notice of Termination any fact or circumstance which contributes to
a
showing of Good Reason or Cause shall not waive any right of the Executive
or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.
(e) Date
of Termination.
“Date
of Termination” means (i) if the Executive’s employment is terminated by the
Company for Cause, or by the Executive during the Window Period or for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive
of
such termination and (iii) if the Executive’s employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death
of
the Executive or the Disability Effective Date, as the case may be.
6. Obligations
of the Company upon Termination.
(a) During
the Window Period.
If,
during the Employment Period, the Executive shall terminate employment without
any reason during the Window Period:
(i) the
Company shall pay to the Executive in a lump sum in cash within 30 days after
the Date of Termination, except as provided in Section 6(f) of this Agreement
the aggregate of the following amounts:
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(A)
the sum
of (1) the Executive’s Annual Base Salary through the Date of Termination to the
extent not theretofore paid and (2) the product of (x) the higher of (I)
the
Recent Annual Bonus and (II) the Annual Bonus paid or payable, including
any
bonus or portion thereof which has been earned but deferred (and annualized
for
any fiscal year consisting of less than twelve full months or during which
the
Executive was employed for less than 12 full months), for the most recently
completed fiscal year during the Employment Period, if any (such higher amount
being referred to as the “Highest Annual Bonus”) and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through
the
Date of Termination, and the denominator of which is 365, in each case to
the
extent not theretofore paid (the sum of the amounts described in clauses
(1) and
(2) shall be hereinafter referred to as the “Accrued Obligations”);
and
(B) the
amount equal to the sum of (x) the Executive’s Annual Base Salary and (y) the
Highest Annual Bonus;
(ii) for
the
period from Executive’s Date of Termination through December 31 of the second
calendar year following the calendar year of Executive’s Date of Termination
after the Executive’s Date of Termination, the Company shall continue benefits
to the Executive and/or the Executive’s family at least equal to those which
would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iv) of this Agreement if
the
Executive’s employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other
peer executives of the Company and its affiliated companies and their families
at a cost to the Executive no greater than the cost the Executive would have
paid for such benefits if he had remained employed, provided, however, that
if
the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer provided
plan,
the medical and other welfare benefits described herein shall be secondary
to
those provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant
to such
plans, practices, programs and policies, the Executive shall be considered
to
have remained employed until 3 years after the Date of Termination and to
have
retired on the last day of such period; and
(iii) to
the
extent not theretofore paid or provided, the Company shall timely pay or
provide
to the Executive any other amounts or benefits required to be paid or provided
or which the Executive is eligible to receive under any plan, program, policy
or
practice or contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as the
“Other
Benefits”).
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(b) Good
Reason; Other Than for Cause, Death or Disability.
If,
during the Employment Period, the Company shall terminate the Executive’s
employment other than for Cause, Death or Disability or the Executive shall
terminate employment for Good Reason:
(i) the
Company shall pay to the Executive in a lump sum in cash within 30 days after
the Date of Termination, except as provided in Section 6(f) of this Agreement,
the aggregate of the following amounts:
(A) the
Accrued Obligations; and
(B) the
amount equal to the product of (1) [two or three times, per attached
Schedule],
and
(2)
the sum of (x) the Executive’s Annual Base Salary and (y) the Highest Annual
Bonus;
(ii) for
the
period from Executive’s Date of Termination through December 31 of the second
calendar year following the calendar year of Executive’s Date of Termination
after the Executive’s Date of Termination, the Company shall continue benefits
to the Executive and/or the Executive’s family at least equal to those which
would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iv) of this Agreement if
the
Executive’s employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other
peer executives of the Company and their families at a cost to the Executive
no
greater than the cost the Executive would have paid for such benefits if
he had
remained employed, provided, however, that if the Executive becomes reemployed
with another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such
other
plan during such applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the Executive
for
retiree benefits pursuant to such plans, practices, programs and policies,
the
Executive shall be considered to have remained employed until 3 years after
the
Date of Termination and to have retired on the last day of such
period;
(iii) the
Company shall, at its sole expense as incurred, provide the Executive with
outplacement services the scope and provider of which shall be selected by
the
Executive in his sole discretion; and
(iv) to
the
extent not theretofore paid or provided, the Company shall timely pay or
provide
to the Executive any other amounts or benefits required to be paid or provided
or which the Executive is eligible to receive under any plan, program, policy
or
practice or contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as the
“Other
Benefits”).
Executive’s
resignation for Good Reason shall not provide a basis for denying Executive
any
retirement or other benefits if he otherwise qualifies for such
benefits.
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(c) Death.
If the
Executive’s employment is terminated by reason of the Executive’s death during
the Employment Period, this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or provision
of
Other Benefits. Accrued Obligations shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 6(c) shall include, without limitation,
and
the Executive’s estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company
to the estates and beneficiaries of peer executives of the Company under
such
plans, programs, practices and policies relating to death benefits, if any,
as
in effect with respect to other peer executives and their beneficiaries at
any
time during the 120-day period immediately preceding the Effective Date or,
if
more favorable to the Executive’s estate and/or the Executive’s beneficiaries,
as in effect on the date of the Executive’s death with respect to other peer
executives of the Company and their beneficiaries.
(d) Disability.
If the
Executive’s employment is terminated by reason of the Executive’s Disability
during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued Obligations
and
the timely payment or provision of Other Benefits. Accrued Obligations shall
be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 6(d) shall include, and the Executive
shall
be entitled after the Disability Effective Date to receive, disability and
other
benefits at least equal to the most favorable of those generally provided
by the
Company to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as
in
effect generally with respect to other peer executives and their families
at any
time during the 120-day period immediately preceding the Effective Date or,
if
more favorable to the Executive and/or the Executive’s family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and their families. Any disability benefits for purposes of Code
Section
409A shall be available only for the period from Executive’s Date of Termination
through December 31 of the second calendar year following the calendar year
of
Executive’s Date of Termination.
(e) Cause;
Other than for Good Reason.
If the
Executive’s employment shall be terminated for Cause during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (x) Executive’s
Annual Base Salary through the Date of Termination, (y) the amount of any
compensation previously deferred by the Executive, and (z) Other Benefits,
in
each case to the extent theretofore unpaid. If the Executive voluntarily
terminates employment during the Employment Period, excluding a termination
for
Good Reason, this Agreement shall terminate without further obligations to
the
Executive, other than for Accrued Obligations and the timely payment or
provision of Other Benefits. In such case, all Accrued Obligations shall
be paid
to the Executive in a lump sum in cash within 30 days of the Date of
Termination.
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11
(f) Application
of Code Section 409A.
(i) Notwithstanding
any other provision in this Agreement, the Executive and the Company intend
for
this Agreement to comply with the provisions of Code Section 409A and any
Treasury Regulations issued thereunder. Each provision and term of this
Agreement should be interpreted accordingly. If any provision or term of
this
Agreement would be prohibited by or be inconsistent with Code Section 409A,
then
such provision shall be deemed to be conformed to comply with Code Section
409A
or, if such conformation is not possible, such provision shall be null and
void
to the extent, and only to the extent, required for this Agreement to be
in
compliance with Code Section 409A without effecting the remainder of this
Agreement.
(ii) To
the
extent required by Code Section 409A, in the event the Executive is a “key
employee” as provided in Code Section 409A(a)(2)(i) on the Date of Termination,
any amounts payable hereunder shall be paid no earlier than the first business
day after the six month anniversary of the Date of Termination. Whether the
Executive is a key employee and whether an amount payable to the Executive
hereunder is subject to Code Section 409A shall be determined by the Company.
7. Non-exclusivity
of Rights.
Nothing
in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may
have
under any contract or agreement with the Company. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any
plan,
policy, practice or program of or any contract or agreement with the Company
at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
8. Full
Settlement.
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
set-off, counterclaim, recoupment, defense or other claim, right or action
which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action
by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether
or
not the Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses
which
the Executive may reasonably incur as a result of any contest (regardless
of the
outcome thereof) by the Company, the Executive or others of the validity
or
enforceability of, or liability under, any provision of this Agreement or
any
guarantee of performance thereof (including as a result of any contest by
the
Executive about the amount of any payment pursuant to this Agreement), plus
in
each case interest on any delayed payment at the applicable Federal rate
provided for in Code Section 7872(f)(2)(A).
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12
9. Certain
Additional Payments by the Company.
(a) Anything
in this Agreement to the contrary notwithstanding and except as set forth
below,
in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 9) (a “Payment”) would be subject to the excise tax imposed
by Code Section 4999 or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment
(a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to
a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount that could be paid to the Executive such that the receipt of Payments
would not give rise to any Excise Tax (the “Reduced Amount”), then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate,
shall
be reduced to the Reduced Amount.
(b) Subject
to the provisions of Section 9(c), all determinations required to be made
under
this Section 9, including whether and when a Gross-Up Payment is required
and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by a nationally recognized
certified public accounting firm as may be designated by the Executive (the
“Accounting Firm”) which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such earlier time as
is
requested by the Company. In the event that the Accounting Firm is serving
as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm
shall
then be referred to as the Accounting Firm hereunder). All fees and expenses
of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 9, shall be paid by the Company to
the
Executive within 5 days of the receipt of the Accounting Firm’s determination.
Any determination by the Accounting Firm shall be binding upon the Company
and
the Executive. As a result of the uncertainty in the application of Code
Section
4999 at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9(c) and the Executive thereafter is required
to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the
Executive.
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13
(c) The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than 10 business days after the Executive is informed in writing
of
such claim and shall apprise the Company of the nature of such claim and
the
date on which such claim is requested to be paid. The Executive shall not
pay
such claim prior to the expiration of the 30-day period following the date
on
which it gives such notice to the Company (or such shorter period ending
on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such
period
that it desires to contest such claim, the Executive shall:
(i) give
the
Company any information reasonably requested by the Company relating to such
claim,
(ii) take
such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate
with the Company in good faith in order effectively to contest such claim,
and
(iv) permit
the Company to participate in any pro-ceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with
such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties
with
respect thereto) imposed as a result of such representation and payment of
costs
and expenses. Without limitation on the foregoing provisions of this Section
9(c), the Company shall control all proceedings taken in connection with
such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority
in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to
a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to
such
contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the
case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If,
after
the receipt by Executive of a Gross-up Payment, Executive becomes entitled
to
receive any refund with respect to the Excess Tax to which such Gross-up
Payment
relates, Executive shall promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto).
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14
10. Restrictive
Covenants.
(a) Confidential
Information.
The
Executive shall hold in a fiduciary capacity for the benefit of the Company
all
secret or confidential information, knowledge or data relating to the Company,
and their respective businesses, which shall have been obtained by the Executive
during the Executive’s employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement). After termination of the
Executive’s employment with the Company, the Executive shall not, without the
prior written consent of the Company or 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 and those designated by it.
(b) Nonraiding
of Employees.
The
Executive covenants that during Executive’s employment hereunder and for a
period of 2 years immediately following the date of termination of Executive’s
employment, but only if said termination is voluntary or for Cause, Executive
will not solicit, induce or encourage for the purposes of employing or offering
employment to any individuals who, as of the date of termination of the
Executive’s employment, are employees of the Company, nor will Executive
directly or indirectly solicit, induce or encourage any of the Company’s
employees to seek employment with any other business, whether or not the
Executive is then affiliated with such business.
In
no
event shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise payable
to
the Executive under this Agreement.
11. Successors.
(a)
This
Agreement is personal to the Executive and without the prior written consent
of
the Company shall not be assignable by the Executive otherwise than by will
or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns.
(c) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform it if no such succession had taken place.
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15
12. Miscellaneous.
(a) This
Agreement shall be governed by and construed in accordance with the laws
of the
Commonwealth of Virginia without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof and
shall
have no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All
notices and other communications hereunder shall be in writing and shall
be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed, if to the Executive,
to
the Executive’s address, or record with the Company and, if to the Company, to
LandAmerica Financial Group, Inc., 0000 Xxx Xxxx, Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer, or to such other address as either party
shall have furnished to the other in writing in accordance herewith. Notice
and
communications shall be effective when actually received by the
addressee.
(c) The
invalidity or unenforceability of any pro-vision of this Agreement shall
not
affect the validity or enforceability of any other provision of this
Agreement.
(d) The
Company may withhold from any amounts payable under this Agreement such federal,
state, local or foreign taxes as shall be required to be withheld pursuant
to
any applicable law or regulation.
(e) The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive
or
the Company may have hereunder, including, without limitation, the right
of the
Executive to terminate employment for Good Reason pursuant to Sections
5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this
Agreement.
(f) The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company,
the
employment of the Executive by the Company is “at will” and, subject to Section
1(a) hereof, prior to the Effective Date, the Executive’s employment and/or this
Agreement may be terminated by either the Executive or the Company at any
time
prior to the Effective Date, in which case the Executive shall have no further
rights under this Agreement. From and after the Effective Date, this Agreement
shall become effective, and shall replace and supersede any existing Employment
Agreement between the Company and the Executive, to the extent its terms
are
more advantageous to the Executive, except that any covenants contained in
any
prior agreement between Executive and the Company restricting Executive’s
ability to compete with or to solicit the employees, clients or customers
of the
Company, or to use or disclose any Confidential Information (as that term
is
defined in any such agreement), shall remain in full force and
effect.
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16
(g) The
Executive hereby acknowledges and agrees that this Agreement is intended
to
replace and supersede the Change of Control Employment Agreement between
Executive and the Company dated _______________, _____ and that such former
agreement is terminated as of the date hereof.
IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of
the
day and year first above written.
LANDAMERICA
FINANCIAL GROUP, INC.
By: _____________________________________
Xxxxxxxx
X. Xxxxxxxx, Xx., President and
Chief
Executive Officer
__________________________________________
[Name
of
Executive]
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17
Schedule
to Change of Control Employment Agreements
Applicable
Multiples
|
Executive
Officer
|
Applicable
Multiple
|
|
Xxxxxxxx
X. Xxxxxxxx, Xx.
Principal
Executive Officer
|
3
|
|
G.
Xxxxxxx Xxxxx
Principal
Financial Officer
|
3
|
|
Xxxxxxx
Xxxxxxxxx
Named
Executive Officer
|
2
|
|
Xxxxxxx
Xxxx
Named
Executive Officer
|
2
|
|
Xxxxxxx
X. Xxxxx
Named
Executive Officer
|
2
|
Page
18
