Exhibit 10.26
VOTING AND STANDSTILL AGREEMENT
THIS VOTING AND STANDSTILL AGREEMENT (the "Agreement"), dated as of
February 27, 1998, is made between LANDAMERICA FINANCIAL GROUP, INC. (formerly
known as Lawyers Title Corporation), a Virginia corporation ("LandAmerica"),
RELIANCE INSURANCE COMPANY, a Pennsylvania corporation ("RIC"), and RELIANCE
GROUP HOLDINGS, INC., a Delaware corporation ("Reliance").
W I T N E S S E T H:
WHEREAS, Lawyers Title Corporation, Lawyers Title Insurance
Corporation, a Virginia corporation, RIC and Reliance entered into a Stock
Purchase Agreement dated August 20, 1997, as amended and restated by an Amended
and Restated Stock Purchase Agreement dated December 11, 1997 (the "Stock
Purchase Agreement"), under which Lawyers Title Corporation agreed to acquire
from RIC all of the issued and outstanding shares of the capital stock of
Commonwealth Land Title Insurance Company, a Pennsylvania corporation
("Commonwealth"), and of Transnation Title Insurance Company, an Arizona
corporation; and
WHEREAS, on February 27, 1998, Lawyers Title Corporation changed its
name to "LandAmerica Financial Group, Inc."; and
WHEREAS, pursuant to the Stock Purchase Agreement, RIC has acquired (i)
4,039,473 shares of LandAmerica's Common Stock, without par value, and (ii)
2,200,000 shares of LandAmerica's 7% Series B Cumulative Convertible Preferred
Stock, without par value, which shares of Series B Preferred Stock are initially
convertible into 4,824,561 shares of Common Stock pursuant to the terms of the
Series B Preferred Stock, and, as a result, beneficially owns as of the date
hereof approximately 44.6% of the issued and outstanding shares of Lawyers
Title's Common Stock on a fully diluted basis; and
WHEREAS, LandAmerica, RIC and Reliance desire to establish in this
Agreement certain conditions of RIC's and Reliance's relationship with
LandAmerica.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and in the Stock Purchase Agreement, LandAmerica, RIC and
Reliance hereby agree as follows:
ARTICLE I
Definitions; Representations and Warranties
Section 1.1. Definitions. Except as otherwise specified herein,
capitalized terms used in this Agreement shall have the respective meanings
assigned to such terms in the Stock Purchase Agreement. For purposes of this
Agreement, the following terms have the following meanings:
(a) "Adjusted Outstanding Shares" shall mean, at any time and with
respect to the determination of (i) the RIC Ownership Percentage as it relates
to RIC and its Affiliates, (ii) the Standstill Percentage as it relates to RIC
and its Affiliates, and (iii) any other percentage of the beneficial ownership
of Common Stock as it relates to a Person or Group, the total number of shares
of Common Stock then issued and outstanding together with the total number of
shares of Common Stock not then issued and outstanding that would be outstanding
if (x) all then existing shares of Series B Preferred Stock had been converted
and (y) all then existing warrants and options exercisable into shares of Common
Stock had been exercised (other than underwriters' overallotment options and
stock options granted under benefit plans of LandAmerica or any of its
Affiliates), but excluding any rights that may be exercisable under the Rights
Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement, and shall include, with
respect to a determination of the Affiliates of RIC, any Affiliate of Reliance.
(c) "Beneficial ownership," "beneficial owner" and "beneficially
own" shall have the meanings ascribed to such terms in Rule 13d-3 under the
Exchange Act as in effect on the date of this Agreement; provided that RIC and
each of its Affiliates and any Person or Group shall be deemed to be the
beneficial owners of any shares of Common Stock that RIC or such Affiliate,
Person and/or Group, as the case may be, has the right to acquire within one
year pursuant to any other agreement, arrangement or understanding or upon the
exercise of conversion or exchange rights, warrants, options or otherwise,
including but not limited to any right to acquire shares of Common Stock through
the conversion of the Series B Preferred Stock.
(d) "Common Stock" shall mean the Common Stock, without par value,
of LandAmerica.
(e) "Continuing Directors" shall mean the members of the Board of
Directors of LandAmerica immediately prior to the Closing Date and any future
members of the Board of Directors nominated by the Board of Directors; provided,
however, that no RIC Director shall constitute a Continuing Director or be
counted in determining the presence of a quorum of Continuing Directors.
(f) "Control" shall mean, with respect to a Person or a Group, (i)
beneficial ownership by such Person or Group of securities that entitle it to
exercise in the aggregate more than fifty percent (50%) of the votes in any
election of directors or other governing body of the entity in question; or (ii)
possession by such Person or Group of the power, directly or indirectly, (x) to
elect a majority of the board of directors (or equivalent governing body) of the
entity in question or (y) in case of a non-corporate entity, to manage or govern
the business, operations or investments of any such non-corporate entity.
(g) "Group" shall have the meaning comprehended by Section
13(d)(3) of the Exchange Act as in effect on the date of this Agreement.
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(h) "Person" shall have the meaning set forth in Section 3(a)(9)
of the Exchange Act as in effect on the date of this Agreement.
(i) "Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated February 27, 1998, executed by LandAmerica and RIC in
connection with the Stock Purchase Agreement.
(j) "RIC Director" shall mean a member of the Board of Directors
of LandAmerica who was designated by RIC for nomination pursuant to this
Agreement, but shall not include Xxxxxxx Xxxxxx, the Chief Executive Officer of
Commonwealth.
(k) "RIC Ownership Percentage" shall mean, at any time, the
percentage of the Adjusted Outstanding Shares that is beneficially owned in the
aggregate by RIC and its Affiliates.
(l) "RIC Shares" shall mean collectively (i) the 4,039,473 shares
of Common Stock, (ii) the 2,200,000 shares of Series B Preferred Stock, and
(iii) the shares of Common Stock into which the 2,200,000 shares of Series B
Preferred Stock are convertible pursuant to the terms of the Series B Preferred
Stock designation, that RIC acquired from LandAmerica pursuant to the Stock
Purchase Agreement, and such additional shares of Common Stock that LandAmerica
may issue with respect to such shares pursuant to any stock splits, stock
dividends, recapitalizations, restructurings, reclassifications or similar
transactions.
(m) "Rights Agreement" shall mean the Amended and Restated Rights
Agreement, dated as of August 20, 1997, between LandAmerica and Wachovia Bank,
N.A., as amended by the First Amendment to Amended and Restated Rights
Agreement, dated as of December 11, 1997, between LandAmerica and Wachovia Bank,
N.A., as such may be amended from time to time, or any successor shareholder
rights plan or agreement.
(n) "Series B Preferred Stock" shall mean the 7% Series B
Cumulative Convertible Preferred Stock, without par value, of LandAmerica.
(o) "Standstill Percentage" shall mean, at any time, not more than
44.6% of the Adjusted Outstanding Shares; provided that, in the event that the
RIC Ownership Percentage is less than 44.6%, then the Standstill Percentage
shall be automatically reduced to the RIC Ownership Percentage; provided further
that, following any such reduction in the Standstill Percentage, the Standstill
Percentage shall not thereafter be subject to any increase.
(p) "Transfer" shall mean sell, transfer, assign, pledge,
hypothecate, give away or in any manner dispose of any Common Stock or Series B
Preferred Stock.
Section 1.2. Representations and Warranties of RIC. RIC represents
and warrants to LandAmerica as follows:
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(a) RIC is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania.
(b) Except for the RIC Shares, neither RIC nor any of its
Affiliates beneficially owns any Common Stock or any options, warrants or rights
of any nature (including conversion and exchange rights) to acquire beneficial
ownership of any Common Stock.
(c) RIC has full legal right, power and authority to enter into
and perform this Agreement, and the execution and delivery of this Agreement by
RIC have been duly authorized by all necessary corporate action on behalf of
RIC. This Agreement is Enforceable against RIC.
(d) The execution, delivery and performance of this Agreement by
RIC does not and will not conflict with or constitute a violation of or default
under the Charter or Bylaws (or comparable documents) of RIC, or any statute,
law, regulation, order or decree applicable to RIC, or any contract, commitment,
agreement, arrangement or restriction of any kind to which RIC is a party or by
which RIC is bound, other than such violations as would not prevent or
materially delay the performance by RIC of its obligations hereunder or
otherwise subject LandAmerica to any claim or liability.
Section 1.3. Representations and Warranties of Reliance. Reliance
represents and warrants to LandAmerica as follows:
(a) Reliance is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) Reliance has full legal right, power and authority to enter
into and perform this Agreement, and the execution and delivery of this
Agreement by Reliance have been duly authorized by all necessary corporate
action on behalf of Reliance. This Agreement is Enforceable against Reliance.
(c) The execution, delivery and performance of this Agreement by
Reliance does not and will not conflict with or constitute a violation of or
default under the Charter or Bylaws (or comparable documents) of Reliance, or
any statute, law, regulation, order or decree applicable to Reliance, or any
contract, commitment, agreement, arrangement or restriction of any kind to which
Reliance is a party or by which Reliance is bound, other than such violations as
would not prevent or materially delay the performance by Reliance of its
obligations hereunder or otherwise subject LandAmerica to any claim or
liability.
Section 1.4. Representations and Warranties of LandAmerica.
LandAmerica hereby represents and warrants to RIC and Reliance as follows:
(a) LandAmerica is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Virginia.
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(b) LandAmerica has full legal right, power and authority to enter
into and perform this Agreement, and the execution and delivery of this
Agreement by LandAmerica have been duly authorized by all necessary corporate
action on behalf of LandAmerica. This Agreement is Enforceable against
LandAmerica.
(c) The execution, delivery and performance of this Agreement by
LandAmerica does not and will not conflict with or constitute a violation of or
default under the Charter or Bylaws of LandAmerica, or any statute, law,
regulation, order or decree applicable to LandAmerica, or any contract,
commitment, agreement, arrangement or restriction of any kind to which
LandAmerica is a party or by which LandAmerica is bound, other than such
violations as would not prevent or materially delay the performance by
LandAmerica of its obligations hereunder or otherwise subject RIC to any claim
or liability.
(d) LandAmerica has taken all actions necessary or appropriate so
that (i) the acquisition by RIC or any Affiliate of RIC of any RIC Shares and
(ii) the Transfer of any RIC Shares permitted by this Agreement will not cause
to be applicable to RIC or any Affiliate of RIC either (x) the Rights Agreement
or (y) any applicable "fair price," "moratorium," "control share acquisition" or
"affiliated transaction" statute, law, rule or regulation in effect on the date
hereof.
ARTICLE II
Board Representation
Section 2.1. Initial Board Representation. On the Closing Date,
LandAmerica will (a) take such action as may be necessary to increase the size
of the Board of Directors (the "Board of Directors") to fourteen (14), (b) upon
receipt from each RIC Director of an executed letter agreement regarding
resignation in the form attached to this Agreement as Exhibit A, fill three (3)
of the vacancies created thereby with RIC Directors in accordance with the
applicable provisions of the Charter and Bylaws of LandAmerica, and (c) fill the
fourth vacancy created thereby with Xxxxxxx Xxxxxx, the Chief Executive Officer
of Commonwealth, in accordance with the applicable provisions of LandAmerica's
Charter and Bylaws. Of the three (3) initial RIC Directors appointed to the
Board of Directors, LandAmerica will (i) appoint one to Class I (current term
expiring in 1998), one to Class II (current term expiring in 1999) and one to
Class III (current term expiring in 2000) and (ii) subject to the right of RIC
to designate new RIC Directors as substitutes for the initial RIC Directors,
recommend for election at the next annual meeting of LandAmerica's shareholders
following such appointments the initial Class I RIC Director for a three (3)
year term expiring in 2001 and each initial RIC Director in Class II and Class
III for the remainder of the term of his respective Class; provided that, if any
such RIC Director is not elected by the shareholders of LandAmerica, LandAmerica
shall have no further obligations under this Section 2.1 for the applicable
year; and provided further that LandAmerica shall be under no obligation to
appoint or recommend for election any RIC Director to the Board of Directors
unless and until it has received from such RIC Director an executed letter
agreement regarding resignation in the form attached to this Agreement as
Exhibit A. Xxxxxxx Xxxxxx, the Chief Executive Officer of Commonwealth, shall be
appointed, and recommended for election at the next annual meeting of
LandAmerica's shareholders following such appointment, to Class I.
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Any person designated by RIC to be a RIC Director who is not an executive
officer of either RIC or an Affiliate of RIC shall be acceptable to the
Continuing Directors, and, if found unacceptable by the Continuing Directors for
any reason whatsoever, (i) LandAmerica shall not be obligated to appoint or
recommend for election any such person to the Board of Directors and (ii) RIC
shall be entitled to designate a replacement that is acceptable to the
Continuing Directors.
Section 2.2. Continuing Board Representation.
(a) Until the earlier to occur of (i) the date that the RIC
Ownership Percentage is less than twenty percent (20%) or (ii) the expiration of
the Preferred Shares Sales Period (as defined in Section 4.1 below), LandAmerica
agrees that, except as otherwise agreed to by a majority of the RIC Directors,
LandAmerica will not take or recommend to its shareholders any action that would
cause the Board of Directors to consist of any number of directors other than
fourteen (14) directors divided into two (2) classes of five (5) directors each
and one class of four (4) directors. At the time that the RIC Ownership
Percentage is reduced to less than twenty percent (20%), LandAmerica may take
such action as may be necessary to reduce the Board of Directors to twelve (12)
directors, and at the time that the RIC Ownership Percentage is reduced to less
than fifteen percent (15%), LandAmerica may take such action as may be necessary
to reduce the Board of Directors to eleven (11) directors. Until the earlier to
occur of (i) the date on which there are no RIC Directors serving on the Board
of Directors pursuant to this Agreement or (ii) the expiration of the Preferred
Shares Sales Period (as defined in Section 4.1 below), LandAmerica agrees that
it will not take or recommend to its shareholders any action that would result
in any amendment to LandAmerica's Bylaws in effect on the date hereof that would
impose any qualifications on the eligibility of directors of LandAmerica to
serve on any committee of the Board of Directors, except as may be required by
the then-current rules and regulations of the New York Stock Exchange (the "NYSE
Rules"), the rules and regulations under the Internal Revenue Code of 1986, as
amended, relating to the qualification of employee stock benefit plans and the
deductibility of compensation paid to executive officers, the rules and
regulations under Section 16(b) of the Exchange Act, including Rule 16b-3
thereunder or any successor rule, and LandAmerica's Bylaws; and
(b) Subject to the provisions of Sections 2.2(a) and 2.6 hereof
regarding reductions in the size of the Board of Directors and required
resignations of RIC Directors, LandAmerica will recommend for election, in the
applicable year in which the respective Class term expires, one RIC Director in
Class I, one RIC Director in Class II and one RIC Director in Class III, in each
case as designated by RIC; provided that, if any such RIC Director is not
elected by the shareholders of LandAmerica, LandAmerica shall have no further
obligations under this Section 2.2(b) for the applicable year; and provided
further that LandAmerica shall be under no obligation to recommend any RIC
Director for election to the Board of Directors unless and until it has received
from such RIC Director an executed letter agreement regarding resignation in the
form attached to this Agreement as Exhibit A. Any person designated by RIC to be
a RIC Director who is not an executive officer of either RIC or an Affiliate of
RIC shall be acceptable to the Continuing Directors, and, if found unacceptable
by the Continuing Directors for any reason whatsoever, (i) LandAmerica shall not
be obligated to recommend any such person for election to
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the Board of Directors and (ii) RIC shall be entitled to designate a replacement
that is acceptable to the Continuing Directors.
Section 2.3. Committee Representation. Until the earlier to occur
of (i) the date that the RIC Ownership Percentage is less than twenty percent
(20%) or (ii) the expiration of the Preferred Shares Sales Period (as defined in
Section 4.1 below), to the extent that, and for so long as, but only insofar as
required by applicable law or NYSE rules, any of the RIC Directors is qualified
under the then-current NYSE rules, the rules and regulations under the Internal
Revenue Code of 1986, as amended, relating to the qualification of employee
stock benefit plans and the deductibility of compensation paid to executive
officers, the rules and regulations under Section 16(b) of the Exchange Act,
including Rule 16b-3 thereunder or any successor rule, the Board of Directors
shall designate one of the RIC Directors to serve on each of the committees of
the Board of Directors (whether existing on the date hereof or formed or
constituted after the date hereof) to the same extent, and on the same basis, as
the other members of the Board of Directors; provided that, if the number of RIC
Directors shall be reduced to one director pursuant to Section 2.6 hereof, then
such remaining RIC Director shall be entitled to maintain his or her membership
on any committee on which such RIC Director then may be serving until the
earliest to occur of (i) the expiration of such RIC Director's term as a
director of LandAmerica, (ii) the date that the RIC Ownership Percentage is less
than fifteen percent (15%), or (iii) the expiration of the Preferred Shares
Sales Period (as defined in Section 4.1 below).
Section 2.4. Relationship with RIC Directors. With respect to any
RIC Director serving on the Board of Directors and any committee thereof
pursuant to the provisions of this Article II, LandAmerica shall at all times,
with respect to matters affecting the full Board of Directors or a specific
committee, as the case may be:
(a) Consult with the RIC Director on all business and financial
matters on which Continuing Directors are consulted;
(b) Provide the RIC Director with the same financial and other
information concerning LandAmerica and its Subsidiaries as may be provided to
the Continuing Directors, at the same time as so provided;
(c) Give the RIC Director the same notice of meetings as the
Continuing Directors are given and reasonable time to attend in person or
participate by telephone;
(d) Permit the RIC Director access at all reasonable times to
senior officers of LandAmerica;
(e) Hold meetings of the Board of Directors not less than four
times per year;
(f) Schedule regular meetings of the Board of Directors at least
six months in advance; and
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(g) In all other respects, deal with each RIC Director in the same
manner and on the same terms as it deals with all other directors, including,
without limitation, the Continuing Directors.
Section 2.5. Resignations at the Request of RIC; Vacancies. RIC
shall have the right to request the resignation from the Board of Directors of
any RIC Director pursuant to the terms of Exhibit A. In the event that any RIC
Director for any reason ceases to serve as a member of the Board of Directors
during his or her term of office and at such time RIC would have the right to a
designation hereunder if an election for the resulting vacancy were to be held,
RIC may designate a person to fill such vacancy (a "RIC Director Vacancy");
provided that, if the person so designated is not an executive officer of either
RIC or an Affiliate of RIC, such person shall be acceptable to the Continuing
Directors. Subject to the foregoing and Section 2.2(b) hereof, LandAmerica
agrees to (i) appoint RIC's designee to the Board of Directors to fill the RIC
Director Vacancy and to serve until the next annual meeting of LandAmerica's
shareholders and (ii) recommend RIC's designee for election to the Board of
Directors at the next annual meeting of LandAmerica's shareholders to fill the
remaining term of the class of directors to which such designee was appointed;
provided further that LandAmerica shall be under no obligation to appoint or
recommend for election any such designee to fill a RIC Director Vacancy unless
and until it has received from such designee an executed letter agreement
regarding resignation in the form attached to this Agreement as Exhibit A.
Section 2.6. Required Resignations. On the date when the RIC
Ownership Percentage is less than twenty percent (20%) but more than fifteen
percent (15%) (the "Board Adjustment Date"), RIC shall, within five (5) Business
Days, cause two (2) of the three (3) RIC Directors to resign from the Board of
Directors. The parties agree that the two (2) RIC Directors that will be subject
to resignation pursuant to the preceding sentence shall be those RIC Directors
who have the shortest terms of office then remaining, viz., those RIC Directors
who are members of classes that will stand for election at one of the next two
annual meetings of LandAmerica's shareholders to be held following the Board
Adjustment Date. From and after the Board Adjustment Date, the remaining RIC
Director may complete any unexpired term as a director of LandAmerica; provided
that, upon the earlier to occur of (i) the date that the RIC Ownership
Percentage is less than fifteen percent (15%) or (ii) the expiration of the
Preferred Shares Sales Period (as defined in Section 4.1), RIC shall, within
five (5) Business Days, cause the remaining RIC Director to resign from the
Board of Directors. In the event that the RIC Ownership Percentage is reduced
from over twenty percent (20%) to less than fifteen percent (15%) such that
there is no Board Adjustment Date, RIC shall, within five (5) Business Days,
cause all three (3) of the RIC Directors to resign from the Board of Directors.
In the event of any decrease in the RIC Ownership Percentage to below such
twenty percent (20%) and fifteen percent (15%) thresholds, any subsequent
increase in the RIC Ownership Percentage to or above such twenty percent (20%)
and fifteen percent (15%) thresholds (i) shall not entitle RIC to reinstate,
elect or designate any RIC Directors to the Board of Directors or any committee
thereof, and (ii) with respect to any increase to or above such twenty percent
(20%) threshold, shall constitute a breach of this Agreement. If RIC does not
cause the resignation of the applicable number of RIC Directors within such five
(5) Business Day period, LandAmerica may seek such resignation or, in the
alternative, the Continuing Directors may seek the removal of the RIC Directors
that are
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subject to such resignation. Upon any shareholder vote relating to the removal
of a RIC Director for failure to resign pursuant to this Section 2.6, RIC and
its Affiliates shall (i) attend any meeting either in person or by proxy and
(ii) vote in favor of such removal. At such time as a RIC Director becomes
subject to resignation pursuant to this Section 2.6, LandAmerica may amend its
Bylaws or take such other action as it deems appropriate to reduce the number of
directors constituting the Board of Directors proportionately or fill the
vacancy caused by such resignation(s) with its own nominee in accordance with
the applicable provisions of the Charter and Bylaws of LandAmerica.
Section 2.7. Charter and Bylaws. The obligations of LandAmerica
set forth in this Article II shall be subject to compliance with the applicable
provisions of the Charter and Bylaws of LandAmerica, which in no respect prevent
LandAmerica from fulfilling its obligations under this Agreement. LandAmerica
will make no modifications or amendments to its Charter or Bylaws that would in
any way hinder, impede or otherwise limit RIC's rights under this Article II.
Section 2.8. No Voting Trust. This Agreement does not create or
constitute, and shall not be construed as creating or constituting, a voting
trust agreement under the Virginia Stock Corporation Act or any other applicable
corporation law.
Section 2.9. Notification of Designation. RIC shall notify
LandAmerica in writing not later than March 15th of each year of its designation
of RIC Directors to be nominated for election at the next annual meeting of
LandAmerica's shareholders; provided that, if RIC should fail to so notify
LandAmerica of its RIC Director designee(s) by such date, RIC shall be deemed to
have designated the RIC Director whose term expires at the next annual meeting
of shareholders. RIC shall cause each RIC Director and each RIC Director
designee to provide promptly information that may be required under the Exchange
Act for inclusion in LandAmerica's proxy statement for such annual meeting and
shall cooperate with LandAmerica in verifying any such information, including
but not limited to the prompt completion of any director questionnaires
applicable to the directors generally. The rights of RIC and the RIC Directors
and the obligations of LandAmerica set forth in this Article II with respect to
the appointment or nomination of RIC Directors shall not be subject to
compliance with the notification requirements of Section 2.7 of LandAmerica's
Bylaws. No Affiliate of RIC shall have any right to designate RIC Directors
under this Article II.
Section 2.10. No Duty to Designate; Reduction of Board
Representation. Nothing contained in this Article II shall be construed as
requiring RIC to designate any RIC Directors or as requiring any RIC Director,
once designated and elected, to continue to serve in office if such RIC Director
elects to resign. Until the earlier to occur of (i) the date on which there are
no RIC Directors serving on the Board of Directors pursuant to this Agreement or
(ii) the expiration of the Preferred Shares Sales Period (as defined in Section
4.1 below), in the event of any vacancy created by the death, resignation or
removal of a RIC Director or the failure of RIC to designate a RIC Director,
other than a vacancy created by the resignation or removal of a RIC Director
pursuant to Section 2.6 above, upon the written request of RIC, LandAmerica
shall take such action as may be necessary to reduce the size of the Board of
Directors to a number equal to (x) fourteen (14) (or such lesser number as
exists following one or more previous reductions of the
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size of the Board pursuant to Sections 2.2(a), 2.6 or this Section 2.10) minus
(y) the number of such vacancies, and thereafter, notwithstanding any other
provisions of this Article II, RIC shall have no right to designate any
individual to be a RIC Director to the extent of such reduction.
Section 2.11. Limitation on Nominations by LandAmerica.
LandAmerica agrees that, during the term of this Agreement, it will not, without
the written consent of RIC, appoint or recommend for election to the Board of
Directors (i) any current or former "executive officer" (as defined in Rule 3b-7
under the Exchange Act as in effect on the date of this Agreement) of
LandAmerica or (ii) any other person with a relationship of the kind described
in Item 404(b) of Regulation S-K as in effect on the date of this Agreement, if
the election of such director following such appointment or recommendation would
cause the total number of directors meeting the description set forth in (i) and
(ii) above to increase above the aggregate number of such directors on the date
hereof (after adjustment for Xxxxxxx Xxxxxx, the Chief Executive Officer of
Commonwealth); provided, however, that no RIC Director shall be included in
determining whether LandAmerica has met the foregoing requirement.
ARTICLE III
Standstill Restrictions; Voting Matters
Section 3.1. Standstill Restrictions.
(a) During the term of this Agreement, Reliance and RIC covenant
and agree that Reliance and RIC shall not, and shall not permit any of their
Affiliates to, either individually or as part of a Group, directly or
indirectly:
(i) exceed the Standstill Percentage (other than as a
result of any stock purchases or repurchases by LandAmerica) or otherwise
acquire (other than acquisitions (x) pursuant to or contemplated by the Stock
Purchase Agreement, including without limitation the conversion of the Series B
Preferred Stock, or (y) resulting from corporate action taken by the Board of
Directors with respect to any pro rata distribution of shares of Common Stock in
connection with any stock split, stock dividend, recapitalization,
reclassification or similar transaction), propose to acquire (or publicly
announce or otherwise disclose an intention to propose to acquire), offer to
acquire, or agree to acquire any Common Stock or Series B Preferred Stock;
provided that this Section 3.1(a)(i) shall not apply to any acquisition (a) of
options, Common Stock, warrants, rights or other securities convertible or
exchangeable into Common Stock granted to any person, including without
limitation RIC Directors, pursuant to any benefit plan of LandAmerica or any of
its Affiliates or the exercise of any such option, warrant or right or
conversion or exchange of any convertible or exchangeable security or (b) upon
the exercise by RIC or its Affiliates of rights pursuant to the Rights Agreement
but only to the extent that such acquisition does not cause an increase in the
RIC Ownership Percentage above that which existed immediately prior to the
rights becoming exercisable and provided that all of the shares of Common Stock
so acquired upon the exercise of the rights shall be subject to all of the terms
of this Agreement;
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(ii) propose (or publicly announce or otherwise disclose
an intention to propose), solicit, offer, seek to effect, negotiate with or
provide any confidential information relating to LandAmerica or its business to
any other Person with respect to, any tender or exchange offer, merger,
consolidation, share exchange, business combination, restructuring,
recapitalization or similar transaction involving LandAmerica (other than (x)
any of the foregoing that may be approved by the Board of Directors or (y) in
connection with any tender or exchange offer in which the Board of Directors has
(a) recommended that its shareholders accept such offer or (b) after ten (10)
business days (as defined in Rule 14d-1 under the Exchange Act as in effect on
the date of this Agreement) from the date of commencement of such offer,
expressed no opinion, remained neutral, was unable to take a position or
otherwise did not oppose or recommend that its shareholders reject such offer);
provided that nothing set forth in this Section 3.1(a)(ii) shall prohibit RIC or
its Affiliates from soliciting, offering, seeking to effect or negotiating with
any Person with respect to Transfers of Common Stock or Series B Preferred Stock
otherwise required or permitted by Article IV of this Agreement; provided
further that in so soliciting, offering, seeking to effect or negotiating,
neither RIC nor its Affiliates shall provide any confidential information
relating to LandAmerica or its business to any Person except as required by
applicable law, including without limitation Section 10(b) of the Exchange Act
and Rule 10b-5 thereunder, but only to the extent that any required disclosure
of such confidential information has been preceded by notice to LandAmerica of
the expected disclosure of such information and the execution of a
confidentiality agreement by RIC (or its Affiliates, as the case may be) and
such Person in the form attached hereto as Exhibit B (such confidentiality
agreement to be promptly forwarded to LandAmerica for its execution, which
execution may be subsequent to the disclosure described in this proviso,
provided that the failure of LandAmerica to so execute such confidentiality
agreement shall in no way be construed to be a failure on the part of RIC (or
its Affiliates, as the case may be) to fulfill its obligations under this
Section 3.1(a)(ii) or to limit or affect the validity of such confidentiality
agreement as between RIC (or its Affiliates, as the case may be) and such
Person);
(iii) make, or in any way participate in, any
"solicitation" of "proxies" to vote (as such terms are defined in Rule 14a-1
under the Exchange Act), solicit any consent or communicate with or seek to
advise or influence any person or entity with respect to the voting of any
Common Stock or become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the Exchange Act) with respect to
LandAmerica; provided that nothing in this Section 3.1(a)(iii) shall apply to
any deemed solicitation of proxies by the RIC Directors that may result from
such RIC Directors' position or status as a director of LandAmerica at the time
of any general solicitation of proxies by the management of LandAmerica;
(iv) form, participate in or join any Person or Group with
respect to any Common Stock or Series B Preferred Stock, or otherwise act in
concert with any third Person for the purpose of (x) acquiring any Common Stock
or Series B Preferred Stock or (y) holding or disposing of Common Stock or
Series B Preferred Stock for any purpose prohibited by this Section 3.1(a);
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(v) except as specifically provided in the Stock Purchase
Agreement or Section 3.2 below, deposit any Common Stock or Series B Preferred
Stock into a voting trust or subject any Common Stock or Series B Preferred
Stock to any arrangement or agreement with respect to the voting thereof;
(vi) initiate, propose or otherwise solicit shareholders
for the approval of any shareholder proposal with respect to LandAmerica as
described in Rule 14a-8 under the Exchange Act, or induce or attempt to induce
any other Person to initiate, propose or otherwise solicit any such shareholder
proposal;
(vii) except as specifically provided in Article II of this
Agreement and in the Series B Preferred Stock designation, seek election to or
seek to place a representative on the Board of Directors, or seek the removal of
any member of the Board of Directors (other than a RIC Director);
(viii) except as specifically provided in the Series B
Preferred Stock designation, call or seek to have called any meeting of the
shareholders of LandAmerica for any purpose;
(ix) except through the RIC Directors, and except as
specifically provided in the Series B Preferred Stock designation, take any
other action to seek to control, disrupt or influence the management or policies
of LandAmerica;
(x) except as specifically provided in the Series B
Preferred Stock designation, demand, request or propose to amend, waive or
terminate the provisions of this Section 3.1(a); or
(xi) agree to do any of the foregoing, or advise, assist,
encourage or persuade any third party to take any action with respect to any of
the foregoing.
(b) Reliance and RIC agree that they will notify LandAmerica
promptly if any inquiries or proposals are received by, any information is
exchanged with respect to, or any negotiations or discussions are initiated or
continued by or with, Reliance, RIC or any of their Affiliates regarding any
matter described in Section 3.1(a) above (excluding the first proviso of Section
3.1(a)(ii) above). RIC and LandAmerica shall mutually agree upon an appropriate
response to be made to any such proposals received by Reliance, RIC or any of
their Affiliates.
(c) Nothing contained in this Article III shall be deemed to
restrict the manner in which the RIC Directors may participate in deliberations
or discussions of the Board of Directors or individual consultations with the
Chairman of the Board or any other members of the Board of Directors, so long as
such actions do not otherwise violate any provision of Section 3.1(a) above.
Section 3.2. Voting Matters.
(a) During the term of this Agreement, Reliance and RIC will take
all such action as may be required so that the Common Stock beneficially owned
and entitled to be voted by
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Reliance, RIC and their Affiliates, as a Group, are voted or caused to be voted
(in person or by proxy):
(i) with respect to the Continuing Director's nominees to
the Board of Directors, in accordance with the recommendation of the Board of
Directors, or a nominating or similar committee of the Board of Directors, if
any such committee exists and makes a recommendation;
(ii) with respect to any "election contest" (as such term
is defined or used in Rule 14a-11 under the Exchange Act as in effect on the
date of this Agreement) initiated by any Person in connection with any tender
offer, in the same proportion as the total votes cast by or on behalf of all
shareholders of LandAmerica (other than Reliance, RIC and their Affiliates) with
respect to such proxy contest;
(iii) with respect to any matters related to share
issuance, mergers, acquisitions and divestitures for which shareholder approval
is sought, in accordance with the independent judgment of Reliance, RIC and
their Affiliates, without regard to any request or recommendation of the Board
of Directors; provided that, if any such transaction is submitted for
shareholder approval by LandAmerica in order to permit LandAmerica to exercise
its call rights under Sections 4.1(a) and 4.1(c) hereof or its redemption rights
under the Series B Preferred Stock designation, then the Common Stock
beneficially owned and entitled to be voted by Reliance, RIC and their
Affiliates, as a Group, shall be voted in accordance with the recommendation of
the Board of Directors; and
(iv) with respect to all matters (other than the election
of RIC Directors) brought before LandAmerica's shareholders for a vote not
otherwise provided for in this Section 3.2(a) or Section 2.6 above, in
accordance with the recommendation of the Board of Directors.
(b) RIC and its Affiliates who beneficially own any of the RIC
Shares shall be present, in person or by proxy, at all duly held meetings of
shareholders of LandAmerica so that the Common Stock held by RIC and its
Affiliates may be counted for the purposes of determining the presence of a
quorum at such meetings.
ARTICLE IV
Transfers of RIC Shares
Section 4.1. Required Sales of RIC Shares.
(a) Subject to compliance by LandAmerica with Section 4.1(e)
below, by the date that is six (6) years and six (6) months after the effective
date of the registration statement for the RIC Common Shares (as defined below)
as provided for in the Registration Rights Agreement (the "Common Shares Exit
Date"), RIC agrees that it will sell, convey or otherwise transfer all of the
4,039,473 shares of Common Stock received by RIC from LandAmerica pursuant to
the Stock Purchase Agreement and such additional shares of Common Stock that
LandAmerica may issue
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with respect to such shares pursuant to any stock splits, stock dividends,
recapitalizations, restructurings, reclassifications or similar transactions or
pursuant to the exercise of any rights under the Rights Agreement (the "RIC
Common Shares") entirely to Persons that are not, at the time of the sale,
conveyance or transfer, an Affiliate of RIC. Such sales, conveyances or
transfers of the RIC Common Shares may occur at any time and from time to time
during the period between the Closing Date and the Common Shares Exit Date (such
period being hereafter referred to as the "Common Shares Sales Period");
provided that, for each Holdback Period and each Discontinuance Period (as those
terms are defined in the Registration Rights Agreement) required by LandAmerica
under the Registration Rights Agreement, the Common Shares Sales Period shall be
extended by the number of days during which the relevant Holdback Period or
Discontinuance Period was in effect. In the event that RIC has not disposed of
all of the RIC Common Shares by the end of the Common Shares Sales Period,
LandAmerica thereafter shall have the absolute right (which shall not be
abridged) from time to time on thirty (30) days' written notice to make one or
more calls to purchase for cash all or a portion of the remaining RIC Common
Shares then held by RIC at a price equal to ninety-five percent (95%) of the
fair market value of the Common Stock at the time of the call(s), with such fair
market value to be calculated based upon the average of the closing prices of
the Common Stock for the ten (10) consecutive trading days preceding the notice
by LandAmerica to RIC of the exercise of its call right.
(b) Subject to Section 4.1(c) and compliance by LandAmerica with
Section 4.1(e) below but in addition to Section 4.1(a) above, if RIC has not
converted any of the 2,200,000 shares of Series B Preferred Stock received by
RIC from LandAmerica on the Closing Date (the "RIC Series B Preferred Shares"),
then by the date that is eight (8) years and six (6) months after the effective
date of the registration statement for the RIC Series B Preferred Shares as
provided for in the Registration Rights Agreement (the "Preferred Shares Exit
Date"), RIC agrees that it will sell, convey or otherwise transfer so many of
the RIC Series B Preferred Shares as are necessary to reduce the RIC Ownership
Percentage to less than twenty percent (20%) of the Adjusted Outstanding Shares;
provided, however, that such sales, conveyances and transfers must be made
entirely to Persons that are not, at the time of the sale, conveyance or
transfer, an Affiliate of RIC. Such sales, conveyances or transfers of the RIC
Series B Preferred Shares may occur at any time and from time to time during the
period between the Closing Date and the Preferred Shares Exit Date (such period
being hereafter referred to as the "Preferred Shares Sales Period"); provided
that for each Holdback Period and each Discontinuance Period (as those terms are
defined in the Registration Rights Agreement) required by LandAmerica under the
Registration Rights Agreement, the Preferred Shares Sales Period shall be
extended by the number of days during which the relevant Holdback Period or
Discontinuance Period was in effect. The provisions of this Section 4.1(b) shall
not in any manner affect (i) the right of LandAmerica to redeem the RIC Series B
Preferred Shares or (ii) subject to Section 4.1(d), the right of RIC to convert
the RIC Series B Preferred Shares into Common Stock, in each case in accordance
with the terms of the Series B Preferred Stock designation set forth in
LandAmerica's Charter.
(c) Subject to Section 4.1(d) and compliance by LandAmerica with
Section 4.1(e) below, if RIC has converted, at any time or from time to time
during the Preferred Shares Sales Period, any of the RIC Series B Preferred
Shares into shares of Common Stock (all such shares of
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Common Stock received upon conversion of the RIC Series B Preferred Shares and
such additional shares of Common Stock that LandAmerica may issue with respect
to such shares pursuant to any stock splits, stock dividends, recapitalizations,
restructurings, reclassifications or similar transactions or pursuant to the
exercise of any rights under the Rights Agreement being hereafter referred to
collectively as the "Converted Shares") in accordance with the terms of the
Series B Preferred Stock designation set forth in LandAmerica's Charter, then
RIC agrees that it will sell, convey or otherwise transfer by the expiration of
the Preferred Shares Sales Period (including any extension permitted under
Section 4.1(b) upon the exercise by LandAmerica of any Holdback Period or
Discontinuance Period) that number of Converted Shares and that number of RIC
Series B Preferred Shares as is necessary to reduce the RIC Ownership Percentage
to less than twenty percent (20%); provided, however, that such sales,
conveyances and transfers of Converted Shares and RIC Series B Preferred Shares
must be made entirely to Persons that are not, at the time of the sale,
conveyance or transfer, an Affiliate of RIC. In the event that RIC has converted
some or all of the RIC Series B Preferred Shares to Common Stock but has not
reduced the RIC Ownership Percentage to below twenty percent (20%) by the
expiration of the Preferred Shares Sales Period, LandAmerica thereafter shall
have the absolute right (which shall not be abridged) from time to time on
thirty (30) days' written notice to make one or more calls to purchase for cash
all or any part of that number of Converted Shares then held by RIC necessary to
reduce the RIC Ownership Percentage to below the twenty percent (20%) threshold
at a price equal to ninety-five percent (95%) of the fair market value of the
Common Stock at the time of the call(s), with such fair market value to be
calculated based upon the average of the closing prices of the Common Stock for
the ten (10) consecutive trading days preceding the notice by LandAmerica to RIC
of the exercise of its call right.
(d) Reliance and RIC agree that, unless (i) LandAmerica should
call for redemption of the RIC Series B Preferred Shares in accordance with the
Series B Preferred Stock designation set forth in LandAmerica's Charter, or (ii)
any one of the following events shall occur: (x) LandAmerica should declare a
regular quarterly dividend on the Common Stock of $.40 or more during any
calendar year, (y) LandAmerica should declare one or more non-regular dividends
on the Common Stock in an aggregate amount of $.50 or more during any calendar
year, or (z) LandAmerica should declare dividends on the Common Stock, whether
regular or non-regular, in an aggregate amount of $1.60 or more during any
calendar year, the RIC Series B Preferred Shares shall not be convertible and
RIC and its Affiliates will refrain from converting, or taking any steps to
convert, any of the RIC Series B Preferred Shares then held by each of them,
respectively, into shares of Common Stock until such time as RIC and its
Affiliates have sold, conveyed or transferred all of the RIC Common Shares
entirely to Persons that are not, at the time of the sale, conveyance or
transfer of the RIC Common Shares, an Affiliate of RIC; provided, however, that
if LandAmerica should call less than all of the RIC Series B Preferred Shares
for redemption pursuant to clause (i) above, then RIC and its Affiliates shall
be entitled to convert into shares of Common Stock only that number of the RIC
Series B Preferred Shares that have been so called for redemption; and provided
further that, in the event the Board of Directors has approved any negotiated
tender or exchange offer with a third party or approved any merger,
consolidation, share exchange, business combination, restructuring,
recapitalization or similar transaction involving LandAmerica in which the
holders of Common Stock are entitled to tender or exchange their holdings of
Common Stock for, or to otherwise receive for their holdings of
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Common Stock, other consideration (whether cash, non-cash or some combination
thereof), LandAmerica agrees that it will, in its sole discretion, either (x)
permit RIC and its Affiliates to convert all of the Series B Preferred Stock
then held by them contingent upon, and effective as of, the closing of such
transaction and without the right of RIC or any of its Affiliates to vote the
shares of Common Stock received upon any such conversion on any matter in
connection with such transaction, or (y) make appropriate provision to provide
to RIC and any of its Affiliates holding Series B Preferred Stock as of the
closing date of such transaction the same kind and amount of consideration
receivable by the holders of the Common Stock in such transaction (the amount of
such consideration to be received by RIC and any of its Affiliates holding
Series B Preferred Stock to be determined by reference to the number of shares
of Common Stock that RIC and its Affiliates would have been entitled to receive
had the Series B Preferred Stock been converted immediately prior to
consummation of such transaction), except that, if LandAmerica elects to comply
with clause (y) of this proviso, RIC and its Affiliates shall not be entitled
thereafter to receive any shares of stock, other securities, cash or property
pursuant to Section 5.4 of the Series B Preferred Stock designation with respect
to such of the Series B Preferred Stock as has received full payment of the
consideration set forth in clause (y) above.
(e) In connection with the obligations of RIC under Sections
4.1(a), 4.1(b) and 4.1(c) above, LandAmerica agrees that it will take all
actions and steps necessary, including the filing of all required financial
statements, reports and other documents, in order to (i) maintain the
effectiveness of the registration with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), of the RIC
Common Shares in accordance with the Registration Rights Agreement until the
earlier of (x) the date on which RIC completes the sale, conveyance or transfer
of all of the RIC Common Shares in accordance with this Agreement or (y) the
expiration of the Common Shares Sales Period, (ii) maintain the effectiveness of
the registration with the Securities and Exchange Commission under the
Securities Act of the RIC Series B Preferred Shares and any shares of Common
Stock issuable upon conversion of the RIC Series B Preferred Shares in
accordance with the Registration Rights Agreement until the earlier of (x) the
date on which RIC completes the sale, conveyance or transfer of all of the RIC
Series B Preferred Shares and/or the Converted Shares in accordance with this
Agreement or (y) the expiration of the Preferred Shares Sales Period, (iii)
comply with all applicable state securities (including insurance securities) or
blue sky laws, and (iv) maintain the listing of the RIC Common Shares on the
NYSE (or such other exchange or trading market as the Common Stock may be listed
from time to time), (v) maintain the listing, on a when-issued basis, of the
Common Stock issuable upon conversion of the RIC Series B Preferred Shares on
the NYSE (or such other exchange or trading market as the Common Stock may be
listed from time to time) and (vi) if applicable, to cause the RIC Series B
Preferred Shares to be originally listed on the NYSE (or such other exchange or
trading market as the Common Stock may be listed from time to time). LandAmerica
will make its senior officers available to RIC at reasonable times to facilitate
the disposition of the RIC Common Shares, the RIC Series B Preferred Shares and
the Converted Shares.
(f) If, prior to the expiration of the Preferred Shares Sales
Period, all of the shares of the Series B Preferred Stock shall have been
redeemed or converted and are no longer outstanding but the RIC Ownership
Percentage is at least twenty percent (20%), then, until the
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earlier of (i) the date by which the RIC Ownership Percentage is less than
twenty percent (20%) or (ii) the expiration of the Common Shares Sales Period,
RIC and its Affiliates shall be entitled to the remedies set forth in Sections
11.3(a) and 11.3(d)(1) of the Series B Preferred Stock designation as if such
Sections had been set forth in full in this Agreement.
(g) LandAmerica will make any Xxxx-Xxxxx-Xxxxxx filing that may be
required in order for RIC or its Affiliates to convert the RIC Series B
Preferred Shares into Common Stock, and such filing will occur as soon as
practicable but not later than thirty (30) days after RIC or its Affiliates make
any Xxxx-Xxxxx-Xxxxxx filing with respect to such conversion. Each party agrees
to bear its own costs in connection with such filings.
Section 4.2. Transfer Restrictions. During the term of this
Agreement, RIC shall not, directly or indirectly, knowingly Transfer any of the
RIC Shares to any Person or Group without the prior written consent of
LandAmerica(which consent shall not be unreasonably withheld), if, as a result
of such Transfer, such Person or Group would have beneficial ownership of Common
Stock representing in the aggregate more than 9.9% of the issued and outstanding
shares of Common Stock. Subject to the foregoing limitation, RIC may Transfer
the RIC Shares in the following manner:
(a) to LandAmerica or any Affiliate of LandAmerica;
(b) pursuant to an effective registration statement under the
Securities Act as provided in Section 4.1 above; provided that the rights of RIC
under this Agreement shall not transfer to any transferee(s) of such RIC Shares;
(c) pursuant to Rule 144, Rule 144A, Regulation S or any other
applicable exemption from registration under the Securities Act; provided that
the rights of RIC under this Agreement shall not transfer to any transferee(s)
of such RIC Shares;
(d) pursuant to a pro rata distribution (including any such
distribution pursuant to any liquidation or dissolution of RIC) by RIC to its
shareholders if RIC has no knowledge that any distributee, or any Person that
controls such distributee, will acquire from RIC beneficial ownership of Common
Stock representing more than 9.9% of the issued and outstanding shares of Common
Stock in such distribution (in each case other than any distributee that is an
Affiliate of RIC), provided that the rights of RIC under this Agreement shall
not transfer to any distributee of such RIC Shares (other than any distributee
that is an Affiliate of RIC); provided further that, upon a change in Control of
RIC occurring after the date of this Agreement, RIC shall not distribute any of
the RIC Shares to its Affiliates pursuant to this Section 4.2(d) or otherwise
unless RIC has received the prior written consent of LandAmerica (which may be
withheld in LandAmerica's sole discretion) and obtained an agreement in writing
by the distributee to be bound by the terms and conditions of this Agreement;
and provided further that, in the event that any Affiliate of RIC receives a
distribution of any of the RIC Shares pursuant to this Section 4.2(d), or
otherwise becomes the beneficial owner of any of the RIC Shares, Reliance shall
cause such Affiliate of RIC to comply with all of the provisions of this
Agreement, including without limitation this Section 4.2.
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(e) pursuant to a merger or consolidation of LandAmerica or
pursuant to a plan of liquidation of LandAmerica, which has been approved by the
affirmative vote of a majority of the members of the Board of Directors then in
office; or
(f) pursuant to a tender offer or exchange offer that the Board of
Directors, by action taken by the affirmative vote of a majority of the members
of the Board of Directors then in office, has determined not to oppose.
ARTICLE V
Further Assurances
Each party shall execute and deliver such additional instruments and
other documents and shall take such further actions as may be necessary or
appropriate to effectuate, carry out and comply with all of its respective
obligations under this Agreement. RIC shall deliver to LandAmerica, within
fifteen (15) days following the end of each quarterly period ending March 31,
June 30, September 30 and December 31, a written transaction statement for such
quarter verified by an officer of RIC that (i) identifies the date and amount of
each Transfer of the RIC Shares during such quarter and whether the Transfer was
to an Affiliate of RIC, and (ii) states the number of RIC Shares held,
beneficially and of record, by RIC and its Affiliates as of the last day of the
applicable quarter. If reasonably requested by LandAmerica at any time during
the term of this Agreement, RIC agrees to execute a letter to LandAmerica
confirming the number of RIC Shares held, beneficially and of record, by RIC and
its Affiliates as of the latest practicable date. LandAmerica shall provide to
RIC as soon as practicable after each March 31, June 30, September 30 and
December 31 (but in any event no later than twenty-five (25) days after each
such date), a written statement as to the amount of net income of LandAmerica
and its Subsidiaries for the three-month period ending on each such March 31,
June 30, September 30 and December 31 and RIC shall keep such information
confidential until LandAmerica publicly announces its quarterly financial
results.
ARTICLE VI
Termination
Section 6.1. Termination of Entire Agreement. Unless earlier
terminated by written agreement of the parties hereto, this Agreement shall
terminate on the earlier of (i) the date on which the RIC Ownership Percentage
is less than fifteen percent (15%) or (ii) the expiration of the Preferred
Shares Sales Period (as defined in Section 4.1 above) and the RIC Ownership
Percentage at such time is less than twenty percent (20%); provided, however,
that the provisions of Sections 4.1(a) and 4.1(c) above with respect to
LandAmerica's right to call the RIC Common Shares and the Converted Shares shall
survive any termination of this Agreement. Any termination of this Agreement as
provided herein shall be without prejudice to the rights of any party arising
out of the breach by any other party of any provisions of this Agreement that
occurred prior to the termination.
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ARTICLE VII
Miscellaneous
Section 7.1. Notices. Any notices or other communications
required or permitted hereunder shall be sufficiently given if in writing
(including telecopy or similar teletransmission), addressed as follows:
If to LandAmerica,
to it at: Lawyers Title Insurance Corporation
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, III, Esquire
With a copy to: Xxxxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Xx., Esquire
If to RIC or Reliance,
to them at: Reliance Insurance Company
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
With a copy to: Reliance Group Holdings, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three (3)
Business Days after being sent,
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if sent by registered or certified mail, with first-class postage prepaid. Each
of the parties hereto shall be entitled to specify a different address by giving
notice as aforesaid to each of the other parties hereto.
Section 7.2. Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated
except by an instrument in writing signed by Reliance, RIC and LandAmerica
following approval thereof by a majority of the Continuing Directors.
Section 7.3. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
and be enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; provided that no party may assign
this Agreement without the other party's prior written consent.
Section 7.4. Entire Agreement. This Agreement, the Stock Purchase
Agreement, the Series B Preferred Stock designation and the Registration Rights
Agreement embody the entire agreement and understanding among the parties
relating to the subject matter hereof and collectively supersede all prior
agreements and understandings relating to such subject matter. There are no
representations, warranties or covenants by the parties hereto relating to such
subject matter other than those expressly set forth in this Agreement and the
Stock Purchase Agreement.
Section 7.5. Specific Performance. The parties acknowledge that
money damages are not an adequate remedy for violations of this Agreement and
that any party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other relief as such
court may deem just and proper in order to enforce this Agreement or prevent any
violation hereof and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief.
Section 7.6. Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
Section 7.7. No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
Section 7.8. No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any Person who
or which is not a party hereto.
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Section 7.9. Consent to Jurisdiction. Each party to this
Agreement, by its execution hereof, (i) hereby irrevocably submits, and agrees
to cause each of its Affiliates to submit, to the jurisdiction of the federal
courts located either in the City of Richmond, Virginia, or in the City of New
York, New York, and in the event that such federal courts shall not have subject
matter jurisdiction over the relevant proceeding, then of the state courts
located either in the City of Richmond, Virginia, or in the City of New York,
New York, for the purpose of any Action arising out of or based upon this
Agreement or relating to the subject matter hereof or the transactions
contemplated hereby, (ii) hereby waives, and agrees to cause each of its
Affiliates to waive, to the extent not prohibited by applicable law, and agrees
not to assert, and agrees not to allow any of its Affiliates to assert, by way
of motion, as a defense or otherwise, in any such Action, any claim that it is
not subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that any such
proceeding brought in one of the above-named courts is improper, or that this
Agreement or the subject matter hereof may not be enforced in or by such court
and (iii) hereby agrees not to commence or to permit any of its Affiliates to
commence any Action arising out of or based upon this Agreement or relating to
the subject matter hereof other than before one of the above-named courts nor to
make any motion or take any other action seeking or intending to cause the
transfer or removal of any such Action to any court other than one of the
above-named courts whether on the grounds of inconvenient forum or otherwise.
Each party hereby consents to service of process in any such proceeding in any
manner permitted by Virginia or New York law, as the case may be, and agrees
that service of process by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 7.1 above is reasonably
calculated to give actual notice. Notwithstanding anything contained in this
Section 7.9 to the contrary with respect to the parties' forum selection, if an
Action is filed against a party to this Agreement, including its Affiliates, by
a person who or which is not a party to this Agreement, an Affiliate of a party
to this Agreement, or an assignee thereof (a "Third Party Action"), in a forum
other than the federal district court or a state court located in the City of
Richmond, Virginia, or in the City of New York, New York, and such Third Party
Action is based upon, arises from, or implicates rights, obligations or
liabilities existing under this Agreement or acts or omissions pursuant to this
Agreement, then the party to this Agreement, including its Affiliates, joined as
a defendant in such Third Party Action shall have the right to file cross-claims
or third-party claims in the Third Party Action against the other party to this
Agreement, including its Affiliates, and even if not a defendant therein, to
intervene in such Third Party Action with or without also filing cross-claims or
third-party claims against the other party to this Agreement, including its
Affiliates.
Section 7.10. Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic substantive law of the
Commonwealth of Virginia, without giving effect to any choice or conflict of law
provision or rule that would cause the application of the law of any other
jurisdiction.
Section 7.11. Name, Captions. The name assigned to this Agreement
and the section captions used herein are for convenience of reference only and
shall not affect the interpretation or construction hereof.
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Section 7.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all,
the parties hereto.
Section 7.13. Expenses. Each of the parties hereto shall bear their
own expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Voting and Standstill Agreement to be executed, as of
the date first above written by their respective officers thereunto duly
authorized.
LANDAMERICA FINANCIAL GROUP, INC.
(formerly known as LAWYERS TITLE CORPORATION)
By: /s/ X. X. Xxxxxx, Xx.
-----------------------------------------------
Name: X. X. Xxxxxx, Xx.
Title: Chairman and Chief Executive Officer
RELIANCE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
RELIANCE GROUP HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and Controller
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Exhibit A
Form of Resignation Agreement
LandAmerica Financial Group, Inc.
(formerly Lawyers Title Corporation)
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Reliance Insurance Company
Xxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
I hereby acknowledge that my position on the Board of Directors of
LandAmerica Financial Group, Inc. (formerly Lawyers Title Corporation)
("LandAmerica") is subject to the provisions of a Voting and Standstill
Agreement (the "Agreement"), dated February 27, 1998, between LandAmerica and
Reliance Insurance Company ("RIC") and Reliance Group Holdings, Inc.
Accordingly, I hereby agree to resign immediately from such Board of Directors
under the terms of Article II of the Agreement in the event that RIC requests
such resignation. I understand that, if I do not resign as requested within five
(5) Business Days (as defined in the Agreement), LandAmerica may seek specific
performance of this letter agreement through court proceedings or otherwise may
seek to remove me from office. I agree that any failure to resign upon request
shall be deemed to be "cause" for my removal from the Board of Directors
pursuant to the Charter and Bylaws of LandAmerica.
Date: February 27, 1998
______________________________
Name
Agreed to and Accepted:
LandAmerica Financial Group, Inc.
By:___________________________
Name:
Title:
Exhibit B
Form of Confidentiality Agreement
________ __, 19__
CONFIDENTIAL
[Name]
[Address]
Re: Confidentiality Agreement
Ladies and Gentlemen:
In connection with our [soliciting, offering, seeking to effect or
negotiating] with you with respect to the [sale, transfer, assignment, pledge,
etc.] of shares of [Common Stock or 7% Series B Cumulative Convertible Preferred
Stock], without par value, of LandAmerica Financial Group, Inc. (the "Company"),
we are prepared to make available to you certain confidential information
relating to the Company and its business (the "Confidential Information"). As a
condition to your being furnished the Confidential Information, you agree to
comply with the terms and conditions of this letter agreement (this
"Agreement").
For the purposes of this Agreement, the term "Representatives" shall
mean your employees, agents and advisors and the directors, officers, employees
and agents of any of your advisors. The term "Third Party" shall be broadly
interpreted to include without limitation any corporation, company, group,
partnership, other entity or individual. The term "Confidential Information"
shall not include information that (i) was or becomes generally available to the
public other than as a result of a disclosure by you or your Representatives, or
(ii) was or becomes available to you on a non-confidential basis from a source
other than the Company or its advisors.
You hereby agree to treat the Confidential Information as confidential
and you shall not, and shall direct your Representatives not to, use in any way
or to disclose, directly or indirectly, the Confidential Information to any
Third Party without the written consent of the Company.
It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by you and that the Company
shall be entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach, and you further agree to waive any
requirement for the securing or posting of any bond in connection with such
remedy.
Such remedy shall not be deemed to be the exclusive remedy for your breach of
this Agreement, but shall be in addition to all other remedies available at law
or equity to the Company.
If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this Agreement, whereupon it will constitute
our agreement with respect to the subject matter hereof.
Very truly yours,
[Name]
Officer of [RIC or Affiliate]
CONFIRMED AND AGREED as of
the date first written
above:
[NAME]
By:_________________________________
Name:
Title:
LANDAMERICA FINANCIAL GROUP, INC.
By:_________________________________
Name:
Title:
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