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 1st
day of
January, 2008.
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 be 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
consents 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
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2
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
(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
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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.
(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 written 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
written 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.
To the extent required by Code Section 409A (i) a reimbursement made under
this
section shall be paid by December 31 of the calendar year following the calendar
year in which the reimbursed expense is incurred and (ii) no reimbursement
or
in-kind benefit provided under this section during one calendar year shall
affect the expenses eligible for reimbursement or in-kind benefits provided
during another calendar year.
(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 written 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. Reimbursement shall occur on or before
December 31 of the calendar year following the calendar year the applicable
expense is incurred. No reimbursement provided under this Section
4(b)(v) during one calendar year shall affect the expenses eligible for
reimbursement during another calendar year
(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 written plans, practices, programs and policies
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5
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. Any reimbursement made under
this section shall occur on or before December 31 of the calendar year following
the calendar year the applicable expense is incurred. No
reimbursement or in-kind benefit provided under this Section 4(b)(vi) during
one
calendar year shall affect the expenses eligible for reimbursement or in-kind
benefits provided during another calendar year.
(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.
(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
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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.
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
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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;
(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 determination 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
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8
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:
(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, 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 (i) if
continuation is not possible under the terms of the applicable plan, program,
practice or policy, then the Company shall pay in cash in a lump sum within
thirty (30) days following
Executive’s
Date of
Termination an amount equal to the present value of the contributions the
Company would have made thereunder on behalf of Executive and/or Executive’s
family for the period from Executive’s Date of Termination through December 31
of the second calendar year
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following
the calendar year of
Executive’s Date of Termination, calculated using (a) Company contribution
levels in effect on the Date of Termination and (b) a present value discount
rate, equal to 120% of the
Federal short-term rate (using monthly compounding) as defined in Section
1274(d) of the Code and as published for the month immediately preceding the
month of payment; and (ii)
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. To the extent required
by
Code Section 409A, (i) a reimbursement made under this section shall
be paid by December 31 of the
calendar year after the calendar year in which the reimbursed expense is
incurred and (ii) no reimbursement or in-kind benefit provided
under this section during
one calendar year shall affect
the expenses eligible for reimbursement or in-kind benefits provided
during another calendar
year;
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 written 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”).
(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) three times, 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, 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,
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10
that
(i) if continuation is not possible
under the terms of the applicable plan, program, practice or policy, then the
Company shall pay in cash in a lump sum within thirty (30) days following Executive’s
Date of Termination an
amount equal to the present value of the contributions the Company would have
made thereunder on behalf of Executive and/or Executive’s family 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, calculated
using (a) Company contribution levels in effect on the Date of Termination
and
(b) a present value discount rate, equal to 120% of the
Federal
short-term rate (using monthly compounding) as defined in Section 1274(d) of
the
Code and as published for the month immediately preceding the month of
payment; and (ii) 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. To the extent required
by
Code Section 409A, (i) a reimbursement made under this section shall be paid
by
December 31 of the calendar year after the calendar year in which the reimbursed
expense is incurred and (ii) no reimbursement or in-kind benefit provided under
this section during one calendar year shall affect the expenses eligible for
reimbursement or in-kind benefits provided during another calendar
year;
and
(iii)
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, the Company shall, at its sole expense as incurred, provide the
Executive with reasonable outplacement services the scope and provider of which
shall be selected by the Executive in his sole discretion (to the extent such
selection is reasonable and directly related to Executive’s termination of
employment with the Company), provided that any reimbursement made to Executive
under this Section 6(b)(iii) shall be paid by December 31 of the third calendar
year following the calendar year of Executive’s Date of Termination;
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 written 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.
(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
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11
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 written 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. To the extent required by 409A, (i)
a reimbursement made under this Section 6(c) shall be paid by December 31 of
the
calendar year after the calendar year in which the reimbursed expense is
incurred and (ii) no reimbursement or in-kind benefit provided under this
Section 6(c) during one calendar year shall affect the expenses eligible for
reimbursement or in-kind benefits provided during another calendar
year.
(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 written 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. To the extent required by
409A, (i) a reimbursement made under this Section 6(d) shall be paid by December
31 of the calendar year after the calendar year in which the reimbursed expense
is incurred and (ii) no reimbursement or in-kind benefit provided under this
Section 6(d) during one calendar year shall affect the expenses eligible for
reimbursement or in-kind benefits provided during another calendar
year.
(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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12
(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, during the
Executive’s lifetime, 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). Any
reimbursement under this Section 8 shall be made no later than December 31
of
the calendar year after the calendar year in which the applicable expense is
incurred.
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13
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, but no later than
the last day of the calendar year following the calendar year in which the
Executive remits the related taxes. 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
Page
14
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.
(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 proceedings 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. Such tax indemnification
shall
be paid to Executive no later than December 31 of the calendar year following
the calendar year in which the Executive remits the related taxes. In
addition, payment of such costs and expenses shall occur no later than December
31 of the calendar year in which the taxes that are the subject of the
proceedings are remitted to the taxing authority or, if no taxes are remitted,
the last day of the calendar year following the taxable year in which the audit
is completed or there is a final and nonappealable settlement of the litigation.
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
Page
15
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).
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.
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16
(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.
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: Chairman & 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 provision 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
6(b)(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(b) 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
Page
17
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.
(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 December 28, 2006 and that such former agreement
has been terminated.
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., Chairman
and
Chief
Executive Officer
__________________________________________
[Name
of Executive]
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18
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
|
3
|
|
Xxxxxxx
Xxxx
Named
Executive Officer
|
3
|
|
Xxxxxxx
X. Xxxxx
Named
Executive Officer
|
3
|
Page
19
