FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1998 Commission File No. 1-13990
LANDAMERICA FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1589611
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
6630 West Broad Street, Richmond, Virginia 23230
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 281-6700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock 15,240,207 July 30, 1998
-------------------- ----------------
No Par Value
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets....................................3
Consolidated Statements of Operations .........................5
Consolidated Statements of Changes
in Shareholders' Equity.....................................6
Consolidated Statements of
Cash Flows..................................................7
Notes to Consolidated
Financial Statements........................................8
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations..................................11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...........16
Item 6. Exhibits and Reports on Form 8-K............................. 16
Signatures................................................... 18
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)
June 30, December 31,
ASSETS 1998 1997
- ------ ---- ----
INVESTMENTS:
Fixed maturities:
Available-for-sale - at fair value (amortized
cost: 1998 - $730,535; 1997 - $251,182) $ 737,973 $262,776
Mortgage loans (less allowance for doubtful
accounts: 1998 - $155; 1997 - $150) 15,208 448
Invested cash 58,057 34,420
--------- --------
Total Investments 811,238 297,644
CASH 57,188 35,629
NOTES AND ACCOUNTS RECEIVABLE:
Notes (less allowance for doubtful accounts:
1998 - $2,039; 1997 - $1,083) 10,708 5,911
Premiums (less allowance for doubtful
accounts: 1998 - $9,176; 1997 - $2,693) 63,062 28,659
Income tax recoverable - 2,392
--------- --------
Total Notes and Accounts Receivable 73,770 36,962
PROPERTY AND EQUIPMENT - at cost (less
accumulated depreciation and amortization:
1998 - $80,513; 1997 - $51,775) 44,758 21,896
TITLE PLANTS 97,704 48,984
GOODWILL (less accumulated amortization:
1998 - $21,352; 1997 - $14,507) 344,044 57,687
DEFERRED INCOME TAXES 82,738 21,610
OTHER ASSETS 69,425 34,281
--------- --------
Total Assets $ 1,580,865 $554,693
=========== ========
See accompanying notes.
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)
June 30, December 31,
LIABILITIES 1998 1997
- ----------- ---- ----
POLICY AND CONTRACT CLAIMS $ 493,945 $202,477
ACCOUNTS PAYABLE AND
ACCRUED EXPENSES 161,464 47,922
INCOME TAXES 3,281 -
NOTES PAYABLE 207,736 6,994
OTHER LIABILITIES 9,783 4,896
--------- --------
Total Liabilities 876,209 262,289
--------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 5,000,000 shares
authorized; no shares of Series A Junior
Participating Preferred Stock issued or
outstanding; 2,200,000 shares of 7% Series B
Cumulative Convertible Preferred Stock
issued and outstanding in 1998 175,700 -
Common stock, no par value, 45,000,000 shares
authorized; shares issued and outstanding:
1998 - 15,198,468; 1997 - 8,964,633 380,977 168,066
Deferred compensation (2,979) -
Unrealized investment gains (less related
deferred income tax expense: 1998 - $2,603;
1997 - $4,058) 4,835 7,536
Retained earnings 146,123 116,802
--------- --------
Total Shareholders' Equity 704,656 292,404
---------- --------
Total Liabilities and Shareholders' Equity $1,580,865 $554,693
========== ========
See accompanying notes.
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
SIXMONTHS AND THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(In thousands of dollars except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C>
REVENUES
Premiums, title search, escrow and other $742,265 $279,188 $492,686 $152,018
Investment income - net 20,356 8,383 12,947 4,247
-------- -------- -------- --------
Total Revenues 762,621 287,571 505,633 156,265
-------- ------- -------- --------
EXPENSES
Salaries and employee benefits 233,487 96,818 147,317 49,902
Agents' commissions 275,942 95,766 191,176 51,055
Provision for policy and contract claims 38,622 15,320 25,644 8,340
Assimilation costs 11,517 - 1,556 -
Interest expense 4,192 - 3,186 -
General, administrative and other 147,365 66,189 92,508 34,574
-------- -------- -------- --------
Total Expenses 711,125 274,093 461,387 143,871
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 51,496 13,478 44,246 12,394
INCOME TAX EXPENSE (BENEFIT)
Current 23,831 7,660 14,905 6,025
Deferred (5,818) (3,040) 610 (1,642)
-------- -------- ------- --------
Total Income Tax Expense 18,013 4,620 15,515 4,383
-------- -------- -------- --------
NET INCOME 33,483 8,858 28,731 8,011
DIVIDENDS - PREFERRED STOCK (2,652) - (1,925) -
-------- -------- -------- --------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $ 30,831 $ 8,858 $26,806 $ 8,011
-------- ------- ------- -------
NET INCOME PER COMMON SHARE $ 2.36 $ 0.99 $ 1.78 $ 0.90
======= ======= ====== =======
NET INCOME PER COMMON SHARE
ASSUMING DILUTION $ 2.02 $ 0.97 $ 1.42 $ 0.88
======= ======= ====== =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 13,042 8,906 15,080 8,912
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
ASSUMING DILUTION 16,549 9,149 20,221 9,118
</TABLE>
See accompanying notes.
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
Net Total
Unrealized Net Stock-
Common Stock Preferred Stock Deferred Gains Retained holders'
Shares Amount Shares Amount Compensation (Losses) Earnings Equity
------ ------ ------ ------ ------------ ---------- --------- --------
<S> <C>
Balance - December 31, 1997 8,964,633 $168,066 - $ - $ - $7,536 $116,802 $292,404
Comprehensive income
Net income - - - - - - 33,483 33,483
Other comprehensive income, net
of tax:
Net unrealized loss on securities - - - - - (2,701) - (2,701)
Comprehensive income - - - - - - - 30,782
------
Issuance of deferred compensation 66,000 2,979 - - (2,979) - - -
Common and preferred stock issued 6,051,973 206,603 2,200,000 175,700 - - - 382,303
Stock option and incentive plans 115,862 3,329 - - - - - 3,329
Preferred dividends (7%) - - - - - - (2,652) (2,652)
Common dividends ($0.10/share) - - - - - - (1,510) (1,510)
--------- ------- --------- ------- ------- ------- --------- ---------
Balance - June 30, 1998 15,198,468 $380,977 2,200,000 $175,700 $(2,979) $4,835 $146,123 $704,656
========== ======== ========= ======== ======== ====== ======== =========
Balance - December 31, 1996 8,889,791 $167,044 - $ - $ - $2,694 $ 92,430 $262,168
Comprehensive income
Net income - - - - - - 8,858 8,858
Other comprehensive income
net of tax:
Net unrealized loss on securities - - - - - (277) - (277)
Comprehensive income - - - - - - - 8,581
------
Stock options and incentive plans 22,575 450 - - - - - 450
Dividends ($0.10/share) - - - - - - (891) (891)
------- ------ ------- ------ ----- ---- ----- ------
Balance - June 30, 1997 8,912,366 $167,494 - $ - $ - $2,417 $100,397 $270,308
========= ======== ======= ====== ====== ====== ======== =========
</TABLE>
See accompanying notes.
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1998 1997
---- ----
<S> <C>
Cash flows from operating activities:
Net income $ 33,483 $ 8,858
Depreciation & amortization 11,441 4,744
Amortization of bond premium 2 284
Realized investment gains (370) (101)
Deferred income tax (5,818) (3,040)
Change in assets & liabilities:
Notes receivable (4,797) 158
Premiums receivable (2,237) (8,985)
Income taxes receivable/payable 3,831 (5,054)
Policy & contract claims 15,356 1,738
Cash surrender value of life insurance - (8,478)
Accounts payable and accrued expenses (1,442) (5,540)
Other (12,649) (834)
------- ------
Net cash provided by (used in) operating activities 36,800 (16,250)
------- -------
Cash flows from investing activities:
Purchase of property & equipment - net (1,555) (3,382)
Purchase of businesses, net of cash acquired (126,346) -
Cost of investments acquired:
Fixed maturities (115,564) (71,308)
Equity securities - (6)
Mortgage loans (4,621) -
Proceeds from investment sales or maturities:
Fixed maturities 31,822 43,770
Equity securities - 44
Mortgage loans - 19
------- ------
Net cash used in investing activities (216,264) (30,863)
-------- -------
Cash flows from financing activities:
Shares issued 78,080 -
Dividends paid (4,162) (891)
Change in notes payable 150,742 2,619
------- ------
Net cash provided by financing activities 224,660 1,728
------- ------
Net increase (decrease) in cash and invested cash 45,196 (45,385)
Cash & invested cash at beginning of period 70,049 95,623
------- ------
Cash & invested cash at end of period $115,245 $50,238
======== =======
</TABLE>
See accompanying notes.
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of dollars except per share amounts)
1. Interim Financial Information
The unaudited consolidated financial information included in this report
has been prepared in conformity with the accounting principles and
practices reflected in the consolidated financial statements included in
the Form 10-K for the year ended December 31, 1997 filed with the
Securities and Exchange Commission under the Securities Exchange Act of
1934. This report should be read in conjunction with the aforementioned
Form 10-K. In the opinion of management, all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of this
information have been made. The results of operations for the interim
periods are not necessarily indicative of results for a full year.
Certain 1997 amounts have been reclassified to conform to the 1998
presentation.
2. Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share (Statement 128), which was adopted
by the Company on December 31, 1997. Under the new requirements for
calculating basic earnings per share, the dilutive effect of stock options
will be excluded and dual presentation of basic and diluted earnings per
share is required unless the per share amounts are equal. The 1997
earnings per share amounts have been restated to conform with Statement
128 requirements (see Note 4).
As of January 1, 1998, the Company adopted Financial Accounting Standards
Board Statement No. 130, Reporting Comprehensive Income (Statement 130).
Statement 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of this
statement had no impact on the Company's net income or shareholders'
equity. Statement 130 requires unrealized gains or losses on the Company's
available-for-sale securities which, prior to adoption, were reported
separately in shareholders' equity to be included in other comprehensive
income.
<PAGE>
3. Acquisition
On February 27, 1998, the Company acquired all of the issued and
outstanding shares of capital stock of Commonwealth Land Title Insurance
Company and Transnation Title Insurance Company (Commonwealth/Transnation)
from Reliance Insurance Company, a subsidiary of Reliance Group Holdings,
Inc. (the "Acquisition"). The shares were acquired in exchange for
4,039,473 shares of the Company's common stock (book value, net of
offering costs - $130,728); 2,200,000 shares of the Company's 7% Series B
Cumulative Convertible Preferred Stock, which are the equivalent of
4,824,561 shares of common stock (book value - $175,700); the net proceeds
of an offering of 1,750,000 shares of common stock ($65,921); and cash
financed with bank debt ($200,681). The Acquisition has been accounted for
by the Company using the "purchase" method of accounting. The assets and
liabilities of Commonwealth/Transnation will be revalued to their
respective fair market values. The financial statements of the Company
reflect the combined operations of the Company and
Commonwealth/Transnation from the closing date of the Acquisition.
Pursuant to EITF 94-3, the Company has recorded assimilation costs of
approximately $11.5 million related to exit and termination costs incurred
in connection with the acquisition of Commonwealth/Transnation. Costs
incurred to exit certain leases and to dispose of certain title plants
comprised $9.4 million of this amount. The remaining $2.1 million
primarily relates to the termination of employees for which employee
severance benefits have been accrued. These charges have been included in
the following pro forma amounts. Exit and termination costs of
Commonwealth/Transnation leases and employees necessary to assimilate the
operations of Commonwealth/Transnation with the Company have been
capitalized as part of the purchase price.
The following unaudited pro forma results of operations of the Company
give effect to the acquisition of Commonwealth/Transnation as though the
transaction had occurred on January 1, 1998 and January 1, 1997,
respectively.
Six Months Ended June 30,
1998 1997
Gross revenues $907,334 $691,147
Operating revenues 881,397 665,891
Investment income 25,937 25,256
Expenses 847,764 674,809
Net income 38,689 10,663
Less preferred dividends 3,850 3,850
-------- -------
Net income available to common
shareholders 34,839 6,813
Net income per common share $ 2.31 $ 0.96
Net income per common share
assuming dilution 1.92 0.91
Weighted number of average
common shares outstanding 15,059 14,958
Weighted number of average common
shares assuming dilution 20,174 19,940
<PAGE>
4. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings
per share:
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
Numerator:
Net income $33,483 $8,858 $28,731 $8,011
Preferred stock dividends (2,652) - (1,925) -
------- ------ ------ ----
Numerator for basic earnings
per share - income available
to common shareholders $30,831 $8,858 $26,806 $8,011
Preferred stock dividends 2,652 - 1,925 -
------- ------ ------ ----
Numerator for diluted
earnings per share -
income available to common
shareholders after assumed
conversion $33,483 $8,858 $28,731 $8,011
Denominator:
Denominator for basic earnings
per share - weighted average
shares 13,042 8,906 15,080 8,912
Effect of dilutive securities:
Employee stock options 291 243 316 206
Convertible preferred stock 3,216 - 4,825 -
------- ------ ------ -----
Denominator for diluted
earnings per share -
adjusted weighted-average
shares 16,549 9,149 20,221 9,118
Basic earnings per share $ 2.36 $ 0.99 $ 1.78 $ 0.90
======= ====== ====== ======
Diluted earnings per share $ 2.02 $ 0.97 $ 1.42 $ 0.88
======= ====== ====== ======
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations.
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
Results of Operations
General
On February 27, 1998, the Company acquired all of the issued and outstanding
shares of capital stock of Commonwealth Land Title Insurance Company and
Transnation Title Insurance Company (Commonwealth/ Transnation) from Reliance
Insurance Company, a subsidiary of Reliance Group Holdings, Inc. (the
"Acquisition"). The assets and liabilities of Commonwealth/Transnation have been
revalued to their respective fair market values. The financial statements of the
Company reflect the combined operations of the Company and
Commonwealth/Transnation from the closing date of the Acquisition.
The following discussion includes information on pro forma results of operations
that assumes that the Commonwealth/Transnation operations were included for the
entire first half of 1998 and 1997. For additional information, see Note 3 of
the Notes to Consolidated Financial Statements set forth elsewhere in this
report.
Net Income
The Company reported net income of $28.7 million, or $1.42 per share on a
diluted basis for the second quarter ended June 30, 1998, compared to net income
of $8.0 million, or $0.88 per share on a diluted basis, for the second quarter
ended June 30, 1997. Excluding a $1.0 million, or $0.05 per share on a diluted
basis, after-tax charge for assimilation costs, net income for the 1998 quarter
would have been $29.7 million, or $1.47 per share on a diluted basis.
The Company earned $33.5 million or $2.02 per share on a diluted basis for the
first six months of 1998 compared to $8.9 million or $.97 per share on a diluted
basis for the comparable period of 1997. Excluding a $7.5 million or $0.45 per
share on a diluted basis after-tax charge for assimilation costs, net income
would have been $41.0 million or $2.47 per share on a diluted basis for the
first six months of 1998.
<PAGE>
On a pro forma basis, net income would have been as follows:
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
(In millions of dollars except per share amounts)
Net income $38.7 $10.7 $28.7 $14.6
Net income per share
assuming dilution $1.92 $0.91 $1.42 $0.78
Operating Revenues
Operating revenues for the second quarter of 1998 were a record $492.7 million,
compared to $152.0 million in the second quarter of 1997. On a pro forma basis,
operating revenues for the second quarter of 1997 would have been $356.8
million. In addition to the inclusion of Commonwealth and Transnation revenues
in the 1998 quarter, the increase is the result of increased volumes in
residential and commercial resale and refinancing transactions, reflecting
continued economic stability and a continuing favorable interest rate
environment.
For the first six months of 1998, operating revenues were $742.3 million,
compared to $279.2 million in the corresponding 1997 period. On a pro forma
basis, operating revenue for the first six months of 1998 would have been $881.4
million, compared to $665.9 million in the prior year period.
Expenses
Assimilation costs of $11.5 million and $1.6 million were incurred in the first
six months and the second quarter of 1998, respectively, in connection with the
acquisition of Commonwealth/Transnation. See Note 3 of the Notes to Consolidated
Financial Statements.
The operating margin (before claims, interest expense and investment income, and
excluding the charge for assimilation costs) was 12.5% in the second quarter of
1998, as compared with 11.0% in the second quarter of 1997. In the first six
months of 1998 the operating margin was 11.5% compared to 7.0% in the first six
months of 1997. This improvement was principally the result of stronger
operating revenues from both direct operations and agency business, with a less
than proportionate increase in operating expenses to handle the increased
volumes.
Claims experience has continued to be favorable, as reflected in the provision
for claims at 5.2% of operating revenue for the second quarter and first half of
1998 compared to 5.5% in the second quarter and first half of 1997.
<PAGE>
Liquidity and Capital Resources
Cash provided by operating activities for the six months ended June 30, 1998 was
$36.8 million. As of June 30, 1998, the Company held cash and invested cash of
$115.2 million and fixed maturity securities of $738.0 million.
With the closing of the Acquisition on February 27, 1998, the Company incurred
debt of $200.7 million and issued 2.2 million shares of 7% Series B Cumulative
Convertible Preferred Stock. The Company believes that it will be able to fund
the approximately $20.0 million annual servicing requirement of the debt and
preferred stock largely from increased cash flow from operations as a result of
the Acquisition. In addition, the Company has a working capital line of credit
in the amount of $30 million which was unused at June 30, 1998.
The Company believes that it will have sufficient liquidity and capital
resources to meet both its short and long term capital needs.
Year 2000 Issues
Many existing computer programs use only two digits to identify a year in the
date field. These programs were designed and developed without considering the
impact of the change in the century. If not corrected, many date-sensitive
applications could fail or create erroneous results by or in the year 2000. The
Company understands the importance of having systems and equipment operational
through the year 2000 and beyond and is committed to addressing these challenges
while continuing to fulfill its business obligations to its clients and business
partners.
Year 2000 readiness is a major undertaking involving the review and modification
of multiple, interacting technical systems, including the Company's systems,
equipment, facilities, services, and products as well as those of third party
business partners (essential suppliers, vendors, service contractors,
distributors, joint ventures, creditors, borrowers, financial service
organizations, etc.).
The Company began its formal Year 2000 compliance program in 1996. The Year 2000
Project Team was appointed to assess the Year 2000 vulnerability of the
Company's significant systems, equipment, facilities, services, and products.
The Year 2000 Project Team is comprised of internal and external personnel.
Several Company executives, including the Company's President, serve as Project
Team Sponsors. The Year 2000 Project Team is separate and distinct from the
Company's standard information and technology department.
Through the Year 2000 Project Team, the Company has undertaken an internal
quality assurance program to evaluate and test its significant systems,
equipment, facilities, services, and products. The Year 2000 Project Team is
independently validating the initial assessment and recommendations made by the
quality assurance program. The internal and external assessments are the basis
of a full remediation and testing process. In addition to the Project Team
Sponsors, the Year 2000 compliance program is subject to the independent review
of a Corporate Steering Committee. Both the Project Team Sponsors and Corporate
Steering Committee review the Year 2000 compliance program for its impact (and
the impact of the Year 2000 issues) on all phases of the Company's business.
<PAGE>
The Year 2000 Project Team has divided its Year 2000 compliance program into
four (4) phases with estimated completion deadlines: assessment (third quarter
1998), remediation/replacement (fourth quarter 1998), testing (second quarter
1999), and integration (third quarter 1999). The first phase of the Year 2000
compliance program is almost complete. The Company has assembled and engaged the
Year 2000 Project Team. Budgets and resources have been examined. Remediation
tools have been acquired. The Company's headquarter main frame and facilities
have been assessed. A pilot program for testing resources and facilities in the
field has been implemented and, as of the end of the second quarter, 85% of the
field has been inventoried.
Although the Company is developing a Year 2000 compliance program, there is no
guarantee that the systems of other companies, upon which the Company's systems
rely, will be properly converted in a timely manner or will not have an adverse
effect on the Company's systems. Thus, the Company is asking its important
business partners to undertake a self-analysis and report any Year 2000-related
issues that might impact the Company. The Company considers the Year 2000
readiness of its business partners as an important factor in its business
dealings and relationships. Of course, notwithstanding the Company's efforts or
results, the actions or omissions of third parties beyond the Company's
knowledge or reasonable control may adversely affect its ability to function
unaffected to and through the Year 2000.
The Company is finalizing the budget necessary to address the Year 2000 issue.
An allocation of the budgeted amount should be completed by the end of the third
quarter 1998. To date, approximately $2 million has been spent in the assessment
phase. Since the Year 2000 Project Team is separate from the Company's
information and technology department and the amount allocated to the Year 2000
issue is specifically allocated for that purpose, the amount budgeted to address
the Year 2000 issue will not result in the delay of any other non-Year 2000
related information and technology projects.
The Company believes that it has identified all of the business systems vital to
its operations and that its Year 2000 compliance program will result in the
continuation of the Company's operations to and through the Year 2000 and
beyond. However, the Year 2000 issue, and its resolution, is complex and
multifaceted. The success of a response plan cannot be conclusively known until
the Year 2000 is reached (or an earlier date to the extent that systems and
equipment address Year 2000 date data prior to year 2000). Even with appropriate
and diligent pursuit of a well-conceived response plan, including testing
procedures, there is no certainty that any company will achieve complete
success. However, the Company is diligently trying to ensure that its
significant systems, equipment, facilities, services, and products will not be
adversely affected by the Year 2000 problem. As such, the Company is hiring a
Corporate Contingency Planner to develop a contingency plan to address the worst
case scenario if the Company's Year 2000 compliance program should fail to
address the Year 2000.
<PAGE>
Forward-Looking and Cautionary Statements
The Company cautions readers that the foregoing discussion and analysis includes
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor created by
that Act. These forward-looking statements, which include statements regarding
the impact of the Year 2000 issue on the Company's business and operations, the
ability to meet servicing requirements on the Company's debt and preferred stock
and the availability of sufficient capital resources to meet short and long-term
capital needs, are believed by the Company to be reasonable based upon
management's current knowledge and assumptions about future events, but are
subject to the uncertainties generally inherent in any such forward-looking
statement, including factors discussed above as well as other factors that may
generally affect the Company's business, financial condition or operating
results. Reference is made to the discussion of "Forward-Looking and Cautionary
Statements" contained in Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, regarding important
factors that could cause actual results, performance or achievements to differ
materially from future results, performance or achievements expressed or implied
in any forward-looking statement made by or on behalf of the Company.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
a) An Annual Meeting of Shareholders (the "Meeting") was held by the
Company on June 16, 1998.
c) At the Meeting, the shareholders elected five directors to serve a
three-year term, one director to serve a two-year term and one
director to serve a one-year term. The voting with respect to each
nominee was as follows:
Broker
Nominee Votes For Votes Withheld Non-Votes
Three-Year Term
George E. Bello 11,751,691 1,180,890 0
Theodore L. Chandler, Jr. 11,777,467 1,155,114 0
Charles H. Foster, Jr. 11,786,852 1,145,729 0
Herbert Wender 11,769,130 1,163,451 0
Marshall B. Wishnack 11,768,507 1,164,074 0
Two-Year Term
Lowell C. Freiberg 11,764,913 1,167,668 0
One-Year Term
Robert M. Steinberg 11,768,409 1,164,172 0
No other matters were voted upon at the Meeting or during the
quarter for which this report is filed.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Document
----------- --------
<S> <C>
10.1 Change of Control Employment Agreement, dated March 1, 1998, between the
Registrant and Herbert Wender.
10.2 Change of Control Employment Agreement, dated March 1, 1998, between the
Registrant and Jeffrey A. Tischler.
10.3 Employment Agreement, dated March 1, 1998, between the Registrant and Charles H.
Foster, Jr.
10.4 Employment Agreement, dated March 1, 1998, between the Registrant and Herbert
Wender.
10.5 Employment Agreement, dated March 1, 1998, between the Registrant and Janet A.
Alpert.
10.6 Employment Agreement, dated March 1, 1998, between the Registrant and Jeffrey A.
Tischler.
10.7 Employment Agreement, dated March 1, 1998, between the Registrant and G. William
Evans.
10.8 LandAmerica Financial Group, Inc. 1991 Stock Incentive Plan, as amended May 16, 1995,
May 21, 1996, November 1, 1996 and June 16, 1998, incorporated by reference to
Exhibit 4.7 of the Registrant's Form S-8 Registration Statement, filed July 14, 1998
(Registration No. 333-59055).
11 Statement re: Computation of Per Share Earnings.
27 Financial Data Schedule (electronic copy only).
</TABLE>
b) Reports on Form 8-K
The Company filed a Form 8-K/A (Amendment No. 1) on April 14, 1998
that amended the Company's Current Report on Form 8-K filed on March
16, 1998 to report the Acquisition. The Form 8-K/A was filed to
include as an additional exhibit a consent from the accountants for
Commonwealth/Transnation.
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LANDAMERICA FINANCIAL GROUP, INC.
---------------------------------
(Registrant)
Date: August 12, 1998 /s/ Charles Henry Foster, Jr.
------------------------ ---------------------------------
Charles Henry Foster, Jr.
Chairman and Chief Executive Officer
Date: August 12, 1998 /s/ Jeffrey Alan Tischler
------------------------ -----------------------------
Jeffrey Alan Tischler
Executive Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<S> <C>
10.1 Change of Control Employment Agreement, dated March 1, 1998, between the Registrant and
Herbert Wender.
10.2 Change of Control Employment Agreement, dated March 1, 1998, between the Registrant and
Jeffrey A. Tischler.
10.3 Employment Agreement, dated March 1, 1998, between the Registrant and Charles H. Foster,
Jr.
10.4 Employment Agreement, dated March 1, 1998, between the Registrant and Herbert Wender.
10.5 Employment Agreement, dated March 1, 1998, between the Registrant and Janet A. Alpert.
10.6 Employment Agreement, dated March 1, 1998, between the Registrant and Jeffrey A. Tischler.
10.7 Employment Agreement, dated March 1, 1998, between the Registrant and G. William Evans.
10.8 LandAmerica Financial Group, Inc. 1991 Stock Incentive Plan, as amended May 16, 1995, May
21, 1996, November 1, 1996 and June 16, 1998, incorporated by reference to Exhibit 4.7 of
the Registrant's Form S-8 Registration Statement, filed July 14, 1998 (Registration No.
333-59055).
11 Statement Re: Computation of Earnings Per Share.
27 Financial Data Schedule (electronic copy only).
</TABLE>
Exhibit 10.1
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
THIS CHANGE OF CONTROL EMPLOYMENT AGREEMENT is made and entered into as
of the 1st day of March, 1998, by and between LandAmerica Financial Group, Inc.,
a Virginia corporation (the "Company"), and Herbert Wender (the "Executive").
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 in Section 2) 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) The "Effective Date" shall mean the first
date during the Change of Control Period (as defined in Section l(b)) on which a
Change of Control 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 the Change of Control or (ii) otherwise
arose in connection with or anticipation of the 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.
(b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the third anniversary of such date; provided,
however, that commencing on the date one year after the date hereof, and on each
anniversary of such date (such date and each anniversary thereof shall be
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate three years 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.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean and shall be deemed to have taken place if: (i) any
individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 (the "Exchange Act")) becomes the
beneficial owner of shares of the Company having 20 percent or more of the total
number of votes that may be cast for the election of directors of the Company,
other than (x) as a result of any acquisition directly from the Company, or (y)
as a result of any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or its subsidiaries; or (ii) a change in
the composition of the Board such that the individuals who, as of the date
hereof, constitute the Board (the Board as of such date shall be hereinafter
referred to as the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this Section,
that any individual who becomes a member of the Board 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 those individuals who are
members of the Board and who were also members of the Incumbent Board (or deemed
to be such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided further, that any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board shall not be so considered as a member of the Incumbent Board.
<PAGE>
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on the Effective Date and ending on the third
anniversary of such date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 90-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 which is less than 35 miles from such
location.
(ii) During the Employment Period, and excluding any periods
of vacation and leave 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, charitable,
title insurance industry association or professional association 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.
<PAGE>
(b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid in equal installments on a monthly basis, at least equal to twelve
times the highest monthly base salary paid or payable to the Executive by the
Company and its affiliated companies in respect of the twelve-month period
immediately preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed at least annually
and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other peer executives of the Company and its
affiliated companies. 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. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under common
control with the Company.
(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
average annualized (for any fiscal year consisting of less than twelve full
months or with respect to which the Executive has been employed by the Company
for less than twelve full months) bonus paid or payable, including by reason of
any deferral, to the Executive by the Company and its affiliated companies in
respect of the three fiscal years immediately preceding the fiscal year in which
the Effective Date occurs (the "Recent Average 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.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies, 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
90-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 and its affiliated companies.
<PAGE>
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, 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 and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 90-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 and
its affiliated companies.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 90-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 and its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 90-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 and its affiliated companies.
(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 90-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 and its affiliated companies.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation 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 90-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 and its affiliated companies.
<PAGE>
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 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 the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(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) a material breach by the Executive of the Executive's obligations under
Section 4(a) (other than as a result of incapacity due to physical or mental
illness) which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such breach is
in the best interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company specifying such
breach or (ii) the conviction of the Executive of a felony involving moral
turpitude.
(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 the Executive without any reason. For purposes
of this Agreement, the "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) or any other action by
the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b), 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;
<PAGE>
(iii) the Company's requiring the Executive to be based at any
office or location other than that described in Section 4(a)(i)(B);
(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), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the
requirements of Section 11(c).
For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for Cause, or
by the Executive without any reason 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). 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 15 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 hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive during the Window Period or for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) During the Window
Period. If, during the Employment Period, the Executive shall terminate
employment without any reason during the Window Period:
<PAGE>
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the sum of (1) the
Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid; (2) the product of (A) the greater of (x)
the Annual Bonus paid or payable, including by reason of any deferral,
to the Executive (and annualized for any fiscal year consisting of less
than twelve full months or for which the Executive has been employed
for less than twelve full months) for the most recently completed
fiscal year during the Employment Period, if any, and (y) the Recent
Average Bonus (such greater amount shall be hereinafter referred to as
the "Highest Annual Bonus") and (B) 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; (3) the amount that
would be payable to the Executive by applying the severance pay formula
set forth in the Lawyers Title Insurance Corporation Severance Benefits
Plan (without regard to its other provisions); (4) any compensation
previously deferred by the Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid; and
(5) any accrued vacation pay, to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2), (3), (4) and (5)
shall be hereinafter referred to as the "Accrued Obligations"); and
(ii) for the remainder of the Employment Period, or such
longer period as any plan, program, practice or policy may provide, 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) if the Executive's employment had not
been terminated in accordance with the most favorable plans, practices,
programs or policies of the Company and its affiliated companies as in
effect and applicable generally to other peer executives and their
families during the 90-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 and its affiliated companies and their families, provided,
however, that if the Executive becomes reemployed with another employer
and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility (such continuation of
such benefits for the applicable period herein set forth shall be
hereinafter referred to as "Welfare Benefit Continuation"). For
purposes of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until the end
of the Employment Period and to have retired on the last day of such
period; and
(iii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive and/or the
Executive's family any other amounts or benefits required to be paid or
provided or which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the Company and
its affiliated companies as in effect and applicable generally to other
peer executives and their families during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as
in effect generally thereafter with respect to other peer executives of
the Company and its affiliated companies and their families (such other
amounts and benefits shall be hereinafter referred to as the "Other
Benefits").
<PAGE>
(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 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 the
aggregate of the following amounts:
A. The Accrued Obligations; and
B. The amount (such amount shall be hereinafter
referred to as the "Severance Amount") equal to the
maximum amount payable to the Executive which is
deductible by the Company under Section 280G of the
Internal Revenue Code of 1986, as amended (the
"Code") as in effect on the date of this Agreement;
and
(ii) The Company shall timely pay or provide for the Welfare
Benefit Continuation and Other 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 (which shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination) and the timely payment or provision
of the Welfare Benefit Continuation and Other Benefits.
(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 (which shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation and Other Benefits.
(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 his Annual Base Salary through the Date of Termination
plus the amount of any compensation previously deferred by the Executive, in
each case to the extent theretofore unpaid. If the Executive terminates
employment during the Employment Period, excluding a termination either for Good
Reason or without any reason during the Window Period, this Agreement shall
terminate without further obligations to the Executive, other than for Accrued
Obligations. In such case, such Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.
<PAGE>
7. Nonexclusivity of Rights. Except as provided in sections 6(a)(ii),
6(b)(ii), 6(c) and 6(d), 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 or any of its affiliated companies and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies. 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 or
any of its affiliated companies 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; Resolution of Disputes. (a) 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, except as provided in Sections 6(a)(ii) and
6(b)(ii) with respect to Welfare Benefit Continuation, such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company
agrees to pay promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
(b) If there shall be any dispute between the Company and the Executive
(i) in the event of any termination of the Executive's employment by the
Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section
6(b) as though such termination were by the Company without Cause or by the
Executive with Good Reason; provided, however, that the Company shall not be
required to pay any disputed amounts pursuant to this paragraph except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
<PAGE>
9. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 6 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (i) whether the
payments or distributions are "parachute payments" under Section 280G, (ii) the
amount of payments and distributions under this Agreement that constitutes
reasonable compensation, and (iii) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
10. 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 or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies 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
except as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
<PAGE>
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 as follows:
If to the Executive to: If to the Company to:
Herbert Wender LandAmerica Financial Group, Inc.
LandAmerica Financial Group, Inc. 6630 West Broad Street
1700 Market Street, 22nd Floor Richmond, Virginia 23230
Philadelphia, Pennsylvania 19103-3990
Attention: Russell W.
Jordan, III, Esquire
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 or local 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 hereof or any other 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 Section 5(c)(i)-(v), shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
<PAGE>
(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, prior to the Effective Date, may be terminated by either the Executive or
the Company at any time. Moreover, if prior to the Effective Date, the
Executive's employment with the Company terminates, then the Executive shall
have no further rights under this Agreement.
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: /s/ Charles H. Foster, Jr.
-------------------------------------------
Title: Chairman and Chief Executive Officer
/s/ Herbert Wender
-------------------------
Executive
Exhibit 10.2
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
THIS CHANGE OF CONTROL EMPLOYMENT AGREEMENT is made and entered into as
of the 1st day of March, 1998, by and between LandAmerica Financial Group, Inc.,
a Virginia corporation (the "Company"), and Jeffrey A. Tischler (the
"Executive").
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 in Section 2) 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) The "Effective Date" shall mean the first
date during the Change of Control Period (as defined in Section l(b)) on which a
Change of Control 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 the Change of Control or (ii) otherwise
arose in connection with or anticipation of the 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.
(b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the third anniversary of such date; provided,
however, that commencing on the date one year after the date hereof, and on each
anniversary of such date (such date and each anniversary thereof shall be
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate three years 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.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean and shall be deemed to have taken place if: (i) any
individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 (the "Exchange Act")) becomes the
beneficial owner of shares of the Company having 20 percent or more of the total
number of votes that may be cast for the election of directors of the Company,
other than (x) as a result of any acquisition directly from the Company, or (y)
as a result of any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or its subsidiaries; or (ii) a change in
the composition of the Board such that the individuals who, as of the date
hereof, constitute the Board (the Board as of such date shall be hereinafter
referred to as the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this Section,
that any individual who becomes a member of the Board 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 those individuals who are
members of the Board and who were also members of the Incumbent Board (or deemed
to be such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided further, that any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board shall not be so considered as a member of the Incumbent Board.
<PAGE>
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on the Effective Date and ending on the third
anniversary of such date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 90-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 which is less than 35 miles from such
location.
(ii) During the Employment Period, and excluding any periods
of vacation and leave 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, charitable,
title insurance industry association or professional association 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.
<PAGE>
(b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid in equal installments on a monthly basis, at least equal to twelve
times the highest monthly base salary paid or payable to the Executive by the
Company and its affiliated companies in respect of the twelve-month period
immediately preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed at least annually
and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other peer executives of the Company and its
affiliated companies. 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. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under common
control with the Company.
(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
average annualized (for any fiscal year consisting of less than twelve full
months or with respect to which the Executive has been employed by the Company
for less than twelve full months) bonus paid or payable, including by reason of
any deferral, to the Executive by the Company and its affiliated companies in
respect of the three fiscal years immediately preceding the fiscal year in which
the Effective Date occurs (the "Recent Average 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.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies, 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
90-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 and its affiliated companies.
<PAGE>
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, 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 and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 90-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 and
its affiliated companies.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 90-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 and its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 90-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 and its affiliated companies.
(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 90-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 and its affiliated companies.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation 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 90-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 and its affiliated companies.
<PAGE>
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 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 the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(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) a material breach by the Executive of the Executive's obligations under
Section 4(a) (other than as a result of incapacity due to physical or mental
illness) which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such breach is
in the best interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company specifying such
breach or (ii) the conviction of the Executive of a felony involving moral
turpitude.
(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 the Executive without any reason. For purposes
of this Agreement, the "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) or any other action by
the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b), 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;
<PAGE>
(iii) the Company's requiring the Executive to be based at any
office or location other than that described in Section 4(a)(i)(B);
(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), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the
requirements of Section 11(c).
For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for Cause, or
by the Executive without any reason 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). 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 15 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 hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive during the Window Period or for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) During the Window
Period. If, during the Employment Period, the Executive shall terminate
employment without any reason during the Window Period:
<PAGE>
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the sum of (1) the
Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid; (2) the product of (A) the greater of (x)
the Annual Bonus paid or payable, including by reason of any deferral,
to the Executive (and annualized for any fiscal year consisting of less
than twelve full months or for which the Executive has been employed
for less than twelve full months) for the most recently completed
fiscal year during the Employment Period, if any, and (y) the Recent
Average Bonus (such greater amount shall be hereinafter referred to as
the "Highest Annual Bonus") and (B) 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; (3) the amount that
would be payable to the Executive by applying the severance pay formula
set forth in the Lawyers Title Insurance Corporation Severance Benefits
Plan (without regard to its other provisions); (4) any compensation
previously deferred by the Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid; and
(5) any accrued vacation pay, to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2), (3), (4) and (5)
shall be hereinafter referred to as the "Accrued Obligations"); and
(ii) for the remainder of the Employment Period, or such
longer period as any plan, program, practice or policy may provide, 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) if the Executive's employment had not
been terminated in accordance with the most favorable plans, practices,
programs or policies of the Company and its affiliated companies as in
effect and applicable generally to other peer executives and their
families during the 90-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 and its affiliated companies and their families, provided,
however, that if the Executive becomes reemployed with another employer
and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility (such continuation of
such benefits for the applicable period herein set forth shall be
hereinafter referred to as "Welfare Benefit Continuation"). For
purposes of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until the end
of the Employment Period and to have retired on the last day of such
period; and
(iii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive and/or the
Executive's family any other amounts or benefits required to be paid or
provided or which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the Company and
its affiliated companies as in effect and applicable generally to other
peer executives and their families during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as
in effect generally thereafter with respect to other peer executives of
the Company and its affiliated companies and their families (such other
amounts and benefits shall be hereinafter referred to as the "Other
Benefits").
<PAGE>
(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 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 the
aggregate of the following amounts:
A. The Accrued Obligations; and
B. The amount (such amount shall be hereinafter
referred to as the "Severance Amount") equal to the
maximum amount payable to the Executive which is
deductible by the Company under Section 280G of the
Internal Revenue Code of 1986, as amended (the
"Code") as in effect on the date of this Agreement;
and
(ii) The Company shall timely pay or provide for the Welfare
Benefit Continuation and Other 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 (which shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination) and the timely payment or provision
of the Welfare Benefit Continuation and Other Benefits.
(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 (which shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation and Other Benefits.
(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 his Annual Base Salary through the Date of Termination
plus the amount of any compensation previously deferred by the Executive, in
each case to the extent theretofore unpaid. If the Executive terminates
employment during the Employment Period, excluding a termination either for Good
Reason or without any reason during the Window Period, this Agreement shall
terminate without further obligations to the Executive, other than for Accrued
Obligations. In such case, such Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.
<PAGE>
7. Nonexclusivity of Rights. Except as provided in sections 6(a)(ii),
6(b)(ii), 6(c) and 6(d), 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 or any of its affiliated companies and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies. 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 or
any of its affiliated companies 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; Resolution of Disputes. (a) 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, except as provided in Sections 6(a)(ii) and
6(b)(ii) with respect to Welfare Benefit Continuation, such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company
agrees to pay promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
(b) If there shall be any dispute between the Company and the Executive
(i) in the event of any termination of the Executive's employment by the
Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section
6(b) as though such termination were by the Company without Cause or by the
Executive with Good Reason; provided, however, that the Company shall not be
required to pay any disputed amounts pursuant to this paragraph except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
<PAGE>
9. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 6 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (i) whether the
payments or distributions are "parachute payments" under Section 280G, (ii) the
amount of payments and distributions under this Agreement that constitutes
reasonable compensation, and (iii) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
10. 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 or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies 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
except as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
<PAGE>
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 as follows:
If to the Executive to: If to the Company to:
Jeffrey A. Tischler LandAmerica Financial Group, Inc.
2020 Walnut Street, Apt. 24B 6630 West Broad Street
Philadelphia, Pennsylvania 19103 Richmond, Virginia 23230
Attention: Russell W. Jordan, III, Esquire
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 or local 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 hereof or any other 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 Section 5(c)(i)-(v), shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
<PAGE>
(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, prior to the Effective Date, may be terminated by either the Executive or
the Company at any time. Moreover, if prior to the Effective Date, the
Executive's employment with the Company terminates, then the Executive shall
have no further rights under this Agreement.
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: /s/ Charles H. Foster, Jr.
-----------------------------------
Title: Chairman and Chief Executive Officer
/s/ Jeffrey A. Tischler
---------------------------
Executive
Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
March, 1998, by and between LandAmerica Financial Group, Inc., a Virginia
corporation (the "Company"), and Charles H. Foster, Jr. (the "Executive").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Stock Purchase
Agreement, as amended (the "Stock Purchase Agreement"), dated August 20, 1997,
by and among Lawyers Title Corporation ("LTC"), Lawyers Title Insurance
Corporation, Reliance Insurance Company ("RIC") and Reliance Group Holdings,
Inc., LTC agreed to purchase all of the issued and outstanding shares of
Commonwealth Land Title Insurance Company and Transnation Title Insurance
Company from Reliance Insurance Company (the "Acquisition"); and
WHEREAS, following the consummation of the Acquisition, LTC was renamed
LandAmerica Financial Group, Inc.; and
WHEREAS, prior to the Acquisition, the Executive was employed by LTC;
and
WHEREAS, 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 maintain the services of the Executive for the benefit of the Company and to
encourage the Executive's full attention and dedication to the Company and to
provide the Executive with compensation and benefits arrangements which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement, the Company and the Executive agree as follows:
1. Certain Definitions. (a) The term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
(b) Every capitalized term used herein, but not otherwise
defined herein, shall have the meaning ascribed to such term in the Stock
Purchase Agreement.
2. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on March 1, 1998 and ending on the third anniversary
thereof (the "Employment Period"), unless this Agreement is earlier terminated
pursuant to Section 10 below.
3. Terms of Employment. (a) Position and Duties. During the Employment
Period, and excluding any periods of vacation and leave 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, charitable, title insurance industry association or professional
association 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.
<PAGE>
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary of five hundred
thousand dollars ($500,000.00) (the "Annual Base Salary"), which shall be paid
in equal installments on a semi-monthly basis. The Annual Base Salary shall be
reviewed at least annually and may be increased at any time and from time to
time, but in no event shall the Annual Base Salary be reduced. The 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 the Annual Base Salary as so
increased.
(ii) Annual Bonus. In addition to the Annual Base
Salary, the Executive shall be entitled to an annual bonus (the "Annual Bonus")
as established by the Compensation Committee of the Board (the "Compensation
Committee"). 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 pursuant to a Company deferral plan. In the event that this
Agreement is terminated prior to the close of the Employment Period pursuant to
either Section 4 or 10 below, the Compensation Committee, in its sole discretion
following a review of all relevant factors, may award the Executive a pro-rata
portion of the Annual Bonus measured to the date of termination for any partial
year completed, or the entire Annual Bonus if Executive terminates as of the
close of the fiscal year.
(iii) Annual Stock Options. The Executive may receive
annual stock options as provided at the discretion of the Compensation
Committee.
(iv) Incentive, Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies. For all purposes of
this Agreement, the term "peer executives" means the most senior executives of
the Company.
(v) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, 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 and its affiliated companies.
<PAGE>
(vi) Supplemental Pension Plan. During the Employment
Period, the Executive shall be entitled to participate in the Lawyers Title
Insurance Corporation 1995 Benefit Restoration Plan, as such plan may be amended
from time to time, to the extent applicable generally to other peer executives
of the Company and its affiliated companies.
(vii) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance with the policies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(viii) Fringe Benefits. During the Employment Period,
the Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its affiliated companies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(ix) 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 personal secretarial and other
assistance as provided generally at any time to other peer executives of the
Company and its affiliated companies.
(x) Deferred Compensation. During the Employment
Period, the Executive shall be entitled to deferred compensation benefits in
accordance with the plans, practices, programs and policies of the Company and
its affiliated companies in effect generally at any time with respect to other
peer executives of the Company and its affiliated companies.
(xi) Vacation. During the Employment Period, the
Executive shall be entitled to a minimum of four weeks paid vacation in
accordance with the plans, policies, programs and practices of the Company and
its affiliated companies as in effect generally at any time with respect to
other peer executives of the Company and its affiliated companies.
(xii) Financial, Tax and Estate Planning Allowance.
During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive for the
purpose of personal financial, tax and estate planning, up to a maximum amount
of ten thousand dollars ($10,000.00) for fiscal year 1998, and five thousand
dollars ($5,000.00) per fiscal year thereafter, in accordance with the policies
in effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
4. 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, as defined in the Company's long-term disability plan, has
occurred during the Employment Period, it may give to the Executive written
notice in accordance with Section 11(b) 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
thirty (30) days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties.
<PAGE>
(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) a material breach by the Executive of the
Executive's obligations under Section 3(a) (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and deliberate
on the Executive's part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach or (ii) the conviction of the Executive of a
felony involving moral turpitude.
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent generally with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b), 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) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(iv) any failure by the Company to comply with and
satisfy Section 9(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 9(c).
For purposes of this Section 4(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b).
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 fifteen (15) 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 hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
<PAGE>
(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 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.
5. Obligations of the Company upon Termination. (a) Good Reason; Other
than for Cause or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:
(i) All stock options held by the Executive on the
Date of Termination shall vest and be immediately exerciseable.
(ii) This Agreement shall terminate and the Executive
shall receive, until the end of the initial employment term, (i) his Annual Base
Salary; plus (ii) one-half (1/2) of the sum of the highest Annual Bonus paid for
any two (2) fiscal years in the five (5) fiscal years immediately preceding that
year in which the Date of Termination occurs.
(b) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate and the Executive shall receive, until the end of the
initial employment term, (i) his Annual Base Salary; plus (ii) one-half (1/2) of
the sum of the highest Annual Bonus paid for any two (2) fiscal years in the
five (5) fiscal years immediately preceding that year in which the Date of
Termination occurs.
(c) Cause; Other than for Good Reason or Death. If the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason, or if the Executive's employment shall be
terminated for Cause or by reason of the Executive's death during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive and vested on the Date of Termination.
6. Nonexclusivity of Rights. Except as provided in Section 5, 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
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. 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 or any of its affiliated companies 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.
<PAGE>
7. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 5 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (a) whether the
payments or distributions are "parachute payments" under Section 280G, (b) the
amount of payments and distributions under this Agreement that constitute
reasonable compensation, and (c) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
8. 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 or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies 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 except as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
(b) Ownership of Information. The Executive acknowledges and
agrees that all memoranda, notes, reports, records and other documents made or
compiled by the Executive, or made available to the Executive during the term of
his employment concerning the business of the Company or any of its affiliated
companies, shall be the Company's property and shall be delivered to the Company
upon the termination of the Executive's employment hereunder or at any other
time upon request by the Board.
<PAGE>
(c) Non-Competition. The Executive agrees that, for so long as
he is employed by the Company and for one (1) year after the termination of the
Executive's employment with the Company, he will not, without the prior written
consent of the Company, directly or indirectly, engage in or have an interest in
(as owner, partner, shareholder, employee, director, officer, consultant or
otherwise), with or without compensation, any business which is in competition
with the lines of business actually being conducted by the Company during the
term of employment or on the date that the employment terminates. Nothing
herein, however, will prohibit the Executive from acquiring or holding not more
than five percent (5%) of any class of publicly traded securities of any such
business, provided that such securities entitle the Executive to no more than
five percent (5%) of the total outstanding votes entitled to be cast by
security-holders of such business in matters in which such security-holders are
entitled to vote.
(d) Non-Interference. (i) The Executive agrees and covenants
that, for a period of one (1) year after the Date of Termination of this
Agreement, the Executive shall not, without the prior written approval of the
Board, Interfere directly or indirectly in any way with the Company or any of
its affiliated companies.
(ii) For purposes of this Agreement, "Interfere"
shall mean, to solicit, entice, persuade, induce, influence or attempt to
influence, directly or indirectly, clients or Prospective Clients, employees,
agents or independent contractors of the Company or any of its affiliated
companies to restrict, reduce, sever or otherwise alter their relationship with
the Company or any of its affiliated companies.
(iii) For purposes of this Agreement, "Prospective
Clients" shall mean persons or entities identified by the Company as prospective
clients of the Company or any of its affiliated companies within twelve (12)
months of the Date of Termination and with whom the Company or such affiliated
companies have had contact.
(e) Severability and Reduction in Scope of Provisions. The
covenants and agreements of the Executive contained in paragraphs (a) through
(d) above are separate and distinct covenants and agreements of the Executive
and if any part of any such paragraph is void, invalid or unenforceable, such
paragraph shall be severed from this Agreement and shall not affect or impair
any other paragraph or the balance of this Agreement, and this Agreement with
the void, invalid or unenforceable paragraph stricken herefrom shall remain in
full force and effect. Further, the periods and scope of the restrictions set
forth in any such paragraph or subparagraph shall be reduced by the minimum
amount necessary to reform such paragraph or subparagraph to the maximum level
of enforcement permitted to the Company by the law governing this Agreement, if
such reform is permitted.
(f) Remedy for Breach. The Executive acknowledges that the
Company and its affiliated companies or any one of them will be irrevocably
damaged if all of the provisions of this Section 8 are not specifically
enforced. Accordingly, the Executive agrees that, in addition to any other
relief to which the Company may be entitled, any one of the Company or its
affiliated companies will be entitled to seek and obtain injunctive relief from
a court of competent jurisdiction for the purpose of restraining the Executive
from any actual or threatened breach of this Section 8.
<PAGE>
(g) Validity of Covenant. The Executive agrees that the
covenants contained in this Section 8 are reasonably necessary to protect the
legitimate interests of the Company and its affiliated companies, are reasonable
with respect to time and territory, and do not interfere with the interests of
the public. The Executive further agrees that the descriptions of the covenants
contained in this Section 8 are sufficiently accurate and definite to inform the
Executive of the scope of the covenants. Finally, the Executive agrees that the
consideration provided for in this Agreement is full, fair and adequate to
support the Executive's obligations hereunder.
9. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
10. Termination of Agreement upon a Change of Control. Upon any Change
of Control, as that term is defined in that certain Change of Control Employment
Agreement, of even date herewith, between the Company and the Executive, the
Change of Control Employment Agreement shall become effective, and shall apply
to the extent its terms are more advantageous to the Executive.
11. 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 as
follows:
If to the Executive to: If to the Company to:
Charles H. Foster, Jr. LandAmerica Financial Group, Inc.
LandAmerica Financial Group, Inc. 6630 West Broad Street
6630 West Broad Street Richmond, Virginia 23230
Richmond, Virginia 23230 Attention: Russell W. Jordan, III, Esquire
<PAGE>
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 or local 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 hereof or any other 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 Section 4(c)(i)-(iv), shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(f) In the event of a dispute with respect to any term of this
Agreement, either party may elect, by delivering written notice to the other
stating the nature of the dispute, to have such dispute settled by arbitration.
Within ten (10) days of the delivery of the written notice electing arbitration
both parties shall appoint an arbitrator and within ten (10) days thereafter the
two arbitrators shall select a third. If a party does not appoint an arbitrator
within the ten-day period, such party shall forfeit the right to do so and the
matter shall be settled by the sole appointed arbitrator. The arbitrator(s)
shall follow the rules of arbitration established by the American Arbitration
Association and shall render a decision within ten (10) days of the hearing
which shall occur no later than twenty (20) days after the arbitrator(s) is/are
appointed. The decision of a majority of the arbitrators, or of the sole
arbitrator, as the case may be, shall be binding upon the respective parties to
the arbitration hearing, their heirs, legal representatives, assigns and
successors. Each party shall pay the fees and expenses of their chosen
arbitrator, and shall pay one-half of the fees and expenses of the third
arbitrator. If only one arbitrator is appointed each party shall pay one-half of
his or her fees and expenses. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board, 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. EXECUTIVE
By: /s/ Janet A. Alpert /s/ Charles H. Foster, Jr.
------------------------- --------------------------
Title: President Charles H. Foster, Jr.
Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
March, 1998, by and between LandAmerica Financial Group, Inc., a Virginia
corporation (the "Company"), and Herbert Wender (the "Executive").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Stock Purchase
Agreement, as amended (the "Stock Purchase Agreement"), dated August 20, 1997,
by and among Lawyers Title Corporation ("LTC"), Lawyers Title Insurance
Corporation, Reliance Insurance Company ("RIC") and Reliance Group Holdings,
Inc., LTC agreed to purchase all of the issued and outstanding shares of
Commonwealth Land Title Insurance Company ("Commonwealth") and Transnation Title
Insurance Company from Reliance Insurance Company (the "Acquisition"); and
WHEREAS, following the consummation of the Acquisition, LTC was renamed
LandAmerica Financial Group, Inc.; and
WHEREAS, prior to the Acquisition, the Executive was employed by
Commonwealth Land Title Insurance Company; and
WHEREAS, 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 maintain the services of the Executive for the benefit of the Company and to
encourage the Executive's full attention and dedication to the Company and to
provide the Executive with compensation and benefits arrangements which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement, the Company and the Executive agree as follows:
1. Certain Definitions. (a) The term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
(b) Every capitalized term used herein, but not otherwise
defined herein, shall have the meaning ascribed to such term in the Stock
Purchase Agreement.
2. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on March 1, 1998 and ending on May 31,1999 (the
"Initial Employment Period"), provided that such term shall be extended for
successive one-year periods unless the Company or the Executive provides written
notice to the other party pursuant to Section 11(b) of its or his intent not to
extend, at least sixty (60) days prior to the end of the then applicable term of
employment (the Initial Employment Period plus any renewal thereof, the
"Employment Period"), unless this Agreement is earlier terminated pursuant to
Section 10 below.
<PAGE>
3. Terms of Employment. (a) Position and Duties. During the Employment
Period, and excluding any periods of vacation and leave 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, charitable, title insurance industry association or professional
association 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. In addition, it is understood that Executive
shall be permitted to continue as Chairman of the Board of Directors of CMAC
Investment Corporation, and to perform all obligations required of him in
connection with that position.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary of four hundred
seventy-five thousand dollars ($475,000.00) (the "Annual Base Salary"), which
shall be paid in equal installments on a semi-monthly basis. The Annual Base
Salary shall be reviewed at least annually and may be increased at any time and
from time to time, but in no event shall the Annual Base Salary be reduced. The
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 the Annual Base
Salary as so increased.
(ii) Annual Bonus. In addition to the Annual Base
Salary, the Executive shall be entitled to a minimum annual bonus (the "Annual
Bonus") for the 1998 calendar year of not less than five hundred thousand
dollars ($500,000.00), which shall be paid to the Executive in cash. For the
period January 1, 1999 through May 31, 1999, the Executive shall be entitled to
a minimum Annual Bonus of not less than two hundred eight thousand, three
hundred thirty-three dollars ($208,333.00), which shall be paid to the Executive
in cash. Thereafter, the Executive shall receive an Annual Bonus as established
by the Compensation Committee of the Board (the "Compensation Committee"). Each
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 pursuant to a Company deferral plan.
(iii) Annual Stock Options. The Executive may receive
annual stock options as provided at the discretion of the Compensation
Committee.
(iv) Incentive, Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies. For all purposes of
this Agreement, the term "peer executives" means the most senior executives of
the Company.
<PAGE>
(v) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, 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 and its affiliated companies.
Executive shall not participate in the Company's Executive Life Insurance Plan
("Split Dollar").
(vi) Supplemental Pension Plan. Pursuant to the terms
of the Stock Purchase Agreement, the Company has agreed to assume all
obligations through the Closing Date of the Stock Purchase Agreement under the
Reliance Group Holdings, Inc. Retirement Benefit Equalization Plan with respect
to the Executive. During the Employment Period, the Executive shall be entitled
to participate in the Lawyers Title Insurance Corporation 1995 Benefit
Restoration Plan, as such plan may be amended from time to time (the "Benefit
Restoration Plan"), to the extent applicable generally to other peer executives
of the Company and its affiliated companies, with the following terms applicable
to Executive's participation: (i) plan participation to be measured from
Executive's date of hire of March 19, 1973; (ii) inclusion of Executive's annual
bonus from Commonwealth and the Company in pensionable earnings; (iii)
Executive's minimum benefit under the Benefit Restoration Plan shall be his
benefit under the Reliance Group Holdings, Inc. Retirement Benefit Equalization
Plan ("Benefit Equalization Plan") as of the Closing Date of the Stock Purchase
Agreement; (iv) application of the early retirement reduction factors under the
Benefit Equalization Plan to Executive's benefit under the Benefit Restoration
Plan if more favorable; and (v) no amendment shall be made to Benefit
Restoration Plan which shall reduce the Executive's benefit without Executive's
consent. The Executive's supplemental pension benefits shall be a general
obligation of the Company to the extent not payable under the terms of the
Benefit Restoration Plan.
(vii) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance with the policies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(viii) Fringe Benefits. During the Employment Period,
the Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its affiliated companies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(ix) 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 personal secretarial and other
assistance as provided generally at any time to other peer executives of the
Company and its affiliated companies.
<PAGE>
(x) Deferred Compensation. During the Employment
Period, the Executive shall be entitled to deferred compensation benefits in
accordance with the plans, practices, programs and policies of the Company and
its affiliated companies in effect generally at any time with respect to other
peer executives of the Company and its affiliated companies.
(xi) Vacation. During the Employment Period, the
Executive shall be entitled to a minimum of four weeks paid vacation in
accordance with the plans, policies, programs and practices of the Company and
its affiliated companies as in effect generally at any time with respect to
other peer executives of the Company and its affiliated companies.
(xii) Financial, Tax and Estate Planning Allowance.
During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive for the
purpose of personal financial, tax and estate planning, up to a maximum amount
of ten thousand dollars ($10,000.00) for fiscal year 1998, and five thousand
dollars ($5,000.00) per fiscal year thereafter, in accordance with the policies
in effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(xiii) Relocation. The Company agrees to extend its
Domestic Relocation Policy to Executive (except with respect to the provisions
of Section 12 relating to home purchase), provided that Executive may choose to
apply the term "Home" to his vacation residence in New Jersey.
4. 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, as defined in and resulting in benefits under the Company's
long-term disability plan, has occurred during the Employment Period, it may
give to the Executive written notice in accordance with Section 11(b) 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 thirty (30) days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. In the event of a termination of employment under this paragraph due to
death or Disability during the Initial Employment Period, Executive or
Executive's estate shall be entitled to a pro-rata portion of the Annual Bonus
under Section 3(b)(ii) measured to the date of death or termination of
employment on account of Disability. Following the Initial Employment Period,
the Compensation Committee, in its sole discretion following a review of all
relevant factors, may award the Executive a pro-rata portion of the Annual Bonus
measured to the date of termination.
(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) a material breach by the Executive of the
Executive's obligations under Section 3(a) (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and deliberate
on the Executive's part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach or (ii) the conviction of the Executive of a
felony involving moral turpitude.
<PAGE>
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent generally with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b), 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) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(iv) any failure by the Company to comply with and
satisfy Section 9(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 9(c).
For purposes of this Section 4(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b).
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 fifteen (15) 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 hereunder or preclude the Executive or the Company 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 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.
<PAGE>
5. Obligations of the Company upon Termination. (a) Good Reason; Other
than for Cause or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:
(i) All stock options held by the Executive on the
Date of Termination shall vest and be immediately exerciseable, and all
restricted stock held by the Executive on the Date of Termination shall become
100% vested and transferable.
(ii) This Agreement shall terminate and the Executive
shall receive, until the end of the Initial Employment Period, (x) the
applicable pro-rata portion of his Annual Base Salary; plus (y) his Annual
Bonus. Following the Initial Employment Period, the Executive shall receive (x)
the applicable pro-rata portion of his Annual Base Salary through the date of
termination; plus (y) the Compensation Committee, in its sole discretion
following a review of all relevant factors, may award the Executive a pro-rata
portion of the Annual Bonus measured to the date of termination.
(iii) Executive and his spouse shall be immediately
eligible for Company-provided post-retirement health insurance under the same
terms and conditions available to peer executives of the Company.
(b) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate and the Executive shall receive, until the end of the
Initial Employment Period, (x) the applicable pro-rata portion of his Annual
Base Salary; plus (y) his Annual Bonus. Following the Initial Employment Period,
the Executive shall receive (x) the applicable pro-rata portion of his Annual
Base Salary through the date of termination; plus (y) the Compensation
Committee, in its sole discretion following a review of all relevant factors,
may award the Executive a pro-rata portion of the Annual Bonus measured to the
date of termination.
(c) Cause; Other than for Good Reason or Death. If the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason, or if the Executive's employment shall be
terminated for Cause or by reason of the Executive's death during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive and vested on the Date of Termination,
provided, that if such termination occurs during the Initial Employment Period,
the Executive shall receive the applicable pro-rata portion of his Annual Bonus
through the date of termination. Following the Initial Employment Period, the
Compensation Committee, in its sole discretion following a review of all
relevant factors, may award the Executive a pro-rata portion of the Annual Bonus
measured to the date of termination.
<PAGE>
(d) Retirement. A termination of employment by Executive on or
after May 31, 1999 shall be deemed to be on account of retirement. All stock
options held by the Executive on the Date of Termination shall vest and be
immediately exercisable and all restricted stock held by Executive on the Date
of Termination shall become 100% vested and transferable.
6. Nonexclusivity of Rights. Except as provided in Section 5, 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
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. 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 or any of its affiliated companies 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.
7. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 5 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (a) whether the
payments or distributions are "parachute payments" under Section 280G, (b) the
amount of payments and distributions under this Agreement that constitute
reasonable compensation, and (c) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
8. 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 or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies 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 except as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
<PAGE>
(b) Ownership of Information. The Executive acknowledges and
agrees that all memoranda, notes, reports, records and other documents made or
compiled by the Executive, or made available to the Executive during the term of
his employment concerning the business of the Company or any of its affiliated
companies, shall be the Company's property and shall be delivered to the Company
upon the termination of the Executive's employment hereunder or at any other
time upon request by the Board.
(c) Non-Competition. The Executive agrees that, for so long as
he is employed by the Company and for one (1) year after the termination of the
Executive's employment with the Company, he will not, without the prior written
consent of the Company, directly or indirectly, engage in or have an interest in
(as owner, partner, shareholder, employee, director, officer, consultant or
otherwise), with or without compensation, any business which is in competition
with the lines of business actually being conducted by the Company during the
term of employment or on the date that the employment terminates. Nothing
herein, however, will prohibit the Executive from acquiring or holding not more
than five percent (5%) of any class of publicly traded securities of any such
business, provided that such securities entitle the Executive to no more than
five percent (5%) of the total outstanding votes entitled to be cast by
security-holders of such business in matters in which such security-holders are
entitled to vote.
(d) Non-Interference. (i) The Executive agrees and covenants
that, for a period of one (1) year after the Date of Termination of this
Agreement, the Executive shall not, without the prior written approval of the
Board, Interfere directly or indirectly in any way with the Company or any of
its affiliated companies.
(ii) For purposes of this Agreement, "Interfere"
shall mean, to solicit, entice, persuade, induce, influence or attempt to
influence, directly or indirectly, clients or Prospective Clients, employees,
agents or independent contractors of the Company or any of its affiliated
companies to restrict, reduce, sever or otherwise alter their relationship with
the Company or any of its affiliated companies.
(iii) For purposes of this Agreement, "Prospective
Clients" shall mean persons or entities identified by the Company as prospective
clients of the Company or any of its affiliated companies within twelve (12)
months of the Date of Termination and with whom the Company or such affiliated
companies have had contact.
(iv) Company recognizes that the discharge of the
Executive's duties with CMAC Investment Corporation shall not be considered an
action to Interfere or compete for purposes of this Agreement, whether prior to
or after the Date of Termination of this Agreement.
(e) Severability and Reduction in Scope of Provisions. The
covenants and agreements of the Executive contained in paragraphs (a) through
(d) above are separate and distinct covenants and agreements of the Executive
and if any part of any such paragraph is void, invalid or unenforceable, such
paragraph shall be severed from this Agreement and shall not affect or impair
any other paragraph or the balance of this Agreement, and this Agreement with
the void, invalid or unenforceable paragraph stricken herefrom shall remain in
full force and effect. Further, the periods and scope of the restrictions set
forth in any such paragraph or subparagraph shall be reduced by the minimum
amount necessary to reform such paragraph or subparagraph to the maximum level
of enforcement permitted to the Company by the law governing this Agreement, if
such reform is permitted.
<PAGE>
(f) Remedy for Breach. The Executive acknowledges that the
Company and its affiliated companies or any one of them will be irrevocably
damaged if all of the provisions of this Section 8 are not specifically
enforced. Accordingly, the Executive agrees that, in addition to any other
relief to which the Company may be entitled, any one of the Company or its
affiliated companies will be entitled to seek and obtain injunctive relief from
a court of competent jurisdiction for the purpose of restraining the Executive
from any actual or threatened breach of this Section 8.
(g) Validity of Covenant. The Executive agrees that the
covenants contained in this Section 8 are reasonably necessary to protect the
legitimate interests of the Company and its affiliated companies, are reasonable
with respect to time and territory, and do not interfere with the interests of
the public. The Executive further agrees that the descriptions of the covenants
contained in this Section 8 are sufficiently accurate and definite to inform the
Executive of the scope of the covenants. Finally, the Executive agrees that the
consideration provided for in this Agreement is full, fair and adequate to
support the Executive's obligations hereunder.
9. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
10. Termination of Agreement upon a Change of Control. Upon any Change
of Control, as that term is defined in that certain Change of Control Employment
Agreement, of even date herewith, between the Company and the Executive, the
Change of Control Employment Agreement shall become effective, and shall apply
to the extent its terms are more advantageous to the Executive.
<PAGE>
11. 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 as
follows:
If to the Executive to: If to the Company to:
Herbert Wender LandAmerica Financial Group, Inc.
LandAmerica Financial Group, Inc. 6630 West Broad Street
1700 Market Street, 22nd Floor Richmond, Virginia 23230
Philadelphia, Pennsylvania 19103-3390
Attention: Russell W.
Jordan, III, Esquire
with a copy to:
James W. Jenning, Esq.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
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 or local 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 hereof or any other 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 Section 4(c)(i)-(iv), shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(f) In the event of a dispute with respect to any term of this
Agreement, either party may elect, by delivering written notice to the other
stating the nature of the dispute, to have such dispute settled by arbitration.
Within ten (10) days of the delivery of the written notice electing arbitration
both parties shall appoint an arbitrator and within ten (10) days thereafter the
two arbitrators shall select a third. If a party does not appoint an arbitrator
within the ten-day period, such party shall forfeit the right to do so and the
matter shall be settled by the sole appointed arbitrator. The arbitrator(s)
shall follow the rules of arbitration established by the American Arbitration
Association and shall render a decision within ten (10) days of the hearing
which shall occur no later than twenty (20) days after the arbitrator(s) is/are
appointed. The decision of a majority of the arbitrators, or of the sole
arbitrator, as the case may be, shall be binding upon the respective parties to
the arbitration hearing, their heirs, legal representatives, assigns and
successors. Each party shall pay the fees and expenses of their chosen
arbitrator, and shall pay one-half of the fees and expenses of the third
arbitrator. If only one arbitrator is appointed each party shall pay one-half of
his or her fees and expenses. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board, 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. EXECUTIVE
By: /s/ Charles H. Foster, Jr. /s/ Herbert Wender
---------------------------------------- ------------------
Title: Chairman and Chief Executive Officer Herbert Wender
Date: July 6, 1998 Date:
Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
March, 1998, by and between LandAmerica Financial Group, Inc., a Virginia
corporation (the "Company"), and Janet A. Alpert (the "Executive").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Stock Purchase
Agreement, as amended (the "Stock Purchase Agreement"), dated August 20, 1997,
by and among Lawyers Title Corporation ("LTC"), Lawyers Title Insurance
Corporation, Reliance Insurance Company ("RIC") and Reliance Group Holdings,
Inc., LTC agreed to purchase all of the issued and outstanding shares of
Commonwealth Land Title Insurance Company and Transnation Title Insurance
Company from Reliance Insurance Company (the "Acquisition"); and
WHEREAS, following the consummation of the Acquisition, LTC was renamed
LandAmerica Financial Group, Inc.; and
WHEREAS, prior to the Acquisition, the Executive was employed by LTC;
and
WHEREAS, 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 maintain the services of the Executive for the benefit of the Company and to
encourage the Executive's full attention and dedication to the Company and to
provide the Executive with compensation and benefits arrangements which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement, the Company and the Executive agree as follows:
1. Certain Definitions. (a) The term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
(b) Every capitalized term used herein, but not otherwise
defined herein, shall have the meaning ascribed to such term in the Stock
Purchase Agreement.
2. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on March 1, 1998 and ending on the second anniversary
thereof (the "Employment Period"), unless this Agreement is earlier terminated
pursuant to Section 10 below.
3. Terms of Employment. (a) Position and Duties. During the Employment
Period, and excluding any periods of vacation and leave 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, charitable, title insurance industry association or professional
association 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.
<PAGE>
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary of three hundred
thirty thousand dollars ($330,000.00) (the "Annual Base Salary"), which shall be
paid in equal installments on a semi-monthly basis. The Annual Base Salary shall
be reviewed at least annually and may be increased at any time and from time to
time, but in no event shall the Annual Base Salary be reduced. The 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 the Annual Base Salary as so
increased.
(ii) Annual Bonus. In addition to the Annual Base
Salary, the Executive shall be entitled to an annual bonus (the "Annual Bonus")
as established by the Compensation Committee of the Board (the "Compensation
Committee"). 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 pursuant to a Company deferral plan. In the event that this
Agreement is terminated prior to the close of the Employment Period pursuant to
either Section 4 or 10 below, the Compensation Committee, in its sole discretion
following a review of all relevant factors, may award the Executive a pro-rata
portion of the Annual Bonus measured to the date of termination for any partial
year completed, or the entire Annual Bonus if Executive terminates as of the
close of the fiscal year.
(iii) Annual Stock Options. The Executive may receive
annual stock options as provided at the discretion of the Compensation
Committee.
(iv) Incentive, Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies. For all purposes of
this Agreement, the term "peer executives" means the most senior executives of
the Company.
(v) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, 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 and its affiliated companies.
<PAGE>
(vi) Supplemental Pension Plan. During the Employment
Period, the Executive shall be entitled to participate in Lawyers Title
Insurance Corporation 1995 Benefit Restoration Plan, as such plan may be amended
from time to time, to the extent applicable generally to other peer executives
of the Company and its affiliated companies.
(vii) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance with the policies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(viii) Fringe Benefits. During the Employment Period,
the Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its affiliated companies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(ix) 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 personal secretarial and other
assistance as provided generally at any time to other peer executives of the
Company and its affiliated companies.
(x) Deferred Compensation. During the Employment
Period, the Executive shall be entitled to deferred compensation benefits in
accordance with the plans, practices, programs and policies of the Company and
its affiliated companies in effect generally at any time with respect to other
peer executives of the Company and its affiliated companies.
(xi) Vacation. During the Employment Period, the
Executive shall be entitled to a minimum of four weeks paid vacation in
accordance with the plans, policies, programs and practices of the Company and
its affiliated companies as in effect generally at any time with respect to
other peer executives of the Company and its affiliated companies.
(xii) Financial, Tax and Estate Planning Allowance.
For the fiscal years 1998 and 1999, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Executive for
the purpose of personal financial, tax and estate planning, up to a maximum
amount of seven thousand five hundred dollars ($7,500.00) for fiscal year 1998,
and three thousand seven hundred fifty dollars ($3,750.00) for fiscal year 1999,
in accordance with the policies in effect generally at any time with respect to
other peer executives of the Company and its affiliated companies.
4. 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, as defined in the Company's long-term disability plan, has
occurred during the Employment Period, it may give to the Executive written
notice in accordance with Section 11(b) 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
thirty (30) days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties.
<PAGE>
(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) a material breach by the Executive of the
Executive's obligations under Section 3(a) (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and deliberate
on the Executive's part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach or (ii) the conviction of the Executive of a
felony involving moral turpitude.
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent generally with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b), 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) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(iv) any failure by the Company to comply with and
satisfy Section 9(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 9(c).
For purposes of this Section 4(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
<PAGE>
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b).
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 fifteen (15) 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 hereunder or preclude the Executive or the Company 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 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.
5. Obligations of the Company upon Termination. (a) Good Reason; Other
than for Cause or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:
(i) All stock options held by the Executive on the
Date of Termination shall vest and be immediately exerciseable.
(ii) This Agreement shall terminate and the Executive
shall receive, until the end of the initial employment term, (i) his Annual Base
Salary; plus (ii) one-half (1/2) of the sum of the highest Annual Bonus paid for
any two (2) fiscal years in the five (5) fiscal years immediately preceding that
year in which the Date of Termination occurs.
(b) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate and the Executive shall receive, until the end of the
initial employment term, (i) his Annual Base Salary; plus (ii) one-half (1/2) of
the sum of the highest Annual Bonus paid for any two (2) fiscal years in the
five (5) fiscal years immediately preceding that year in which the Date of
Termination occurs.
<PAGE>
(c) Cause; Other than for Good Reason or Death. If the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason, or if the Executive's employment shall be
terminated for Cause or by reason of the Executive's death during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive and vested on the Date of Termination.
6. Nonexclusivity of Rights. Except as provided in Section 5, 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
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. 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 or any of its affiliated companies 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.
7. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 5 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (a) whether the
payments or distributions are "parachute payments" under Section 280G, (b) the
amount of payments and distributions under this Agreement that constitute
reasonable compensation, and (c) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
8. 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 or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies 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 except as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
<PAGE>
(b) Ownership of Information. The Executive acknowledges and
agrees that all memoranda, notes, reports, records and other documents made or
compiled by the Executive, or made available to the Executive during the term of
his employment concerning the business of the Company or any of its affiliated
companies, shall be the Company's property and shall be delivered to the Company
upon the termination of the Executive's employment hereunder or at any other
time upon request by the Board.
(c) Non-Competition. The Executive agrees that, for so long as
she is employed by the Company and for one (1) year after the termination of the
Executive's employment with the Company, she will not, without the prior written
consent of the Company, directly or indirectly, engage in or have an interest in
(as owner, partner, shareholder, employee, director, officer, consultant or
otherwise), with or without compensation, any business which is in competition
with the lines of business actually being conducted by the Company during the
term of employment or on the date that the employment terminates. Nothing
herein, however, will prohibit the Executive from acquiring or holding not more
than five percent (5%) of any class of publicly traded securities of any such
business, provided that such securities entitle the Executive to no more than
five percent (5%) of the total outstanding votes entitled to be cast by
security-holders of such business in matters in which such security-holders are
entitled to vote.
(d) Non-Interference. (i) The Executive agrees and covenants
that, for a period of one (1) year after the Date of Termination of this
Agreement, the Executive shall not, without the prior written approval of the
Board, Interfere directly or indirectly in any way with the Company or any of
its affiliated companies.
(ii) For purposes of this Agreement, "Interfere"
shall mean, to solicit, entice, persuade, induce, influence or attempt to
influence, directly or indirectly, clients or Prospective Clients, employees,
agents or independent contractors of the Company or any of its affiliated
companies to restrict, reduce, sever or otherwise alter their relationship with
the Company or any of its affiliated companies.
(iii) For purposes of this Agreement, "Prospective
Clients" shall mean persons or entities identified by the Company as prospective
clients of the Company or any of its affiliated companies within twelve (12)
months of the Date of Termination and with whom the Company or such affiliated
companies have had contact.
(e) Severability and Reduction in Scope of Provisions. The
covenants and agreements of the Executive contained in paragraphs (a) through
(d) above are separate and distinct covenants and agreements of the Executive
and if any part of any such paragraph is void, invalid or unenforceable, such
paragraph shall be severed from this Agreement and shall not affect or impair
any other paragraph or the balance of this Agreement, and this Agreement with
the void, invalid or unenforceable paragraph stricken herefrom shall remain in
full force and effect. Further, the periods and scope of the restrictions set
forth in any such paragraph or subparagraph shall be reduced by the minimum
amount necessary to reform such paragraph or subparagraph to the maximum level
of enforcement permitted to the Company by the law governing this Agreement, if
such reform is permitted.
<PAGE>
(f) Remedy for Breach. The Executive acknowledges that the
Company and its affiliated companies or any one of them will be irrevocably
damaged if all of the provisions of this Section 8 are not specifically
enforced. Accordingly, the Executive agrees that, in addition to any other
relief to which the Company may be entitled, any one of the Company or its
affiliated companies will be entitled to seek and obtain injunctive relief from
a court of competent jurisdiction for the purpose of restraining the Executive
from any actual or threatened breach of this Section 8.
(g) Validity of Covenant. The Executive agrees that the
covenants contained in this Section 8 are reasonably necessary to protect the
legitimate interests of the Company and its affiliated companies, are reasonable
with respect to time and territory, and do not interfere with the interests of
the public. The Executive further agrees that the descriptions of the covenants
contained in this Section 8 are sufficiently accurate and definite to inform the
Executive of the scope of the covenants. Finally, the Executive agrees that the
consideration provided for in this Agreement is full, fair and adequate to
support the Executive's obligations hereunder.
9. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
10. Termination of Agreement upon a Change of Control. Upon any Change
of Control, as that term is defined in that certain Change of Control Employment
Agreement, of even date herewith, between the Company and the Executive, the
Change of Control Employment Agreement shall become effective, and shall apply
to the extent its terms are more advantageous to the Executive.
<PAGE>
11. 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 as
follows:
If to the Executive to: If to the Company to:
Janet A. Alpert LandAmerica Financial Group, Inc.
LandAmerica Financial Group, Inc. 6630 West Broad Street
6630 West Broad Street Richmond, Virginia 23230
Richmond, Virginia 23230
Attention: Russell W. Jordan, III, Esquire
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 or local 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 hereof or any other 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 Section 4(c)(i)-(iv), shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(f) In the event of a dispute with respect to any term of this
Agreement, either party may elect, by delivering written notice to the other
stating the nature of the dispute, to have such dispute settled by arbitration.
Within ten (10) days of the delivery of the written notice electing arbitration
both parties shall appoint an arbitrator and within ten (10) days thereafter the
two arbitrators shall select a third. If a party does not appoint an arbitrator
within the ten-day period, such party shall forfeit the right to do so and the
matter shall be settled by the sole appointed arbitrator. The arbitrator(s)
shall follow the rules of arbitration established by the American Arbitration
Association and shall render a decision within ten (10) days of the hearing
which shall occur no later than twenty (20) days after the arbitrator(s) is/are
appointed. The decision of a majority of the arbitrators, or of the sole
arbitrator, as the case may be, shall be binding upon the respective parties to
the arbitration hearing, their heirs, legal representatives, assigns and
successors. Each party shall pay the fees and expenses of their chosen
arbitrator, and shall pay one-half of the fees and expenses of the third
arbitrator. If only one arbitrator is appointed each party shall pay one-half of
his or her fees and expenses. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board, 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. EXECUTIVE
By: /s/ Charles H. Foster, Jr. /s/ Janet A. Alpert
-------------------------------- -------------------
Title: Chairman and Chief Executive Officer Janet A. Alpert
Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
March, 1998, by and between LandAmerica Financial Group, Inc., a Virginia
corporation (the "Company"), and Jeffrey A. Tischler (the "Executive").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Stock Purchase
Agreement, as amended (the "Stock Purchase Agreement"), dated August 20, 1997,
by and among Lawyers Title Corporation ("LTC"), Lawyers Title Insurance
Corporation, Reliance Insurance Company ("RIC") and Reliance Group Holdings,
Inc., LTC agreed to purchase all of the issued and outstanding shares of
Commonwealth Land Title Insurance Company and Transnation Title Insurance
Company from Reliance Insurance Company (the "Acquisition"); and
WHEREAS, following the consummation of the Acquisition, LTC was renamed
LandAmerica Financial Group, Inc.; and
WHEREAS, prior to the Acquisition, the Executive was employed by
Commonwealth Land Title Insurance Company; and
WHEREAS, 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 maintain the services of the Executive for the benefit of the Company and to
encourage the Executive's full attention and dedication to the Company and to
provide the Executive with compensation and benefits arrangements which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement, the Company and the Executive agree as follows:
1. Certain Definitions. (a) The term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
(b) Every capitalized term used herein, but not otherwise
defined herein, shall have the meaning ascribed to such term in the Stock
Purchase Agreement.
2. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on March 1, 1998 and ending on the first anniversary
thereof (the "Employment Period"), unless this Agreement is earlier terminated
pursuant to Section 10 below.
3. Terms of Employment. (a) Position and Duties. During the Employment
Period, and excluding any periods of vacation and leave 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, charitable, title insurance industry association or professional
association 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.
<PAGE>
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary of two hundred fifty
thousand dollars ($250,000.00) (the "Annual Base Salary"), which shall be paid
in equal installments on a semi-monthly basis. The Annual Base Salary shall be
reviewed at least annually and may be increased at any time and from time to
time, but in no event shall the Annual Base Salary be reduced. The 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 the Annual Base Salary as so
increased.
(ii) Annual Bonus. In addition to the Annual Base
Salary, the Executive shall be entitled to an annual bonus (the "Annual Bonus")
as established by the Compensation Committee of the Board (the "Compensation
Committee"). For fiscal year 1998, the Executive shall be entitled to an Annual
Bonus for the entire year, including the months of January and February 1998, as
established by the Compensation Committee. 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 pursuant to a Company deferral
plan. In the event that this Agreement is terminated prior to the close of the
Employment Period pursuant to either Section 4 or 10 below, the Compensation
Committee, in its sole discretion following a review of all relevant factors,
may award the Executive a pro-rata portion of the Annual Bonus measured to the
date of termination for any partial year completed, or the entire Annual Bonus
if Executive terminates as of the close of the fiscal year.
(iii) Annual Stock Options. The Executive may receive
annual stock options as provided at the discretion of the Compensation
Committee.
(iv) Incentive, Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies. For all purposes of
this Agreement, the term "peer executives" means the most senior executives of
the Company.
(v) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, 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 and its affiliated companies.
<PAGE>
(vi) Supplemental Pension Plan. During the Employment
Period, the Executive shall be entitled to participate in the Lawyers Title
Insurance Corporation 1995 Benefit Restoration Plan, as such plan may be amended
from time to time, to the extent applicable generally to other peer executives
of the Company and its affiliated companies.
(vii) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance with the policies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(viii) Fringe Benefits. During the Employment Period,
the Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its affiliated companies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(ix) 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 personal secretarial and other
assistance as provided generally at any time to other peer executives of the
Company and its affiliated companies.
(x) Deferred Compensation. During the Employment
Period, the Executive shall be entitled to deferred compensation benefits in
accordance with the plans, practices, programs and policies of the Company and
its affiliated companies in effect generally at any time with respect to other
peer executives of the Company and its affiliated companies.
(xi) Vacation. During the Employment Period, the
Executive shall be entitled to a minimum of four weeks paid vacation in
accordance with the plans, policies, programs and practices of the Company and
its affiliated companies as in effect generally at any time with respect to
other peer executives of the Company and its affiliated companies.
(xii) Financial, Tax and Estate Planning Allowance.
For the fiscal year 1998, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive for the
purpose of personal financial, tax and estate planning, up to a maximum amount
of five thousand dollars ($5,000.00), in accordance with the policies in effect
generally at any time with respect to other peer executives of the Company and
its affiliated companies.
<PAGE>
4. 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, as defined in the Company's long-term disability plan, has
occurred during the Employment Period, it may give to the Executive written
notice in accordance with Section 11(b) 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
thirty (30) days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties.
(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) a material breach by the Executive of the
Executive's obligations under Section 3(a) (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and deliberate
on the Executive's part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach or (ii) the conviction of the Executive of a
felony involving moral turpitude.
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent generally with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b), 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) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(iv) any failure by the Company to comply with and
satisfy Section 9(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 9(c).
<PAGE>
For purposes of this Section 4(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b).
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 fifteen (15) 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 hereunder or preclude the Executive or the Company 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 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.
5. Obligations of the Company upon Termination. (a) Good Reason; Other
than for Cause or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:
(i) All stock options held by the Executive on the
Date of Termination shall vest and be immediately exerciseable.
(ii) This Agreement shall terminate and the Executive
shall receive, until the end of the initial employment term, (i) his Annual Base
Salary; plus (ii) one-half (1/2) of the sum of the highest Annual Bonus paid for
any two (2) fiscal years in the five (5) fiscal years immediately preceding that
year in which the Date of Termination occurs.
(b) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate and the Executive shall receive, until the end of the
initial employment term, (i) his Annual Base Salary; plus (ii) one-half (1/2) of
the sum of the highest Annual Bonus paid for any two (2) fiscal years in the
five (5) fiscal years immediately preceding that year in which the Date of
Termination occurs.
<PAGE>
(c) Cause; Other than for Good Reason or Death. If the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason, or if the Executive's employment shall be
terminated for Cause or by reason of the Executive's death during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive and vested on the Date of Termination.
6. Nonexclusivity of Rights. Except as provided in Section 5, 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
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. 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 or any of its affiliated companies 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.
7. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 5 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (a) whether the
payments or distributions are "parachute payments" under Section 280G, (b) the
amount of payments and distributions under this Agreement that constitute
reasonable compensation, and (c) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
8. 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 or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies 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 except as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
<PAGE>
(b) Ownership of Information. The Executive acknowledges and
agrees that all memoranda, notes, reports, records and other documents made or
compiled by the Executive, or made available to the Executive during the term of
his employment concerning the business of the Company or any of its affiliated
companies, shall be the Company's property and shall be delivered to the Company
upon the termination of the Executive's employment hereunder or at any other
time upon request by the Board.
(c) Non-Competition. The Executive agrees that, for so long as
he is employed by the Company and for six (6) months after the termination of
the Executive's employment with the Company, he will not, without the prior
written consent of the Company, directly or indirectly, engage in or have an
interest in (as owner, partner, shareholder, employee, director, officer,
consultant or otherwise), with or without compensation, any business which is in
competition with the lines of business actually being conducted by the Company
during the term of employment or on the date that the employment terminates.
Nothing herein, however, will prohibit the Executive from acquiring or holding
not more than one percent (1%) of any class of publicly traded securities of any
such business, provided that such securities entitle the Executive to no more
than one percent (1%) of the total outstanding votes entitled to be cast by
security-holders of such business in matters in which such security-holders are
entitled to vote.
(d) Non-Interference. (i) The Executive agrees and covenants
that, for a period of six (6) months after the Date of Termination of this
Agreement, the Executive shall not, without the prior written approval of the
Board, Interfere directly or indirectly in any way with the Company or any of
its affiliated companies.
(ii) For purposes of this Agreement, "Interfere"
shall mean, to solicit, entice, persuade, induce, influence or attempt to
influence, directly or indirectly, clients or Prospective Clients, employees,
agents or independent contractors of the Company or any of its affiliated
companies to restrict, reduce, sever or otherwise alter their relationship with
the Company or any of its affiliated companies.
(iii) For purposes of this Agreement, "Prospective
Clients" shall mean persons or entities identified by the Company as prospective
clients of the Company or any of its affiliated companies within twelve (12)
months of the Date of Termination and with whom the Company or such affiliated
companies have had contact.
<PAGE>
(e) Severability and Reduction in Scope of Provisions. The
covenants and agreements of the Executive contained in paragraphs (a) through
(d) above are separate and distinct covenants and agreements of the Executive
and if any part of any such paragraph is void, invalid or unenforceable, such
paragraph shall be severed from this Agreement and shall not affect or impair
any other paragraph or the balance of this Agreement, and this Agreement with
the void, invalid or unenforceable paragraph stricken herefrom shall remain in
full force and effect. Further, the periods and scope of the restrictions set
forth in any such paragraph or subparagraph shall be reduced by the minimum
amount necessary to reform such paragraph or subparagraph to the maximum level
of enforcement permitted to the Company by the law governing this Agreement, if
such reform is permitted.
(f) Remedy for Breach. The Executive acknowledges that the
Company and its affiliated companies or any one of them will be irrevocably
damaged if all of the provisions of this Section 8 are not specifically
enforced. Accordingly, the Executive agrees that, in addition to any other
relief to which the Company may be entitled, any one of the Company or its
affiliated companies will be entitled to seek and obtain injunctive relief from
a court of competent jurisdiction for the purpose of restraining the Executive
from any actual or threatened breach of this Section 8.
(g) Validity of Covenant. The Executive agrees that the
covenants contained in this Section 8 are reasonably necessary to protect the
legitimate interests of the Company and its affiliated companies, are reasonable
with respect to time and territory, and do not interfere with the interests of
the public. The Executive further agrees that the descriptions of the covenants
contained in this Section 8 are sufficiently accurate and definite to inform the
Executive of the scope of the covenants. Finally, the Executive agrees that the
consideration provided for in this Agreement is full, fair and adequate to
support the Executive's obligations hereunder.
9. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
<PAGE>
10. Termination of Agreement upon a Change of Control. Upon any Change
of Control, as that term is defined in that certain Change of Control Employment
Agreement, of even date herewith, between the Company and the Executive, the
Change of Control Employment Agreement shall become effective, and shall apply
to the extent its terms are more advantageous to the Executive.
11. 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 as
follows:
If to the Executive to: If to the Company to:
Jeffrey A. Tischler LandAmerica Financial Group, Inc.
2020 Walnut Street, Apt. 24B 6630 West Broad Street
Philadelphia, Pennsylvania 19103 Richmond, Virginia 23230
Attention: Russell W. Jordan, III, Esquire
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 or local 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 hereof or any other 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 Section 4(c)(i)-(iv), shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
<PAGE>
(f) In the event of a dispute with respect to any term of this
Agreement, either party may elect, by delivering written notice to the other
stating the nature of the dispute, to have such dispute settled by arbitration.
Within ten (10) days of the delivery of the written notice electing arbitration
both parties shall appoint an arbitrator and within ten (10) days thereafter the
two arbitrators shall select a third. If a party does not appoint an arbitrator
within the ten-day period, such party shall forfeit the right to do so and the
matter shall be settled by the sole appointed arbitrator. The arbitrator(s)
shall follow the rules of arbitration established by the American Arbitration
Association and shall render a decision within ten (10) days of the hearing
which shall occur no later than twenty (20) days after the arbitrator(s) is/are
appointed. The decision of a majority of the arbitrators, or of the sole
arbitrator, as the case may be, shall be binding upon the respective parties to
the arbitration hearing, their heirs, legal representatives, assigns and
successors. Each party shall pay the fees and expenses of their chosen
arbitrator, and shall pay one-half of the fees and expenses of the third
arbitrator. If only one arbitrator is appointed each party shall pay one-half of
his or her fees and expenses. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board, 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. EXECUTIVE
By: /s/ Charles H. Foster, Jr. /s/ Jeffrey A. Tischler
--------------------------------------- ------------------------
Title: Chairman and Chief Executive Officer Jeffrey A. Tischler
Date: May 26, 1998 Date:
Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
March, 1998, by and between LandAmerica Financial Group, Inc., a Virginia
corporation (the "Company"), and G. William Evans (the "Executive").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Stock Purchase
Agreement, as amended (the "Stock Purchase Agreement"), dated August 20, 1997,
by and among Lawyers Title Corporation ("LTC"), Lawyers Title Insurance
Corporation, Reliance Insurance Company ("RIC") and Reliance Group Holdings,
Inc., LTC agreed to purchase all of the issued and outstanding shares of
Commonwealth Land Title Insurance Company and Transnation Title Insurance
Company from Reliance Insurance Company (the "Acquisition"); and
WHEREAS, following the consummation of the Acquisition, LTC was renamed
LandAmerica Financial Group, Inc.; and
WHEREAS, prior to the Acquisition, the Executive was employed by LTC;
and
WHEREAS, 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 maintain the services of the Executive for the benefit of the Company and to
encourage the Executive's full attention and dedication to the Company and to
provide the Executive with compensation and benefits arrangements which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement, the Company and the Executive agree as follows:
1. Certain Definitions. (a) The term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
(b) Every capitalized term used herein, but not otherwise
defined herein, shall have the meaning ascribed to such term in the Stock
Purchase Agreement.
2. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on March 1, 1998 and ending on the first anniversary
thereof (the "Employment Period"), unless this Agreement is earlier terminated
pursuant to Section 10 below.
3. Terms of Employment. (a) Position and Duties. During the Employment
Period, and excluding any periods of vacation and leave 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, charitable, title insurance industry association or professional
association 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.
<PAGE>
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary of two hundred fifty
thousand dollars ($250,000.00) (the "Annual Base Salary"), which shall be paid
in equal installments on a semi-monthly basis. The Annual Base Salary shall be
reviewed at least annually and may be increased at any time and from time to
time, but in no event shall the Annual Base Salary be reduced. The 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 the Annual Base Salary as so
increased.
(ii) Annual Bonus. In addition to the Annual Base
Salary, the Executive shall be entitled to an annual bonus (the "Annual Bonus")
as established by the Compensation Committee of the Board (the "Compensation
Committee"). 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 pursuant to a Company deferral plan. In the event that this
Agreement is terminated prior to the close of the Employment Period pursuant to
either Section 4 or 10 below, the Compensation Committee, in its sole discretion
following a review of all relevant factors, may award the Executive a pro-rata
portion of the Annual Bonus measured to the date of termination for any partial
year completed, or the entire Annual Bonus if Executive terminates as of the
close of the fiscal year.
(iii) Annual Stock Options. The Executive may receive
annual stock options as provided at the discretion of the Compensation
Committee.
(iv) Incentive, Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
incentive (including, without limitation, stock incentive), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies. For all purposes of
this Agreement, the term "peer executives" means the most senior executives of
the Company.
(v) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, 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 and its affiliated companies.
<PAGE>
(vi) Supplemental Pension Plan. During the Employment
Period, the Executive shall be entitled to participate in the Lawyers Title
Insurance Corporation 1995 Benefit Restoration Plan, as such plan may be amended
from time to time, to the extent applicable generally to other peer executives
of the Company and its affiliated companies.
(vii) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance with the policies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(viii) Fringe Benefits. During the Employment Period,
the Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its affiliated companies in
effect generally at any time with respect to other peer executives of the
Company and its affiliated companies.
(ix) 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 personal secretarial and other
assistance as provided generally at any time to other peer executives of the
Company and its affiliated companies.
(x) Deferred Compensation. During the Employment
Period, the Executive shall be entitled to deferred compensation benefits in
accordance with the plans, practices, programs and policies of the Company and
its affiliated companies in effect generally at any time with respect to other
peer executives of the Company and its affiliated companies.
(xi) Vacation. During the Employment Period, the
Executive shall be entitled to a minimum of four weeks paid vacation in
accordance with the plans, policies, programs and practices of the Company and
its affiliated companies as in effect generally at any time with respect to
other peer executives of the Company and its affiliated companies.
(xii) Financial, Tax and Estate Planning Allowance.
For the fiscal year 1998, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive for the
purpose of personal financial, tax and estate planning, up to a maximum amount
of five thousand dollars ($5,000.00), in accordance with the policies in effect
generally at any time with respect to other peer executives of the Company and
its affiliated companies.
4. 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, as defined in the Company's long-term disability plan, has
occurred during the Employment Period, it may give to the Executive written
notice in accordance with Section 11(b) 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
thirty (30) days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties.
<PAGE>
(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) a material breach by the Executive of the
Executive's obligations under Section 3(a) (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and deliberate
on the Executive's part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach or (ii) the conviction of the Executive of a
felony involving moral turpitude.
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent generally with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 3(b), 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) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
(iv) any failure by the Company to comply with and
satisfy Section 9(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 9(c).
For purposes of this Section 4(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b).
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 fifteen (15) 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 hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
<PAGE>
(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 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.
5. Obligations of the Company upon Termination. (a) Good Reason; Other
than for Cause or Disability. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:
(i) All stock options held by the Executive on the
Date of Termination shall vest and be immediately exerciseable.
(ii) This Agreement shall terminate and the Executive
shall receive, until the end of the initial employment term, (i) his Annual Base
Salary; plus (ii) one-half (1/2) of the sum of the highest Annual Bonus paid for
any two (2) fiscal years in the five (5) fiscal years immediately preceding that
year in which the Date of Termination occurs.
(b) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate and the Executive shall receive, until the end of the
initial employment term, (i) his Annual Base Salary; plus (ii) one-half (1/2) of
the sum of the highest Annual Bonus paid for any two (2) fiscal years in the
five (5) fiscal years immediately preceding that year in which the Date of
Termination occurs.
(c) Cause; Other than for Good Reason or Death. If the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason, or if the Executive's employment shall be
terminated for Cause or by reason of the Executive's death during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive and vested on the Date of Termination.
<PAGE>
6. Nonexclusivity of Rights. Except as provided in Section 5, 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
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. 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 or any of its affiliated companies 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.
7. Limitation of Benefits. It is the intention of the parties that
payments to be made to the Executive pursuant to Section 5 shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Code and
any regulations thereunder. If the independent accountants serving as auditors
for the Company on the Effective Date (or any other accounting firm designated
by the Company) determine 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) would be
nondeductible by the Company under Section 280G of the Code (and any successor
provision) as amended from time to time, then the amounts payable or
distributable under this Agreement will be reduced to the maximum amount which
may be paid or distributed without causing such payments or distributions to be
nondeductible. The determination shall take into account (a) whether the
payments or distributions are "parachute payments" under Section 280G, (b) the
amount of payments and distributions under this Agreement that constitute
reasonable compensation, and (c) the present value of such payments and
distributions determined in accordance with Treasury Regulations in effect from
time to time. The Executive shall have the right to designate which payments or
distributions will be reduced.
8. 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 or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies 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 except as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
<PAGE>
(b) Ownership of Information. The Executive acknowledges and
agrees that all memoranda, notes, reports, records and other documents made or
compiled by the Executive, or made available to the Executive during the term of
his employment concerning the business of the Company or any of its affiliated
companies, shall be the Company's property and shall be delivered to the Company
upon the termination of the Executive's employment hereunder or at any other
time upon request by the Board.
(c) Non-Competition. The Executive agrees that, for so long as
he is employed by the Company and for six (6) months after the termination of
the Executive's employment with the Company, he will not, without the prior
written consent of the Company, directly or indirectly, engage in or have an
interest in (as owner, partner, shareholder, employee, director, officer,
consultant or otherwise), with or without compensation, any business which is in
competition with the lines of business actually being conducted by the Company
during the term of employment or on the date that the employment terminates.
Nothing herein, however, will prohibit the Executive from acquiring or holding
not more than five percent (5%) of any class of publicly traded securities of
any such business, provided that such securities entitle the Executive to no
more than five percent (5%) of the total outstanding votes entitled to be cast
by security-holders of such business in matters in which such security-holders
are entitled to vote.
(d) Non-Interference. (i) The Executive agrees and covenants
that, for a period of six (6) months after the Date of Termination of this
Agreement, the Executive shall not, without the prior written approval of the
Board, Interfere directly or indirectly in any way with the Company or any of
its affiliated companies.
(ii) For purposes of this Agreement, "Interfere"
shall mean, to solicit, entice, persuade, induce, influence or attempt to
influence, directly or indirectly, clients or Prospective Clients, employees,
agents or independent contractors of the Company or any of its affiliated
companies to restrict, reduce, sever or otherwise alter their relationship with
the Company or any of its affiliated companies.
(iii) For purposes of this Agreement, "Prospective
Clients" shall mean persons or entities identified by the Company as prospective
clients of the Company or any of its affiliated companies within twelve (12)
months of the Date of Termination and with whom the Company or such affiliated
companies have had contact.
(e) Severability and Reduction in Scope of Provisions. The
covenants and agreements of the Executive contained in paragraphs (a) through
(d) above are separate and distinct covenants and agreements of the Executive
and if any part of any such paragraph is void, invalid or unenforceable, such
paragraph shall be severed from this Agreement and shall not affect or impair
any other paragraph or the balance of this Agreement, and this Agreement with
the void, invalid or unenforceable paragraph stricken herefrom shall remain in
full force and effect. Further, the periods and scope of the restrictions set
forth in any such paragraph or subparagraph shall be reduced by the minimum
amount necessary to reform such paragraph or subparagraph to the maximum level
of enforcement permitted to the Company by the law governing this Agreement, if
such reform is permitted.
<PAGE>
(f) Remedy for Breach. The Executive acknowledges that the
Company and its affiliated companies or any one of them will be irrevocably
damaged if all of the provisions of this Section 8 are not specifically
enforced. Accordingly, the Executive agrees that, in addition to any other
relief to which the Company may be entitled, any one of the Company or its
affiliated companies will be entitled to seek and obtain injunctive relief from
a court of competent jurisdiction for the purpose of restraining the Executive
from any actual or threatened breach of this Section 8.
(g) Validity of Covenant. The Executive agrees that the
covenants contained in this Section 8 are reasonably necessary to protect the
legitimate interests of the Company and its affiliated companies, are reasonable
with respect to time and territory, and do not interfere with the interests of
the public. The Executive further agrees that the descriptions of the covenants
contained in this Section 8 are sufficiently accurate and definite to inform the
Executive of the scope of the covenants. Finally, the Executive agrees that the
consideration provided for in this Agreement is full, fair and adequate to
support the Executive's obligations hereunder.
9. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
10. Termination of Agreement upon a Change of Control. Upon any Change
of Control, as that term is defined in that certain Change of Control Employment
Agreement, of even date herewith, between the Company and the Executive, the
Change of Control Employment Agreement shall become effective and shall apply to
the extent its terms are more advantageous to the Executive.
<PAGE>
11. 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 as
follows:
If to the Executive to: If to the Company to:
G. William Evans LandAmerica Financial Group, Inc.
LandAmerica Financial Group, Inc. 6630 West Broad Street
6630 West Broad Street Richmond, Virginia 23230
Richmond, Virginia 23230
Attention: Russell W. Jordan, III, Esquire
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 or local 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 hereof or any other 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 Section 4(c)(i)-(iv), shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(f) In the event of a dispute with respect to any term of this
Agreement, either party may elect, by delivering written notice to the other
stating the nature of the dispute, to have such dispute settled by arbitration.
Within ten (10) days of the delivery of the written notice electing arbitration
both parties shall appoint an arbitrator and within ten (10) days thereafter the
two arbitrators shall select a third. If a party does not appoint an arbitrator
within the ten-day period, such party shall forfeit the right to do so and the
matter shall be settled by the sole appointed arbitrator. The arbitrator(s)
shall follow the rules of arbitration established by the American Arbitration
Association and shall render a decision within ten (10) days of the hearing
which shall occur no later than twenty (20) days after the arbitrator(s) is/are
appointed. The decision of a majority of the arbitrators, or of the sole
arbitrator, as the case may be, shall be binding upon the respective parties to
the arbitration hearing, their heirs, legal representatives, assigns and
successors. Each party shall pay the fees and expenses of their chosen
arbitrator, and shall pay one-half of the fees and expenses of the third
arbitrator. If only one arbitrator is appointed each party shall pay one-half of
his or her fees and expenses. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board, 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. EXECUTIVE
By: /s/ Charles H. Foster, Jr. /s/ G. William Evans
---------------------------------------- --------------------
Title: Chairman and Chief Executive Officer G. William Evans
Exhibit 11
LANDAMERICA FINANCIAL GROUP, INC. AND SUBSIDIARIES
Statement Re: Computation of Earnings Per Share
The information required by this Exhibit is contained in Note 4 to the
Consolidated Financial Statements of LandAmerica Financial Group, Inc. and its
subsidiaries for the quarter ended June 30, 1998 set forth on page 10 of this
report.
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<DEBT-HELD-FOR-SALE> 737,973
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 15,208
<REAL-ESTATE> 0
<TOTAL-INVEST> 811,228
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<TOTAL-ASSETS> 1,580,865
<POLICY-LOSSES> 493,945
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0
175,700
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742,265
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<UNDERWRITING-OTHER> 672,503
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<INCOME-TAX> 18,013
<INCOME-CONTINUING> 33,483
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<NET-INCOME> 33,483
<EPS-PRIMARY> 2.36
<EPS-DILUTED> 2.02
<RESERVE-OPEN> 0
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