SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
</TABLE>
LANDAMERICA FINANCIAL GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
.....................................................................
(2) Aggregate number of securities to which transaction applies:
.....................................................................
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
.....................................................................
(4) Proposed maximum aggregate value of transaction:
.....................................................................
(5) Total fee paid:
.....................................................................
[ ] Fee paid previously with preliminary materials.
.....................................................................
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
.....................................................................
(2) Form, Schedule or Registration Statement No.:
.....................................................................
(3) Filing Party:
.....................................................................
(4) Date Filed:
.....................................................................
<PAGE>
[LANDAMERICA FINANCIAL GROUP, INC. LOGO]
_______________
ANNUAL MEETING OF SHAREHOLDERS
_______________
April 6, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of LandAmerica Financial Group, Inc., which is to be held in the
Commonwealth Room on the 3rd Floor of the Commonwealth Club located at 401 West
Franklin Street, Richmond, Virginia, on Tuesday, May 16, 2000, at 10:00 a.m. At
the Meeting, you will be asked to elect five Directors to serve three-year terms
and two Directors to serve two-year terms, and to approve the LandAmerica
Financial Group, Inc. 2000 Stock Incentive Plan.
Whether or not you plan to attend the Meeting, it is important that
your shares be represented and voted at the Meeting. You can vote by signing,
dating and returning the enclosed proxy card or voting instruction. Also,
registered shareholders and participants in plans holding shares of the
Company's Common Stock may vote by telephone or over the Internet. Instructions
for using these convenient services are set forth on the proxy card or voting
instruction. Beneficial owners of shares held in street name should follow the
enclosed instructions for voting their shares. I hope you will be able to attend
the Meeting, but even if you cannot, please vote your shares as soon as you can.
Sincerely,
/s/ Charles H. Foster, Jr.
Charles H. Foster, Jr.
Chairman and Chief
Executive Officer
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
101 Gateway Centre Parkway
Gateway One
Richmond, Virginia 23235-5153
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders (the "Meeting") of LandAmerica
Financial Group, Inc. (the "Company") will be held in the Commonwealth Room on
the 3rd Floor of the Commonwealth Club located at 401 West Franklin Street,
Richmond, Virginia, on Tuesday, May 16, 2000, at 10:00 a.m., for the following
purposes:
(1) To elect five Directors to serve three-year terms and two
Directors to serve two-year terms;
(2) To approve the LandAmerica Financial Group, Inc. 2000 Stock
Incentive Plan; and
(3) To act upon such other matters as may properly come before the
Meeting or any adjournments thereof.
Only holders of shares of Common Stock of record at the close of
business on April 3, 2000, shall be entitled to notice of and to vote at the
Meeting.
By Order of the Board of Directors,
Russell W. Jordan, III
Secretary
April 6, 2000
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of the
Company. A shareholder may revoke the proxy at any time prior to its use, but
proxies properly executed and received by the Secretary prior to the Meeting,
and not revoked, will be voted in accordance with the terms thereof.
Shareholders and participants in plans holding shares of the Company's Common
Stock are urged to complete, sign and date the enclosed proxy or voting
instruction and return it as promptly as possible in the postage-paid envelope
enclosed for that purpose. Registered shareholders and plan participants can
also deliver proxies and voting instructions by calling a toll-free telephone
number or by using the Internet. The telephone and Internet voting procedures
are designed to authenticate shareholders' and plan participants' identities, to
allow shareholders and plan participants to give their voting instructions and
to confirm that such instructions have been recorded properly. Instructions for
voting by telephone or over the Internet are set forth on the enclosed proxy
card or voting instruction. If your shares are held in street name with your
bank or broker, please follow the instructions found on the voting instruction
card enclosed with this Proxy Statement.
The Company will pay all of the costs associated with this proxy
solicitation. Proxies are being solicited by mail and may also be solicited in
person or by telephone, telefacsimile or other means of electronic transmission
by Directors, officers and employees of the Company. The Company will reimburse
banks, brokerage firms, and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy materials to the beneficial owners of
the shares of the Company's Common Stock. It is contemplated that additional
solicitation of proxies will be made by Corporate Investor Communications, Inc.,
at an anticipated cost to the Company of approximately $6,000, plus
reimbursement of out-of-pocket expenses.
This Proxy Statement will be mailed to registered holders of the Common
Stock of the Company on or about April 6, 2000.
VOTING RIGHTS
The Company had 13,403,141 shares of Common Stock outstanding as of
April 3, 2000, each having one vote. Only holders of the Company's Common Stock
of record at the close of business on April 3, 2000, will be entitled to vote. A
majority of the shares entitled to vote, represented in person or by proxy, will
constitute a quorum for the transaction of business at the Meeting. Abstentions
and shares held in street name ("Broker Shares") voted as to any matter at the
Meeting will be included in determining the number of shares present or
represented at the Meeting. Broker Shares that are not voted on any matter at
the Meeting will not be included in determining the number of shares present or
represented at the Meeting.
The Company is not aware of any matters that are to come before the
Meeting other than those described in this Proxy Statement. However, if other
matters do properly come before the Meeting, it is the intention of the persons
named in the enclosed proxy card to vote such proxy in accordance with their
best judgment.
<PAGE>
Proposal One
ELECTION OF DIRECTORS
At the Meeting, five Directors are to be elected for terms of three
years and two Directors are to be elected for terms of two years. Seven other
Directors have been elected to terms that end in either 2001 or 2002, as
indicated below. The following pages set forth certain information concerning
the nominees and the Directors whose terms of office will continue after the
Meeting. All of the nominees and incumbent Directors listed below were
previously elected Directors by the shareholders, except Howard E. Steinberg,
who was elected by the Board effective March 15, 2000, and Julious P. Smith,
Jr., who is standing for election for the first time. Robert M. Steinberg, a
Director since 1998, resigned from the Board effective March 15, 2000.
Proxies, unless otherwise specified, will be voted for the election of
the nominees listed to serve as Directors. The election of each nominee for
Director requires a plurality of the votes cast in the election of Directors.
If, at the time of the Meeting, any nominee should be unavailable to serve as a
Director, it is intended that votes will be cast, pursuant to the enclosed
proxy, for such substitute nominee as may be nominated by the Board of
Directors. Each nominee has consented to being named in this Proxy Statement and
to serve if elected.
Certain Voting Arrangements
On February 27, 1998, the Company acquired from Reliance Insurance
Company ("RIC") all of the issued and outstanding shares of the capital stock of
Commonwealth Land Title Insurance Company ("Commonwealth") and Transnation Title
Insurance Company ("Transnation"), resulting in Commonwealth and Transnation
each becoming wholly owned subsidiaries of the Company (the "Acquisition"). In
connection with the Acquisition, the Company, RIC and RIC's parent, Reliance
Group Holdings, Inc. ("Reliance"), entered into a Voting and Standstill
Agreement (the "Voting Agreement"). The Voting Agreement provides that as long
as RIC owns, on a fully diluted basis, at least 20% of the Company's issued and
outstanding capital stock, RIC will be entitled to nominate, and the Company
will recommend for election, one Director (an "RIC Director") in each of the
three classes of the Board of Directors, and, subject to applicable law or rules
of the New York Stock Exchange, one of the RIC Directors will be designated to
serve on each of the committees of the Board of Directors. The number of RIC
Directors will be reduced once RIC's ownership of the Company's issued and
outstanding Common Stock is reduced to less than 20%. Pursuant to the Voting
Agreement, Reliance and RIC have agreed to certain prohibitions and requirements
with respect to the voting of shares of stock owned by them or their affiliates,
including the requirement that such shares be voted for nominees to the Board of
Directors of the Company recommended by the Board of Directors or a nominating
committee thereof. Unless terminated earlier by written agreement of the
parties, the Voting Agreement will remain in effect until RIC's ownership of the
capital stock of the Company is reduced below predetermined levels.
Howard E. Steinberg has been nominated pursuant to the Voting Agreement
to replace Robert M. Steinberg as an RIC Director in the class of Directors
whose terms expire in 2002.
2
<PAGE>
Nominees for Election for Terms Expiring in 2003
JANET A. ALPERT, 53, is President of the Company and of each of Lawyers
Title Insurance Corporation ("Lawyers Title"), Commonwealth and Transnation,
subsidiaries of the Company. Prior to February 27, 1998, she was President and
Chief Operating Officer of the Company and of Lawyers Title, positions she held
for more than five years. Ms. Alpert is a member of the Executive Committee and
has been a Director since 1994.
MICHAEL DINKINS, 46, is Chairman and Chief Executive Officer of Access
Worldwide Communications, Inc. ("Access Worldwide") (a marketing services
company). From August 1999 to March 2000, he was President and Chief Executive
Officer, and from August 1997 to August 1999, he was Chief Financial Officer of
Access Worldwide. From 1996 to August 1997, Mr. Dinkins was President of the
Graphic Communications Group of Cadmus Communications Corporation ("Cadmus") (a
printing, marketing and publishing company). From September 1993 to 1996, he was
Vice President and Chief Financial Officer of Cadmus. Mr. Dinkins is a Director
of Access Worldwide. He is a member of the Audit Committee and the Pension and
Portfolio Committee and has been a Director since 1997.
JAMES ERMER, 57, retired as Executive Vice President - Strategic
Planning and Corporate Development of CSX Corporation ("CSX") (a railroad and
transportation company) in December 1996. Prior to April 25, 1995, he was Senior
Vice President - Finance and Chief Financial Officer of CSX, a position he held
for more than five years. Mr. Ermer is a Director and trustee of the Nations
Funds group of mutual funds. He is Chairman of the Finance Committee and a
member of the Compensation Committee and the Pension and Portfolio Committee.
Mr. Ermer has been a Director since 1991.
LOWELL C. FREIBERG, 60, has been Executive Vice President of Reliance
(a property and casualty insurance holding company) since May 1998, and he has
been Chief Financial Officer of Reliance for more than five years. Prior to May
1998, Mr. Freiberg was Senior Vice President of Reliance, a position he held for
more than five years. He is a Director of Reliance and Symbol Technologies, Inc.
Mr. Freiberg is a member of the Pension and Portfolio Committee and the Finance
Committee and has been a Director since 1998.
JOHN P. McCANN, 55, is Chairman and Chief Executive Officer of United
Dominion Realty Trust, Inc. ("United Dominion") (an apartment real estate
investment trust). Prior to January 1, 1999, he was Chairman, President and
Chief Executive Officer of United Dominion, a position he held for more than
five years. Mr. McCann is a Director of United Dominion and Storage USA, Inc. He
is a member of the Audit Committee, the Pension and Portfolio Committee and the
Finance Committee. Mr. McCann has been a Director since 1997.
Nominees for Election for Terms Expiring in 2002
JULIOUS P. SMITH, JR., 57, is Chairman and Chief Executive Officer and
a member of the law firm of Williams, Mullen, Clark & Dobbins (formerly
Williams, Mullen, Christian & Dobbins). Prior to June 1, 1999, he was President
and Chief Executive Officer and a member of Williams,
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<PAGE>
Mullen, Christian & Dobbins, positions he held for more than five years. Mr.
Smith is a Director of the Mutual Assurance Society of Virginia. Williams,
Mullen, Clark & Dobbins acts as counsel to the Company.
HOWARD E. STEINBERG, 55, is Executive Vice President - Chief of
Corporate Operations of Reliance. From May 1998 to March 2000, he was Executive
Vice President, General Counsel and Corporate Secretary of Reliance. Prior to
May 1998, he was Senior Vice President, General Counsel and Corporate Secretary
of Reliance, positions he held for more than five years. Mr. Steinberg is a
Director of Reliance. He is a member of the Executive Committee and the
Corporate Governance Committee and has been a Director since March 15, 2000.
The Board of Directors recommends that the shareholders vote for the
nominees set forth above.
Incumbent Directors Whose Terms Expire in 2002
ROBERT F. NORFLEET, JR., 60, serves as a consultant in the capacity of
Director of Client Relations for the Trust and Investment Management Group of
Crestar Bank. From 1994 until his retirement on March 1, 1996, he was Corporate
Executive Vice President and Senior Credit Officer of Crestar Bank. Mr. Norfleet
is Chairman of the Audit Committee and a member of the Executive Committee and
has been a Director since 1991.
EUGENE P. TRANI, 60, is President of Virginia Commonwealth University
(an urban, public research university), a position he has held for more than
five years. He is a Director of Universal Corporation, SunTrust Mid-Atlantic
Bank and Heilig-Meyers Company. Dr. Trani is Chairman of the Corporate
Governance Committee and a member of the Audit Committee and the Compensation
Committee. He has been a Director since 1993.
Incumbent Directors Whose Terms Expire in 2001
GEORGE E. BELLO, 64, is Executive Vice President and Controller of
Reliance, a position he has held for more than five years. He is a Director of
Reliance and Horizon Health Corporation. Mr. Bello is a member of the
Compensation Committee and has been a Director since 1998.
THEODORE L. CHANDLER, JR., 47, is Senior Executive Vice President of
the Company. He is also Senior Executive Vice President of each of Lawyers
Title, Commonwealth and Transnation, positions he has held since February 23,
2000. Prior to January 31, 2000, Mr. Chandler was a member of the law firm of
Williams, Mullen, Clark & Dobbins, a position he held for more than five years.
He is a Director of Hilb, Rogal and Hamilton Company, Open Plan Systems, Inc.
and the Mutual Assurance Society of Virginia. Mr. Chandler is a member of the
Executive Committee and has been a Director since 1991.
CHARLES H. FOSTER, JR., 57, is Chairman and Chief Executive Officer of
the Company and of Lawyers Title, positions he has held for more than five
years. He is also Chairman and Chief Executive Officer of each of Commonwealth
and Transnation, positions he has held since June 1, 1999. Mr. Foster is a
Director of Universal Corporation and SunTrust Mid-Atlantic Bank. He is
4
<PAGE>
Chairman of the Executive Committee and a member of the Pension and Portfolio
Committee and the Finance Committee. Mr. Foster been a Director since 1991.
HERBERT WENDER, 62, was Vice Chairman and Chief Operating Officer of
the Company from March 1, 1998 until his retirement on May 31, 1999. Prior to
May 31, 1999, he was also Chairman and Chief Executive Officer of each of
Commonwealth and Transnation, positions he held for more than five years. Mr.
Wender is Lead Director of Radian Group, Inc. (a private mortgage insurance
company). He is a member of the Pension and Portfolio Committee and the Finance
Committee. Mr. Wender has been a Director since 1998.
MARSHALL B. WISHNACK, 53, was Chairman and Chief Executive Officer of
Wheat First Union (formerly Wheat First Butcher Singer and now First Union
Securities) (the securities brokerage division of First Union Corporation) from
April 1, 1996 until his retirement on December 31, 1999. Prior to April 1, 1996,
he was President and Chief Executive Officer of Wheat First Butcher Singer, a
position he held for more than five years. Mr. Wishnack is a Director of S&K
Famous Brands, Inc. He is Chairman of the Compensation Committee and a member of
the Audit Committee and the Corporate Governance Committee. Mr. Wishnack has
been a Director since 1991.
STOCK OWNERSHIP
Principal Shareholders
The following table sets forth certain information with respect to the
beneficial ownership of shares of the Company's Common Stock by each person or
group known by the Company to beneficially own more than 5% of the outstanding
shares of such stock.
<TABLE>
<CAPTION>
Name of Beneficial Owner Number of Shares Percent of Class 1
- ------------------------ ----------------- ------------------
<S> <C> <C>
LandAmerica Financial Group, Inc.
Savings and Stock Ownership Plan 2 1,431,008 10.33%
101 Gateway Centre Parkway
Gateway One
Richmond, Virginia 23235-5153
Reliance Group Holdings, Inc. 3 4,039,473 29.17%
Reliance Financial Services Corporation
Reliance Insurance Company
55 East 52nd Street
New York, New York 10055
Dimensional Fund Advisors Inc. 4 774,862 5.60%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
5
<PAGE>
______________________
1 The percents shown in the table are based on the number of shares of
Common Stock outstanding on December 31, 1999.
2 Each participant in the LandAmerica Financial Group, Inc. Savings and
Stock Ownership Plan (the "401(k) Plan") has the right to instruct Merrill Lynch
Trust Company, trustee for the 401(k) Plan, with respect to the voting of shares
allocated to his or her account. The trustee, however, will vote any shares for
which it receives no instructions in the same proportion as those shares for
which it has received instructions. The table shows the number of shares of the
Company's Common Stock held by the 401(k) Plan on December 31, 1999.
3 In an Amendment No. 2 to Schedule 13D (the "Schedule 13D") filed with
the Securities and Exchange Commission (the "Commission") on March 28, 2000, by
Reliance Financial Services Corporation ("Reliance Financial"), Reliance
Financial reported beneficial ownership as of March 28, 2000 of 4,039,473 shares
of Common Stock, representing approximately 28.9% of such shares outstanding as
of September 30, 1999. According to the Schedule 13D, all of the 4,039,473
shares of Common Stock beneficially owned by Reliance Financial are owned
directly by RIC, a wholly owned subsidiary of Reliance Financial. RIC has sole
voting (subject to the terms of the Voting Agreement described more fully
elsewhere in this Proxy Statement) and dispositive power over all of the shares
of Common Stock beneficially owned by Reliance Financial. See "Election of
Directors - Certain Voting Arrangements." Reliance Financial is a wholly owned
subsidiary of Reliance, which, according to the Schedule 13D, is also deemed to
beneficially own all 4,039,473 of the shares.
4 In a Schedule 13G filed with the Commission on February 3, 2000,
Dimensional Fund Advisors Inc. ("Dimensional") reported that in its role as
investment advisor to four investment companies registered under the Investment
Company Act of 1940 or as investment manager to certain commingled group trusts
and separate accounts (collectively, the "Funds"), it has sole power to vote and
dispose of 774,862 shares of the Company's Common Stock. The Schedule 13G states
that all of such shares are owned by the Funds, no one of which, to the
knowledge of Dimensional, owns more than 5% of the shares of Common Stock
outstanding.
Directors and Executive Officers
The following table sets forth certain information with respect to (a)
the beneficial ownership of shares of the Company's Common Stock by (i) each
Director and nominee, (ii) each executive officer listed in the Summary
Compensation Table (the "Named Executive Officers") and (iii) all Directors and
executive officers as a group and (b) the amount of Deferred Stock Units held by
each such person and group.
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<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership
------------------------------------------------------
Additional
Name of Beneficial Owner Number of Shares 1,2 Percent of Class Deferred Stock Units 3
- ------------------------ ----------------- ---------------- --------------------
<S> <C> <C> <C>
Janet A. Alpert 123,020 * 3,530.69
George E. Bello 0 * 0
Theodore L. Chandler, Jr. 22,648 * 2,385.67
Michael Dinkins 5,573 * 0
James Ermer 16,073 * 2,273.74
G. William Evans 46,846 * 3,365.92
Lowell C. Freiberg 0 * 0
Charles H. Foster, Jr. 248,056 1.79% 7,666.63
John P. McCann 10,573 * 1,889.44
Robert F. Norfleet, Jr. 13,823 * 2,109.87
Jeffrey C. Selby 5,018 * 678.40
Julious P. Smith, Jr. 1,000 4 * 0
Howard E. Steinberg 0 * 0
Jeffrey A. Tischler 5,910 * 2,367.80
Eugene P. Trani 12,073 * 2,197.55
Jeffrey D. Vaughan 31,234 * 4,391.87
Herbert Wender 29,430 * 1,121.78
Marshall B. Wishnack 15,573 * 2,171.26
All Directors and executive 657,889 4.75% 39,771.24
officers as a group (22
persons, including those
named above)
</TABLE>
_____________________
* Percentage of ownership is less than 1% of the outstanding shares of
Common Stock of the Company.
1 Except as otherwise noted, the number of shares of Common Stock of
the Company shown in the table is as of December 31, 1999. The percents shown in
the table are based on the number of shares of Common Stock outstanding on
December 31, 1999.
2 The number of shares of Common Stock shown in the table includes
51,279 shares held for certain Directors and executive officers in the 401(k)
Plan as of December 31, 1999, and 449,143 shares that certain Directors and
executive officers have the right to acquire through the exercise of stock
options within 60 days following December 31, 1999. The number of shares also
includes 5,073 shares of the Company's Common Stock held in fiduciary
capacities. Such shares may be deemed to be beneficially owned by the rules of
the Commission, but inclusion of the shares in the table does not constitute
admission of beneficial ownership.
3 The amounts reported in this column are Deferred Stock Units held by
(i) non-employee Directors under the Company's Outside Directors Deferral Plan
(see "Directors' Compensation") and (ii) executive officers under the Company's
Executive Voluntary Deferral Plan, a salary deferral plan, as of December 31,
1999. Each Deferred Stock Unit represents a hypothetical share of the Company's
Common Stock, fluctuates in value with the market price of such stock and is
payable only in cash.
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<PAGE>
4 The number of shares of Common Stock shown in the table for Mr. Smith
is as of March 2, 2000.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors and executive officers and persons who own more
than 10% of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership of Common Stock with the Commission. Such
persons are required by Commission regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, the Company believes that applicable Section 16(a) filing
requirements were satisfied for transactions that occurred in 1999, except that
Jeffrey A. Tischler filed an amendment to his year-end Form 5 reporting shares
he acquired in August 1999. The Annual Statement of Beneficial Ownership of
Securities on Form 5 for the 1998 fiscal year for each of the Company's
non-employee Directors who is not a RIC Director did not include the Director's
acquisition of Deferred Stock Units in 1998 under the Company's Outside
Directors Deferral Plan. The acquisition of Deferred Stock Units in 1998 has
been included on each such Director's Form 5 report for the 1999 fiscal year.
COMMITTEES
The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee, the Compensation Committee, the Pension and
Portfolio Committee, the Finance Committee and the Corporate Governance
Committee (formerly the Nominating Committee). The Executive Committee has the
authority to act for the Board of Directors on most matters during the intervals
between Board meetings. The Audit Committee reviews the scope and the results of
the work of the independent public accountants and internal auditors, reviews
the adequacy of internal accounting controls and recommends the selection of the
independent public accountants to the Board of Directors. The responsibilities
of the Compensation Committee are discussed below under "Compensation Committee
Report on Executive Compensation." The Pension and Portfolio Committee
establishes the investment policy and monitors the performance of pension and
portfolio investments of the Company and its subsidiaries. The Finance Committee
advises the Board of Directors with respect to financing needs, capital
structure and other financial matters. The Corporate Governance Committee
(formerly the Nominating Committee) develops qualifications for Director
candidates, recommends to the Board of Directors persons to serve as Directors
of the Company and monitors developments in, and makes recommendations to the
Board concerning corporate governance practices. Shareholders entitled to vote
for the election of Directors may nominate candidates for consideration by the
Corporate Governance Committee. See "Proposals for 2001 Annual Meeting."
During the fiscal year ended December 31, 1999, there were ten meetings
of the Board of Directors, four meetings of the Executive Committee, three
meetings of the Audit Committee, six meetings of the Compensation Committee,
four meetings of the Pension and Portfolio Committee and
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<PAGE>
three meetings of the Corporate Governance Committee. All Directors attended 75%
or more of the total aggregate number of meetings of the Board of Directors and
of the committees on which they served, except Mr. Freiberg.
DIRECTORS' COMPENSATION
Each Director who is not an officer of the Company receives a quarterly
retainer of $3,750, a fee of $1,500 for attendance at each Board meeting, and a
fee of $750 for attendance at each meeting of a Board committee of which he is a
member. Effective December 1, 1998, each such non-employee Director may elect to
receive all or part of his compensation in stock. The number of shares of the
Company's Common Stock issuable to a Director who makes an annual irrevocable
election to receive all stock in lieu of cash compensation is increased by 20%.
A Director who is also an officer of the Company receives no compensation for
his or her services as a Director. Pursuant to a policy of RIC, the annual
retainer and meeting fees that an RIC Director is eligible to receive will be
paid directly to RIC.
The Outside Directors Deferral Plan, as amended and restated in 1998,
permits non-employee Directors to defer all or a portion of their cash
compensation in Deferred Stock Units. Each Deferred Stock Unit represents a
hypothetical share of the Company's Common Stock and fluctuates in value with
the market price of such stock. A Participant's Deferred Stock Unit Account is
increased by Common Stock dividends paid by the Company. Those Directors who
elect to defer 100% of their total cash compensation into Deferred Stock Units
for a given year shall receive additional compensation in the form of Deferred
Stock Units equal to 20% of their total compensation. Any amounts deferred under
the original Outside Directors Deferral Plan may be transferred into the amended
and restated Plan by making a one time election to do so. If such amounts are
not transferred, the Director's Deferred Cash Account will continue to be
credited with interest annually. The interest paid is based on the Rate of
Return set forth in the amended and restated Plan, which is currently 9%. Under
the original Plan and the amended and restated Plan, benefits are paid in cash
in a lump sum or in installments and include survivor's benefits on the benefit
commencement date chosen by the Participant. A Participant may also postpone
receipt of benefit payments by making a timely election. Accelerated payment of
deferred benefits may occur under certain conditions, including a change of
control of the Company.
Prior to 1997 pursuant to the Company's 1992 Stock Option Plan for
Non-Employee Directors (the "Directors' Option Plan"), and in 1997 pursuant to
the Company's 1991 Stock Incentive Plan, as amended (the "1991 Stock Incentive
Plan"), each non-employee Director was granted an option to purchase 1,500
shares of Common Stock of the Company on the first business day following each
annual meeting of shareholders. Beginning in 1998, pursuant to the 1991 Stock
Incentive Plan, the annual option grant to each non-employee Director who is not
affiliated with RIC was increased to 2,000 shares of the Company's Common Stock.
Each RIC Director is entitled to receive cash compensation equal to the grant
date present value of such option determined by using the Black-Scholes option
pricing model; however, pursuant to a policy of RIC, at the direction of the RIC
Directors, such amounts are paid directly to RIC. The exercise price of all
options granted to non-employee Directors is the fair market value of the
Company's Common Stock on the date of grant. All of the options are exercisable
six months after the date of grant and expire ten years from
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<PAGE>
the date of grant. Shorter expiration periods may apply in the event an optionee
dies, becomes disabled or resigns from or does not stand for reelection to the
Board. The options will be adjusted for stock dividends, stock splits and
certain other corporate events that may occur in the future.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executive officers as well
as those officers of its subsidiaries who are members of executive management
(collectively "senior management") are made by the Compensation Committee of the
Board. The Committee determines the salaries of the Company's senior management
and reviews and approves annual management incentive programs and executive
benefits for senior management. It also administers the 1991 Stock Incentive
Plan, the Directors' Option Plan, the Executive Voluntary Deferral Plan, the
Outside Directors Deferral Plan and the Executive Target Ownership Program. The
Committee reviews any significant changes in the tax qualified employee pension
benefit plans and the Regional Management Incentive Programs. All decisions by
the Compensation Committee relating to the compensation of the Company's senior
management are reported to the full Board.
Under rules established by the Commission, the Company is required to
provide certain information with respect to the compensation and benefits
provided to the Company's Chairman and Chief Executive Officer, Charles H.
Foster, Jr., and the other executive officers of the Company, including the
Named Executive Officers. The report of the Compensation Committee set forth
below addresses the Company's compensation policies in effect for 1999.
Executive Compensation Policies
The Compensation Committee's executive compensation policies are
designed to provide competitive levels of compensation that integrate pay with
the Company's annual and long-term performance goals, recognize individual
initiative and achievements, and assist the Company in attracting and retaining
highly qualified executives. They provide for competitive base salaries which
reflect individual performance and level of responsibility; annual variable
performance opportunities payable in cash on the basis of merit and for the
achievement of financial and operating performance goals established by the
Committee; and long-term, stock-based incentive opportunities which strengthen
the mutuality of interests between senior management and the Company's
shareholders.
In furtherance of its responsibility to determine executive
compensation, the Compensation Committee annually, or more frequently, reviews
the Company's executive compensation program. The Compensation Committee reviews
data from published compensation surveys and evaluates compensation structures
and the financial performance of other publicly held companies in the title
insurance industry and in certain other financial services sectors as well as
the compensation of executive officers in those companies in order to establish
general parameters within which it may fix competitive compensation for its
executive officers. The insurance industry peer group used for compensation
analysis is included within, but is narrower than, the peer group index in the
performance graph included in this proxy statement due to the small number of
title companies on which compensation data is publicly available. The
Compensation Committee believes that
10
<PAGE>
compensation comparisons are most appropriately made to executives within the
insurance industry peer group, with particular emphasis on comparable title
insurance companies. This group may change as the Company or its competitors
change their focus, merge or consolidate or as new competitors emerge.
The Compensation Committee then determines the appropriate salary and
management incentive using a number of factors, including the executive
officer's individual duties and responsibilities in the Company, relative
importance to the overall success of the Company's short- and long-term goals
and attainment of individual performance goals, if appropriate. With respect to
Mr. Foster, the Committee specifically considers the following factors:
integrity, vision, leadership, ability to meet agreed upon corporate performance
objectives, succession planning, shareholder relations and CEO-Board relations,
and it evaluates the overall performance of the Company, including revenues,
earnings, development of the organization and return on shareholders' equity.
With respect to the other executive officers, including the Named Executive
Officers, the committee sets performance criteria, such as profitability, growth
and productivity, for the area or areas of Company operations for which the
executive is personally responsible and accountable.
Combining subjective and objective policies and practices, this
assessment process is undertaken annually, or more frequently, by the
Compensation Committee in order to implement the Company's pay-for-performance
policy, which focuses on an executive officer's total compensation, including
cash and non-cash compensation, from all sources.
Base Salaries and Annual Incentives
The Company's executive compensation program stresses incentive
opportunities linked to financial and operating performance and incorporates
competitive base salaries for senior management targeting the median for
comparable positions at comparable companies during 1999. On March 1, 1998, the
Company entered into an Employment Agreement with Mr. Foster for a period of
three years. Pursuant to the terms of the Employment Agreement, Mr. Foster's
annual base salary was fixed at $500,000. The Committee reviews Mr. Foster's
base salary annually to consider appropriate increases. After a review and
evaluation by the Committee in 1999 of Mr. Foster's personal performance in
light of his management responsibilities, the Company's profitability levels in
1998 and the competitiveness of Mr. Foster's salary to those of other chief
executive officers of comparable companies, Mr. Foster's salary was maintained
at $500,000.
The executive officers of the Company, including the Named Executive
Officers, were eligible for incentive compensation for their 1999 performance.
Annual incentive awards for 1999 were made to certain members of senior
management, including the Named Executive Officers, out of an incentive pool
based on a multiple of the actual annual earnings per share of the Company
during 1999. The Committee intends to award annual incentives based on
comparisons to peer group and individual performance. The Compensation Committee
review included an assessment of the performance of selected individuals in
achieving objective and subjective quarterly and annual goals in his or her
respective area of responsibility. Based on the performance of the Company and
his individual performance, Mr. Foster's annual incentive award for 1999 was
$216,000.
11
<PAGE>
Long-Term Incentives
The Committee administers the 1991 Stock Incentive Plan under which it
has granted to key executives stock options and shares of restricted Common
Stock based upon a determination of competitive aggregate compensation levels.
The primary objective of issuing stock-based incentives is to encourage
significant investment in stock ownership by management and to provide long-term
financial rewards linked directly to market performance of the Company's stock.
The Committee believes that significant ownership of stock by senior management
is the best way to align the interests of management and the shareholders, and
the Company's stock incentive program is effectively designed to further this
objective.
Effective February 16, 1999, the Compensation Committee granted stock
options (the "1999 Options") to various executives, including the Named
Executive Officers. The Committee granted Mr. Foster a 1999 Option to acquire
40,000 shares of Common Stock. In determining the number of shares to be subject
to the options granted to Mr. Foster, the Committee evaluated Mr. Foster's
overall compensation package relative to that of other chief executives in the
insurance industry peer group. With respect to the allocation of available
options among the Named Executive Officers and other executives, the Committee
is of the view that, as a person's level of responsibility increases, greater
portions of his or her total compensation should be linked to the long-term
performance of the Company's Common Stock and return to its shareholders.
The exercise price of the 1999 Options is based on the closing price of
the Common Stock on the date of grant. The 1999 Options cannot be exercised
until twelve months after the date of grant and expire seven years from such
date. An earlier expiration date may apply in the event of an optionee's
termination of employment, retirement, death or disability. The 1999 Options
vest at the rate of 25% each year in each of the four years following the date
of grant.
Executive Target Ownership Program
In 1998, the Company adopted the Executive Target Ownership Program
which requires senior management to attain certain stock ownership levels and
therefore maintain a vested interest in the equity performance of the Company.
Over a five year period, the executives covered by the program are expected to
reach certain ownership levels, which are expressed as a multiple of the
executive's base salary and which range from five times base salary, the level
applicable to Mr. Foster, to two times base salary depending on the executive's
position. Stock ownership for purposes of this program includes (1) shares owned
outright by the executive, the executive's immediate family or a trust for the
executive's benefit, (2) vested shares held in a qualified benefit plan, (3) the
vested portion of restricted shares, (4) shares retained from the exercise of
options and (5) Deferred Stock Units under the Executive Voluntary Deferral
Plan. Unexercised stock options do not count for purposes of this program.
The tables which follow this report, and the accompanying narrative and
footnotes, reflect the decisions covered by the above discussion.
12
<PAGE>
Tax Considerations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), provides certain criteria for the tax deductibility of
compensation in excess of $1 million paid to the Company's executive officers.
The Company intends to qualify executive compensation for deductibility under
Section 162(m) to the extent consistent with the best interests of the Company.
Since corporate objectives may not always be consistent with the requirements of
full deductibility, it is conceivable that the Company may enter into
compensation arrangements in the future under which payments are not deductible
under Section 162(m). Deductibility will not be the sole factor used by the
Committee in ascertaining appropriate levels or modes of compensation.
To meet the criteria applicable to deductible performance-based
compensation (as defined in Section 162(m)), the Company has taken appropriate
action to cause grants of stock options and stock appreciation rights under the
1991 Stock Incentive Plan and future grants of stock options and stock
appreciation rights under the proposed 2000 Stock Incentive Plan to be
performance-based. See Proposal Two for further discussion of the 2000 Stock
Incentive Plan and Exhibit A attached hereto for the full text of such plan.
Compensation Committee
Marshall B. Wishnack, Chairman
George E. Bello
James Ermer
Eugene P. Trani
Richmond, Virginia
March 21, 2000
Compensation Committee Interlocks
and Insider Participation
During 1999, Theodore L. Chandler, Jr. served on the Compensation
Committee while he was a member of the law firm of Williams, Mullen, Clark &
Dobbins, which acts as counsel to the Company.
13
<PAGE>
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended December 31,
1999, 1998 and 1997, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued for those
years, to each of the Named Executive Officers in all capacities in which they
served:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------ -------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary ($)1 Bonus ($)2 Compensation($)3 Awards ($) Options (#) Compensation ($)5
------------------ ---- ----------- ---------- ---------------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles H. Foster, Jr. 1999 $500,000 $216,000 -- $ 0 40,000 $ 37,403
Chairman and Chief 1998 458,348 600,000 -- 388,125 4 10,000 42,078
Executive Officer 1997 250,008 352,800 -- 0 35,000 32,529
Janet A. Alpert 1999 330,000 142,560 -- 0 20,000 28,180
President 1998 306,666 335,000 -- 215,625 4 5,000 31,278
1997 189,996 235,200 -- 0 18,000 27,311
G. William Evans 1999 250,000 110,925 -- 0 12,000 18,166
Executive Vice 1998 233,340 220,000 -- 172,500 4 2,000 21,426
President and Chief 1997 147,501 138,916 -- 0 6,000 13,246
Financial Officer
Jeffrey C. Selby 6 1999 175,008 168,400 -- 0 7,000 13,259
Executive Vice
President - Director of
National Commercial
Services and Manager
of National Agents and
Affiliates
Jeffrey D. Vaughan 1999 175,008 108,080 -- 0 12,000 14,405
Executive Vice 1998 160,010 155,611 -- 172,500 4 2,000 17,398
President - Real Estate 1997 125,040 150,436 -- 0 6,000 13,450
Services Group
Herbert Wender 7 1999 197,920 208,333 -- 0 0 3,429
Former Vice Chairman 1998 395,842 525,000 -- 301,875 4 8,000 5,577
and Chief Operating
Officer
Jeffrey A. Tischler 8 1999 177,089 0 -- 0 12,000 345,486
Former Executive Vice 1998 208,340 230,000 -- 172,500 4 6,000 20,927
President and Chief
Financial Officer
</TABLE>
_______________
14
<PAGE>
1 The 1998 amounts shown in this column for Mr. Wender and Mr. Tischler
are the salaries paid to them by the Company and its subsidiaries following the
Acquisition and their employment by the Company.
2 In addition to the 1998 amounts shown in this column, on March 5,
1998, a bonus of $750,000 ($600,000 of which was paid in shares of the Company's
Common Stock) was paid by the Company to Mr. Wender as a bonus for his 1997
performance as Chairman and Chief Executive Officer of Commonwealth and
Transnation, and a bonus of $350,000 was paid by the Company to Mr. Tischler for
his 1997 performance as Executive Vice President, Chief Financial and
Administrative Officer of Commonwealth and Transnation.
3 The dollar value of perquisites and other personal benefits received
by each of the Named Executive Officers during each of the fiscal years ended
December 31, 1999, 1998 and 1997 did not exceed the lesser of $50,000 or 10% of
the total amount of salary and bonus reported for each in such years.
4 The 1998 amounts in this column are the dollar values, based on a
$43.125 closing price of a share of Common Stock on April 6, 1998 as reported on
the New York Stock Exchange, of the following number of shares of restricted
Common Stock awarded on such date to the Named Executive Officers: Mr. Foster,
9,000 shares; Ms. Alpert, 5,000 shares; Mr. Evans, 4,000 shares; Mr. Vaughan,
4,000 shares; Mr. Wender, 7,000 shares; and Mr. Tischler, 4,000 shares. On March
1, 1999, and on each of the three successive anniversary dates of such date, the
awards, except the awards to Mr. Wender and Mr. Tischler, vest for 25% of the
shares of Common Stock covered by such awards. The awards to Mr. Wender vested
upon his retirement on May 31, 1999. The awards to Mr. Tischler vested on
September 15, 1999, pursuant to an Employee Severance and Release Agreement
between the Company and Mr. Tischler (the "Tischler Agreement") in connection
with his resignation from the Company (see "Contractual Obligations"). The
number of shares of restricted Common Stock held by each of the Named Executive
Officers on December 31, 1999, and the dollar value of such shares on such date
based on a $18.375 closing price of a share of Common Stock on such date as
reported on the New York Stock Exchange, were as follows: Mr. Foster, 9,000
shares, $165,375; Ms. Alpert, 5,000 shares, $91,875; Mr. Evans, 4,000 shares,
$73,500; Mr. Selby, 1,000 shares, $18,375; and Mr. Vaughan, 4,000 shares,
$73,500. Dividends will be paid on the shares of restricted Common Stock awarded
on April 6, 1998 to the Named Executive Officers.
5 "All Other Compensation" includes the following amounts for the
fiscal year ended December 31, 1999: (a) $5,120, $5,120, $5,120, $5,120, $5,120,
$3,429 and $3,840 for Mr. Foster, Ms. Alpert, Mr. Evans, Mr. Selby, Mr. Vaughan,
Mr. Wender and Mr. Tischler, respectively, representing total contributions of
$32,869 to the Company's 401(k) Plan on behalf of each of the Named Executive
Officers to match 1999 pre-tax elective deferral contributions (which are
included under the "Salary" column) made by each to such plan; (b) $5,397 and
$4,895 of accrued interest on income deferred in 1986, 1987, 1988 or 1989 by Mr.
Foster and Ms. Alpert, respectively, under the Lawyers Title Deferred Income
Plan (computed assuming that each of the participating Named Executive Officers
satisfies all conditions necessary to earn the highest interest rate payable
under such plan), to the extent the total interest accrued with respect to such
income amounts during 1999 exceeded 120% of the applicable federal long term
rate provided under Section 1274(d) of the Internal Revenue Code of 1986, as
amended; (c) $26,886, $18,165, $13,046, $8,139, $9,285 and $14,146 for Mr.
Foster, Ms. Alpert, Mr. Evans, Mr. Selby, Mr. Vaughan and Mr. Tischler,
respectively, representing compensation attributable to life insurance premiums
paid by the Company in 1999 pursuant to the Company's split-dollar life
insurance plan; and (d) $327,500 for Mr. Tischler, representing amounts paid and
payable to him by the Company pursuant to the Tischler Agreement.
15
<PAGE>
6 Mr. Selby was elected Executive Vice President - Director of National
Commercial Services and Manager of National Agents and Affiliates of the Company
effective February 17, 1999.
7 Mr. Wender was elected Vice Chairman and Chief Operating Officer of
the Company effective March 1, 1998, in connection with the Acquisition. He
retired on May 31, 1999.
8 Mr. Tischler was elected Executive Vice President, Chief Financial
Officer and Treasurer of the Company effective March 1, 1998, in connection with
the Acquisition. In February 1999, his title was changed to Executive Vice
President and Chief Financial Officer of the Company. He resigned on September
15, 1999, to pursue other interests.
Stock Options
The following tables contain information concerning grants of stock
options to the Named Executive Officers during the fiscal year ended December
31, 1999, exercises of stock options by the Named Executive Officers in such
fiscal year and the fiscal year-end value of all unexercised stock options held
by the Named Executive Officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------
Number of
Securities % of Total Options
Underlying Granted to Grant Date
Options Employees in Exercise or Expiration Present
Name Granted (#)1 Fiscal Year Base Price ($/Sh) 2 Date 3 Value ($)4
---- ----------- ----------- ------------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Charles H. Foster, Jr. 40,000 21.9% $44.00 2/16/06 $537,170
Janet A. Alpert 20,000 10.9 44.00 2/16/06 268,585
G. William Evans 12,000 6.6 44.00 2/16/06 161,151
Jeffrey C. Selby 7,000 3.8 44.00 2/16/06 94,005
Jeffrey D. Vaughan 12,000 6.6 44.00 2/16/06 161,151
Jeffrey A. Tischler 12,000 6.6 44.00 12/14/99 74,306
</TABLE>
_______________
1 The options granted to the Named Executive Officers other than Mr.
Tischler become exercisable for 25% of the shares of Common Stock of the Company
covered by such options on each of the first four successive anniversary dates
of the date of grant. The options granted to Mr. Tischler became exercisable for
all covered shares on September 15, 1999, pursuant to the Tischler Agreement.
The options listed in the table were granted on February 16, 1999.
2 The exercise price for the options listed in the table was the fair
market value on the date of grant. The exercise price may be paid in cash, in
shares of Common Stock of the Company valued at fair market value on the date of
exercise or pursuant to a cashless exercise procedure under which the optionee
provides irrevocable instructions to a brokerage firm to sell the purchased
shares and to remit to the Company, out of the sale proceeds, an amount equal to
the exercise price plus all required withholding and other deductions.
16
<PAGE>
3 The options listed in the table expire seven years from the date of
grant. An earlier expiration date may apply in the event of the optionee's
termination of employment, retirement, death or disability.
4 The Black-Scholes option pricing model was used to determine the
"Grant Date Present Value" of the options listed in the table. The model used
assumed a risk free interest rate of 5.07%, a dividend yield of .455%, a
volatility measure of .346, which is the variance on the rate of return on the
Common Stock of the Company over the most recent 251 trading day period prior to
the grant of the option, and an exercise date approximately four years after the
option vests. Because the magnitude of any nontransferability discount is
extremely difficult to determine, none was applied in determining the value of
the listed option.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)2
------------------------- --------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($)1 Exercisable Unexercisable Exercisable Unexercisable
---- ---------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles H. Foster, Jr. 53,769 $1,040,614 158,043 77,500 $775,019 $ 0
Janet A. Alpert 12,000 238,393 72,750 40,250 229,720 0
G. William Evans 0 0 22,000 18,750 76,894 0
Jeffrey C. Selby 0 0 500 8,500 0 0
Jeffrey D. Vaughan 0 0 9,950 17,150 19,613 0
Herbert Wender 0 0 8,000 0 0 0
Jeffrey A. Tischler 0 0 0 0 0 0
</TABLE>
________________
1 The value realized represents the difference between the exercise
price of the option and the fair market value of the Company's Common Stock on
the date of exercise.
2 The value of in-the-money options at fiscal year-end was calculated
by determining the difference between the fair market value of the Common Stock
of the Company underlying the options on December 31, 1999, and the exercise
price of the options.
Retirement Benefits
All of the Named Executive Officers participate in the Company's Cash
Balance Plan, a qualified defined benefit retirement plan. Under the plan, a
hypothetical cash balance account is established for each participant for record
keeping purposes. Each year a participant's cash balance account is credited
with (a) a compensation credit based on the participant's age, service and
compensation for that year and (b) an interest credit based on the participant's
account balances at the end of the prior year. The compensation credit
percentage is determined by the sum of the participant's age and service at the
beginning of the year, and ranges from 2% for a sum of less than 35 to 5% for a
sum of 80 or more. Interest credits for the year are based on the average of
10-year Treasury bond rates in effect for the month of November of the prior
year. At retirement, the account balance may be converted to various monthly
benefit options based on actuarial factors defined in the plan or may be paid in
a lump sum benefit. Benefits for participants who were eligible for early
retirement on December 31, 1998 under the terms of the former Lawyers Title
Retirement Plan or the
17
<PAGE>
former Commonwealth Pension Plan will be no less than benefits calculated under
the provisions of such former plan.
The Internal Revenue Code limits (a) the annual retirement benefit that
may be paid under the Cash Balance Plan and (b) the compensation that may be
used in computing a benefit. The maximum benefit limitation is adjusted each
year to reflect the cost of living. For 1999, the maximum benefit limitation was
$130,000 (based on a life annuity) and the earnings limitation was $160,000.
Ms. Alpert and Messrs. Foster, Evans and Vaughan are also covered by
the Company's 1999 Benefit Restoration Plan, an unfunded plan designed to
restore to selected participants the benefits that cannot be paid under the Cash
Balance Plan due to the Internal Revenue Code maximum benefit limitation, the
earnings limitation, or both. The benefit payable under the 1999 Benefit
Restoration Plan is the difference between the benefit that would be payable
under the Cash Balance Plan, but for either or both of the Internal Revenue Code
limitations, and the amount actually payable under the Cash Balance Plan. The
benefits under the 1999 Benefit Restoration Plan are payable for a period of 15
years.
Mr. Selby is also covered by a Supplemental Executive Retirement Plan
Agreement with Commonwealth and Transnation that provides a benefit at
retirement equal to 30% of the average of base salary received from November 1,
1993 to the date of retirement. The benefit is in addition to the benefits under
the Cash Balance Plan and is payable for a period of 10 years.
Mr. Wender's employment agreement with the Company provided that he is
entitled to a retirement benefit to restore the benefits that cannot be paid to
him under the Cash Balance Plan due to the Internal Revenue Code maximum benefit
limitation, the earnings limitation, or both. The benefits under the agreement
are based on the average of total earnings for the five years prior to
retirement and are payable for a period of 10 years.
Assuming current salary and bonus levels (as reported in the Summary
Compensation Table) and participation until normal retirement at age 65, the
estimated total annual benefit payable to each of the Named Executive Officers
at normal retirement age under the Cash Balance Plan, and the 1999 Benefit
Restoration Plan or the Commonwealth/Transnation Supplemental Executive
Retirement Plan Agreement, as applicable, is as follows: Mr. Foster, $346,000;
Ms. Alpert, $285,000; Mr. Evans, $194,000; Mr. Selby, $87,000; Mr. Vaughan,
$181,000; and Mr. Tischler, $13,000.
Mr. Wender retired on May 31, 1999. Under the Cash Balance Plan and his
employment agreement, he is entitled to $352,000 in annual retirement benefits.
Contractual Obligations
Employment Agreements. In 1998, the Company entered into an employment
agreement with Mr. Foster for a three-year period, an employment agreement with
Mr. Wender for a period that ended on May 31, 1999, and an employment agreement
with Ms. Alpert for a two-year period. These employment agreements provide the
following annual base salaries: Mr. Foster, $500,000; Mr. Wender, $475,000; and
Ms. Alpert $330,000. Mr. Wender was entitled to an annual bonus of not less
18
<PAGE>
than $500,000 for the 1998 fiscal year and a bonus of $208,333 for the period
from January 1, 1999 to May 31, 1999. Mr. Foster and Ms. Alpert are entitled to
receive an annual bonus as established by the Compensation Committee. The
employment agreements provide that each of the executives is entitled to
participate in and receive all benefits under all incentive, savings,
retirement, welfare benefit, expense reimbursement, fringe benefit and other
plans and arrangements made available to peer executives of the Company.
Pursuant to the Acquisition and Mr. Wender's employment agreement, the Company
has assumed all obligations through February 27, 1998, under the Reliance
Retirement Benefit Equalization Plan with respect to Mr. Wender.
Change of Control Agreements. To ensure that the Company will have the
continued dedicated service of certain executives notwithstanding the
possibility, threat or occurrence of a change of control, the Company has
entered into change of control employment agreements with certain executives,
including the Named Executive Officers. The agreements generally provide that if
the executive is terminated other than for cause within three years after a
change of control of the Company, or if the executive terminates his employment
for good reason within such three-year period or voluntarily during the 30-day
period following the first anniversary of the change of control, the executive
is entitled to receive "severance benefits." Severance benefits include a lump
sum severance payment equal to up to three times the sum of the officer's base
salary and highest annual bonus, together with certain other payments and
benefits, including continuation of employee welfare benefits and, under most of
the agreements, an additional payment to compensate the executive for certain
excise taxes imposed on certain change of control payments.
The Board of Directors believes that the change of control employment
agreements benefit the Company and its shareholders by securing the continued
service of key management personnel and by enabling management to perform its
duties and responsibilities without the distracting uncertainty associated with
a change of control.
Tischler Agreements. On September 15, 1999, Jeffrey A. Tischler
resigned as Executive Vice President and Chief Financial Officer of the Company
to pursue other interests. In connection with Mr. Tischler's departure, the
Company and Mr. Tischler entered into the Tischler Agreement that provides for
(i) severance payments of $225,000 to be made by the Company to Mr. Tischler,
(ii) payment of up to $27,500 in expenses incurred or expected to be incurred by
Mr. Tischler, (iii) Mr. Tischler's resignation from all positions with the
Company and its subsidiaries, (iv) accelerated vesting of options and restricted
Common Stock held by Mr. Tischler, (v) payments to Mr. Tischler in the event of
a change of control of the Company and (vi) a release of claims by Mr. Tischler.
The Tischler Agreement also contains restrictive covenants related to
confidentiality, non-competition and non-interference that govern the
post-employment relationship between the Company and Mr. Tischler. In addition,
the Company and Mr. Tischler entered into a Release Agreement, dated September
15, 1999, that provides for a severance payment of $75,000 to Mr. Tischler for
relocation expenses and a release of claims by Mr. Tischler.
19
<PAGE>
STOCK PERFORMANCE
The following graph compares the cumulative total return to the
shareholders of the Company for the last five fiscal years with the total return
on the Standard & Poors 500 Index and the Nasdaq Insurance Index, assuming the
investment of $100 in the Company's Common Stock on December 31, 1994, and the
reinvestment of all dividends.
[STOCK PEFORMANCE GRAPH]
LANDAMERICA FINANCIAL GROUP, INC.
CUMULATIVE TOTAL RETURN TO SHAREHOLDERS
- ----------------- -------------------- ------------------- ---------------------
NASDAQ
LandAmerica S&P 500 Index Insurance Index
================= ==================== =================== =====================
12/31/94 $100 $100 $100
- ----------------- -------------------- ------------------- ---------------------
12/31/95 184 138 142
- ----------------- -------------------- ------------------- ---------------------
12/31/96 191 169 162
- ----------------- -------------------- ------------------- ---------------------
12/31/97 309 226 237
- ----------------- -------------------- ------------------- ---------------------
12/31/98 551 290 211
- ----------------- -------------------- ------------------- ---------------------
12/31/99 183 351 164
================= ==================== =================== =====================
20
<PAGE>
Proposal Two
APPROVAL OF THE
LANDAMERICA FINANCIAL GROUP, INC.
2000 STOCK INCENTIVE PLAN
The Board of Directors has adopted unanimously and recommends that the
shareholders approve the LandAmerica Financial Group, Inc. 2000 Stock Incentive
Plan (the "2000 Plan"). The 2000 Plan will replace the 1991 Stock Incentive Plan
(referred to in this section as the "1991 Plan") which, by its terms, expires on
October 31, 2000. The Company's experience with stock options has convinced the
Board of Directors of the important role of stock options and other stock-based
incentives in recruiting and retaining officers, directors and employees with
ability and initiative and in encouraging such persons to have a greater
financial investment in the Company.
The complete text of the 2000 Plan is attached to this Proxy Statement
as Exhibit A. The following general description of the principal features of the
2000 Plan is qualified in its entirety by reference to Exhibit A.
General Information
The 2000 Plan would authorize the Compensation Committee of the Board
of Directors (the "Committee") to award shares of Common Stock, restricted
stock, stock options, stock appreciation rights and phantom stock (collectively,
"Stock Incentives") to Directors, officers and employees of the Company and its
subsidiaries who are designated by the Committee. No determination has been made
as to which of the persons eligible to participate in the 2000 Plan (currently,
eight non-employee Directors and 25 officers) will receive awards under the 2000
Plan, and, therefore, the benefits to be allocated to any individual or to
various groups of participants are not presently determinable.
If the shareholders approve the 2000 Plan, the Company will be
authorized to issue up to 3,000,000 shares of Common Stock under the 2000 Plan.
Shares will be considered to be issued under the 2000 Plan only when the shares
are actually issued to a participant. Additionally, any shares tendered or
withheld in payment of all or part of the exercise price of a stock option
granted under the 2000 Plan or in satisfaction of withholding tax obligations,
any shares forfeited or canceled in accordance with the terms of a grant or
award under the 2000 Plan or the 1991 Plan and any shares that are not issued
under the 2000 Plan or the 1991 Plan because of a payment of cash in lieu of
shares will become available for issuance under the 2000 Plan. The 2000 Plan
provides that not more than 500,000 shares of Common Stock shall be available
for awards of Common Stock, restricted stock and/or phantom stock.
There are currently 39,888 shares of Common Stock available for Stock
Incentives which may be issued under the 1991 Plan prior to its expiration on
October 31, 2000; thereafter, any outstanding Stock Incentive under that plan
may be exercised in accordance with the terms thereof. Shares that were
authorized for such Stock Incentives under the 1991 Plan and not issued or
covered
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by grants or awards under the 1991 Plan as of October 31, 2000, will not be
available for issuance under the 2000 Plan.
The 2000 Plan provides that if there is a stock split, stock dividend
or other event that affects the Company's capitalization, appropriate
adjustments will be made in the number of shares that may be issued under the
plan and in the number of shares and price in all outstanding grants and awards
made before such event.
On March 1, 2000, the closing price for a share of the Company's Common
Stock on the New York Stock Exchange was $18.25. On that date, 35,000 shares of
restricted Common Stock and 954,817 unexercised non-qualified stock options were
covered by outstanding grants and awards under the 1991 Plan.
Grants and Awards under the 2000 Plan
Stock Options. The 2000 Plan will permit the granting of incentive
stock options ("ISOs"), which qualify for special tax treatment, and
non-qualified stock options. The exercise price for options will not be less
than the fair market value of a share of Common Stock on the date of grant. The
period in which an option may be exercised will be determined by the Committee
on the date of grant, but will not exceed 10 years in the case of an ISO.
Payment of the option exercise price may be in cash or, if the award agreement
provides, by surrendering previously owned shares of Common Stock or the Company
withholding shares of Common Stock upon exercise. The Company may also assist in
a "cashless exercise" through a broker with the consent of the Committee.
Stock Appreciation Rights ("SARs"). SARs may also be granted either
independently or in combination with underlying stock options. Each SAR will
entitle the holder upon exercise to receive the excess of the fair market value
of a share of Common Stock at the time of exercise over the fair market value of
a share of Common Stock on the date of grant of the SAR. A limited SAR is
exercisable upon a Change of Control and entitles the holder to receive, with
respect to each share of Common Stock encompassed by the exercise of such SAR,
the higher of (x) the highest sales price of a share of Common Stock as reported
on the New York Stock Exchange composite tape during the 60-day period prior to
and including the date of the Change of Control, or (y) the highest price per
share paid in a Change of Control transaction, except that in the case of an SAR
related to an ISO, such price shall be based only on the fair market value of a
share of Common Stock on the date the ISO is exercised. At the discretion of the
Committee, all or part of the payment in respect of an SAR may be in cash,
shares of Common Stock or a combination thereof.
Common Stock and Restricted Stock. The Committee may also authorize the
award of shares of Common Stock and/or restricted Common Stock. The restricted
stock would vest and become transferable upon the satisfaction of conditions set
forth in the applicable award agreement. Restricted stock awards may be subject
to forfeiture if, for example, the recipient's employment terminates before the
award vests. During the period of restriction, holders of restricted stock will
have voting rights and the right to receive dividends on their shares.
Phantom Stock. The Committee may also award shares of phantom stock by
means of a
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bookkeeping entry by which an account is credited (but not funded) as though
shares of Common Stock had been transferred to such account. The award may
entitle the recipient to receive, upon satisfaction of such terms and conditions
as prescribed by the Committee, cash, shares of Common Stock or a combination of
both.
Change of Control Provisions
The 2000 Plan provides that in the event of a "Change of Control" (as
defined in the plan), unless otherwise provided by the Committee in a grant or
award agreement, all outstanding stock options, SARs and phantom stock will
become fully exercisable and the restrictions applicable to outstanding
restricted stock will lapse. The Committee may also provide that under such
circumstances holders of restricted stock may elect to receive, in exchange for
shares that were restricted stock, a cash payment equal to the fair market value
of the shares surrendered.
Federal Income Tax Consequences
Non-Qualified Stock Options. Non-qualified stock options granted under
the 2000 Plan are not taxable to an optionee at grant but result in taxation at
exercise, at which time the individual will recognize ordinary income in an
amount equal to the difference between the option exercise price and the fair
market value of the Common Stock on the exercise date. The Company will be
entitled to deduct a corresponding amount as a business expense in the year the
optionee recognizes this income.
Incentive Stock Options. An employee will generally not recognize
income on receipt or exercise of an ISO so long as he or she has been an
employee of the Company or its subsidiaries from the date the option was granted
until three months before the date of exercise; however, the amount by which the
fair market value of the Common Stock at the time of exercise exceeds the option
price is a required adjustment for purposes of the alternative minimum tax
applicable to the employee. If the employee holds the Common Stock received upon
exercise of the option for one year after exercise (and for two years from the
date of grant of the option), any difference between the amount realized upon
the disposition of the stock and the amount paid for the stock will be treated
as long-term capital gain (or loss, if applicable) to the employee. If the
employee exercises an ISO and satisfies these holding period requirements, the
Company may not deduct any amount in connection with the ISO.
In contrast, if an employee exercises an ISO but does not satisfy the
holding period requirements with respect to the Common Stock acquired on
exercise, the employee generally will recognize ordinary income in the year of
the disposition equal to the excess, if any, of the fair market value of the
Common Stock on the date of exercise over the option price; and any excess of
the amount realized on the disposition over the fair market value on the date of
exercise will be taxed as long-or short-term capital gain (as applicable). If,
however, the fair market value of the Common Stock on the date of disposition is
less than on the date of exercise, the employee will recognize ordinary income
equal only to the difference between the amount realized on disposition and the
option price. In either event, the Company will be entitled to deduct an amount
equal to the amount constituting ordinary income to the employee in the year of
the premature disposition.
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Stock Appreciation Rights. There are no immediate federal income tax
consequences to an employee when an SAR is granted. Instead, the employee
realizes ordinary income upon exercise of an SAR in an amount equal to the cash
and/or the fair market value (on the date of exercise) of the shares of Common
Stock received. The Company will be entitled to deduct the same amount as a
business expense at the time.
Restricted Stock. The federal income tax consequences of restricted
stock awards depend on the restrictions imposed on the stock. Generally, the
fair market value of the stock received will not be includable in the
participant's gross income until such time as the stock is no longer subject to
a substantial risk of forfeiture or becomes transferable. The employee may,
however, make a tax election to include the value of the stock in gross income
in the year of receipt despite such restrictions. Generally, the Company will be
entitled to deduct the fair market value of the stock transferred to the
employee as a business expense in the year the employee includes the
compensation in income.
Phantom Stock. A participant generally will not recognize taxable
income upon the award of shares of phantom stock. The participant, however, will
recognize ordinary income when the participant receives payment of cash and/or
shares of Common Stock for the phantom stock. The amount included in the
participant's income will equal the amount of cash and the fair market value of
the shares of Common Stock received. The Company generally will be entitled to a
corresponding tax deduction at the time the participant recognizes ordinary
income with respect to phantom stock.
Common Stock/Cash Payments. The fair market value of any shares of
Common Stock awarded to a participant and any cash payments a participant
receives in connection with other Stock Incentives or as dividends on restricted
stock are taxable as ordinary income in the year received or made available to
the participant without substantial limitations or restrictions. Generally, the
Company will be entitled to deduct the amount (other than dividends) that the
participant includes as income as a business expense in the year the participant
recognizes such income.
Section 162(m) of the Internal Revenue Code places a $1 million annual
limit on the deductible compensation of certain executives of publicly traded
corporations. The limit, however, does not apply to "qualified performance-based
compensation." The Company believes that grants of options and SARs under the
2000 Plan will qualify for the performance-based compensation exception to the
deductibility limit, assuming that the 2000 Plan is approved by the
shareholders.
State tax consequences may in some cases differ from those described
above. Grants and awards under the 2000 Plan may in some instances be made to
employees who are subject to tax in jurisdictions other than the United States
and may result in tax consequences differing from those described above.
Other Information
Upon approval by the Company's shareholders, the 2000 Plan will be
effective as of February 23, 2000, and will expire on May 31, 2010, unless
terminated earlier by the Board of Directors. Grants and awards issued before
the 2000 Plan expires or is terminated may extend beyond the
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expiration or termination date. The Board of Directors may amend the 2000 Plan
at any time, provided that no such amendment will be made without shareholder
approval if such approval is required under any applicable law, rule or
regulation. Except for adjustments that result from events that affect the
Company's capitalization, the 2000 Plan prohibits any repricing of options
without shareholder approval. In any calendar year, no individual may receive
Stock Incentives under the 2000 Plan that cover more than 200,000 shares of the
Company's Common Stock.
Vote Required
In order for it to be adopted, the proposed 2000 Plan must be approved
by the holders of a majority of the shares of Common Stock present or
represented by properly executed and delivered proxies at the Annual Meeting.
Abstentions and Broker Shares voted as to any matter at the Annual Meeting will
be included in determining the number of shares present or represented at the
Annual Meeting. Broker Shares that are not voted on any matter at the Annual
Meeting will not be included in determining the number of shares present or
represented at the Annual Meeting.
The Board of Directors recommends that the shareholders vote in favor
of Proposal Two.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors
has appointed Ernst & Young LLP as independent public accountants to audit the
consolidated financial statements of the Company for the fiscal year ending
December 31, 2000. Representatives of Ernst & Young LLP will be present at the
Annual Meeting, will be available to respond to appropriate questions and may
make a statement if they so desire.
PROPOSALS FOR 2001 ANNUAL MEETING
Under the regulations of the Commission, any shareholder desiring to
make a proposal to be acted upon at the 2001 Annual Meeting of Shareholders must
cause such proposal to be delivered, in proper form, to the Secretary of the
Company, whose address is 101 Gateway Centre Parkway, Gateway One, Richmond,
Virginia 23235-5153, no later than December 7, 2000, in order for the proposal
to be considered for inclusion in the Company's Proxy Statement and form of
proxy for that meeting. The Company anticipates holding the 2001 Annual Meeting
of Shareholders on May 15, 2001.
The Company's Bylaws also prescribe the procedure that a shareholder
must follow to nominate Directors or to bring other business before
shareholders' meetings. For a shareholder to nominate a candidate for Director
or to bring other business before a meeting, notice must be received by the
Secretary of the Company not less than 60 days and not more than 90 days prior
to the date of the meeting. Based on an anticipated date of May 15, 2001 for the
2001 Annual Meeting of Shareholders, the Company must receive such notice no
later than March 16, 2001 and no earlier than February 14, 2001. Notice of a
nomination for Director must describe various matters regarding the nominee and
the shareholder giving the notice. Notice of other business to be brought before
the
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meeting must include a description of the proposed business, the reasons
therefor, and other specified matters. Any shareholder may obtain a copy of the
Company's Bylaws, without charge, upon written request to the Secretary of the
Company.
OTHER MATTERS
THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
1999, INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO SHAREHOLDERS WITH THIS
PROXY STATEMENT. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1999
FILED WITH THE COMMISSION, EXCLUDING EXHIBITS, MAY BE OBTAINED WITHOUT CHARGE BY
WRITING TO THE SECRETARY OF THE COMPANY, WHOSE ADDRESS IS 101 GATEWAY CENTRE
PARKWAY, GATEWAY ONE, RICHMOND, VIRGINIA 23235-5153 OR BY VISITING THE COMPANY'S
WEBSITE AT WWW.LANDAM.COM.
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EXHIBIT A
LANDAMERICA FINANCIAL GROUP, INC.
2000 STOCK INCENTIVE PLAN
Article I
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
1.01 Agreement means a written agreement (including any amendment
or supplement thereto) between the Company and a Participant specifying the
terms and conditions of a Grant or an Award issued to such Participant.
1.02 Award means an award of Common Stock, Restricted Stock and/or
Phantom Stock.
1.03 Board means the Board of Directors of the Company.
1.04 Change of Control means:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (a) the then outstanding shares
of Common Stock of the Company (the "Outstanding Company Common Stock") or (b)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (i), the following acquisitions shall not constitute a Change
of Control: (a) any acquisition directly from the Company; (b) any acquisition
by the Company; (c) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company; or (d) any acquisition by any corporation pursuant to a transaction
which complies with clauses (a), (b) and (c) of subsection (iii) of this Section
1.04; or
(ii) Individuals who, as of the Effective Date, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the Effective Date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other
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disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (a) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
Subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (b) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (c) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, for purposes of subsection (i) of this
Section 1.04, a Change of Control shall not be deemed to have taken place if, as
a result of an acquisition by the Company which reduces the Outstanding Company
Common Stock or the Outstanding Company Voting Securities, the beneficial
ownership of a Person increases to 20% or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities; provided, however, that if a
Person shall become the beneficial owner of 20% or more of the Outstanding
Company Common Stock or the Outstanding Company Voting Securities by reason of
share purchases by the Company and, after such share purchases by the Company,
such Person becomes the beneficial owner of any additional shares of the
Outstanding Company Common Stock or the Outstanding Company Voting Stock, for
purposes of subsection (i) of this Section 1.04, a Change of Control shall be
deemed to have taken place.
1.05 Change of Control Date is the date on which an event described
in (i) through (iv) of Section 1.04 occurs.
1.06 Code means the Internal Revenue Code of 1986, as amended from
time to time. References to the Code shall include the valid and binding
governmental regulations, court decisions and other regulatory and judicial
authority issued or rendered thereunder.
1.07 Commission means the Securities and Exchange Commission or any
successor agency.
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1.08 Committee means the Compensation Committee of the Board.
1.09 Common Stock means the Common Stock of the Company.
1.10 Company means LandAmerica Financial Group, Inc.
1.11 Effective Date means the date on which this Plan is approved
by the shareholders of the Company.
1.12 Exchange Act means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
1.13 Fair Market Value means, on any given date, the closing price
of a share of Common Stock as reported on the New York Stock Exchange composite
tape on such day or, if the Common Stock was not traded on the New York Stock
Exchange on such day, then on the next preceding day that the Common Stock was
traded on such exchange, all as reported by such source as the Committee may
select.
1.14 Grant means the grant of an Option and/or an SAR.
1.15 Incentive Stock Option means an Option which qualifies and is
intended to qualify as an "incentive stock option" under Section 422 of the
Code.
1.16 Initial Value means, with respect to an SAR, the Fair Market
Value of one share of Common Stock on the date of grant, as set forth in an
Agreement.
1.17 Non-Qualified Stock Option means an Option other than an
Incentive Stock Option.
1.18 Option means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common Stock at the price
and on the conditions set forth in an Agreement.
1.19 Option Price means the price per share for Common Stock
purchased on the exercise of an Option as provided in Article VI.
1.20 Participant means an officer, director or employee of the
Company or of a Subsidiary who satisfies the requirements of Article IV and is
selected by the Committee to receive a Grant or an Award.
1.21 Phantom Stock means a bookkeeping entry on behalf of a
Participant by which his account is credited (but not funded) as though Common
Stock had been transferred to such account.
1.22 Plan means the LandAmerica Financial Group, Inc. 2000 Stock
Incentive Plan, as amended from time to time.
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1.23 Prior Plan means the LandAmerica Financial Group, Inc. 1991
Stock Incentive Plan, as amended.
1.24 Restricted Stock means shares of Common Stock awarded to a
Participant under Article IX and designated as Restricted Stock. Shares of
Common Stock shall cease to be Restricted Stock when, in accordance with the
terms of the applicable Agreement, they become transferable and free of
substantial risk of forfeiture.
1.25 Rule 16b-3 means Rule 16b-3, as promulgated by the Commission
under Section 16(b) of the Exchange Act, as amended from time to time, or any
successor rule.
1.26 SAR means a stock appreciation right granted pursuant to this
Plan that entitles the holder to receive, with respect to each share of Common
Stock encompassed by the exercise of such SAR, the excess of the Fair Market
Value at the time of exercise over the Initial Value of the SAR; provided, that
any limited stock appreciation right granted by the Committee and exercisable
upon a Change of Control shall entitle the holder to receive, with respect to
each share of Common Stock encompassed by the exercise of such SAR, the higher
of (x) the highest sales price of a share of Common Stock as reported on the New
York Stock Exchange composite tape during the 60-day period prior to and
including the Change of Control Date, or (y) the highest price per share paid in
a Change of Control transaction, except that in the case of SARs related to
Incentive Stock Options, such price shall be based only on the Fair Market Value
of the Common Stock on the date that the Incentive Stock Option is exercised.
1.27 Securities Broker means the registered securities broker
acceptable to the Company who agrees to effect the cashless exercise of an
Option pursuant to Section 8.05 hereof.
1.28 Subsidiary means, with respect to any corporation, a
"subsidiary corporation" of that corporation within the meaning of Code Section
424(f).
Article II
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
officers, directors and key employees with ability and initiative by enabling
such persons who contribute significantly to the Company or a Subsidiary to
participate in its future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the award of
Common Stock, Restricted Stock, and Phantom Stock, and the issuance of Options
qualifying as Incentive Stock Options or Non-Qualified Stock Options as
designated by the Committee at time of grant, and SARs. No Option that is
intended to be an Incentive Stock Option however, shall be invalid for failure
to qualify as an Incentive Stock Option under Section 422 of the Code but shall
be treated as a Non-Qualified Stock Option.
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Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
have authority to issue Grants and Awards upon such terms (not inconsistent with
the provisions of this Plan) as the Committee may consider appropriate. The
terms of such Grants and Awards may include conditions (in addition to those
contained in this Plan) on (i) the exercisability of all or any part of an
Option or SAR and (ii) the transferability or forfeitability of Restricted Stock
or Phantom Stock. In addition, the Committee shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. To fulfill the purposes of the Plan without
amending the Plan, the Committee may also modify any Grants or Awards issued to
Participants who are nonresident aliens or employed outside of the United States
to recognize differences in local law, tax policy or custom.
The express grant in the Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. Any
decision made, or action taken, by the Committee or in connection with the
administration of this Plan shall be final and conclusive. All expenses of
administering this Plan shall be borne by the Company.
Article IV
ELIGIBILITY
4.01 General. Any officer, director or employee of the Company or
of any Subsidiary (including any corporation that becomes a Subsidiary of the
Company after the adoption of this Plan) may receive one or more Awards or
Grants, or any combination or type thereof. Employee and non-employee directors
of the Company are eligible to participate in this Plan.
4.02 Grants and Awards. The Committee will designate the
individuals to whom Grants and/or Awards are to be made and will specify the
number of shares of Common Stock subject to each such Grant or Award. An Option
may be granted alone or in addition to other Grants and/or Awards under the
Plan. The Committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options or both types of Options (in each case with or
without a related SAR) to any Participant; provided, however, that Incentive
Stock Options may be granted only to employees of the Company and its
Subsidiaries. An SAR may be granted with or without a related Option. All Grants
or Awards under this Plan shall be evidenced by Agreements which shall be
subject to applicable provisions of this Plan and to such other provisions as
the Committee may determine. No Participant may be granted Options that are
Incentive Stock Options, or related SARs (under all plans of the Company and its
Subsidiaries which provide for the grant of Incentive Stock Options) which are
first exercisable in any calendar year for Common Stock having an aggregate Fair
Market Value (determined as of the date an Option is granted) exceeding $100,000
or such other amount as shall be specified in Code Section 422 and the rules and
regulations thereunder from time to time. No Participant may receive Grants or
Awards under the Plan with respect to more than 200,000 shares of Common Stock
during any one calendar year.
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4.03 Designation of Option as an Incentive Stock Option or
Non-Qualified Stock Option. The Committee will designate at the time an Option
is granted whether the Option is to be treated as an Incentive Stock Option or a
Non-Qualified Stock Option. In the absence, however, of any such designation,
such Option shall be treated as a Non-Qualified Stock Option.
4.04 Qualification of Incentive Stock Option under Section 422 of
the Code. Anything in this Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or, without
the consent of the Participant so affected, to disqualify any Incentive Stock
Option under such Section 422. No Option that is intended to be an Incentive
Stock Option however, shall be invalid for failure to qualify as an Incentive
Stock Option under Section 422 of the Code but shall be treated as a
Non-Qualified Stock Option.
Article V
STOCK SUBJECT TO PLAN
5.01 Maximum Number of Shares to be Awarded. Subject to the
adjustment provisions of Article XI and the provisions of (i) and (ii) of this
Article V, up to 3,000,000 shares of Common Stock may be issued under the Plan.
In addition to such authorization, the following shares of Common Stock may be
issued under the Plan:
(i) Shares of Common Stock that are forfeited under this
Plan or the Prior Plan, and shares of Common Stock that are not issued under
this Plan or the Prior Plan because of (x) a payment of cash in lieu of shares
of Common Stock, (y) the cancellation, termination or expiration of Grants and
Awards, and/or (z) other similar events under this Plan or the Prior Plan, shall
be available for issuance under this Plan; and
(ii) If a Participant tenders, or has withheld, shares of
Common Stock in payment of all or part of the Option Price under an Option
granted under this Plan or the Prior Plan, or in satisfaction of withholding tax
obligations thereunder, the shares of Common Stock so tendered by the
Participant or so withheld shall become available for issuance under this Plan.
Notwithstanding (i) above, any shares of Common Stock that are
authorized to be issued under the Prior Plan but that are not issued or covered
by Grants or Awards under the Prior Plan, shall not be available for issuance
under this Plan.
Subject to the adjustment provisions of Article XI, not more than
500,000 shares of Common Stock shall be issued under Awards of Common Stock,
Restricted Stock and/or Phantom Stock.
Subject to the foregoing provisions of this Article V, if a Grant or an
Award may be paid only in shares of Common Stock, or in either cash or shares of
Common Stock, the shares of Common Stock shall be deemed to be issued hereunder
only when and to the extent that payment is actually
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made in shares of Common Stock. However, the Committee may authorize a cash
payment under a Grant or an Award in lieu of shares of Common Stock if there are
insufficient shares of Common Stock available for issuance under the Plan.
5.02 Independent SARs. Upon the exercise of an SAR granted
independently of an Option, the Company may deliver to the Participant
authorized but previously unissued Common Stock, cash, or a combination thereof
as provided in Section 8.03. The maximum aggregate number of shares of Common
Stock that may be issued pursuant to SARs that are granted independently of
Options is subject to the provisions of Section 5.01 hereof.
Article VI
OPTION PRICE
The price per share for Common Stock purchased on the exercise of an
Option shall be fixed by the Committee on the date of grant; provided, however,
that the price per share shall not be less than the Fair Market Value on such
date.
Article VII
EXERCISE OF OPTIONS
7.01 Maximum Option or SAR Period. The period in which an Option or
SAR may be exercised shall be determined by the Committee on the date of grant;
provided, however, that an Incentive Stock Option shall not be exercisable after
the expiration of 10 years (or 5 years in the case of an Incentive Stock Option
granted to a 10% shareholder as determined under Section 422 of the Code) from
the date the Incentive Stock Option was granted. The date upon which any Option
or SAR granted by the Committee becomes exercisable may be accelerated by the
Committee in its discretion. Subject to the terms hereof, the term of
exercisability for any Option or SAR granted by the Committee may be extended by
the Committee and may be made contingent upon the continued employment of the
Participant by the Company or Subsidiary.
7.02 Transferability of Options and SARs. Non-Qualified Stock
Options and SARs may be transferable by a Participant and exercisable by a
person other than a Participant, but only to the extent specifically provided in
an Option or SAR Agreement. Incentive Stock Options, by their terms, shall not
be transferable except by will or by the laws of descent and distribution and
shall be exercisable, during the Participant's lifetime, only by the
Participant. No right or interest of a Participant in any Option or SAR shall be
liable for, or subject to, any lien, obligation or liability of such
Participant.
7.03 Employee Status. For purposes of determining the applicability
of Section 422 of the Code (relating to Incentive Stock Options), or in the
event that the terms of any Grant provide that it may be exercised only during
employment or within a specified period of time after termination of employment,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.
A-7
<PAGE>
Article VIII
METHOD OF EXERCISE
8.01 Exercise. Subject to the provisions of Articles VII and XII,
an Option or SAR may be exercised in whole at any time or in part from time to
time at such times and in compliance with the applicable Agreement and such
other requirements as the Committee shall determine; provided, however, that an
SAR that is related to an Option may be exercised only to the extent that the
related Option is exercisable and when the Fair Market Value exceeds the Option
Price of the related Option. An Option or SAR granted under this Plan may be
exercised with respect to any number of whole shares less than the full number
for which the Option or SAR could be exercised. Such partial exercise of an
Option or SAR shall not affect the right to exercise the Option or SAR from time
to time in accordance with this Plan with respect to remaining shares subject to
the Option or related SAR. The exercise of an Option shall result in the
termination of the SAR to the extent of the number of shares with respect to
which the Option is exercised.
8.02 Payment. Unless otherwise provided by the Agreement, payment
of the Option Price shall be made in cash. If the Agreement provides, payment of
all or part of the Option Price (and any applicable withholding taxes) may be
made by surrendering already owned shares of Common Stock to the Company or by
the Company withholding shares of Common Stock from the Participant upon
exercise, provided the shares surrendered or withheld have a Fair Market Value
(determined as of the day preceding the date of exercise) that is not less than
such price or part thereof and any such withholding taxes. In addition, the
Committee may establish such payment or other terms as it may deem to be
appropriate and consistent with these purposes.
8.03 Determination of Payment of Cash and/or Common Stock Upon
Exercise of SAR. At the Committee's discretion, the amount payable as a result
of the exercise of an SAR may be settled in cash, Common Stock, or a combination
of cash and Common Stock. No fractional shares shall be delivered upon the
exercise of an SAR but a cash payment will be made in lieu thereof.
8.04 Shareholder Rights. No Participant shall have any rights as a
shareholder with respect to shares subject to his Option or SAR until the date
he exercises such Option.
8.05 Cashless Exercise. To the extent permitted under the
applicable laws and regulations, at the request of the Participant and with the
consent of the Committee, the Company agrees to cooperate in a "cashless
exercise" of the Option. The cashless exercise shall be effected by the
Participant delivering to the Securities Broker instructions to exercise all or
part of the Option, including instructions to sell a sufficient number of shares
of Common Stock to cover the costs and expenses associated therewith. The
Committee may permit a Participant to elect to pay any applicable withholding
taxes by requesting that the Company withhold the number of shares of Common
Stock equivalent at current Fair Market Value to the withholding taxes due.
8.06 Cashing Out of Option. The Committee may elect to cash out all
or part of the portion of any Option to be exercised by paying the optionee an
amount, in cash or Common Stock, equal to the
A-8
<PAGE>
excess of the Fair Market Value of the Common Stock that is the subject of the
portion of the Option to be exercised over the Option Price times the number of
shares of Common Stock subject to the portion of the Option to be exercised on
the effective date of such cash out.
Article IX
COMMON STOCK AND RESTRICTED STOCK
9.01 Award. In accordance with the provisions of Article IV, the
Committee will designate the individuals to whom an Award of Common Stock and/or
Restricted Stock is to be made and will specify the number of shares of Common
Stock covered by such Award or Awards.
9.02 Vesting. In the case of Restricted Stock, on the date of the
Award, the Committee may prescribe that the Participant's rights in the
Restricted Stock shall be forfeitable or otherwise restricted in any manner in
the discretion of the Committee for such period of time as is set forth in the
Agreement. Subject to the provisions of Article XII hereof, the Committee may
award Common Stock to a Participant which is not forfeitable and is free of any
restrictions on transferability.
9.03 Shareholder Rights. Prior to their forfeiture in accordance
with the terms of the Agreement and while the shares are Restricted Stock, a
Participant will have all rights of a shareholder with respect to Restricted
Stock, including the right to receive dividends and vote the shares; provided,
however, that (i) a Participant may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of Restricted Stock, (ii) the Company shall
retain custody of the certificates evidencing shares of Restricted Stock, and
(iii) the Participant will deliver to the Company a stock power, endorsed in
blank, with respect to each award of Restricted Stock.
Article X
PHANTOM STOCK
10.01 Award. Pursuant to this Plan or an Agreement establishing
additional terms and conditions, the Committee may designate employees to whom
Awards of Phantom Stock may be made and will specify the number of shares of
Common Stock covered by the Award.
10.02 Vesting. On the date of the Award, the Committee may prescribe
that the Participant's right to receive payment for Phantom Stock shall be
forfeitable or otherwise restricted in any manner in the discretion of the
Committee for such period of time set forth in the Agreement.
10.03 Shareholder Rights. A Participant for whom Phantom Stock has
been credited generally shall have none of the rights of a shareholder with
respect to such Phantom Stock. However, a plan or Agreement for the use of
Phantom Stock may provide for the crediting of a Participant's Phantom Stock
account with cash or stock dividends declared with respect to Common Stock
represented by such Phantom Stock.
10.04 Payment. At the Committee's discretion, the amount payable to
a Participant for
A-9
<PAGE>
Phantom Stock credited to his account shall be made in cash, Common Stock or a
combination of cash and Common Stock.
10.05 Transferability of Phantom Stock. Phantom Stock may be
transferable by a Participant, but only to the extent specifically provided in
the Agreement. No right or interest of a Participant in any Phantom Stock shall
be liable for, or subject to, any lien, obligation or liability of such
Participant.
Article XI
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar changes in
capitalization; (y) spin-offs, spin-outs, split-ups, split-offs, or other such
distribution of assets to shareholders; or (z) direct or indirect assumptions
and/or conversions of outstanding Options due to an acquisition of the Company,
then the maximum number of shares as to which Grants and Awards may be issued
under this Plan shall be proportionately adjusted and their terms shall be
adjusted as the Committee shall determine to be equitably required, provided
that the number of shares subject to any Grant or Award shall always be a whole
number. Any determination made under this Article XI by the Committee shall be
final and conclusive.
The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to any
Grant or Award.
Article XII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Grant shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of all domestic stock exchanges on which the
Company's shares may be listed. The Company may rely on an opinion of its
counsel as to such compliance. Any share certificate issued to evidence Common
Stock for which a Grant is exercised or an Award is issued may bear such legends
and statements as the Committee may deem advisable to assure compliance with
federal and state laws and regulations. No Grant shall be exercisable, no Common
Stock shall be issued, no certificate for shares shall be delivered, and no
payment shall be made under this Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from regulatory bodies
having jurisdiction over such matters.
A-10
<PAGE>
Article XIII
GENERAL PROVISIONS
13.01 Effect on Employment. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or a Subsidiary or in any way affect any right and power of the
Company or a Subsidiary to terminate the employment of any employee at any time
with or without assigning a reason therefor.
13.02 Unfunded Plan. The Plan, insofar as it provides for a Grant or
an Award of Phantom Stock, is not required to be funded, and the Company shall
not be required to segregate any assets that may at any time be represented by a
Grant or an Award of Phantom Stock under this Plan.
13.03 Change of Control. Notwithstanding any other provision of the
Plan to the contrary, in the event of a Change of Control:
(i) Unless otherwise provided by the Committee in an
Agreement, any outstanding Option, SAR (including any limited SAR) or Phantom
Stock which is not presently exercisable and vested as of a Change of Control
Date shall become fully exercisable and vested to the full extent of the
original Grant upon such Change of Control Date.
(ii) Unless otherwise provided by the Committee in an
Agreement, the restrictions applicable to any outstanding Restricted Stock shall
lapse, and such Restricted Stock shall become free of all restrictions and
become fully vested, nonforfeitable and transferable to the full extent of the
original Award. The Committee may also provide in an Agreement that a
Participant may elect, by written notice to the Company within 60 days after a
Change of Control Date, to receive, in exchange for shares that were Restricted
Stock immediately before the Change of Control Date, a cash payment equal to the
Fair Market Value of the shares surrendered on the last business day the Common
Stock is traded on the New York Stock Exchange prior to receipt by the Company
of such written notice.
(iii) The Committee may, in its complete discretion, cause
the acceleration or release of any and all restrictions or conditions related to
a Grant or Award, in such manner, in the case of officers and directors of the
Company who are subject to Section 16(b) of the Exchange Act, as to conform to
the provisions of Rule 16b-3.
13.04 Rules of Construction. Headings are given to the articles and
sections of this Plan solely for ease of reference and are not to be considered
in construing the terms and conditions of the Plan. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
13.05 Rule 16b-3 Requirements. Notwithstanding any other provisions
of the Plan, the Committee may impose such conditions on any Grant or Award, and
the Board may amend the Plan in any such respects, as they may determine, on the
advice of counsel, are necessary or desirable to satisfy the provisions of Rule
16b-3. Any provision of the Plan to the contrary notwithstanding, and
A-11
<PAGE>
except to the extent that the Committee determines otherwise: (a) transactions
by and with respect to officers and directors of the Company who are subject to
Section 16(b) of the Exchange Act shall comply with any applicable conditions of
Rule 16b-3; and (b) every provision of the Plan shall be administered,
interpreted and construed to carry out the foregoing provisions of this
sentence.
13.06 Amendment, Modification and Termination. At any time and from
time to time, the Board may terminate, amend or modify the Plan. Such amendment
or modification may be without shareholder approval except to the extent that
such approval is required by the Code, pursuant to the rules under Section 16 of
the Exchange Act, by any national securities exchange or system on which the
Common Stock is then listed or reported, by any regulatory body having
jurisdiction with respect thereto or under any other applicable laws, rules, or
regulations. No termination, amendment, or modification of the Plan, other than
pursuant to Section 13.05 herein, shall in any manner adversely affect any Grant
or Award theretofore issued under the Plan, without the written consent of the
Participant. The Committee may amend the terms of any Grant or Award theretofore
issued under this Plan, prospectively or retrospectively, but no such amendment
shall impair the rights of any Participant without the Participant's written
consent except an amendment provided for or contemplated in the terms of the
Grant or Award, an amendment made to cause the Plan, or Grant or Award, to
qualify for the exemption provided by Rule 16b-3, or an amendment to make an
adjustment under Article XI. Except as provided in Article XI, the Option Price
of any outstanding Option may not be adjusted or amended, whether through
amendment, cancellation or replacement, unless such adjustment or amendment is
approved by the shareholders of the Company.
13.07 Governing Law. The validity, construction and effect of the
Plan and any actions taken or related to the Plan shall be determined in
accordance with the laws of the Commonwealth of Virginia and applicable federal
law.
13.08 Successors and Assigns. All obligations of the Company under
the Plan, with respect to Grants and Awards issued hereunder, shall be binding
on any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation or otherwise, of
all or substantially all of the business and/or assets of the Company. The Plan
shall be binding on all successors and permitted assigns of a Participant,
including, but not limited to, the estate of such Participant and the executor,
administrator or trustee of such estate, and the guardians or legal
representative of the Participant.
13.09 Effect on Prior Plan and Other Compensation Arrangements. The
adoption of this Plan shall have no effect on Grants and Awards made pursuant to
the Prior Plan and the Company's other compensation arrangements. Nothing
contained in this Plan shall prevent the Company from adopting other or
additional compensation plans or arrangements for its officers, directors or
employees.
13.10 Duration of Plan. No Grant or Award may be made under this
Plan after May 31, 2010.
13.11 Effective Date. Options may be granted under this Plan, upon
its adoption by the Board, provided that no Option will be effective unless and
until this Plan is approved by the holders of a
A-12
<PAGE>
majority of the shares of the Company's outstanding voting stock present in
person, or represented by proxy, and entitled to vote at a duly held meeting of
the shareholders. No Option granted prior to the Effective Date may be exercised
before the requisite shareholder approval is obtained.
A-13
<PAGE>
[FORM OF PROXY CARD AND VOTING INSTRUCTIONS]
LANDAMERICA FINANCIAL GROUP, INC.
April 6, 2000
Dear Shareholder:
Please take note of the important information enclosed with this Proxy. There
are issues related to the management and operation of the Company that require
your immediate attention and approval. These are discussed in detail in the
enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares. You may vote by mail, by telephone or over the Internet.
If you would like to vote by mail, please mark the boxes on the proxy card to
indicate how your shares shall be voted. Then sign the card, detach it and
return your proxy vote in the enclosed postage paid envelope.
If you would like to vote by telephone or over the Internet, please follow the
steps set forth on the proxy card.
Your vote must be received prior to the Annual Meeting of Shareholders, May 16,
2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Charles H. Foster, Jr.
Chairman and Chief Executive Officer
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John M. Carter, Russell W. Jordan, III and G.
William Evans, and each or any of them, proxies for the undersigned, with power
of substitution, to vote all the shares of Common Stock of LandAmerica Financial
Group, Inc. held of record by the undersigned on April 3, 2000, at the Annual
Meeting of Shareholders to be held at 10:00 a.m. May 16, 2000, and at any
adjournments thereof, upon the matters listed on the reverse side, as more fully
set forth in the Proxy Statement, and for the transaction of such other business
as may properly come before the Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED ON THE
REVERSE SIDE BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES AND FOR PROPOSAL 2.
<TABLE>
<CAPTION>
<S><C>
- ----------------------------------------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ----------------------------------------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on this Proxy. Attorneys-in-fact, executors, trustees, guardians,
corporate officers, etc. should give full title.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
(continued, and to be DATED and SIGNED on reverse side)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- -----------------------------------------------------
LANDAMERICA FINANCIAL GROUP, INC. 1. Election of Directors. For All For All
Nominees Withhold Except
- -----------------------------------------------------
(01) Janet A. Alpert _ _ _
COMMON STOCK (02) Michael Dinkins |_| |_| |_|
(03) James Ermer
(04) Lowell C. Freiberg
(05) John P. McCann
(06) Julious P. Smith, Jr.
(07) Howard E. Steinberg
CONTROL NUMBER: INSTRUCTION: To withhold authority to vote for any individual
RECORD DATE SHARES: nominee, mark the "For All Except" box and strike a line through
the name(s) of the nominee(s). Your shares will be voted "For"
the remaining nominee(s).
2. Proposal to approve the For Against Abstain
LandAmerica Financial _ _ _
Group, Inc. 2000 Stock |_| |_| |_|
Incentive Plan.
-------------- _
Please be sure to sign and date this Date Mark box at right if an address change or comment has |_|
Proxy. been noted on the reverse side of this card.
- -----------------------------------------------------
Shareholder sign here Co-owner sign here
- -----------------------------------------------------
DETACH CARD DETACH CARD
VOTE BY TELEPHONE VOTE BY INTERNET
- ----------------- ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone. confirmed and posted.
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card. 1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/lfg
There is NO CHARGE for this call.
3. Enter your Control Number located on your Proxy Card.
3. Enter your Control Number located on your Proxy Card.
4. Follow the instructions provided.
4. Follow the recorded instructions.
Your vote is important!
Your vote is important! Go to http://www.eproxyvote.com/lfg anytime!
Call 1-877-PRX-VOTE anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet.
</TABLE>
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
April 6, 2000
Dear Participant:
Please take note of the important information enclosed with this Voting
Instruction. There are issues related to the management and operation of the
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares. You may vote by mail, by telephone or over the Internet.
If you would like to vote by mail, please mark the boxes on the Voting
Instruction to indicate how your shares will be voted. Then sign the Voting
Instruction, detach it and return it in the enclosed postage paid envelope.
If you would like to vote by telephone or over the Internet, please follow the
steps set forth on the Voting Instruction.
Your vote must be received prior to the Annual Meeting of Shareholders, May 16,
2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Charles H. Foster, Jr.
Chairman and Chief Executive Officer
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
TO TRUSTEE, LANDAMERICA FINANCIAL GROUP, INC.
SAVINGS AND STOCK OWNERSHIP PLAN
This Voting Instruction is Solicited on Behalf of the Board of Directors of
LandAmerica Financial Group, Inc.
Pursuant to Section 10.4 of the LandAmerica Financial Group, Inc. Savings and
Stock Ownership Plan, you are directed to vote, in person or by proxy, the whole
shares of Common Stock of LandAmerica Financial Group, Inc. credited to the
undersigned Participant's Account as of April 3, 2000, at the Annual Meeting of
Shareholders of LandAmerica Financial Group, Inc., to be held at 10:00 a.m. on
May 16, 2000, and at any adjournments thereof, upon the matters listed on the
reverse side, as more fully set forth in the Proxy Statement, and for the
transaction of such other business as may properly come before the Meeting.
THIS VOTING INSTRUCTION WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS
MADE, OR IF A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE
TRUSTEE, THE SHARES OF LANDAMERICA FINANCIAL GROUP, INC. COMMON STOCK CREDITED
TO YOUR PARTICIPANT'S ACCOUNT WILL BE VOTED IN THE SAME PROPORTION AS THOSE
SHARES OF LANDAMERICA FINANCIAL GROUP, INC. COMMON STOCK FOR WHICH THE TRUSTEE
HAS RECEIVED PROPER VOTING INSTRUCTIONS WITH RESPECT TO PROPOSALS 1 AND 2.
<TABLE>
<CAPTION>
<S><C>
- ------------------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------------------
Please sign exactly as your name appears on this Voting Instruction.
- ------------------------------------------------------------------------------------------
</TABLE>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
(continued, and to be DATED and SIGNED on reverse side)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- -----------------------------------------------------
LANDAMERICA FINANCIAL GROUP, INC. 1. Election of Directors. For All For All
Nominees Withhold Except
- -----------------------------------------------------
(01) Janet A. Alpert _ _ _
LANDAMERICA FINANCIAL GROUP, INC. (02) Michael Dinkins |_| |_| |_|
SAVINGS AND STOCK OWNERSHIP PLAN (03) James Ermer
(04)Lowell C. Freiberg
(05) John P. McCann
(06) Julious P. Smith, Jr.
(07)Howard E. Steinberg
CONTROL NUMBER: INSTRUCTION: To withhold authority to vote for any individual
RECORD DATE SHARES: nominee, mark the "For All Except" box and strike a line through
the name(s) of the nominee(s). Your shares will be voted "For"
the remaining nominee(s).
2. Proposal to approve the For Against Abstain
LandAmerica Financial _ _ _
Group, Inc. 2000 Stock |_| |_| |_|
Incentive Plan.
-------------- _
Please be sure to sign and date this Date Mark box at right if an address change or comment has |_|
Voting Instruction. been noted on the reverse side of this card.
- -----------------------------------------------------
Participant sign here
- -----------------------------------------------------
DETACH CARD DETACH CARD
VOTE BY TELEPHONE VOTE BY INTERNET
- ----------------- ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone. confirmed and posted.
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement and Voting 1. Read the accompanying Proxy Statement and Voting
Instruction. Instruction.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/lfg
There is NO CHARGE for this call.
3. Enter your Control Number located on your Voting
3. Enter your Control Number located on your Voting Instruction.
Instruction.
4. Follow the instructions provided.
4. Follow the recorded instructions.
Your vote is important!
Your vote is important! Go to http://www.eproxyvote.com/lfg anytime!
Call 1-877-PRX-VOTE anytime!
Do not return your Voting Instruction if you are voting by Telephone or Internet.
</TABLE>
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
April 6, 2000
Dear Participant:
Please take note of the important information enclosed with this Voting
Instruction. There are issues related to the management and operation of the
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares. You may vote by mail, by telephone or over the Internet.
If you would like to vote by mail, please mark the boxes on the Voting
Instruction to indicate how your shares will be voted. Then sign the Voting
Instruction, detach it and return it in the enclosed postage paid envelope.
If you would like to vote by telephone or over the Internet, please follow the
steps set forth on the Voting Instruction.
Your vote must be received prior to the Annual Meeting of Shareholders, May 16,
2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Charles H. Foster, Jr.
Chairman and Chief Executive Officer
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
TO ADMINISTRATOR, LAWYERS TITLE INSURANCE CORPORATION
1995 STOCK PURCHASE PLAN
This Voting Instruction is Solicited on Behalf of the Board of Directors of
LandAmerica Financial Group, Inc.
Pursuant to Section 10 of the Lawyers Title Insurance Corporation 1995 Stock
Purchase Plan, you are directed to vote, in person or by proxy, the whole shares
of Common Stock of LandAmerica Financial Group, Inc. credited to the undersigned
Participant's Account as of February 29, 2000, at the Annual Meeting of
Shareholders of LandAmerica Financial Group, Inc., to be held at 10:00 a.m. on
May 16, 2000, and at any adjournments thereof, upon the matters listed on the
reverse side, as more fully set forth in the Proxy Statement, and for the
transaction of such other business as may properly come before the Meeting.
THIS VOTING INSTRUCTION, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS
MADE, OR IF A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE
ADMINISTRATOR, THE ADMINISTRATOR MAY VOTE THE SHARES AT ITS DISCRETION.
<TABLE>
<CAPTION>
<S><C>
- ------------------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------------------
Please sign exactly as your name appears on this Voting Instruction.
- ------------------------------------------------------------------------------------------
</TABLE>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
(continued, and to be DATED and SIGNED on reverse side)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- -----------------------------------------------------
LANDAMERICA FINANCIAL GROUP, INC. 1. Election of Directors. For All For All
Nominees Withhold Except
- -----------------------------------------------------
(01) Janet A. Alpert _ _ _
LAWYERS TITLE (02) Michael Dinkins |_| |_| |_|
INSURANCE CORPORATION (03)James Ermer
1995 STOCK PURCHASE PLAN (04)Lowell C. Freiberg
(05) John P. McCann
(06) Julious P. Smith, Jr.
(07) Howard E. Steinberg
CONTROL NUMBER: INSTRUCTION: To withhold authority to vote for any individual
RECORD DATE SHARES: nominee, mark the "For All Except" box and strike a line through
the name(s) of the nominee(s). Your shares will be voted "For"
the remaining nominee(s).
2. Proposal to approve the For Against Abstain
LandAmerica Financial _ _ _
Group, Inc. 2000 Stock |_| |_| |_|
Incentive Plan.
-------------- _
Please be sure to sign and date this Date Mark box at right if an address change or comment has |_|
Voting Instruction. been noted on the reverse side of this card.
- -----------------------------------------------------
Participant sign here
- -----------------------------------------------------
DETACH CARD DETACH CARD
VOTE BY TELEPHONE VOTE BY INTERNET
- ----------------- ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone. confirmed and posted.
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement and Voting 1. Read the accompanying Proxy Statement and Voting
Instruction. Instruction.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/lfg
There is NO CHARGE for this call.
3. Enter your Control Number located on your Voting
3. Enter your Control Number located on your Voting Instruction.
Instruction.
4. Follow the instructions provided.
4. Follow the recorded instructions.
Your vote is important!
Your vote is important! Go to http://www.eproxyvote.com/lfg anytime!
Call 1-877-PRX-VOTE anytime!
Do not return your Voting Instruction if you are voting by Telephone or Internet.
</TABLE>
<PAGE>
LANDAMERICA FINANCIAL GROUP, INC.
April 6, 2000
Dear Participant:
Please take note of the important information enclosed with this Voting
Instruction. There are issues related to the management and operation of the
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares. You may vote by mail, by telephone or over the Internet.
If you would like to vote by mail, please mark the boxes on the Voting
Instruction to indicate how your shares will be voted. Then sign the Voting
Instruction, detach it and return it in the enclosed postage paid envelope.
If your would like to vote by telephone or over the Internet, please follow the
steps set forth on the Voting Instruction.
Your vote must be received prior to the Annual Meeting of Shareholders, May 16,
2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Charles H. Foster, Jr.
Chairman and Chief Executive Officer
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LANDAMERICA FINANCIAL GROUP, INC.
TO TRUSTEE, UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
AND DESIGNATED AFFILIATED COMPANIES EMPLOYEES' STOCK PURCHASE PLAN
This Voting Instruction is Solicited on Behalf of the Board of Directors of
LandAmerica Financial Group, Inc.
Pursuant to Section 13.02 of the Universal Leaf Tobacco Company, Incorporated
and Designated Affiliated Companies Employees' Stock Purchase Plan, you are
directed to vote, in person or by proxy, the whole shares of Common Stock of
LandAmerica Financial Group, Inc. credited to the undersigned Participant's
Account as of March 1, 2000, at the Annual Meeting of Shareholders of
LandAmerica Financial Group, Inc., to be held at 10:00 a.m. on May 16, 2000, and
at any adjournments thereof, upon the matters listed on the reverse side, as
more fully set forth in the Proxy Statement, and for the transaction of such
other business as may properly come before the Meeting.
THIS VOTING INSTRUCTION, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS
MADE, OR IF A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE
TRUSTEE, THE SHARES OF LANDAMERICA FINANCIAL GROUP, INC. COMMON STOCK CREDITED
TO YOUR PARTICIPANT'S ACCOUNT WILL BE VOTED IN THE SAME PROPORTION AS THOSE
SHARES OF LANDAMERICA FINANCIAL GROUP, INC. COMMON STOCK FOR WHICH THE TRUSTEE
HAS RECEIVED PROPER VOTING INSTRUCTIONS WITH RESPECT TO PROPOSALS 1 AND 2.
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PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------------------
Please sign exactly as your name appears on this Voting Instruction
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
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(continued, and to be DATED and SIGNED on reverse side)
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|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- -----------------------------------------------------
LANDAMERICA FINANCIAL GROUP, INC. 1. Election of Directors. For All For All
Nominees Withhold Except
- -----------------------------------------------------
(01) Janet A. Alpert _ _ _
UNIVERSAL LEAF TOBACCO COMPANY, (02) Michael Dinkins |_| |_| |_|
INCORPORATED AND DESIGNATED (03) James Ermer
AFFILIATED COMPANIES EMPLOYEES' (04) Lowell C. Freiberg
STOCK PURCHASE PLAN (05) John P. McCann
(06) Julious P. Smith, Jr.
(07) Howard E. Steinberg
CONTROL NUMBER: INSTRUCTION: To withhold authority to vote for any individual
RECORD DATE SHARES: nominee, mark the "For All Except" box and strike a line through
the name(s) of the nominee(s). Your shares will be voted "For"
the remaining nominee(s).
2. Proposal to approve the For Against Abstain
LandAmerica Financial _ _ _
Group, Inc. 2000 Stock |_| |_| |_|
Incentive Plan.
-------------- _
Please be sure to sign and date this Date Mark box at right if an address change or comment has |_|
Voting Instruction. been noted on the reverse side of this card.
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Participant sign here
- -----------------------------------------------------
DETACH CARD DETACH CARD
VOTE BY TELEPHONE VOTE BY INTERNET
- ----------------- ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone. confirmed and posted.
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement and Voting 1. Read the accompanying Proxy Statement and Voting
Instruction. Instruction.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/lfg
There is NO CHARGE for this call.
3. Enter your Control Number located on your Voting
3. Enter your Control Number located on your Voting Instruction.
Instruction.
4. Follow the instructions provided.
4. Follow the recorded instructions.
Your vote is important!
Your vote is important! Go to http://www.eproxyvote.com/lfg anytime!
Call 1-877-PRX-VOTE anytime!
Do not return your Voting Instruction if you are voting by Telephone or Internet.
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