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Exhibit
10.6
CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
AGREEMENT by and
between LandAmerica Financial Group, Inc., a Virginia corporation
(the “Company”), and
(the “Executive”), dated as of the
day of
.
The Board of
Directors of the Company (the “Board”), has determined
that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive’s full attention
and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT
IS HEREBY AGREED AS FOLLOWS:
1. Certain
Definitions .
(a) The
“Effective Date” shall mean the first date during the
Change of Control Period (as defined in Section 1(b)) on which a
Change of Control (as defined in Section 2) occurs. Anything in
this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Executive’s employment with the
Company is terminated prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated
to effect a Change of Control or (ii) otherwise arose in connection
with or anticipation of a Change of Control, then for all purposes
of this Agreement the “Effective Date” shall mean the
date immediately prior to the date of such termination of
employment.
(b) The
“Change of Control Period” shall mean the period
commencing on the date hereof and ending on December 31,
2006.
(c)
“Subsidiary” shall mean any corporation that is
directly, or indirectly though one or more intermediaries,
controlled by the Company.
2. Change of
Control . For the purpose of this Agreement, a “Change of
Control” shall mean:
(a) The acquisition
by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or
(b) Individuals
who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(c) Consummation of
a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination; or
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(d) Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
Notwithstanding the
foregoing, for purposes of subsection (a) of this Section 2, a
Change of Control shall not be deemed to have taken place if, as a
result of an acquisition by the Company which reduces the
Outstanding Company Common Stock or the Outstanding Company Voting
Securities, the beneficial ownership of a Person increases to 20%
or more of the Outstanding Company Common Stock or the Outstanding
Company Voting Securities; provided, however, that if a Person
shall become the beneficial owner of 20% or more of the Outstanding
Company Common Stock or the Outstanding Company Voting Securities
by reason of share purchases by the Company and, after such share
purchases by the Company, such Person becomes the beneficial owner
of any additional shares of the Outstanding Company Common Stock or
the Outstanding Company Voting Stock, for purposes of subsection
(a) of this Section 2, a Change of Control shall be deemed to have
taken place.
3. Employment
Period . If the Executive is employed by the Company and/or a
Subsidiary on the Effective Date, the Company hereby agrees to
continue to employ and to cause such Subsidiary to continue to
employ the Executive, and the Executive hereby agrees to remain in
the employ of the Company and/or such Subsidiary, subject to the
terms and conditions of this Agreement, for the period commencing
on the Effective Date and ending on the third anniversary of such
date (the “Employment Period”). For purposes of this
Agreement, unless expressly limited to LandAmerica Financial Group,
Inc., “Company” hereinafter shall mean each of
LandAmerica Financial Group, Inc. and/or any of its Subsidiaries or
affiliated companies that employ the Executive. As used in this
Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common
control with the Company.
4. Terms of
Employment .
(a) Position and
Duties .
(i) During the
Employment Period, (A) the Executive’s position (including
status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date and (B) the
Executive’s services shall be performed at the location where
the Executive was employed immediately preceding the Effective Date
or any office or location less than 35 miles from such
location.
(ii) During the
Employment Period, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to
devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees,
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(B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C)
manage personal investments, so long as such activities do not
significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
(b)
Compensation .
(i) Base
Salary . During the Employment Period, the Executive shall
receive an annual base salary (“Annual Base Salary”),
which shall be paid at a monthly rate, at least equal to 12 times
the highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the
Company in respect of the 12-month period immediately preceding the
month in which the Effective Date occurs. During the Employment
Period, the Annual Base Salary shall be reviewed no more than 12
months after the last salary increase awarded to the Executive
prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Annual
Base Salary shall not be reduced after any such increase and the
term Annual Base Salary as utilized in this Agreement shall refer
to Annual Base Salary as so increased.
(ii) Annual
Bonus . In addition to Annual Base Salary, the Executive shall
be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the “Annual Bonus”) in cash at
least equal to the Executive’s highest bonus under annual
incentive plans of the Company or any comparable bonus under any
predecessor or successor plan, for the last three full fiscal years
prior to the Effective Date (annualized in the event that the
Executive was not employed by the Company for the whole of such
fiscal year) (the “Recent Annual Bonus”). Each such
Annual Bonus shall be paid no later than the end of the third month
of the fiscal year next following the fiscal year for which the
Annual Bonus is awarded, unless the Executive shall elect to defer
the receipt of such Annual Bonus.
(iii) Incentive,
Savings and Retirement Plans . During the Employment Period,
the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company, but
in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 120-day period immediately preceding
the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company.
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(iv) Welfare
Benefit Plans. During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by
the Company (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent
applicable generally to other peer executives of the Company, but
in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company.
(v) Expenses
. During the Employment Period the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies,
practices and procedures of the Company in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company.
(vi) Fringe
Benefits . During the Employment Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if
applicable, use of an automobile and payment of related expenses,
in accordance with the most favorable plans, practices, programs
and policies of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company.
(vii) Office and
Support Staff . During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and its affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company.
(viii)
Vacation . During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the
Company.
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5. Termination
of Employment .
(a) Death or
Disability . The Executive’s employment shall terminate
automatically upon the Executive’s death during the
Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below),
it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the
Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the
“Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall mean
that the Executive is unable, by reason of physical or mental
incapacity, to perform Executive’s duties to the Company on a
full-time basis for a period longer than 3 consecutive months or
more than 6 months in any consecutive 12-month period. The
existence of a Disability shall be determined by the Board of
Directors of the Company, based upon due consideration of the
opinion of the Executive’s personal physician or physicians
and of the opinion of any physician or physicians selected by the
Board of Directors for these purposes. If the Executive’s
personal physician disagrees with the physician retained by the
Company, the Board of Directors will retain an impartial physician
selected by the Executive’s personal physician and the
Company’s physician and the opinion of the impartial
physician shall be binding upon the Company and the Executive. The
Executive shall submit to examination by any physician or
physicians so selected by the Board of Directors, and shall
otherwise cooperate with the Board of Directors in making the
determination contemplated hereunder, such cooperation to include,
without limitation, consenting to the release of information by any
such physician(s) to the Board of Directors.
(b) Cause .
The Company may terminate the Executive’s employment during
the Employment Period for Cause. For purposes of this Agreement,
“Cause” shall mean:
(i) the willful and
continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such
failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive
Officer of the Company which specifically identifies the manner in
which the Board or Chief Executive Officer believes that the
Executive has not substantially performed the Executive’s
duties, or
(ii) the willful
engaging by the Executive in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the
Company.
For purposes of this
provision, no act or failure to act, on the part of the Executive,
shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive’s action or omission was
in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by
the Board or upon the instructions of the Chief Executive Officer
or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively
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presumed to be done, or
omitted to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable
notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive
is guilty of the conduct described in subparagraph (i) or (ii)
above, and specifying the particulars thereof in detail.
(c) Good Reason;
Window Period . The Executive’s employment may be
terminated (i) during the Employment Period by the Executive for
Good Reason or (ii) during the Window Period by Executive without
any reason. For purposes of this Agreement, “Window
Period” shall mean the 30-day period immediately following
the first annivers
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