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Exhibit 10.13
CONFIDENTIAL
September 23, 1997
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Executive Vice President and
Manager Title Operations
Chicago Title and Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
This letter is to set forth certain understandings regarding your
continued service as a senior executive of Chicago Title and Trust Company
("CT&T") and its title insurance subsidiaries (the "Company"). Effective as of
the date hereof, the employment agreement dated July 29, 1996 between you and
CT&T (the "Agreement") is amended as hereinafter set forth.
1. Section 1 of the Agreement is amended to read in its entirety as
follows:
"1. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect through December 31, 1997 and shall be
automatically renewed for one additional one year period ending December 31,
1998."
2. Section 4(b) of the Agreement is amended to read in its entirety
as follows:
"(b) In addition, for the year ending December 31, 1998 (i) your
base salary, effective January 1, 1998, shall be reduced to $200,000 per annum
and you shall not be required to work more than half time; (ii) CT&T will
reimburse you in respect of a leased apartment, utilities, if any, and parking
space in Chicago in an amount not to exceed $3,000 per month (net of income tax
liability), (iii) for purposes of CT&T's Executive Salary Continuation Plan,
Pension Plan, Excess Benefits Pension Plan, and life insurance plans, your 1998
salary shall be deemed to be $290,000 per annum and (iv) you shall be eligible
for an additional special incentive opportunity of $100,000, payment of which
shall be based upon your performance of objectives mutually agreed by you and
▇▇▇▇ ▇▇▇, the new CEO, and evaluated by the Personnel Committee of the CT&T
Board, upon the recommendation of the new CEO."
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3. Section 5 of the Agreement is hereby amended to add the following
sentence at the end thereof:
"In the event of your retirement on December 31, 1998, the Units in
the 1997-2000 cycle of CT&T's Executive Long-Term Incentive Plan previously
granted to you, shall continue as if you remained an employee through December
31, 1999."
4. You agree that during the period of your employment by the
Company and for two years after the termination of such employment, you will not
be associated as employee, proprietor, stockholder, partner, representative,
agent, officer or otherwise with any business that competes with the Company.
5. The Agreement, as amended hereby, sets forth the entire
understanding between the parties.
6. On or before November 1, 1998, you will provide to ▇▇▇▇ ▇▇▇, the
new CEO, your recommendations regarding the continued coverage of the agency
network matters and oversight for which you were responsible during the
preceding ten months.
If this letter correctly sets forth our agreement on the subject
matter hereof, kindly sign and return to the undersigned the enclosed copy of
this letter which will then constitute our agreement on this subject.
Very truly yours,
CHICAGO TITLE AND TRUST COMPANY
By /s/ ▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇ ▇▇▇
Title: President
Agreed to on this 3rd day
of October, 1997.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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CONFIDENTIAL
July 29, 1996
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Executive Vice President and
Manager Title Operations
Chicago Title and Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
Chicago Title and Trust Company ("CT&T") considers it essential to
the best interests of the Company to ▇▇▇▇▇▇ your continuous employment as a
senior executive of CT&T and its title insurance subsidiaries (the "Company").
This agreement confirms your acceptance of your current employment
with the Company. In order to induce you to remain in the employ of the Company,
CT&T agrees that you shall receive the severance and other benefits set forth in
this agreement in the event your employment with the Company is hereafter
terminated under the circumstances described below.
1. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect through December 31, 1997 and shall be
automatically renewed for additional successive one year periods ending December
31, unless written notice of non-renewal is given by either you or CT&T not less
than 90 days prior to December 31, 1997 or subsequent December 31 to which this
Agreement shall have been extended as hereinabove provided.
2. Termination. You shall be entitled to the benefits provided in
Section 3(c) hereof upon the termination of your employment during the term of
this Agreement unless such termination is (i) because of your death or "Normal
Retirement," (ii) by the Company for "Cause" or "Disability" or (iii) because of
resignation or retirement by you, other than for "Good Reason," as such terms
are hereinafter defined.
(a) Disability. If, as a result of your incapacity due to physical
or mental illness, you shall become totally disabled within the meaning of the
Company's long-term disability income benefits policy as in effect on the date
of this Agreement, and payments are made to you under the Company's then
existing long-term disability income benefits policy, this Agreement shall
terminate as of the date upon which you were determined to be totally disabled.
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(b) Normal Retirement. Termination by the Company or you of your
employment based on "Normal Retirement" shall mean retirement at not less than
age 65 under the provisions of the Company's retirement policies or in
accordance with any retirement arrangement established with your consent with
respect to you.
(c) Retirement for Good Reason. "Retirement for Good Reason" shall
mean retirement other than Normal Retirement elected by you as a result of the
occurrence of any of the events referred to in Section 2(f) hereof.
(d) Resignation for Good Reason. "Resignation for Good Reason" shall
mean resignation by you as a result of the occurrence of one of the events
referred to in Section 2(f) hereof.
(e) Cause. Termination by the Company of your employment for "Cause"
shall mean termination because of failure to perform your duties, engaging in
willful misconduct injurious to the Company, conviction of a felony involving
personal dishonesty and disability. The term "failure" means a material and
repeated failure after notice from the CT&T Board of the alleged failure. Upon
termination for Cause, all of your rights to compensation, fringe benefits and
other payments under this Agreement shall terminate immediately to the extent
permitted by applicable law.
The termination by the Company of your employment for reasons other
than those specified above shall be deemed to be a termination without cause.
(f) Good Reason. You shall be entitled to resign your employment or
retire for Good Reason. For purposes of this Agreement, "Good Reason" shall,
absent your express written consent to the contrary, mean:
(i) the giving of a title to you or the assignment to you of any
duties materially inconsistent with your present position, duties,
responsibilities and status as an executive officer of the Company;
(ii) a reduction by the Company in your annual base salary or
incentive compensation opportunity as in effect on the date hereof; or
(iii) the relocation of the offices at which you are based to a
location anywhere more than 10 miles from its current location, except for
required travel on the Company's business to an extent consistent with
your duties.
(g) Notice of Termination. Any purported termination by the Company
or Resignation for Good Reason or Retirement for Good Reason by you shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 7 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination,
resignation or retirement provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for such termination, resignation or retirement under the provision so
indicated.
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(h) Date of Termination. Etc. "Date of Termination" shall mean (i)
if your employment is terminated for Disability, the date upon which you were
determined to be totally disabled within the meaning of the Company's long-term
disability income benefits policy as in effect on the date of this Agreement and
(ii) if your employment is terminated by reason of death or Normal Retirement,
the date of death or Normal Retirement, as applicable, and (iii) if your
employment terminates for any other reason, the date specified in the Notice of
Termination (which shall not be less than thirty (30) nor more than sixty (60)
days, from the date such Notice of Termination is given); provided that if
within thirty (30) days after any Notice of Termination is given, the party
receiving such Notice of Termination notifies the other party in writing that a
dispute exists concerning the termination or resignation, the Date of
Termination shall be the date determined by arbitration pursuant to Section 11
below.
3. Compensation Upon Termination or During Disability.
(a) During any period that you fail to perform your duties as an
employee of the Company as a result of incapacity due to physical or mental
illness, you shall continue to receive your full base salary at the rate then in
effect reduced by payments received under the Company's long-term disability
income benefits policy or any other Company program in which you participate.
Thereafter, your benefits shall be determined in accordance with the Company's
insurance programs then in effect.
(b) If your employment shall be terminated for Cause, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given and the Company shall have
no further obligations to you under this Agreement.
(c) If your employment by the Company shall be terminated (i) by the
Company other than for Cause, Normal Retirement or Disability or (ii) by you
through Retirement for Good Reason or Resignation for Good Reason, then you
shall be entitled to the benefits provided below:
(A) The Company shall pay your full base salary through the
expiration hereof on December 31, 1997 or such later December 31st to
which this Agreement shall have been extended in accordance with Section 1
hereof at the rate in effect at the time Notice of Termination is given.
(B) You shall be entitled to continuation of all of the
benefits currently provided to you, and benefits plans in which you
participate, through the expiration hereof on December 31, 1997 or such
later December 31st to which this Agreement shall have been extended in
accordance with Section 1 hereof, including health and life insurance, and
401(k) plans.
(C) Your entitlement under long-term incentives, including
QBMI, as at the Date of Termination shall continue as if you continued as
an active employee through December 31, 1997 or such later December 31st
to which this Agreement shall have been extended in accordance with
Section 1 hereof.
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(D) Any annual incentive opportunities to which, at the Date
of Termination, you would be entitled shall be paid to you in full at the
normal time of payment thereof.
(E) In respect of your retirement benefits, the (i) Company
shall pay you, as promptly as practicable after your retirement on
December 31, 1997 or such later December 31st to which this Agreement
shall have been extended in accordance with Section 1 hereof an amount,
net of tax cost to you, equal to the amount by which your early retirement
lump sum benefits under the Company's Pension Plan and Excess Benefits
Pension Plan have been reduced by the use of an interest rate higher than
the PBGC rate used in calculating benefits on such retirement date and
(ii) your benefits under the Pension Plan and Excess Benefits Pension Plan
shall be determined as if you had retired on the April 11th next
succeeding such December 31, and appropriate adjustment shall be made
through the non-qualified Excess Benefits Pension Plan.
(F) You shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this
Section 3 be reduced by any compensation earned by you as the result of
employment by another employer, or otherwise except as specifically
provided in this Section 3.
(G) You agree that the remedies for employment termination
under this Section and Section 2 hereof, reasonably reflect liquidated
damages for such termination and that such provisions state your entire
and exclusive claims, rights, entitlement and remedies against the Company
and its successors, assigns, affiliates, and representatives.
4. Special Incentive.
(a) In connection with the Company's employment of a new chief
executive officer ("New CEO"), the Company will provide you with a special bonus
opportunity in the amount of $150,000, payment of which will be dependent upon
your performance through December 31, 1997 of personal objectives relating to
the successful transition of such New CEO with the Company, such performance and
such objectives to be determined by ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Chairman of the
Personnel Committee of the CT&T Board after consultation with the New CEO.
Payment of such special bonus shall be made as promptly as practicable after
December 31, 1997, and shall be not less than $75,000.
(b) In addition, in the event that this Agreement is renewed for the
year ending December 31, 1998, (i) your base salary, effective January 1, 1998
shall be not less than $310,000 per annum and (ii) you shall be eligible for an
additional special incentive opportunity of $100,000, payment of which shall be
based upon your performance of objectives established and evaluated by ▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇., Chairman of the Personnel Committee of the CT&T Board, after
consultation with the new CEO.
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5. Special Retirement Provisions. Provided that your employment has
not been terminated prior to expiration hereof as provided in Section 1 hereof,
in the event of your retirement on December 31, 1997 or, in the event of
renewal of this Agreement, December 31, 1998, (a) your benefits under the
Company's Pension Plan and Excess Benefits Pension Plans will be determined as
if you had retired on the April 11th next succeeding such retirement date and an
appropriate adjustment in respect thereof shall be made in the non-qualified
Excess Benefits Pension Plan, and (b) the Company shall pay you, as promptly as
practicable after such retirement, an amount, net of tax cost to you, equal to
the amount by which your early retirement lump sum benefits under the Company's
Pension Plan and Excess Benefits Pension Plan have been reduced by the use of an
interest rate higher than the PBGC rate used in calculating retirement benefits
on such retirement date.
6. Successors: Binding Agreement.
(a) This Agreement will be binding upon the Company and its
successors and assigns.
(b) This Agreement shall inure to the benefit of and be enforceable
by your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder if you had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisees, legatee or other designee or
if there is no such designee, to your estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement, provided
that any notices to the Company shall be directed to the attention of the
Chairman of the Board of CT&T, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
with a copy to the Secretary of Alleghany Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or to such other address as either party may have
furnished to the other in writing in accordance herewith, that notice of change
of address shall be effective only upon receipt.
8. Entire Agreement. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions and preliminary agreements.
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9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and by the Company. No provision hereof shall be
construed as an agreement of the Company to continue to employ you for any
particular period. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Illinois.
10. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration. Any dispute arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Chicago, Illinois
in accordance with the rules of the American Arbitration Association then in
effect. The prevailing party in any such arbitration proceeding shall be
entitled to reimbursement of legal fees incurred in connection therewith.
Judgment may be entered on this arbitrator's award in any court having
jurisdiction.
If this letter correctly sets forth our agreement on the subject
matter hereof, kindly sign and return to the undersigned the enclosed copy of
this letter which will then constitute our agreement on this subject.
Very truly yours,
CHICAGO TITLE AND TRUST COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name:
Title:
Agreed to on this 31st day
of July, 1996.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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