þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required) |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required) |
Delaware | 16-1725106 | |
(State or other jurisdiction | (I.R.S. Employer | |
of incorporation or organization) | Identification No.) | |
601 Riverside Avenue | (904) 854-8100 | |
Jacksonville, Florida 32204 | (Registrants telephone number, | |
(Address of principal executive offices, | including area code) | |
including zip code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.0001 par value | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller Reporting company o | |||
(Do not check if a smaller reporting company)
|
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Fidelity National Title Group.
This segment consists of the operations of our title
insurance underwriters and related businesses. This segment provides core title insurance
and escrow and other title-related services including collection and trust activities,
trustees sales guarantees, recordings and reconveyances.
Specialty Insurance.
The specialty insurance segment consists of certain subsidiaries
that issue flood, home warranty, homeowners, automobile and other personal lines insurance
policies.
Corporate and Other.
The corporate and other segment consists of the operations of the
parent holding company, certain other unallocated corporate overhead expenses, other smaller
operations, and the Companys share in the operations of certain equity investments,
including Sedgwick, Ceridian, and Remy International, Inc. (Remy).
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Continue to operate each of our seven title brands independently
. We believe that in
order to maintain and strengthen our title insurance customer base, we must leave the
Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title,
Security Union Title and Alamo Title brands intact and operate these brands independently.
In most of our largest markets, we operate two, and in a few cases as many as five, brands,
including the brands acquired with the LFG Underwriters
.
This approach allows us to continue
to attract customers who identify with one brand over another and allows us to utilize a
broader base of local agents and local operations than we would have with a single
consolidated brand.
Consistently deliver superior customer service
. We believe customer service and
consistent product delivery are the most important factors in attracting and retaining
customers. Our ability to provide superior customer service and provide consistent product
delivery requires continued focus on providing high quality service and products at
competitive prices. Our goal is to continue to improve the experience of our customers in
all aspects of our business.
Manage our operations successfully through business cycles
. We operate in a cyclical
business and our ability to diversify our revenue base within our core title insurance
business and manage the duration of our investments may allow us to better operate in this
cyclical business. Maintaining a broad geographic revenue base, utilizing both direct and
independent agency operations and pursuing both residential and commercial title insurance
business help diversify our title insurance revenues. Maintaining shorter durations on our
investment portfolio allows us to mitigate our interest rate risk and, in a rising interest
rate environment, to increase our investment revenue, which may offset some of the decline
in premiums and service revenues we would expect in such an environment. For a more detailed
discussion of our investment strategies, see Investment Policies and Investment Portfolio.
Continue to improve our products and technology
. As a national provider of real estate
transaction products and services, we participate in an industry that is subject to
significant change, frequent new product and service introductions and evolving industry
standards. We believe that our future success will depend in part on our ability to
anticipate industry changes and offer products and services that meet evolving industry
standards. In connection with our service offerings, we are continuing to deploy new
information system technologies to our direct and agency operations. We expect to improve
the process of ordering title and escrow services and improve the delivery of our products
to our customers.
Maintain values supporting our strategy
. We believe that our continued focus on and
support of our long-established corporate culture will reinforce and support our business
strategy. Our goal is to foster and support a corporate culture where our agents and
employees seek to operate independently and profitably at the local level while forming
close customer relationships by meeting customer needs and improving customer service.
Utilizing a relatively flat managerial structure and providing our employees with a sense of
individual ownership supports this goal.
Effectively manage costs based on economic factors
. We believe that our focus on our
operating margins is essential to our continued success in the title insurance business.
Regardless of the business cycle in which we may be operating, we seek to continue to
evaluate and manage our cost structure and make appropriate adjustments where economic
conditions dictate. This continual focus on our cost structure helps us to better
maintain our operating margins.
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We offer coverage under the U.S. National Flood Insurance Program (NFIP) through
Fidelity National Property and Casualty Insurance Company, which provides flood insurance in
all 50 states. We are the largest provider of NFIP flood insurance in the U.S. through our
independent agent network.
We provide an efficient methodology for obtaining insurance on newly acquired homes,
whether new construction or upon resale. We have an easy to use fully integrated website,
which our agents use as a completely paperless and fully automated quoting and policy
delivery system. This system is in use for all of our property products, including flood
insurance.
Our underwriting practice is conservative. Catastrophe exposure is closely managed on a
real time basis. We also buy reinsurance to assist in maintaining our profitability and
growing our surplus.
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The customer, typically a real estate salesperson or broker, escrow agent, attorney or
lender, places an order for a title policy.
Company personnel note the specifics of the title policy order and place a request with
the title company or its agents for a preliminary report or commitment.
After the relevant historical data on the property is compiled, the title officer
prepares a preliminary report that documents the current status of title to the property,
any exclusions, exceptions and/or limitations that the title company might include in the
policy, and specific issues that need to be addressed and resolved by the parties to the
transaction before the title policy will be issued.
The preliminary report is circulated to all the parties for satisfaction of any specific
issues.
After the specific issues identified in the preliminary report are satisfied, an escrow
agent closes the transaction in accordance with the instructions of the parties and the
title companys conditions.
Once the transaction is closed and all monies have been released, the title company
issues a title insurance policy.
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higher margins because we retain the entire premium from each transaction instead of
paying a commission to an independent agent;
continuity of service levels to a broad range of customers; and
additional sources of income through escrow and closing services.
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Year Ended December 31,
2008
2007
2006
Amount
%
Amount
%
Amount
%
(Dollars in thousands)
$
1,140,266
42.3
%
$
1,601,768
42.1
%
$
1,957,064
42.5
%
1,554,743
57.7
2,198,690
57.9
2,649,136
57.5
$
2,695,009
100.0
%
$
3,800,458
100.0
%
$
4,606,200
100.0
%
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Year Ended December 31,
2008
2007
2006
Amount
%
Amount
%
Amount
%
(Dollars in thousands)
$
473,768
17.6
%
$
625,993
16.5
%
$
810,961
17.6
%
337,907
12.5
479,973
12.6
514,228
11.2
208,412
7.7
412,313
10.8
635,066
13.8
199,240
7.4
305,142
8.0
360,779
7.8
118,518
4.4
161,936
4.3
199,936
4.3
1,357,164
50.4
1,815,101
47.8
2,085,230
45.3
$
2,695,041
100.2
%
$
3,800,458
100.0
%
$
4,606,200
100.0
%
Flood insurance.
We issue new and renewal flood insurance policies in conjunction with
the NFIP. The NFIP bears all insurance risk related to these policies.
Home warranty.
We issue one-year, renewable contracts that protect homeowners against
defects in household systems and appliances.
Personal lines insurance.
We offer and underwrite homeowners insurance in 49 states.
Automobile insurance is currently underwritten in 29 states. We will expand into several
additional states in 2009 where favorable underwriting potential exists. In addition, we
underwrite personal umbrella, inland marine (boat and recreational watercraft), and other
personal lines niche products in selected markets.
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10% of the insurers statutory surplus as of the immediately prior year end; or
the statutory net income of the insurer during the prior calendar year.
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S&P
Moodys
Fitch
(1)
A.M. Best
A
A3
BBB
A
A
A
A
A
A
A
N/A
A
A
A
A
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December 31,
2008
2007
Amortized
% of
% of
Amortized
% of
% of
Rating(1)
Cost
Total
Fair Value
Total
Cost
Total
Fair Value
Total
(Dollars in thousands)
$
1,154,868
40.7
%
$
1,194,028
41.8
%
$
1,681,547
60.0
%
$
1,706,834
60.4
%
621,375
21.9
627,731
22.0
597,608
21.3
602,881
21.4
778,528
27.5
760,964
26.7
399,995
14.3
399,074
14.1
231,919
8.2
223,293
7.8
100,784
3.6
97,340
3.5
5,136
0.2
4,448
0.2
3,913
0.1
3,827
0.1
42,383
1.5
43,365
1.5
19,785
0.7
14,616
0.5
$
2,834,209
100.0
%
$
2,853,829
100.0
%
$
2,803,632
100.0
%
$
2,824,572
100.0
%
(1)
Ratings as assigned by Standard & Poors Ratings Group and Moodys Investors Services.
December 31, 2008
Amortized
% of
% of
Maturity
Cost
Total
Fair Value
Total
(Dollars in thousands)
$
313,583
11.1
%
$
315,826
11.1
%
1,123,303
39.6
1,129,429
39.6
845,396
29.8
848,144
29.7
288,220
10.2
295,974
10.3
263,707
9.3
264,456
9.3
$
2,834,209
100.0
%
$
2,853,829
100.0
%
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December 31,
2008
2007
2006
(Dollars in thousands)
$
153,770
$
219,771
$
244,185
$
3,545,490
$
4,414,951
$
5,088,863
4.3
%
5.0
%
4.8
%
(1)
Net investment income as reported in our Consolidated Statements of
Earnings has been adjusted in the presentation above to provide the
tax equivalent yield on tax exempt investments.
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the possibility that revenues, cost savings, growth prospects, and any other synergies
expected from our acquisition of the LFG Underwriters will not be realized (see Recent
Developments in Item 7, Managements Discussion and Analysis of Financial Condition and
Results of Operations);
changes in general economic, business, and political conditions, including changes in the
financial markets;
continued weakness or adverse changes in the level of real estate activity, which may be
caused by, among other things, high or increasing interest rates, a limited supply of
mortgage funding, or a weak U.S. economy;
our potential inability to find suitable acquisition candidates, as well as the risks
associated with acquisitions in lines of business that will not necessarily be limited to
our traditional areas of focus, or difficulties integrating acquisitions;
our dependence on distributions from our title insurance underwriters as our main source
of cash flow;
significant competition that our operating subsidiaries face;
compliance with extensive government regulation of our operating subsidiaries and adverse
changes in applicable laws or regulations or in their application by regulators;
regulatory investigations of the title insurance industry;
our business concentration in the State of California, the
source of approximately 18% of
our title insurance premiums; and
other risks detailed elsewhere in this document and in our other filings with the SEC.
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when mortgage interest rates are high or increasing;
when the mortgage funding supply is limited; and
when the United States economy is weak.
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licensing requirements;
trade and marketing practices;
accounting and financing practices;
capital and surplus requirements;
the amount of dividends and other payments made by insurance subsidiaries;
investment practices;
rate schedules;
deposits of securities for the benefit of policyholders;
establishing reserves; and
regulation of reinsurance.
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our ability to integrate the acquired business operations, products and personnel;
our ability to retain key personnel of the acquired business;
our ability to expand our financial and management controls and reporting systems and
procedures;
our ability to maintain the customers and goodwill of the acquired business; and
any unexpected costs or unforeseen liabilities associated with the acquired business.
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our ongoing and future relationships with FIS or LPS, including
related party agreements and other arrangements with respect to the
administration of tax matters, employee benefits, indemnification, claims
administration and handling, and other matters; and
the quality and pricing of services that we have agreed to provide
to FIS or LPS or that it has agreed to provide to us.
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These matters raise difficult and complicated factual and legal issues and are subject to
many uncertainties and complexities, including but not limited to the underlying facts of each
matter, novel legal issues, variations between jurisdictions in which matters are being
litigated, differences in applicable laws and judicial interpretations, the length of time
before many of these matters might be resolved by settlement or through litigation and, in
some cases, the timing of their resolutions relative to other similar cases brought against
other companies, the fact that many of these matters are putative class actions in which a
class has not been certified and in which the purported class may not be clearly defined, the
fact that many of these matters involve multi-state class actions in which the applicable law
for the claims at issue is in dispute and therefore unclear, and the current challenging legal
environment faced by large corporations and insurance companies.
In these matters, plaintiffs seek a variety of remedies including equitable relief in the
form of injunctive and other remedies and monetary relief in the form of compensatory damages.
In most cases, the monetary damages sought include punitive or treble damages. Often more
specific information beyond the type of relief sought is not available because plaintiffs have
not requested more specific relief in their court pleadings. In addition, the dollar amount of
damages sought is frequently not stated with specificity. In those cases where plaintiffs have
made a statement with regard to monetary damages, they often specify damages either just above
or below a jurisdictional limit regardless of the facts of the case. These limits represent
either the jurisdictional threshold for bringing a case in federal court or the maximum they
can seek without risking removal from state court to federal court. In our experience,
monetary demands in plaintiffs court pleadings bear little relation to the ultimate loss, if
any, that we may experience. None of the cases described below includes a statement as to the
dollar amount of damages demanded. Instead, each of the cases includes a demand in an amount
to be proved at trial.
For the reasons specified above, it is not possible to make meaningful estimates of the
amount or range of loss that could result from these matters at this time. We review these
matters on an ongoing basis and follow the provisions of Statement of Financial Accounting
Standards (SFAS) No. 5, Accounting for Contingencies when making accrual and disclosure
decisions. When assessing reasonably possible and probable outcomes, management bases its
decision on its assessment of the ultimate outcome following all appeals.
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We intend to vigorously defend each of these matters. In our opinion, while some of these
matters may be material to our operating results for any particular period if an unfavorable
outcome results, none will have a material adverse effect on our overall financial condition.
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27
28
29
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31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
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90
91
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94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
Item 5.
Market for Registrants Common Equity and Related Stockholder Matters and Issuer
Purchases of Equity Securities
Cash Dividends
High
Low
Declared
$
20.96
$
12.60
$
0.30
19.17
12.56
0.30
18.19
11.93
0.30
18.51
6.66
0.15
$
26.21
$
22.92
$
0.30
28.62
22.92
0.30
24.22
16.46
0.30
17.81
13.10
0.30
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Year Ended December 31,
2008(1)
2007(2)
2006(3)
2005(4)
2004(5)
(In thousands, except per share and other data)
$
4,329,095
$
5,523,175
$
9,434,399
$
9,654,226
$
8,293,623
1,355,845
1,700,935
3,225,319
3,224,678
2,786,297
1,208,647
1,109,438
2,075,101
1,702,353
1,598,942
1,218,044
1,698,215
2,035,423
2,060,467
2,028,926
142,759
130,092
460,750
406,259
338,434
630,404
653,876
486,334
480,556
311,916
68,789
54,941
209,972
172,327
47,214
4,624,488
5,347,497
8,492,899
8,046,640
7,111,729
(295,393
)
175,678
941,500
1,607,586
1,181,894
(125,542
)
46,776
350,871
573,391
438,114
(169,851
)
128,902
590,629
1,034,195
743,780
(13,375
)
835
1,702
354
2,197
(183,226
)
129,737
592,331
1,034,549
745,977
(4,210
)
(32
)
154,570
70,443
5,015
$
(179,016
)
$
129,769
$
437,761
$
964,106
$
740,962
$
(0.85
)
$
0.60
$
2.40
$
5.56
209,974
216,583
182,031
173,463
$
(0.85
)
$
0.59
$
2.39
$
5.55
209,974
219,989
182,861
173,575
$
4.28
172,951
$
1.05
$
1.20
$
1.17
0.25
$
4,376,493
$
4,101,821
$
4,121,751
$
4,564,189
$
3,346,276
315,297
569,562
676,444
513,394
331,222
8,368,240
7,587,853
7,259,559
11,104,617
9,270,535
1,350,849
1,167,739
491,167
3,217,019
1,370,556
2,738,625
1,419,910
1,220,636
1,113,506
1,000,474
51,199
53,868
56,044
636,304
18,874
2,805,573
3,244,088
3,474,368
3,279,775
4,700,091
$
13.05
$
15.23
$
15.75
18.81
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Year Ended December 31,
2008(1)
2007(2)
2006(3)
2005(4)
2004(5)
(In thousands, except per share and other data)
1,860,400
2,259,800
3,146,200
3,615,400
3,680,200
1,121,200
1,434,800
2,051,500
2,487,000
2,636,300
18.2
%
13.2
%
7.5
%
7.2
%
5.5
%
59.5
%
55.4
%
53.7
%
56.4
%
55.2
%
40.5
%
44.6
%
46.3
%
43.6
%
44.8
%
(1)
Our financial results for the year ended December 31, 2008, include a
charge to our provision for claim losses of $261.6 million ($157.0 million
net of income taxes) which we recorded as a result of adverse claim loss
development on prior policy years and the results of various entities
acquired on various dates during 2008.
(2)
Our financial results for the year ended December 31, 2007, include
charges to our provision for claim losses totaling $217.2 million ($159.5
million net of income taxes) which we recorded as a result of adverse
claim loss development on prior policy years and the results of various
entities acquired on various dates during 2007.
(3)
Beginning October 24, 2006, the date on which the 2006 Distribution was
completed, our financial results no longer include the results of FIS. The
operations of FIS continue to be included in our results for periods prior
to October 24, 2006. In addition, FISs financial results for 2006 include
the results of operations of Certegy Inc. (Certegy) since February 1,
2006, the date on which Certegy was acquired by FIS (see note B of Notes
to Consolidated Financial Statements).
(4)
Our financial results for the year ended December 31, 2005 include in
revenue and net earnings a $318.2 million gain on sale relating to the
issuance of subsidiary stock, approximately $100.0 million in additional
income tax expense relating to the distribution to our shareholders of a
17.5% interest of FNT and additional minority interest expense related to
the minority interests issued in FNT and FIS. (See note A of the Notes to
Consolidated Financial Statements).
(5)
Our financial results for the year ended December 31, 2004 include the
results of various entities acquired on various dates during 2004.
(6)
Our historical basic and diluted earnings per share for 2006 and 2005 have
been calculated using FNTs basic and diluted weighted average shares
outstanding.
(7)
Unaudited pro forma net earnings per share for 2004 is calculated using
the number of outstanding shares of Old FNF on a date prior to the
distribution of FNT shares to Old FNF shareholders in 2005.
(8)
Investments as of December 31, 2008, 2007, 2006, 2005, and 2004 include
securities pledged to secure trust deposits of $382.5 million, $513.8
million, $696.8 million, $656.0 million, and $546.0 million, respectively.
Investments as of December 31, 2008, 2007, 2006, and 2005 include
securities pledged relating to our securities lending program of $103.6
million, $264.2 million, $305.3 million and $138.7 million, respectively.
(9)
Cash and cash equivalents as of December 31, 2008, 2007, 2006, 2005, and
2004 include cash pledged to secure trust deposits of $109.6 million,
$193.5 million, $228.5 million, $234.7 million, and $195.2 million,
respectively. Cash and cash equivalents as of December 31, 2008, 2007,
2006 and 2005 include cash pledged relating to our securities lending
program of $107.6 million, $271.8 million, $316.0 million, and $143.4
million, respectively.
(10)
As a result of adverse title insurance claim loss development on prior
policy years, we recorded charges in 2008 totaling $261.6 million, or
$157.0 million net of income taxes, and in 2007 totaling $217.2 million,
or $159.5 million net of income taxes, to our provision for claim losses.
These charges were recorded in addition to our provision for claim losses
of 8.5% and 7.5% for the years ended December 31, 2008 and 2007,
respectively.
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(11)
Book value per share is calculated as stockholders equity at December 31
of each year presented divided by actual shares outstanding at December 31
of each year presented.
(12)
Includes title insurance premiums and escrow, title-related and other fees.
Quarter Ended
March 31,
June 30,
September 30,(1)
December 31,(2)
(In thousands, except per share data)
$
1,137,160
$
1,179,798
$
989,683
$
1,022,454
36,367
13,527
(322,874
)
(22,413
)
27,245
6,925
(198,302
)
(14,884
)
0.13
0.03
(0.95
)
(0.07
)
0.13
0.03
(0.95
)
(0.07
)
0.30
0.30
0.30
0.15
$
1,366,880
$
1,495,000
$
1,361,408
$
1,299,887
124,705
126,441
(66
)
(75,402
)
83,399
84,835
6,472
(44,937
)
0.38
0.39
0.03
(0.21
)
0.37
0.38
0.03
(0.21
)
0.30
0.30
0.30
0.30
(1)
Includes loss provision charge of $261.6 million, or $157.0 million net of income taxes, in 2008
and $81.5 million, or $55.5 million net of income taxes, in 2007.
(2)
Includes loss provision charge of $135.7 million, or $104.0 million net of income taxes, in 2007.
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Fidelity National Title Group.
This segment consists of the operation of our title
insurance underwriters and related businesses. This segment provides core title insurance
and escrow and other title-related services including collection and trust activities,
trustees sales guarantees, recordings and reconveyances.
Specialty Insurance.
The specialty insurance segment consists of certain subsidiaries
that issue flood, home warranty, homeowners, automobile and other personal lines insurance
policies. Our Board of Directors has authorized us to investigate strategic alternatives
for certain of our specialty insurance businesses. The assets to be evaluated include the
flood insurance and personal lines insurance businesses, but not the home warranty
business. However, there can be no assurance that any transaction will be completed.
Corporate and Other.
The corporate and other segment consists of the operations of the
parent holding company, certain other unallocated corporate overhead expenses, other
smaller operations, and our share in the operations of certain equity investments,
including Sedgwick, Ceridian and Remy International, Inc. (Remy).
when mortgage interest rates are high or increasing;
when the mortgage funding supply is limited; and
when the United States economy is weak.
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As of
As of
December 31,
December 31,
2008
%
2007
%
(In thousands)
$
369,085
13.8
%
$
214,243
16.2
%
2,309,902
86.2
%
1,108,379
83.8
%
$
2,678,987
100.0
%
$
1,322,622
100.0
%
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2008
2007
2006
(In thousands)
$
1,354,061
$
1,154,872
$
1,068,072
1,115,803
(8,515
)
229,076
285,034
306,179
261,876
217,216
39,399
490,952
502,250
345,578
(12,865
)
(16,982
)
(18,815
)
(268,964
)
(286,079
)
(231,448
)
(281,829
)
(303,061
)
(250,263
)
$
2,678,987
$
1,354,061
$
1,154,872
$
2,695,009
$
3,800,458
$
4,608,329
2008
2007
2006
(In thousands)
8.5
%
7.5
%
6.6
%
9.7
%
5.7
%
0.9
%
18.2
%
13.2
%
7.5
%
(a)
Reserves assumed in 2008 were assumed in the purchase of the LFG Underwriters.
Table of Contents
Level 1
Level 2
Level 3
Total
$
$
2,821,774
$
32,055
$
2,853,829
71,516
71,516
$
71,516
$
2,821,774
$
32,055
$
2,925,345
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Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
4,329,095
$
5,523,175
$
9,434,064
$
4,624,488
$
5,347,497
$
8,492,899
$
(179,016
)
$
129,769
$
437,761
Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
1,140,266
$
1,601,768
$
1,957,064
1,554,743
2,198,690
2,649,136
1,148,539
1,132,415
1,114,047
3,094,370
373,392
386,427
394,613
134,370
185,417
206,607
(22,215
)
18,458
18,562
$
4,329,095
$
5,523,175
$
9,434,399
1,860,400
2,259,800
3,146,200
1,121,200
1,434,800
2,051,500
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Year Ended December 31,
2008
2007
2006
Amount
%
Amount
%
Amount
%
(Dollars in thousands)
$
1,140,266
42.3
%
$
1,601,768
42.1
%
$
1,957,064
42.5
%
1,554,743
57.7
2,198,690
57.9
2,649,136
57.5
$
2,695,009
100.0
%
$
3,800,458
100.0
%
$
4,606,200
100.0
%
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Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
1,355,845
$
1,700,935
$
3,225,319
1,208,647
1,109,438
2,075,101
1,218,044
1,698,215
2,035,423
142,759
130,092
460,750
630,404
653,876
486,334
68,789
54,941
209,972
$
4,624,488
$
5,347,497
$
8,492,899
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Year Ended December 31,
2008
2007
2006
Amount
%
Amount
%
Amount
%
(Dollars in thousands)
$
1,554,743
100.0
%
$
2,198,690
100.0
%
$
2,649,136
100.0
%
1,218,044
78.3
1,698,215
77.2
2,035,423
76.8
$
336,699
21.7
%
$
500,475
22.8
%
$
613,713
23.2
%
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Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
1,140,266
$
1,601,768
$
1,883,357
1,554,743
2,198,690
2,724,972
1,034,250
1,034,574
1,109,293
120,157
164,874
165,305
(32,889
)
5,080
14,627
3,816,527
5,004,986
5,897,554
1,253,563
1,594,516
1,789,805
964,282
891,838
891,112
1,218,044
1,698,085
2,099,244
114,989
120,223
110,486
490,952
502,250
345,578
5,657
14,597
12,755
4,047,487
4,821,509
5,248,980
$
(230,960
)
$
183,477
$
648,574
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Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
373,392
$
386,427
$
394,613
12,929
16,231
15,565
(3,007
)
23
17
383,314
402,681
410,195
45,228
45,499
45,145
158,269
144,992
144,702
4,896
6,046
6,254
139,452
151,626
140,625
487
1,478
1,443
348,332
349,641
338,169
$
34,982
$
53,040
$
72,026
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Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
65,849
$
65,764
$
45,434
148,824
165,659
148,328
(9,372
)
(14,033
)
(7,703
)
139,452
151,626
140,625
(106,534
)
(115,643
)
(92,893
)
(39,129
)
(35,898
)
(27,402
)
(145,663
)
(151,541
)
(120,295
)
$
59,638
$
65,849
$
65,764
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2009
2010
2011
2012
2013
Thereafter
Total
(Dollars in thousands)
$
87,639
$
58,835
$
870,671
$
20,956
$
309,344
$
3,404
$
1,350,849
166,626
125,972
86,451
51,112
23,542
101,580
555,283
14,672
12,861
13,611
13,048
13,296
92,781
160,269
443,992
370,625
294,034
229,232
178,349
1,162,755
2,678,987
42,364
11,309
4,847
895
223
59,638
$
755,293
$
579,602
$
1,269,614
$
315,243
$
524,754
$
1,360,520
$
4,805,026
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future mortgage interest rates, which will affect the number of real estate and
refinancing transactions and, therefore, the rate at which title insurance claims will
emerge;
the legal environment whereby court decisions and reinterpretations of title insurance
policy language to broaden coverage could increase total obligations and influence claim
payout patterns;
events such as fraud, defalcation, and multiple property title defects that can
substantially and unexpectedly cause increases in both the amount and timing of estimated
title insurance loss payments;
loss cost trends whereby increases or decreases in inflationary factors (including the
value of real estate) will influence the ultimate amount of title insurance loss payments;
and
claims staffing levels whereby claims may be settled at a different rate based on the
future staffing levels of the claims department.
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Page
Number
56
58
59
60
61
62
63
64
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Fidelity National Financial, Inc.:
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Jacksonville, Florida
Certified Public Accountants
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Fidelity National Financial, Inc.:
Jacksonville, Florida
Certified Public Accountants
Table of Contents
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands, except per share data)
$
1,140,266
$
1,601,768
$
1,957,064
1,554,743
2,198,690
2,649,136
1,148,539
1,132,415
1,114,047
3,094,370
373,392
386,427
394,613
134,370
185,417
206,607
(22,215
)
18,458
18,562
$
4,329,095
$
5,523,175
$
9,434,399
1,355,845
1,700,935
3,225,319
1,208,647
1,109,438
2,075,101
1,218,044
1,698,215
2,035,423
142,759
130,092
460,750
630,404
653,876
486,334
68,789
54,941
209,972
4,624,488
5,347,497
8,492,899
(295,393
)
175,678
941,500
(125,542
)
46,776
350,871
(169,851
)
128,902
590,629
(13,375
)
835
1,702
(183,226
)
129,737
592,331
(4,210
)
(32
)
154,570
$
(179,016
)
$
129,769
$
437,761
$
(0.85
)
$
0.60
$
2.40
209,974
216,583
182,031
$
(0.85
)
$
0.59
$
2.39
209,974
219,989
182,861
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Year Ended December 31,
2008
2007
2006
(In thousands)
$
(179,016
)
$
129,769
$
437,761
(37,580
)
44,516
25,632
(45,103
)
(7,651
)
2,285
(497
)
33,096
(11,101
)
(13,398
)
(2,295
)
(17,889
)
10,716
6,379
(75,127
)
46,416
15,821
$
(254,143
)
$
176,185
$
453,582
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Accumulated
Common Stock
Investment by
Other
Class A
Class B
Parent /Additional
Retained
Comprehensive
Treasury Stock
Shares
Amount
Shares
Amount
Paid-In Capital
Earnings (Deficit)
Earnings (Loss)
Shares
Amount
Total
(In thousands, except share data)
31,147
$
3
143,176
$
14
$
3,254,960
$
103,665
$
(78,867
)
$
3,279,775
49,051
49,051
1,597
1,597
170
(55,498
)
(55,498
)
81,776
81,776
188,646
19
(143,176
)
(14
)
(1,046,315
)
(17,189
)
(1,063,499
)
1,545
862,296
862,296
28,343
28,343
(497
)
(497
)
12,234
12,234
6,379
6,379
14,894
14,894
(5,218
)
(5,218
)
22,912
22,912
95
(2,028
)
(2,028
)
(195,910
)
(195,910
)
437,761
437,761
221,508
$
22
$
3,193,904
$
345,516
$
(63,046
)
95
(2,028
)
$
3,474,368
1,088
8,409
8,409
9,675
(183,148
)
(183,148
)
4,687
4,687
473
2,285
2,285
33,415
33,415
10,716
10,716
29,866
29,866
262
(4,097
)
(4,097
)
(262,182
)
(262,182
)
129,769
129,769
223,069
$
22
$
3,236,866
$
213,103
$
(16,630
)
10,032
$
(189,273
)
$
3,244,088
3,177
1
50,000
50,001
775
5,377
5,377
3,167
(45,998
)
(45,998
)
297
297
1,370
(45,103
)
(45,103
)
(7,651
)
(7,651
)
(4,484
)
(4,484
)
(17,889
)
(17,889
)
32,669
32,669
289
(3,677
)
(3,677
)
(223,041
)
(223,041
)
(179,016
)
(179,016
)
228,391
$
23
$
3,325,209
$
(188,954
)
$
(91,757
)
13,488
$
(238,948
)
$
2,805,573
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Year Ended December 31,
2008
2007
2006
(In thousands)
$
(179,016
)
$
129,769
$
437,761
142,759
130,092
460,750
(4,210
)
(32
)
154,570
13,375
(835
)
(1,702
)
22,215
(18,458
)
(18,562
)
32,669
29,866
64,984
(297
)
(4,687
)
(81,776
)
(12,293
)
(662
)
2,392
(11,700
)
27,626
22,286
98,540
(65,193
)
(20,087
)
(227,034
)
(115,584
)
(83,664
)
(173,771
)
202,912
199,274
114,866
(72,007
)
(32,527
)
(97,480
)
4,587
341,096
719,446
632,639
4,632,657
2,981,431
292,107
466,744
302,842
3,746
8,064
4,656
4,049
8,480
4,337
(3,567
)
(3,100
)
5,942
(6,043
)
(11,453
)
(18,493
)
(84,183
)
(83,852
)
(145,387
)
(17,052
)
(29,335
)
(180,875
)
(1,023
)
(980
)
(4,458
)
(570,662
)
(5,168,015
)
(2,958,834
)
(185,569
)
421,006
213,340
(145,562
)
(509,173
)
53,872
(143,240
)
(245,825
)
(172,955
)
(24,926
)
(514,782
)
(114,016
)
380,397
570,468
642,203
(263,491
)
(29,431
)
(873,109
)
(904
)
(1,004
)
(223,041
)
(262,182
)
(195,910
)
(3,570
)
(2,024
)
(40,896
)
5,377
8,409
50,648
45,852
297
4,687
81,776
(145,689
)
(45,998
)
(187,245
)
(150,029
)
101,778
(436,129
)
(170,368
)
(71,908
)
169,301
376,078
447,986
278,685
$
205,710
$
376,078
$
447,986
Table of Contents
Fidelity National Title Group.
This segment consists of the operation of FNFs title
insurance underwriters and related businesses. This segment provides core title insurance
and escrow and other title related services including collection and trust activities,
trustees sales guarantees, recordings and reconveyances.
Specialty Insurance.
The specialty insurance segment consists of certain subsidiaries
that issue flood, home warranty, homeowners, automobile and other personal lines insurance
policies. The Company recently announced that its Board of Directors has authorized the
investigation of strategic alternatives for certain of its specialty insurance businesses.
The assets to be evaluated include the flood insurance and personal lines insurance
businesses, but not the home warranty business. However, there can be no assurance that any
transaction will be completed.
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Corporate and Other.
The corporate and other segment consists of the operations of the
parent holding company, certain other unallocated corporate overhead expenses, other
smaller operations, and the Companys share in the operations of certain equity
investments, including Sedgwick, Ceridian and Remy International, Inc. (Remy).
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Year Ended December 31,
2008
2007
2006
(In thousands, except per share data)
$
(179,016
)
$
129,769
$
437,761
209,974
216,583
182,031
3,406
830
209,974
219,989
182,861
$
(0.85
)
$
0.60
$
2.40
$
(0.85
)
$
0.59
$
2.39
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Title agency services by LPS.
The historical FIS subsidiaries who are party to these
agreements became subsidiaries of LPS in connection with the spin-off. These agreements allow
LPS to provide services to existing customers through loan facilitation transactions,
primarily with large national lenders. The arrangement involves the provision of title agency
services by LPS, which results in the issuance of title policies on behalf of title insurance
underwriters owned by the Company. Subject to certain early termination provisions for cause,
each of these agreements may be terminated upon five years prior written notice, which notice
may not be given until after the fifth anniversary of the effective date of each agreement,
which ranges from July 2004 through September 2006 (thus effectively resulting in a minimum
ten-year term and a rolling one-year term thereafter). Under these agreements, LPS retains
commissions which, in aggregate, are equal to approximately 89% of the total title premium
from title policies that LPS places with the Companys subsidiaries. LPS also performs similar
functions in connection with trustee sale guarantees, a form of title insurance that the
Companys subsidiaries issue as part of the foreclosure process on a defaulted loan. Effective
as of January 1, 2009, this agreement was amended to provide that LPS will retain
approximately 87% of the total title premiums.
Information Technology (IT), data processing services and software development services
from FIS and LPS.
These agreements govern IT support services and software development
provided to the Company by FIS and LPS, primarily consisting of infrastructure support and
data center management. Subject to certain early termination provisions (including the payment
of minimum monthly service and termination fees), both of these agreements expire on or about
June 30, 2013 with an option to renew for one or two additional years. In connection with the
spin-off, the agreement with FIS was amended so that certain of the services, primarily those
related to infrastructure support and data center management, continue to be provided by FIS
on revised terms and conditions. The Company also entered into a new agreement with LPS for
the provision of certain of the services that were previously provided under the agreement
with FIS, primarily those related to software application development services and other
IT-related services for the Company.
Administrative corporate support services to and from FIS and LPS.
The Company has provided
certain administrative corporate support services such as general management, statutory
accounting, claims administration, corporate aviation and other administrative support
services to FIS and, since July 2, 2008, to LPS. On a lesser scale, until recently, FIS has
provided similar support services to the Company. The pricing of these administrative services
is at cost. In connection with the spin-off, the Company entered into an agreement to provide
LPS with certain corporate services, amended the agreement with FIS to reflect the change in
the services provided to FIS, and terminated the agreement for FIS to provide services to the
Company. All of these administrative services are provided on an at-cost basis. The term of
these administrative corporate services agreements is two years, subject to early termination
because the services are no longer required by the party receiving the services or upon mutual
agreement of the parties and subject to extension in certain circumstances.
Other real estate, tax, and title support related services by LPS.
The historical FIS
subsidiaries who are party to these agreements with the Company became subsidiaries of LPS in
connection with the spin-off. Under these arrangements, the Company pays LPS for providing
other real estate related services to the Company, which consist primarily of real estate, tax
data and title related data services required by the Companys title insurance operations and
flood zone determination and reporting services used by the Companys title insurers in
connection with properties that may be located in special flood hazard areas.
Title plant access and title production services by LPS.
The historical FIS subsidiaries who
are party to these agreements with the Company became subsidiaries of LPS in connection with
the spin-off. Under these agreements, the Companys title insurers provide LPS with title
plant access for real property located in various states, including online database access,
physical access to title records, use of space, image system use, and use of special software,
as well as other title production services. For the title plant access, LPS pays monthly fees
(subject to certain minimum charges) based on the number of title reports or products ordered
and other services received. For the title production services, LPS pays for services based on
the number of properties searched, subject to certain minimum use. The title plant access
agreement has a term of 3 years beginning in November 2006 and is automatically renewable for
successive 3 year terms unless either party gives 30 days prior written
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notice.
The title production services agreement can be terminated by either party upon 30 days
prior written notice.
Real estate management, real estate lease and equipment lease agreements.
Included in the
Companys revenues are amounts received related to leases of certain equipment to FIS and to
LPS and the sublease of certain office space, furniture and furnishings to FIS and to LPS. In
addition, the Companys expenses include expenses for a lease of office space and equipment
for the Companys corporate headquarters and business operations as well as expenses for
property management services for the Companys corporate headquarters building. These expenses
were paid to FIS for services provided prior to the spin-off and to LPS for services provided
on and after the spin-off. In connection with the spin-off and the transfer of certain real
property from FIS to LPS, the Company terminated its real estate lease with FIS and entered
into a new lease with LPS with terms that are similar to those of the terminated FIS lease. In
addition, the Company amended its sublease with FIS to take into account a reduction in the
office space leased by FIS, and entered into a new sublease with LPS for its sublease of
office space in the Companys headquarters building. The rents paid by the Company to FIS and
LPS and paid to the Company by FIS and LPS under the leases and subleases are based on the
same rate per square foot. The lease term for all of the leases and subleases expires on June
30, 2011. The Company also entered into a new property management agreement with LPS since LPS
has replaced FIS as the principal owner and manager of the Jacksonville headquarters campus.
The management fees charged to the Company are reflective of the actual operating costs of the
property managed and are partially recovered by the Company in rents charged under the
sublease by the Company to FIS and LPS. The term of the property management agreements
coincides with that of the leases and subleases, which expire on June 30, 2011.
Licensing, cost sharing, business processing and other agreements.
The historical FIS
subsidiaries who are party to these agreements with the Company became subsidiaries of LPS in
connection with the spin-off. These agreements provide for the reimbursement of certain
amounts from the Company related to various licensing and cost sharing agreements, as well as
the payment of certain amounts by LPS to the Company in connection with the use of certain
intellectual property, including software and business processes, and other assets or
services. The software licenses have various terms, but generally may be terminated on 90
days prior notice. The business processing license and services agreement has a 10-year term,
but in connection with the spin-off, its term was amended and will expire on July 2, 2009.
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October 24 -
Full Year
Full Year
December 31
2008
2007
2006
(In millions)
$
212.3
$
149.4
$
22.4
25.5
8.4
0.5
246.2
149.9
22.4
$
187.9
$
132.2
$
19.5
42.6
46.8
17.6
(1.6
)
(2.7
)
(1.5
)
10.3
5.1
11.4
13.5
2.4
54.9
53.7
3.1
0.2
(8.2
)
0.7
5.7
7.8
1.2
0.3
0.1
$
301.4
$
253.5
$
48.1
December 31,
December 31,
2008
2007
(In millions)
$
6.2
$
7.1
6.9
$
13.9
3.0
$
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$
138.0
50.0
50.0
3.8
$
241.8
929.3
81.7
95.1
41.5
151.1
99.7
226.4
(1,115.8
)
(267.2
)
$
241.8
$
46.7
14.0
3.8
202.7
$
267.2
2008
2007
$
6,413.6
$
8,614.4
(413.0
)
82.8
(1.94
)
0.38
(1.94
)
0.37
(A)
The pro forma net earnings for FNF and the LFG Underwriters for 2008 include charges recorded by
the LFG Underwriters of $135.1 million for impairments of other intangible assets and goodwill and
charges recorded by FNF of $261.6 million for adverse development of loss reserves. The pro forma
net earnings for 2007 include charges recorded by FNF of $217.2 million for adverse development of
loss reserves.
Table of Contents
Table of Contents
Table of Contents
Level 1
Level 2
Level 3
Total
$
$
2,821,774
$
32,055
$
2,853,829
71,516
71,516
$
71,516
$
2,821,774
$
32,055
$
2,925,345
December 31, 2008
Carrying
Amortized
Unrealized
Unrealized
Fair
Value
Cost
Gains
Losses
Value
(Dollars in thousands)
$
558,651
$
526,425
$
32,469
$
(243
)
$
558,651
1,049,125
1,029,505
24,550
(4,930
)
1,049,125
875,005
910,533
8,413
(43,941
)
875,005
43,510
41,582
1,943
(15
)
43,510
293,188
292,452
1,227
(491
)
293,188
34,350
33,712
677
(39
)
34,350
$
2,853,829
$
2,834,209
$
69,279
$
(49,659
)
$
2,853,829
Table of Contents
December 31, 2007
Carrying
Amortized
Unrealized
Unrealized
Fair
Value
Cost
Gains
Losses
Value
(Dollars in thousands)
$
863,181
$
841,483
$
21,990
$
(292
)
$
863,181
1,261,517
1,252,904
9,498
(885
)
1,261,517
657,445
667,331
4,615
(14,501
)
657,445
42,414
41,900
549
(35
)
42,414
15
14
1
15
$
2,824,572
$
2,803,632
$
36,653
$
(15,713
)
$
2,824,572
December 31, 2008
Amortized
% of
% of
Maturity
Cost
Total
Fair Value
Total
(Dollars in thousands)
$
313,583
11.1
%
$
315,826
11.1
%
1,123,303
39.6
1,129,429
39.6
845,396
29.8
848,144
29.7
288,220
10.2
295,974
10.3
263,707
9.3
264,456
9.3
$
2,834,209
100.0
%
$
2,853,829
100.0
%
$
440,073
13.1
%
$
448,612
13.0
%
Table of Contents
Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
11,414
$
36,223
$
36,371
102,331
119,879
112,523
2,614
4,231
8,725
11,485
18,200
29,141
6,526
6,884
19,847
$
134,370
$
185,417
$
206,607
Less than 12 Months
12 Months or Longer
Total
Unrealized
Unrealized
Unrealized
Fair Value
Losses
Fair Value
Losses
Fair Value
Losses
$
37,920
$
(243
)
$
$
$
37,920
$
(243
)
116,364
(3,740
)
10,762
(1,190
)
127,126
(4,930
)
451,615
(26,006
)
90,043
(17,935
)
541,658
(43,941
)
2,022
(15
)
2,022
(15
)
42,578
(491
)
42,578
(491
)
22,346
(10,483
)
22,346
(10,483
)
2,137
(39
)
2,137
(39
)
$
674,982
$
(41,017
)
$
100,805
$
(19,125
)
$
775,787
$
(60,142
)
Table of Contents
Less
than 12 Months
12 Months or Longer
Total
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
$
3,117
$
(3
)
$
103,433
$
(289
)
106,550
(292
)
$
16,860
$
(153
)
$
180,137
$
(732
)
196,997
(885
)
97,068
(4,671
)
249,452
(9,830
)
346,520
(14,501
)
9,305
(35
)
9,305
(35
)
42,259
(8,596
)
454
(182
)
42,713
(8,778
)
$
159,304
$
(13,423
)
$
542,781
$
(11,068
)
$
702,085
$
(24,491
)
Ownership
2008
2007
33
%
$
453,129
$
503,118
(a)
115,646
131,160
47
%
61,786
79,958
various
13,978
24,120
$
644,539
$
738,356
(a)
As of December 31, 2008 and 2007, the company ownership percentage in Sedgwick was 32% and 40%,
respectively.
Table of Contents
September 30, 2008
(in millions)
$
1,300.0
4,755.5
3,397.9
$
9,453.4
$
986.3
3,516.5
3,557.7
8,060.5
1,392.9
$
9,453.4
Period from
November 10, 2007,
through September 30, 2008
(in millions)
$
1,417.7
(108.4
)
(73.0
)
Year Ended December 31,
2008
2007
(Dollars in thousands)
$
89,418
$
91,670
39,465
32,798
82,025
79,092
550,989
485,593
761,897
689,153
(454,742
)
(422,997
)
$
307,155
$
266,156
Fidelity National
Specialty
Corporate
Title Group, Inc.
Insurance
and Other
Total
(Dollars in thousands)
$
1,087,813
$
28,717
$
42,643
$
1,159,173
158,517
26,890
185,407
1,246,330
28,717
69,533
1,344,580
237,966
(888
)
237,078
$
1,484,296
$
28,717
$
68,645
$
1,581,658
Table of Contents
December 31,
2008
2007
(Dollars in thousands)
$
204,389
$
201,921
25,563
25,563
229,952
227,484
(137,442
)
(109,976
)
$
92,510
$
117,508
December 31,
2008
2007
(Dollars in thousands)
$
235,813
$
200,793
100,418
121,524
107,627
271,807
78,624
28,141
56,471
46,767
27,118
32,690
8,873
16,430
214,001
104,957
$
828,945
$
823,109
December 31,
2008
2007
(Dollars in thousands)
$
249,217
$
249,033
241,081
240,981
585,000
535,000
197,536
133,148
50,000
28,015
9,577
$
1,350,849
$
1,167,739
Table of Contents
Table of Contents
$
87,639
58,835
870,671
20,956
309,344
3,404
$
1,350,849
Table of Contents
Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
(91,847
)
$
55,212
$
331,327
(33,695
)
(8,436
)
19,544
$
(125,542
)
$
46,776
$
350,871
2008
2007
2006
$
(125,542
)
$
46,776
$
350,871
276
1,400
(62
)
(10,437
)
6,165
3,956
(20,683
)
25,699
15,190
18,215
(6,395
)
(7,940
)
(12,629
)
26,869
11,144
(297
)
(4,687
)
(81,776
)
$
(138,468
)
$
68,958
$
280,239
Year Ended December 31,
2008
2007
2006
35.0
%
35.0
%
35.0
%
(0.9
)
(0.9
)
(1.4
)
0.7
(1.8
)
(0.4
)
4.0
(12.2
)
(2.4
)
2.5
2.6
4.1
1.2
3.8
2.3
42.5
%
26.5
%
37.2
%
Table of Contents
December 31,
2008
2007
(Dollars in thousands)
$
142,778
$
131,939
54,770
52,135
39,080
14,730
3,844
14,625
10,117
8,789
333
730
291
3,869
17,717
12,766
425,052
83,461
(132,550
)
292,502
83,461
(70,925
)
(58,656
)
(32,372
)
(1,434
)
(28,042
)
(7,241
)
(7,432
)
(11,799
)
(28,821
)
(18,171
)
(11,190
)
(14,513
)
(6,758
)
(153,284
)
(144,070
)
$
139,218
$
(60,609
)
Table of Contents
Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
1,419,910
$
1,220,636
$
1,113,506
1,115,803
(8,515
)
377,900
450,693
454,507
252,504
203,183
31,827
630,404
653,876
486,334
(119,399
)
(101,246
)
(111,708
)
(308,093
)
(353,356
)
(258,981
)
(427,492
)
(454,602
)
(370,689
)
$
2,738,625
$
1,419,910
$
1,220,636
$
2,678,987
$
1,322,622
$
1,154,872
18.2
%
13.2
%
7.5
%
(1)
In 2008, the Company assumed $1,115.8 million in additional reserves
for claim losses with the acquisition of the LFG Underwriters. In
2006, the Company transferred $8.5 million in reserves to FIS in
connection with the distribution of FIS.
Table of Contents
These matters raise difficult and complicated factual and legal issues and are subject to
many uncertainties and complexities, including but not limited to the underlying facts of each
matter, novel legal issues, variations between jurisdictions in which matters are being
litigated, differences in applicable laws and judicial interpretations, the length of time
before many of these matters might be resolved by settlement or through litigation and, in
some cases, the timing of their resolutions relative to other similar cases brought against
other companies, the fact that many of these matters are putative class actions in which a
class has not been certified and in which the purported class may not be clearly defined, the
fact that many of these matters involve multi-state class actions in which the applicable law
for the claims at issue is in dispute and therefore unclear, and the current challenging legal
environment faced by large corporations and insurance companies.
In these matters, plaintiffs seek a variety of remedies including equitable relief in the
form of injunctive and other remedies and monetary relief in the form of compensatory damages.
In most cases, the monetary damages sought include punitive or treble damages. Often more
specific information beyond the type of relief sought is not available because plaintiffs have
not requested more specific relief in their court pleadings. In addition, the dollar amount of
damages sought is frequently not stated with specificity. In those cases where plaintiffs have
made a statement with regard to monetary damages, they often specify damages either just above
or below a jurisdictional limit regardless of the facts of the case. These limits represent
either the jurisdictional threshold for bringing a case in federal court or the maximum they
can seek without risking removal from state court to federal court. In the Companys
experience, monetary demands in plaintiffs court pleadings bear little relation to the
ultimate loss, if any, that the Company may experience. None of the cases described below
includes a statement as to the dollar amount of damages demanded. Instead, each of the cases
includes a demand in an amount to be proved at trial.
For the reasons specified above, it is not possible to make meaningful estimates of the
amount or range of loss that could result from these matters at this time. The Company reviews
these matters on an ongoing basis and follows the provisions of Statement of Financial
Accounting Standards (SFAS) No. 5, Accounting for Contingencies when making accrual and
disclosure decisions. When assessing reasonably possible and probable outcomes, management
bases its decision on its assessment of the ultimate outcome following all appeals.
The Company intends to vigorously defend each of these matters. In the opinion of the
Companys management, while some of these matters may be material to the Companys operating
results for any particular period if an unfavorable outcome results, none will have a material
adverse effect on its overall financial condition.
Table of Contents
Table of Contents
Table of Contents
$
166,626
125,972
86,451
51,112
23,542
101,580
$
555,283
Table of Contents
Table of Contents
Table of Contents
Weighted Average
Options
Exercise Price
Exercisable
15,890,293
$
18.47
11,480,299
183,500
39.20
(8,403,694
)
12.40
(204,894
)
38.15
7,465,205
$
24.19
5,017,779
Table of Contents
Weighted Average
Options
Exercise Price
Exercisable
2,206,500
$
21.90
2,116,500
23.40
10,009,967
10.47
(158,116
)
10.08
(33,441
)
5.01
14,141,410
$
14.55
7,406,280
5,257,997
13.64
(1,087,946
)
7.73
(302,627
)
21.66
18,008,834
$
14.57
9,904,089
6,162,942
7.09
(775,092
)
6.93
(177,401
)
17.70
23,219,283
$
12.82
11,971,263
Weighted Average
Grant Date Fair
Shares
Value
777,500
$
21.90
1,544,500
22.82
702,620
15.14
(11,250
)
21.90
(416,721
)
17.13
2,596,649
$
21.38
510,503
13.87
(34,289
)
17.54
(996,811
)
20.07
2,076,052
16.82
1,370,358
11.46
(28,973
)
16.98
(1,165,137
)
19.54
2,252,300
12.71
Options Outstanding
Options Exercisable
Weighted
Weighted
Average
Weighted
Average
Weighted
Remaining
Average
Remaining
Average
Range of
Number of
Contractual
Exercise
Intrinsic
Number of
Contractual
Exercise
Intrinsic
Exercise Prices
Options
Life
Price
Value
Options
Life
Price
Value
(In thousands)
(In thousands)
1,800,782
2.32
$
3.82
$
25,089
1,800,782
2.32
$
3.82
$
25,087
7,174,533
7.24
7.38
74,400
1,011,591
3.70
9.15
8,703
2,268,493
3.70
12.77
11,307
2,268,493
3.70
12.77
11,307
6,841,827
6.37
14.35
23,232
2,948,345
5.71
15.30
7,229
Table of Contents
Options Outstanding
Options Exercisable
Weighted
Weighted
Average
Weighted
Average
Weighted
Remaining
Average
Remaining
Average
Range of
Number of
Contractual
Exercise
Intrinsic
Number of
Contractual
Exercise
Intrinsic
Exercise Prices
Options
Life
Price
Value
Options
Life
Price
Value
(In thousands)
(In thousands)
1,125,270
5.92
17.80
1,084,900
5.87
17.75
2,126,878
6.83
21.88
1,599,461
6.82
21.88
1,881,500
7.98
23.44
1,257,691
7.98
23.44
23,219,283
6.21
$
12.82
$
134,028
11,971,263
5.05
$
14.53
$
52,326
Table of Contents
2008
2007
2006
(Dollars in thousands)
$
149,670
$
158,258
$
162,875
(1,866
)
(7,212
)
(3,970
)
9,008
8,876
8,780
844
2,667
1,856
(12,682
)
(12,919
)
(11,283
)
$
144,974
$
149,670
$
158,258
$
142,546
$
126,991
$
112,636
(25,600
)
11,373
13,511
3,842
17,101
12,127
(12,682
)
(12,919
)
(11,283
)
$
108,106
$
142,546
$
126,991
$
(36,868
)
$
(7,124
)
$
(31,267
)
83,544
53,800
67,677
$
46,676
$
46,676
$
36,410
2008
2007
2006
(Dollars in thousands)
$
$
$
9,008
8,876
8,780
(11,581
)
(10,638
)
(9,752
)
6,415
8,597
9,916
$
3,842
$
6,835
$
8,944
Before Tax
Net of Tax
(Dollars in thousands)
$
53,800
$
30,632
(6,415
)
(4,041
)
(6,415
)
(4,041
)
36,159
22,780
36,159
22,780
Table of Contents
Before Tax
Net of Tax
(Dollars in thousands)
83,544
49,371
(6,406
)
(4,036
)
$
(6,406
)
$
(4,036
)
$
67,676
$
39,530
(8,597
)
(5,513
)
(8,597
)
(5,513
)
(5,279
)
(3,385
)
(5,279
)
(3,385
)
53,800
30,632
(8,597
)
(5,457
)
$
(8,597
)
$
(5,457
)
2008
2007
6.25
%
6.25
%
N/A
(a)
N/A
(a)
2008
2007
2006
6.25
%
5.75
%
5.50
%
8.5
%
8.5
%
8.5
%
N/A
(a)
N/A
(a)
N/A
(a)
(a)
Rate of compensation increase is not applicable due to the pension being frozen at December 31, 2000.
Table of Contents
Percentage of
Target Allocation
Plan Assets
Asset Category
2009
2008
2007
65
%
65.2
%
56.8
%
35
%
24.9
34.4
7.0
5.4
1-3
%
2.9
3.4
100.0
%
100.0
%
$
12,919
12,682
$
12,682
10,859
11,624
11,161
11,558
87,091
Table of Contents
2008
2007
2006
(Dollars in thousands)
$
17,294
$
19,912
$
18,235
43
946
990
1,099
1,173
1,567
1,631
2,768
(2,420
)
(1,040
)
(5,073
)
4,185
(3,078
)
(2,870
)
(2,861
)
$
15,295
$
17,294
$
19,912
$
$
$
1,905
1,303
1,230
1,173
1,567
1,631
(3,078
)
(2,870
)
(2,861
)
$
$
$
$
(15,295
)
$
(17,294
)
$
(19,912
)
$
(15,295
)
$
(17,294
)
$
(19,912
)
2008
2007
2006
(Dollars in thousands)
$
$
$
43
946
990
1,099
505
(22
)
(3,225
)
581
1,487
$
1,451
$
1,549
$
(596
)
Before Tax
Net of Tax
(Dollars in thousands)
$
2,887
$
1,834
(505
)
(318
)
(1,041
)
(656
)
(1,546
)
(974
)
$
1,341
$
860
Table of Contents
Before Tax
Net of Tax
(Dollars in thousands)
520
328
$
5,751
$
3,652
22
14
(581
)
(369
)
2,768
1,758
(5,073
)
(3,221
)
(2,864
)
(1,818
)
$
2,887
$
1,834
506
321
2008
2007
5.75
%
5.75
%
8.5
%
9
%
5
%
5
%
2016
2012
2008
2007
2006
5.75
%
5.75
%
5.50
%
9
%
10
%
11
%
5
%
5
%
5
%
2012
2012
2012
One-Percentage-Point
One-Percentage-Point
Increase
Decrease
(Dollars in thousands)
$
53
$
(48
)
786
(701
)
Table of Contents
$
1,303
1,905
$
1,990
2,003
1,987
1,887
1,738
5,690
Year Ended December 31,
2008
2007
2006
(Dollars in thousands)
$
64,406
$
53,897
$
57,636
(37,388
)
86,918
354,711
$
1,645,402
$
416,431
$
396,738
243,241
245,825
290,091
$
1,402,161
$
170,606
$
106,647
2008
2007
2006
17.6
%
16.5
%
17.6
%
12.5
%
12.6
%
11.2
%
7.7
%
10.8
%
13.8
%
7.4
%
8.0
%
7.8
%
Table of Contents
Fidelity National
Specialty
Corporate
Title Group, Inc.
Insurance
and Other
Total
$
2,695,009
$
$
$
2,695,009
1,034,250
373,392
114,289
1,521,931
$
3,729,259
$
373,392
$
114,289
$
4,216,940
87,268
9,922
14,965
112,155
$
3,816,527
$
383,314
$
129,254
$
4,329,095
114,989
4,896
22,874
142,759
5,657
487
62,645
68,789
(230,960
)
34,982
(99,415
)
(295,393
)
(98,159
)
11,658
(39,041
)
(125,542
)
1,073
(14,448
)
(13,375
)
1,518
(5,728
)
(4,210
)
$
(133,246
)
$
23,324
$
(69,094
)
$
(179,016
)
$
6,766,196
$
422,630
$
1,179,414
$
8,368,240
1,484,296
28,717
68,645
1,581,658
Fidelity National
Specialty
Corporate
Title Group, Inc.
Insurance
and Other
Total
$
3,800,458
$
$
$
3,800,458
1,034,574
386,427
97,841
1,518,842
$
4,835,032
$
386,427
$
97,841
$
5,319,300
Table of Contents
Fidelity National
Specialty
Corporate
Title Group, Inc.
Insurance
and Other
Total
169,954
16,254
17,667
203,875
$
5,004,986
$
402,681
$
115,508
$
5,523,175
120,223
6,046
3,823
130,092
14,597
1,478
38,866
54,941
183,477
53,040
(60,839
)
175,678
49,275
19,271
(21,770
)
46,776
2,467
(1,632
)
835
2,889
(2,921
)
(32
)
$
133,780
$
33,769
$
(37,780
)
$
129,769
$
5,953,562
$
461,548
$
1,172,743
$
7,587,853
1,246,330
28,717
69,533
1,344,580
Fidelity National
Fidelity National
Specialty
Corporate
Information
Title Group, Inc.
Insurance
and Other
Services, Inc.
Eliminations
Total
$
4,608,329
$
$
(2,372
)
$
64,964
$
(64,721
)
$
4,606,200
1,109,293
394,613
4,754
3,215,409
(121,039
)
4,603,030
(185,760
)
185,760
$
5,717,622
$
394,613
$
2,382
$
3,094,613
$
$
9,209,230
179,932
15,582
20,881
8,774
225,169
$
5,897,554
$
410,195
$
23,263
$
3,103,387
$
$
9,434,399
110,486
6,254
447
343,563
460,750
12,755
1,443
41,579
154,195
209,972
648,574
72,026
(97,466
)
318,366
941,500
220,898
28,920
(17,379
)
118,432
350,871
1,702
1,702
1,354
153,246
(30
)
154,570
$
428,024
$
43,106
$
(233,333
)
$
199,964
437,761
$
6,023,461
$
455,057
$
781,041
$
$
$
7,259,559
1,087,813
23,842
42,643
1,154,298
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Exhibit | ||
Number | Description | |
|
||
2.1
|
Securities Exchange and Distribution Agreement between Old FNF and the Registrant, dated as of June 25, 2006, as amended and restated as of September 18, 2006 (incorporated by reference to Annex A to the Registrants Schedule 14C filed on September 19, 2006 (the Information Statement)) | |
|
||
3.1
|
Form of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Annex C to the Information Statement) | |
|
||
3.2
|
Amended and Restated Bylaws of the Registrant, as adopted on September 26, 2005 (incorporated by reference to Exhibit 3.2 to the Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2005) | |
|
||
4.1
|
Indenture between the Registrant and The Bank of New York Trust Company, N.A., dated December 8, 2005, relating to the 7.30%and 5.25% notes referred to below (incorporated by reference to Exhibit 4.1 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2005) |
109
Exhibit | ||
Number | Description | |
|
||
4.2
|
First Supplemental Indenture between the Registrant and the Bank of New York Trust Company, N.A., dated as of January 6, 2006 (incorporated by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K filed on January 24, 2006) | |
|
||
4.3
|
Form of Subordinated Indenture between the Registrant and the Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit 4.2(A) to the Registrants Registration Statement on Form S-3 filed on November 14, 2007) | |
|
||
4.4
|
Form of 7.30% note due August 15, 2011 (incorporated by reference to Exhibit 4.6 to the Registrants Registration Statement on Form S-4 filed on October 28, 2005) | |
|
||
4.5
|
Form of 5.25% note due March 15, 2013 (incorporated by reference to Exhibit 4.7 to the Registrants Registration Statement on Form S-4 filed on October 28, 2005) | |
|
||
4.6
|
Form of 2.36% Subordinated Promissory Note due 2013 (incorporated by reference to Exhibit 99.2 to the Registrants Current Report on Form 8-K filed on December 24, 2008) | |
|
||
4.7
|
Form of the Registrants Common Stock Certificate (incorporated by reference to Exhibit 4.5 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2006 (the 2006 Annual Report)) | |
|
||
10.1
|
Credit Agreement among the Registrant, Bank of America, N.A., and certain agents and other lenders party thereto, dated as of September 12, 2006 (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on October 30, 2006) | |
|
||
10.2
|
Stock Purchase Agreement, dated as of November 25, 2008, as amended and restated as of December 12, 2008, as further amended and restated as of December 21, 2008, among Fidelity National Title Insurance Company, Chicago Title Insurance Company, and LandAmerica Financial Group, Inc. (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on December 24, 2008.) | |
|
||
10.3
|
Amended and Restated Fidelity National Financial, Inc. 2005 Omnibus Incentive Plan, effective as of September 26, 2005 (incorporated by reference to Annex A to the Registrants Schedule 14A filed on April 15, 2008).(1) | |
|
||
10.4
|
Fidelity National Title Group, Inc. Employee Stock Purchase Plan, effective as of September 26, 2005 (incorporated by reference to Exhibit 10.50 to the Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).(1) | |
|
||
10.5
|
Form of Notice of Restricted Stock Grant and Restricted Stock Award Agreement under Amended and Restated Fidelity National Financial, Inc. 2005 Omnibus Incentive Plan.(1) | |
|
||
10.6
|
Form of Notice of Stock Option Grant and Stock Option Award Agreement under Amended and Restated Fidelity National Financial, Inc. 2005 Omnibus Incentive Plan.(1) | |
|
||
10.7
|
Fidelity Sedgwick Holdings, Inc. 2006 Stock Incentive Plan (the FSH Plan), effective as of January 31, 2006 (incorporated by reference to Exhibit 99.3 to Old FNFs Current Report on Form 8-K filed on February 6, 2006).(1) | |
|
||
10.8
|
Form of Stock Option Agreement under the FSH Plan (incorporated by reference to Exhibit 99.4 to Old FNFs Current Report on Form 8-K filed on February 6, 2006).(1) | |
|
||
10.9
|
Tax Disaffiliation Agreement by and among Old FNF, the Registrant and FIS, dated as of October 23, 2006 (incorporated by reference to Exhibit 99.1 to Old FNFs Form 8-K, filed on October 27, 2006) | |
|
||
10.10
|
Cross-Indemnity Agreement by and between the Registrant and FIS, dated as of October 23, 2006 (incorporated by reference to Exhibit 99.2 to FISs Form 8-K, filed on October 27, 2006) | |
|
||
10.11
|
Amended and Restated Employment Agreement between the Registrant and Anthony J. Park, effective as of October 10, 2008(1) | |
|
||
10.12
|
Employment Agreement between the Registrant and Brent B. Bickett, effective as of October 24, 2006 (incorporated by reference to Exhibit 10.10 to the 2006 Annual Report).(1) | |
|
||
10.13
|
Employment Agreement between the Registrant and Peter T. Sadowski, effective as of October 24, 2006 (incorporated by reference to Exhibit 10.11 to the 2006 Annual Report).(1) | |
|
||
10.14
|
Amended and Restated Employment Agreement between the Registrant and William P. Foley, II, effective as of July 2, 2008(1) |
110
Exhibit | ||
Number | Description | |
|
||
10.15
|
Amended and Restated Employment Agreement between the Registrant and Alan L. Stinson, effective as of July 2, 2008(1) | |
|
||
10.16
|
Amended and Restated Employment Agreement between the Registrant and Raymond R. Quirk, effective as of October 10, 2008(1) | |
|
||
10.17
|
Fidelity National Title Group, Inc. Annual Incentive Plan (incorporated by reference to Annex E to the Information Statement).(1) | |
|
||
10.18
|
Fidelity National Financial, Inc. Deferred Compensation Plan, as amended and restated, effective January 1, 2009.(1) | |
|
||
21.1
|
Subsidiaries of the Registrant | |
|
||
23.1
|
Consents of KPMG LLP, Independent Registered Public Accounting Firm | |
|
||
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
||
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
||
32.1
|
Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | |
|
||
32.2
|
Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 |
(1) | A management or compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 15(c) of Form 10-K |
111
112
Fidelity National Financial, Inc.
By:
/s/
Alan L. Stinson
Alan L. Stinson
Chief Executive Officer
Signature
Title
Date
/s/
Alan L. Stinson
Chief Executive Officer
March 2, 2009
(Principal Executive Officer)
Chief Financial Officer
March 2, 2009
(Principal Financial and Accounting Officer)
Director and Chairman of the Board
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Director
March 2, 2009
Table of Contents
113
Fidelity National Financial, Inc.:
Jacksonville, Florida
Certified Public Accountants
Table of Contents
December 31, | ||||||||
2008 | 2007 | |||||||
(In thousands, except share data) | ||||||||
ASSETS
|
||||||||
Cash
|
$ | | $ | | ||||
Investment securities available for sale, at fair value
|
96,205 | 60,003 | ||||||
Investment in unconsolidated affiliates
|
569,073 | 634,578 | ||||||
Accounts receivable from subsidiaries
|
245,784 | 612,202 | ||||||
Notes receivable, net
|
227 | 28,175 | ||||||
Income taxes receivable
|
115,371 | 67,244 | ||||||
Deferred tax assets
|
139,218 | | ||||||
Investment in subsidiaries
|
2,822,103 | 2,997,415 | ||||||
Property and equipment, net
|
11,783 | 11,349 | ||||||
Prepaid expenses and other assets
|
11,950 | 1,675 | ||||||
Other intangibles
|
4,419 | 5,936 | ||||||
|
||||||||
|
$ | 4,016,133 | $ | 4,418,577 | ||||
|
||||||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||
Liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$ | 34,063 | $ | 34,998 | ||||
Notes payable
|
1,125,298 | 1,025,014 | ||||||
Deferred tax liabilities
|
| 60,609 | ||||||
|
||||||||
|
1,159,361 | 1,120,621 | ||||||
Minority Interest
|
51,199 | 53,868 | ||||||
Stockholders Equity:
|
||||||||
Common stock, Class A, $0.0001 par value; authorized
600,000,000 shares at December 31, 2008 and 2007;
issued 228,391,066 shares and 223,069,076 shares at
December 31, 2008 and 2007, respectively
|
23 | 22 | ||||||
Preferred stock, $0.0001 par value; authorized
50,000,000 shares, issued and outstanding, none
|
| | ||||||
Additional paid-in capital
|
3,325,209 | 3,236,866 | ||||||
Retained earnings
|
(188,954 | ) | 213,103 | |||||
|
||||||||
|
3,136,278 | 3,449,991 | ||||||
Accumulated other comprehensive loss
|
(91,757 | ) | (16,630 | ) | ||||
Less treasury stock, 13,488,288 shares and 10,032,449
shares at December 31, 2008 and December 31, 2007,
respectively, at cost
|
(238,948 | ) | (189,273 | ) | ||||
|
||||||||
|
2,805,573 | 3,244,088 | ||||||
|
||||||||
|
$ | 4,016,133 | $ | 4,418,577 | ||||
|
114
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands, except per share data) | ||||||||||||
Revenue:
|
||||||||||||
Other fees and revenue
|
$ | 3,540 | $ | 12,930 | $ | 388 | ||||||
Interest and investment income
|
14,731 | 6,697 | 21,146 | |||||||||
|
||||||||||||
|
18,271 | 19,627 | 21,534 | |||||||||
|
||||||||||||
Expenses:
|
||||||||||||
Personnel expenses
|
14,898 | 20,830 | 47,538 | |||||||||
Other operating expenses
|
20,293 | 12,788 | 27,778 | |||||||||
Interest expense
|
54,118 | 38,050 | 41,089 | |||||||||
|
||||||||||||
|
89,309 | 71,668 | 116,405 | |||||||||
|
||||||||||||
Loss before income tax expense benefit and equity in
(losses) earnings of subsidiaries
|
(71,038 | ) | (52,041 | ) | (94,871 | ) | ||||||
Income tax benefit
|
(30,191 | ) | (13,791 | ) | (35,292 | ) | ||||||
|
||||||||||||
Loss before equity in (losses) earnings of subsidiaries
|
(40,847 | ) | (38,250 | ) | (59,579 | ) | ||||||
Equity in (losses) earnings of subsidiaries
|
(142,379 | ) | 167,987 | 651,910 | ||||||||
|
||||||||||||
(Loss) earnings before minority interest
|
(183,226 | ) | 129,737 | 592,331 | ||||||||
Minority interest
|
(4,210 | ) | (32 | ) | 154,570 | |||||||
|
||||||||||||
Net earnings
|
$ | (179,016 | ) | $ | 129,769 | $ | 437,761 | |||||
|
||||||||||||
Basic earnings per share
|
$ | (0.85 | ) | $ | 0.60 | $ | 2.40 | |||||
|
||||||||||||
Weighted average shares outstanding, basic basis
|
209,974 | 216,583 | 182,031 | |||||||||
|
||||||||||||
Diluted earnings per share
|
$ | (0.85 | ) | $ | 0.59 | $ | 2.39 | |||||
|
||||||||||||
Weighted average shares outstanding, diluted basis
|
209,974 | 219,989 | 182,861 | |||||||||
|
||||||||||||
Retained earnings, beginning of year
|
$ | 213,103 | $ | 345,516 | $ | 103,665 | ||||||
Dividends declared
|
(223,041 | ) | (262,182 | ) | (195,910 | ) | ||||||
Net (loss) earnings
|
(179,016 | ) | 129,769 | 437,761 | ||||||||
|
||||||||||||
Retained (deficit) earnings, end of year
|
$ | (188,954 | ) | $ | 213,103 | $ | 345,516 | |||||
|
115
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||
Net (losses) earnings
|
$ | (179,016 | ) | $ | 129,769 | $ | 437,761 | |||||
Adjustments to reconcile net (losses) earnings to net cash used in
operating activities:
|
||||||||||||
Amortization of debt issuance costs
|
1,517 | 1,630 | 1,167 | |||||||||
Minority interest
|
(4,210 | ) | (32 | ) | 154,570 | |||||||
Equity in losses (earnings) of subsidiaries
|
142,379 | (167,987 | ) | (651,910 | ) | |||||||
Losses (gains) on sales of investments and other assets
|
2,554 | (1,691 | ) | (4,850 | ) | |||||||
Stock-based compensation cost
|
32,669 | 29,866 | 64,984 | |||||||||
Tax benefit associated with the exercise of stock options
|
(297 | ) | (4,687 | ) | (81,776 | ) | ||||||
Transaction fee income
|
| (12,293 | ) | | ||||||||
Net decrease in income taxes
|
(72,007 | ) | (32,527 | ) | (92,144 | ) | ||||||
Net (increase) decrease in prepaid expenses and other assets
|
(9,836 | ) | 7,348 | 5,880 | ||||||||
Net (decrease) increase in accounts payable and accrued liabilities
|
(34,356 | ) | 6,178 | (463 | ) | |||||||
|
||||||||||||
Net cash used in operating activities
|
(120,603 | ) | (44,426 | ) | (166,781 | ) | ||||||
|
||||||||||||
Cash Flows From Investing Activities:
|
||||||||||||
Proceeds from sales of investments
|
26,020 | 372,767 | 919,653 | |||||||||
Purchases of investments
|
(12,600 | ) | (241,796 | ) | (944,672 | ) | ||||||
Net (purchases) proceeds from short-term investing activities
|
(89,836 | ) | | 320,553 | ||||||||
Purchases of property and equipment
|
(1,472 | ) | (10,597 | ) | (914 | ) | ||||||
Collections (proceeds) of notes receivable
|
266 | 1,389 | (340 | ) | ||||||||
Proceeds from the sale of partial interest in Sedgwick CMS
|
53,872 | | | |||||||||
Net additions to investment in subsidiaries
|
| (498,206 | ) | (115,022 | ) | |||||||
|
||||||||||||
Net cash (used in) provided by investing activities
|
(23,750 | ) | (376,443 | ) | 179,258 | |||||||
|
||||||||||||
Cash Flows From Financing Activities:
|
||||||||||||
Borrowings
|
170,000 | 535,000 | | |||||||||
Debt service payments
|
(120,000 | ) | | (8,652 | ) | |||||||
Debt cost additions
|
| (904 | ) | (1,336 | ) | |||||||
Dividends paid
|
(223,041 | ) | (262,182 | ) | (195,910 | ) | ||||||
Purchases of treasury stock
|
(45,998 | ) | (187,245 | ) | | |||||||
Exercise of stock options
|
5,377 | 8,409 | 35,665 | |||||||||
Tax benefit associated with the exercise of stock options
|
297 | 4,687 | 81,776 | |||||||||
Net borrowings and dividends from subsidiaries
|
357,718 | 323,104 | 75,980 | |||||||||
|
||||||||||||
Net cash provided by (used in) financing activities
|
144,353 | 420,869 | (12,477 | ) | ||||||||
|
||||||||||||
Net change in cash and cash equivalents
|
| | | |||||||||
Cash at beginning of year
|
| | | |||||||||
|
||||||||||||
Cash at end of year
|
$ | | $ | | $ | | ||||||
|
116
December 31, | ||||||||
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Unsecured notes, net of discount,
interest payable semi-annually at
5.25%, due March 2013
|
$ | 249,217 | $ | 249,033 | ||||
Unsecured notes, net of discount,
interest payable semi-annually at
7.3%, due August 2011
|
241,081 | 240,981 | ||||||
Syndicated credit agreement,
unsecured, interest due monthly at
LIBOR plus 0.36% (3.53% at December
31, 2008), unused portion $515
million at December 31, 2008
|
585,000 | 535,000 | ||||||
Subordinated note payable to
LandAmerica Financial Group, Inc.,
interest payable annually at 2.36%,
due December 2013
|
50,000 | | ||||||
|
||||||||
|
$ | 1,125,298 | $ | 1,025,014 | ||||
|
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Cash paid (received) during the year:
|
||||||||||||
Interest paid
|
$ | 50,305 | $ | 37,700 | $ | 35,292 | ||||||
Income taxes (received) paid
|
(47,403 | ) | (38,119 | ) | 185,678 |
117
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charge to | Balance at | ||||||||||||||||||
Beginning of | Costs and | Other | Deduction | End of | ||||||||||||||||
Description | Period | Expenses | (Described) | (Described) | Period | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Year ended December 31, 2008:
|
||||||||||||||||||||
Reserve for claim losses
|
$ | 1,419,910 | $ | 630,404 | $ | 1,115,803 | (3) | $ | 427,492 | (1) | $ | 2,738,625 | ||||||||
Allowance on trade and notes
receivables
|
13,091 | 9,934 | 337 | (2) | 5,998 | (2) | ||||||||||||||
|
15,263 | (3) | 32,627 | |||||||||||||||||
Year ended December 31, 2007:
|
||||||||||||||||||||
Reserve for claim losses
|
$ | 1,220,636 | $ | 653,876 | $ | | $ | 454,602 | (1) | $ | 1,419,910 | |||||||||
Allowance on trade and notes
receivables
|
12,674 | 3,997 | 624 | (2) | 4,204 | (2) | 13,091 | |||||||||||||
Year ended December 31, 2006:
|
||||||||||||||||||||
Reserve for claim losses
|
$ | 1,113,506 | $ | 486,334 | $ | (8,515 | ) | $ | 370,689 | (1) | $ | 1,220,636 | ||||||||
Allowance on trade and notes
receivables
|
34,037 | 15,972 | (24,761 | )(4) | 12,574 | (2) | 12,674 |
(1) | Represents payments of claim losses, net of recoupments. | |
(2) | Represents uncollectible accounts written-off, change in reserve due to reevaluation of specific items and change in reserve due to purchases and sales of certain assets. | |
(3) | Represents reserves assumed in the acquisition of certain title insurance underwriters from LandAmerica Financial Group, Inc. on December 22, 2008 (see note B to Notes to Consolidated Financial Statements). | |
(4) | Represents reserves transferred in the distribution of FIS, partially offset by reserves assumed in FIS acquisitions in the period from January 1 through October 23, 2006. |
118
Exhibit
Number
Description
Securities Exchange and Distribution Agreement between Old FNF and the Registrant, dated as of
June 25, 2006, as amended and restated as of September 18, 2006 (incorporated by reference to
Annex A to the Registrants Schedule 14C filed on September 19, 2006 (the Information
Statement))
Form of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Annex C to the Information Statement)
Amended and Restated Bylaws of the Registrant, as adopted on September 26, 2005 (incorporated by
reference to Exhibit 3.2 to the Registrants Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005)
Indenture between the Registrant and The Bank of New York Trust Company, N.A., dated December 8,
2005, relating to the 7.30% and 5.25% notes referred to below (incorporated by reference to
Exhibit 4.1 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2005)
First Supplemental Indenture between the Registrant and the Bank of New York Trust Company, N.A.,
dated as of January 6, 2006 (incorporated by reference to Exhibit 4.1 to the Registrants Current
Report on Form 8-K filed on January 24, 2006)
Form of Subordinated Indenture between the Registrant and the Bank of New York Trust Company,
N.A. (incorporated by reference to Exhibit 4.2(A) to the Registrants Registration Statement on
Form S-3 filed on November 14, 2007)
Form of 7.30% note due August 15, 2011 (incorporated by reference to Exhibit 4.6 to the
Registrants Registration Statement on Form S-4 filed on October 28, 2005)
Form of 5.25% note due March 15, 2013 (incorporated by reference to Exhibit 4.7 to the
Registrants Registration Statement on Form S-4 filed on October 28, 2005)
Form of 2.36% Subordinated Promissory Note due 2013 (incorporated by reference to Exhibit 99.2 to
the Registrants Current Report on Form 8-K filed on December 24, 2008)
Form of the Registrants Common Stock Certificate (incorporated by reference to Exhibit 4.5 to
the Registrants Annual Report on Form 10-K for the year ended December 31, 2006 (the 2006
Annual Report))
Credit Agreement among the Registrant, Bank of America, N.A., and certain agents and other
lenders party thereto, dated as of September 12, 2006 (incorporated by reference to Exhibit 10.1
to the Registrants Current Report on Form 8-K filed on October 30, 2006)
Stock Purchase Agreement, dated as of November 25, 2008, as amended and restated as of December
12, 2008, as further amended and restated as of December 21, 2008, among Fidelity National Title
Insurance Company, Chicago Title Insurance Company, and LandAmerica Financial Group, Inc.
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed
on December 24, 2008.)
Amended and Restated Fidelity National Financial, Inc. 2005 Omnibus Incentive Plan, effective as
of September 26, 2005 (incorporated by reference to Annex A to the Registrants Schedule 14A
filed on April 15, 2008).(1)
Fidelity National Title Group, Inc. Employee Stock Purchase Plan, effective as of September 26,
2005 (incorporated by reference to Exhibit 10.50 to the Registrants Quarterly Report on Form
10-Q for the quarter ended September 30, 2005).(1)
Form of Notice of Restricted Stock Grant and Restricted Stock Award Agreement under Amended and
Restated Fidelity National Financial, Inc. 2005 Omnibus Incentive Plan.(1)
Form of Notice of Stock Option Grant and Stock Option Agreement under Amended and Restated
Fidelity National Financial, Inc. 2005 Omnibus Incentive Plan.(1)
Fidelity Sedgwick Holdings, Inc. 2006 Stock Incentive Plan (the FSH Plan), effective as of
January 31, 2006 (incorporated by reference to Exhibit 99.3 to Old FNFs Current Report on Form
8-K filed on February 6, 2006).(1)
Form of Stock Option Agreement under the FSH Plan (incorporated by reference to Exhibit 99.4 to
Old FNFs Current Report on Form 8-K filed on February 6, 2006).(1)
Table of Contents
Exhibit
Number
Description
Tax Disaffiliation Agreement by and among Old FNF, the Registrant and FIS, dated as of October
23, 2006 (incorporated by reference to Exhibit 99.1 to Old FNFs Form 8-K, filed on October 27,
2006)
Cross-Indemnity Agreement by and between the Registrant and FIS, dated as of October 23, 2006
(incorporated by reference to Exhibit 99.2 to FISs Form 8-K, filed on October 27, 2006)
Amended and Restated Employment Agreement between the Registrant and Anthony J. Park, effective
as of October 10, 2008(1)
Employment Agreement between the Registrant and Brent B. Bickett, effective as of October 24,
2006 (incorporated by reference to Exhibit 10.10 to the 2006 Annual Report).(1)
Employment Agreement between the Registrant and Peter T. Sadowski, effective as of October 24,
2006 (incorporated by reference to Exhibit 10.11 to the 2006 Annual Report).(1)
Amended and Restated Employment Agreement between the Registrant and William P. Foley, II,
effective as of July 2, 2008(1)
Amended and Restated Employment Agreement between the Registrant and Alan L. Stinson, effective
as of July 2, 2008(1)
Amended and Restated Employment Agreement between the Registrant and Raymond R. Quirk, effective
as of October 10, 2008(1)
Fidelity National Title Group, Inc. Annual Incentive Plan (incorporated by reference to Annex E
to the Information Statement).(1)
Fidelity National Financial, Inc.
Deferred Compensation Plan, as amended and restated, effective
January 1, 2009.(1)
Subsidiaries of the Registrant
Consents of KPMG LLP, Independent Registered Public Accounting Firm
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
(1)
A management or compensatory plan or arrangement required
to be filed as an exhibit to this report pursuant to Item
15(c) of Form 10-K
Name of Grantee:
|
||
|
||
Number of Shares of Restricted Stock
Granted:
|
||
|
||
Effective Date of Grant:
|
||
|
||
Period of Restriction:
|
Subject to the terms of the Plan and the | |
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Restricted Stock Award Agreement attached hereto, the | |
|
Period of Restriction shall lapse, and the Shares | |
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shall vest and become free of the forfeiture and | |
|
transfer restrictions contained in the Restricted | |
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Stock Award Agreement, with respect to one third | |
|
of the shares on each anniversary of the | |
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Effective Date of Grant. |
Stock Recipient: | Fidelity National Financial, Inc. | |||||
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||||||
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By | |||||
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||||||
(Name)
|
Anthony J. Park | |||||
Date:
|
Chief Financial Officer | |||||
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||||||
Address:
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||||||
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||||||
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Name of Optionee:
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||
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||
Total Number of Shares Subject to Option:
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||
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||
Type of Option:
|
Nonqualified | |
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||
Exercise Price Per Share:
|
$ | |
|
||
Effective Date of Grant:
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||
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||
Vesting Schedule:
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Subject to the terms of the Plan and the Stock | |
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Option Agreement attached hereto, the right to | |
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exercise this option shall vest with respect to one | |
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third of the option on each anniversary of the | |
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Effective Date of Grant. | |
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||
Expiration Date:
|
8 th Anniversary of Effective Date of Grant | |
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The option is subject to earlier expiration, as | |
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provided in Section 3(b) of the attached Stock | |
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Option Agreement. |
Optionee: | Fidelity National Financial, Inc. | |||||
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||||||
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By: | |||||
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||||||
(Name)
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Anthony J. Park | |||||
Date:
|
Chief Financial Officer | |||||
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||||||
Address:
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(a) | the standard Company benefits enjoyed by the Companys other top executives as a group; |
(b) | payment by the Company of the Employees initiation and membership dues in all social and/or recreational clubs as deemed necessary and appropriate by the Company to maintain various business relationships on behalf of the Company; provided, however, that the Company shall not be obligated to pay for any of the Employees personal purchases and expenses at such clubs; | ||
(c) | medical and other insurance coverage (for the Employee and any covered dependents) provided by the Company to its other top executives as a group; | ||
(d) | supplemental disability insurance sufficient to provide two-thirds of the Employees pre-disability Annual Base Salary; | ||
(e) | an annual incentive bonus opportunity under the Companys annual incentive plan (Annual Bonus Plan) for each calendar year included in the Employment Term, with such opportunity to be earned based upon attainment of performance objectives established by the Committee (Annual Bonus). The Employees bonus factor or bonus target under the Annual Bonus Plan shall be not less than 100% of the Employees Annual Base Salary. The Employees bonus factor may be periodically reviewed and increased (but not decreased without the Employees express written consent) at the discretion of the Committee. The Annual Bonus shall be paid no later than the March 15 th first following the calendar year to which the Annual Bonus relates. Unless provided otherwise herein or the Board determines otherwise, no Annual Bonus shall be paid to the Employee unless the Employee is employed by the Company, or an affiliate thereof, on the Annual Bonus payment date; and | ||
(f) | participation in the Companys equity incentive plans. |
(a) | Notice of Termination . Any purported termination of the Employees employment (other than by reason of death) shall be communicated by written Notice of Termination (as defined herein) from one party hereto to the other party |
2
hereto in accordance with the notice provisions contained in Section 25. For purposes of this Agreement, a Notice of Termination shall mean a notice that indicates the Date of Termination (as that term is defined in Section 7(b)) and, with respect to a termination due to Disability (as that term is defined in Section 7(e)), Cause (as that term is defined in Section 7(d)) or Good Reason (as that term is defined in Section 7(f)), sets forth in reasonable detail the facts and circumstances that are alleged to provide a basis for such termination. A Notice of Termination from the Company shall specify whether the termination is with or without Cause or due to the Employees Disability. A Notice of Termination from the Employee shall specify whether the termination is with or without Good Reason or due to Disability. |
(b) | Date of Termination . For purposes of this Agreement, Date of Termination shall mean the date specified in the Notice of Termination (but in no event shall such date be earlier than the 30th day following the date the Notice of Termination is given, unless expressly agreed to by the parties hereto) or the date of the Employees death. | ||
(c) | No Waiver . The failure to set forth any fact or circumstance in a Notice of Termination, which fact or circumstance was not known to the party giving the Notice of Termination when the notice was given, shall not constitute a waiver of the right to assert such fact or circumstance in an attempt to enforce any right under or provision of this Agreement. | ||
(d) | Cause . For purposes of this Agreement, a termination for Cause means a termination by the Company based upon the Employees (i) persistent failure to perform duties consistent with a commercially reasonable standard of care (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (ii) willful neglect of duties (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (iii) conviction of, or pleading nolo contendere to, criminal or other illegal activities involving dishonesty; (iv) material breach of this Agreement; or (v) impeding, or failing to materially cooperate with, an investigation authorized by the Board. The Employees termination for Cause shall be effective when and if a resolution is duly adopted by an affirmative vote of at least 3 / 4 of the Board (less the Employee), stating that, in the good faith opinion of the Board, the Employee is guilty of the conduct described in the Notice of Termination and such conduct constitutes Cause under this Agreement; provided, however, that the Employee shall have been given reasonable opportunity (i) to cure any act or omission that constitutes Cause if capable of cure and (ii), together with counsel, during the thirty (30) day period following the receipt by the Employee of the Notice of Termination and prior to the adoption of the Boards resolution, to be heard by the Board. | ||
(e) | Disability . For purposes of this Agreement, a termination based upon Disability means a termination by the Company based upon the Employees entitlement to |
3
long-term disability benefits under the Companys long-term disability plan or policy, as the case may be, as in effect on the Date of Termination. |
(f) | Good Reason . For purposes of this Agreement, a termination for Good Reason means a termination by the Employee during the Employment Term based upon the occurrence (without the Employees express written consent) of any of the following: |
(i) | a material diminution in the Employees position or title, or the assignment of duties to the Employee that are materially inconsistent with the Employees position or title; | ||
(ii) | a material diminution in the Employees Annual Base Salary or Annual Bonus Opportunity; | ||
(iii) | within six (6) months immediately preceding or within two (2) years immediately following a Change in Control: (A) a material adverse change in the Employees status, authority or responsibility ( e.g. , the Company has determined that a change in the departments or functional groups over which the Employee has managerial authority would constitute such a material adverse change); (B) a material adverse change in the position to whom the Employee reports (including any requirement that the Employee report to a corporate officer or employee instead of reporting directly to the CEO) or to the Employees service relationship (or the conditions under which the Employee performs his duties) as a result of such reporting structure change, or a material diminution in the authority, duties or responsibilities of the position to whom the Employee reports; (C) a material diminution in the budget over which the Employee has managing authority; or (D) a material change in the geographic location of the Employees principal place of employment ( e.g. , the Company has determined that a relocation of more than thirty-five (35) miles would constitute such a material change); or | ||
(iv) | the material breach by the Company of any of its other obligations under this Agreement. |
4
(a) | Termination by the Company for other than Cause, Death or Disability or Termination by the Employee for Good Reason . If the Employees employment is terminated by the Company for any reason, other than Cause, Death or Disability or by the Employee for Good Reason: |
(i) | the Company shall pay to the Employee (A) within five (5) business days after the Date of Termination, any earned but unpaid Annual Base Salary and any expense reimbursement payments owed to the Employee and (B) no later than March 15 of the year in which the Date of Termination occurs, any earned but unpaid Annual Bonus payments relating to the prior calendar year (the Accrued Obligations); | ||
(ii) | the Company shall pay to the Employee no later than March 15 of the calendar year following the year in which the Date of Termination occurs, a prorated Annual Bonus based upon the actual Annual Bonus that would have been earned by the Employee for the year in which the Date of Termination occurs (based upon the target Annual Bonus opportunity in the year in which the Date of Termination occurred, or the prior year if no target Annual Bonus opportunity has yet been determined, and the actual satisfaction of the applicable performance measures, but ignoring any requirement under the Annual Bonus Plan that the Employee must be employed on the payment date) multiplied by the percentage of the calendar year completed before the Date of Termination; | ||
(iii) | the Company shall pay to the Employee, no later than the sixty-fifth (65 th ) calendar day after the Date of Termination, a lump-sum payment equal to 200% of the sum of (x) the Employees Annual Base Salary in effect immediately prior to the Date of Termination (disregarding any reduction in Annual Base Salary to which the Employee did not expressly consent in writing) and (y) the highest Annual Bonus paid to the Employee by the Company within the three (3) years preceding his termination of employment or, if higher, the target Annual Bonus opportunity in the year in which the Date of Termination occurs; | ||
(iv) | all stock option, restricted stock and other equity-based incentive awards granted by the Company that were outstanding but not vested as of the Date of Termination shall become immediately vested and/or payable, as the case may be, unless the equity incentive awards are based upon satisfaction of performance criteria (not based solely on the passage of time); in which case, they will only vest pursuant to their express terms; and |
5
(v) | the Company shall provide the Employee with certain continued welfare benefits as follows: |
(a) | Any life insurance coverage provided by the Company shall terminate at the same time as life insurance coverage would normally terminate for any other employee that terminates employment with the Company, and the Employee shall have the right to convert that life insurance coverage to an individual policy under the regular rules of the Companys group policy. In addition, if the Employee is covered under or receives life insurance coverage provided by the Company on the Date of Termination, then within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly life insurance premiums based on the monthly premiums that would be due assuming that the Employee had converted his Company life insurance coverage that was in effect on the Notice of Termination into an individual policy. | ||
(b) | As long as the Employee pays the full monthly premiums for COBRA coverage, the Company shall provide the Employee and, as applicable, the Employees eligible dependents with continued medical and dental coverage, on the same basis as provided to the Companys active executives and their dependents until the earlier of: (i) three (3) years after the Date of Termination; or (ii) the date the Employee is first eligible for medical and dental coverage (without pre-existing condition limitations) with a subsequent employer. In addition, within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly medical and dental COBRA premiums based on the level of coverage in effect for the Employee ( e.g. , employee only or family coverage) on the Date of Termination. |
(b) | Termination by the Company for Cause or by the Employee without Good Reason . If the Employees employment is terminated (i) by the Company for Cause or (ii) by the Employee without Good Reason, the Companys only obligation under this Agreement shall be payment of any earned but unpaid Annual Base Salary and any expense reimbursement payments owed to the Employee. |
(c) | Termination due to Death or Disability . If the Employees employment is terminated due to death or Disability, the Company shall pay to the Employee (or to the Employees estate or personal representative in the case of the Employees death), within thirty (30) business days after the Date of Termination, (i) any Accrued Obligations and (ii) a prorated Annual Bonus based on (A) the target Annual Bonus opportunity in the year in which the Date of Termination occurs or |
6
the prior year if no target Annual Bonus opportunity has yet been determined and (B) the fraction of the year the Employee was employed. |
(d) | Definition of Change in Control . For purposes of this Agreement, the term Change in Control shall mean that the conditions set forth in any one of the following subsections shall have been satisfied: |
(i) | the acquisition, directly or indirectly, by any person (within the meaning of Section 3(a)(9) of the Securities and Exchange Act of 1934, as amended (the Exchange Act) and used in Sections 13(d) and 14(d) thereof) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of all outstanding securities of the Company; | ||
(ii) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation; | ||
(iii) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger; | ||
(iv) | during any period of two (2) consecutive years during the Employment Term or any extensions thereof, individuals, who, at the beginning of such period, constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; | ||
(v) | the sale, transfer or other disposition (in one transaction or a series of related transactions) of assets of the Company that have a total fair market value equal to or more than one-third of the total fair market value of all of the assets of the Company immediately prior to such sale, transfer or other disposition, other than a sale, transfer or other disposition to an entity (x) which immediately following such sale, transfer or other disposition owns, directly or indirectly, at least 50% of the Companys outstanding voting securities or (y) 50% or more of whose outstanding voting securities is immediately following such sale, transfer or other disposition owned, directly or indirectly, by the Company. For purposes of the foregoing |
7
clause, the sale of stock of a subsidiary of the Company (or the assets of such subsidiary) shall be treated as a sale of assets of the Company; or |
(vi) | the approval by the stockholders of a plan or proposal for the liquidation or dissolution of the Company. |
(e) | Six-Month Delay . To the extent the Employee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance promulgated thereunder and any elections made by the Company in accordance therewith, notwithstanding the timing of payment provided in any other Section of this Agreement, no payment, distribution or benefit under this Agreement that constitutes a distribution of deferred compensation (within the meaning of Treasury Regulation Section 1.409A-1(b)) upon separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), after taking into account all available exemptions, that would otherwise be payable during the six (6) month period after separation from service, will be made during such six (6) month period, and any such payment, distribution or benefit will instead be paid on the first business day after such six (6) month period. |
(a) | If any payments or benefits paid or provided or to be paid or provided to the Employee or for his benefit pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his employment with the Company or its subsidiaries or the termination thereof (a Payment and, collectively, the Payments) would be subject to the excise tax (the Excise Tax) imposed by Section 4999 of the Code, then, except as otherwise provided in this Section 9(a), the Employee will be entitled to receive an additional payment (a Gross-Up Payment) in an amount such that, after payment by the Employee of all income taxes, all employment taxes and any Excise Tax imposed upon the Gross-Up Payment (including any related interest and penalties), the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax (including any related interest and penalties) imposed upon the Payments. Notwithstanding the foregoing, if the amount of the Payments does not exceed by more than 3% the amount that would be payable to the Employee if the Payments were reduced to one dollar less than what would constitute a parachute payment under Section 280G of the Code (the Scaled Back Amount ), then the Payments shall be reduced, in a manner determined by the Employee, to the Scaled Back Amount, and the Employee shall not be entitled to any Gross-Up Payment. | ||
(b) | An initial determination of (i) whether a Gross-Up Payment is required pursuant to this Agreement, and, if applicable, the amount of such Gross-Up Payment or (ii) whether the Payments must be reduced to the Scaled Back Amount and, if so, the amount of such reduction, will be made at the Companys expense by an accounting firm selected by the Company. The accounting firm will provide its determination, together with detailed supporting calculations and documentation, to the Company and the Employee within ten (10) business days after the date of |
8
termination of Employees employment, or such other time as may be reasonably requested by the Company or the Employee. If the accounting firm determines that no Excise Tax is payable by the Employee with respect to a Payment or Payments, it will furnish the Employee with an opinion to that effect. If a Gross-Up Payment becomes payable, such Gross-Up Payment will be paid by the Company to the Employee within thirty (30) business days of the receipt of the accounting firms determination. If a reduction in Payments is required, such reduction shall be effectuated within thirty (30) business days of the receipt of the accounting firms determination. Within ten (10) business days after the accounting firm delivers its determination to the Employee, the Employee will have the right to dispute the determination. The existence of a dispute will not in any way affect the Employees right to receive a Gross-Up Payment in accordance with the determination. If there is no dispute, the determination will be binding, final, and conclusive upon the Company and the Employee. If there is a dispute, the Company and the Employee will together select a second accounting firm, which will review the determination and the Employees basis for the dispute and then will render its own determination, which will be binding, final, and conclusive on the Company and on the Employee for purposes of determining whether a Gross-Up Payment is required pursuant to this Section 9(b) or whether a reduction to the Scaled Back Amount is required, as the case may be. If as a result of any dispute pursuant to this Section 9(b) a Gross-Up Payment is made or additional Gross-Up Payments are made, such Gross-Up Payment(s) will be paid by the Company to the Employee within thirty (30) business days of the receipt of the second accounting firms determination. The Company will bear all costs associated with the second accounting firms determination, unless such determination does not result in additional Gross-Up Payments to the Employee or unless such determination does not mitigate the reduction in Payments required to arrive at the Scaled Back Amount, in which case all such costs will be borne by the Employee. |
(c) | For purposes of determining the amount of the Gross-Up Payment and, if applicable, the Scaled Back Amount, the Employee will be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made or the Scaled Back Amount is determined, as the case may be, and applicable state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employees residence on the date of termination of Employees employment, net of the maximum reduction in federal income taxes that would be obtained from deduction of those state and local taxes. | ||
(d) | As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that Gross-Up Payments which will not have been made by the Company should have been made, the Employees Payments will be reduced to the Scaled Back Amount when they should not have been or the Employees Payments are reduced to a greater extent than they should have been (an Underpayment) or Gross-Up Payments are made by the Company which should not have been made, the Employees Payments are not reduced to the Scaled Back Amount when they |
9
should have been or they are not reduced to the extent they should have been (an Overpayment). If it is determined that an Underpayment has occurred, the accounting firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. If it is determined that an Overpayment has occurred, the accounting firm shall determine the amount of the Overpayment that has occurred and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company; provided, however, that if the Company determines that such repayment obligation would be or result in an unlawful extension of credit under Section 13(k) of the Exchange Act, repayment shall not be required. The Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contest or disputes with the Internal Revenue Service in connection with the Excise Tax. |
(e) | The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require a payment resulting in an Underpayment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: |
(i) | give the Company any information reasonably requested by the Company relating to such claim, | ||
(ii) | take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, | ||
(iii) | cooperate with the Company in good faith in order effectively to contest such claim, and | ||
(iv) | permit the Company to participate in any proceeding relating to such claim; |
10
(f) | If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 9(e), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Companys complying with the requirements of Section 9(e)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 9(e), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid. | ||
(g) | Any payment under this Section 9 must be made by the Company no later than the end of the Employees tax year following the Employees tax year in which the Employee remits the related tax payments. |
11
12
(a) | if the Employees employment is terminated by the Company without Cause; | ||
(b) | if the Employees employment is terminated as a result of the Companys unwillingness to extend the Employment Term; | ||
(c) | if the Employee terminates employment for Good Reason; or | ||
(d) | if the Employee terminates employment without Good Reason, any time during the one (1) year period immediately following a Change in Control. |
13
14
15
FIDELITY NATIONAL FINANCIAL, INC.
|
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By: | /s/ Raymond R. Quirk | |||
Its: President | ||||
ANTHONY J. PARK
|
||||
/s/ Anthony J. Park | ||||
16
(a) | the standard Company benefits enjoyed by the Companys other top executives as a group; | ||
(b) | medical and other insurance coverage (for the Employee and any covered dependents) provided by the Company to its other top executives as a group; | ||
(c) | supplemental disability insurance sufficient to provide two-thirds of the Employees pre-disability Annual Base Salary; | ||
(d) | an annual incentive bonus opportunity under the Companys annual incentive plan (Annual Bonus Plan) for each calendar year included in the Employment Term, with such opportunity to be earned based upon attainment of performance objectives established by the Committee (Annual Bonus). The Employees target Annual Bonus under the Annual Bonus Plan shall be no less than 250% of the Employees Annual Base Salary (collectively, the target and maximum are referred to as the Annual Bonus Opportunity). The Employees Annual Bonus Opportunity may be periodically reviewed and increased (but not decreased without the Employees express written consent) at the discretion of the Committee. The Annual Bonus shall be paid no later than the March 15 th first following the calendar year to which the Annual Bonus relates. Unless provided otherwise herein or the Board determines otherwise, no Annual Bonus shall be paid to the Employee unless the Employee is employed by the Company, or an affiliate thereof, on the Annual Bonus payment date; and | ||
(e) | participation in the Companys equity incentive plans. |
(a) | Notice of Termination . Any purported termination of the Employees employment (other than by reason of death) shall be communicated by written |
2
Notice of Termination (as defined herein) from one party to the other in accordance with the notice provisions contained in Section 25. For purposes of this Agreement, a Notice of Termination shall mean a notice that indicates the Date of Termination (as that term is defined in Subsection 8(b)) and, with respect to a termination due to Disability (as that term is defined in Subsection 8(e)), Cause (as that term is defined in Subsection 8(d)), or Good Reason (as that term is defined in Subsection 8(f)), sets forth in reasonable detail the facts and circumstances that are alleged to provide a basis for such termination. A Notice of Termination from the Company shall specify whether the termination is with or without Cause or due to the Employees Disability. A Notice of Termination from the Employee shall specify whether the termination is with or without Good Reason. |
(b) | Date of Termination . For purposes of this Agreement, Date of Termination shall mean the date specified in the Notice of Termination (but in no event shall such date be earlier than the thirtieth (30 th ) day following the date the Notice of Termination is given) or the date of the Employees death. | ||
(c) | No Waiver . The failure to set forth any fact or circumstance in a Notice of Termination, which fact or circumstance was not known to the party giving the Notice of Termination when the notice was given, shall not constitute a waiver of the right to assert such fact or circumstance in an attempt to enforce any right under or provision of this Agreement. | ||
(d) | Cause . For purposes of this Agreement, a termination for Cause means a termination by the Company based upon the Employees: (i) persistent failure to perform duties consistent with a commercially reasonable standard of care (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (ii) willful neglect of duties (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (iii) conviction of, or pleading nolo contendere to, criminal or other illegal activities involving dishonesty; (iv) material breach of this Agreement; or (v) failure to materially cooperate with or impeding an investigation authorized by the Board. The Employees termination for Cause shall be effective when and if a resolution is duly adopted by an affirmative vote of at least 3 / 4 of the Board (less the Employee), stating that, in the good faith opinion of the Board, the Employee is guilty of the conduct described in the Notice of Termination and such conduct constitutes Cause under this Agreement; provided , however , that the Employee shall have been given reasonable opportunity (A) to cure any act or omission that constitutes Cause if capable of cure and (B), together with counsel, during the thirty (30) day period following the receipt by the Employee of the Notice of Termination and prior to the adoption of the Boards resolution, to be heard by the Board. | ||
(e) | Disability . For purposes of this Agreement, a termination based upon Disability means a termination by the Company based upon the Employees entitlement to |
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long-term disability benefits under the Companys long-term disability plan or policy, as the case may be, as in effect on the Date of Termination. |
(f) | Good Reason . For purposes of this Agreement, a termination for Good Reason means a termination by the Employee during the Employment Term based upon the occurrence (without the Employees express written consent) of any of the following: |
(i) | a material diminution in the Employees position or title, or the assignment of duties to the Employee that are materially inconsistent with the Employees position or title; | ||
(ii) | a material diminution in the Employees Annual Base Salary or Annual Bonus Opportunity; | ||
(iii) | within six (6) months immediately preceding or within two (2) years immediately following a Change in Control: (A) a material adverse change in the Employees status, authority or responsibility ( e.g. , the Employee no longer serving as Chairman of the Board would constitute such a material adverse change); (B) a material adverse change in the position to whom the Employee reports (including any requirement that the Employee report to a corporate officer or employee instead of reporting directly to the Board) or to the Employees service relationship (or the conditions under which the Employee performs his duties) as a result of such reporting structure change, or a material diminution in the authority, duties or responsibilities of the position to whom the Employee reports; (C) a material diminution in the budget over which the Employee has managing authority; or (D) a material change in the geographic location of the Employees principal place of employment ( e.g. , the Company has determined that a relocation of more than thirty-five (35) miles would constitute such a material change); or | ||
(iv) | a material breach by the Company of any of its obligations under this Agreement. | ||
Notwithstanding the foregoing, the Employee being placed on a paid leave for up to sixty (60) days pending a determination of whether there is a basis to terminate the Employee for Cause shall not constitute Good Reason. The Employees continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder; provided , however , that no such event described above shall constitute Good Reason unless: (1) the Employee gives Notice of Termination to the Company specifying the condition or event relied upon for such termination either: (x) within ninety (90) days of the initial existence of such event; or (y) in the case of an event predating a Change in Control, within ninety (90) days of the Change in Control; and (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of the Employees Notice of Termination. |
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(a) | Termination by the Company for a Reason Other than Cause, Death or Disability and Termination by the Employee for Good Reason or following a Change in Control . If the Employees employment is terminated by: (1) the Company for any reason other than Cause, Death or Disability; or (2) the Employee for (x) for Good Reason or (y) for any reason during the period immediately following a Change in Control and ending on the six (6) month anniversary of such Change in Control: |
(i) | the Company shall pay the Employee the following (collectively, the Accrued Obligations): (A) within five (5) business days after the Date of Termination, any earned but unpaid Annual Base Salary; (B) within a reasonable time following submission of all applicable documentation, any expense reimbursement payments owed to the Employee for expenses incurred prior to the Date of Termination; and (C) no later than March 15 th of the year in which the Date of Termination occurs, any earned but unpaid Annual Bonus payments relating to the prior calendar year; | ||
(ii) | the Company shall pay the Employee no later than March 15 th of the calendar year following the year in which the Date of Termination occurs, a prorated Annual Bonus based upon the actual Annual Bonus that would have been earned by the Employee for the year in which the Date of Termination occurs (based upon the target Annual Bonus Opportunity in the year in which the Date of Termination occurred, or the prior year if no target Annual Bonus Opportunity has yet been determined, and the actual satisfaction of the applicable performance measures, but ignoring any requirement under the Annual Bonus plan that the Employee must be employed on the payment date) multiplied by the percentage of the calendar year completed before the Date of Termination; | ||
(iii) | the Company shall pay the Employee, no later than the sixty-fifth (65 th ) calendar day after the Date of Termination, a lump-sum payment equal to 300% of the sum of: (A) the Employees Annual Base Salary in effect immediately prior to the Date of Termination (disregarding any reduction in Annual Base Salary to which the Employee did not expressly consent in writing); and (B) the highest Annual Bonus paid to the Employee by the Company within the three (3) years preceding his termination of employment or, if higher, the target Annual Bonus Opportunity in the year in which the Date of Termination occurs; | ||
(iv) | all stock option, restricted stock and other equity-based incentive awards granted by the Company that were outstanding but not vested as of the Date of Termination shall become immediately vested and/or payable, as the case may be, unless the equity incentive awards are based upon satisfaction of performance criteria (not based solely on the passage of time); in which case, they will only vest pursuant to their express terms; and |
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(v) | the Company shall provide the Employee with certain continued welfare benefits as follows: |
(A) | Any life insurance coverage provided by the Company shall terminate at the same time as life insurance coverage would normally terminate for any other employee that terminates employment with the Company, and the Employee shall have the right to convert that life insurance coverage to an individual policy under the regular rules of the Companys group policy. In addition, if the Employee is covered under or receives life insurance coverage provided by the Company on the Date of Termination, then within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly life insurance premiums based on the monthly premiums that would be due assuming that the Employee had converted his Company life insurance coverage that was in effect on the Notice of Termination into an individual policy. | ||
(B) | As long as the Employee pays the full monthly premiums for COBRA coverage, the Company shall provide the Employee and, as applicable, the Employees eligible dependents with continued medical and dental coverage, on the same basis as provided to the Companys active executives and their dependents until the earlier of: (i) three (3) years after the Date of Termination; or (ii) the date the Employee is first eligible for medical and dental coverage (without pre-existing condition limitations) with a subsequent employer. In addition, within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly medical and dental COBRA premiums based on the level of coverage in effect for the Employee ( e.g. , employee only or family coverage) on the Date of Termination. |
(b) | Termination by the Company for Cause and by the Employee without Good Reason . If the Employees employment is terminated (i) by the Company for Cause or (ii) by the Employee without Good Reason (excluding for this purpose the Employee terminating his employment without Good Reason during the six (6) month period immediately following a Change in Control in accordance with Section 9(a)), the Companys only obligation under this Agreement shall be payment of any Accrued Obligations. | ||
(c) | Termination due to Death or Disability . If the Employees employment is terminated due to death or Disability, the Company shall pay the Employee (or to the Employees estate or personal representative in the case of death), within thirty (30) business days after the Date of Termination: (i) any Accrued Obligations, plus (ii) a prorated Annual Bonus based upon the target Annual Bonus opportunity in the year in which the Date of Termination occurred (or the prior |
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year if no target Annual Bonus Opportunity has yet been determined) multiplied by the percentage of the calendar year completed before the Date of Termination. |
(d) | Definition of Change in Control . For purposes of this Agreement, the term Change in Control shall mean that the conditions set forth in any one of the following subsections shall have been satisfied: |
(i) | the acquisition, directly or indirectly, by any person (within the meaning of Section 3(a)(9) of the Securities and Exchange Act of 1934, as amended (the Exchange Act) and used in Sections 13(d) and 14(d) thereof) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company; | ||
(ii) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation; | ||
(iii) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger; | ||
(iv) | during any period of two (2) consecutive years during the Employment Term or any extensions thereof, individuals, who, at the beginning of such period, constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; | ||
(v) | the sale, transfer or other disposition (in one transaction or a series of related transactions) of assets of the Company that have a total fair market value equal to or more than one-third of the total fair market value of all of the assets of the Company immediately prior to such sale, transfer or other disposition, other than a sale, transfer or other disposition to an entity (A) which immediately following such sale, transfer or other disposition owns, directly or indirectly, at least fifty percent (50%) of the Companys outstanding voting securities or (B) fifty percent (50%) or more of whose outstanding voting securities is immediately following such sale, transfer or other disposition owned, directly or indirectly, by the Company. For |
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purposes of the foregoing clause, the sale of stock of a subsidiary of the Company (or the assets of such subsidiary) shall be treated as a sale of assets of the Company; or |
(vi) | the approval by the stockholders of a plan or proposal for the liquidation or dissolution of the Company. |
(e) | Six-Month Delay . To the extent the Employee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance promulgated thereunder and any elections made by the Company in accordance therewith, notwithstanding the timing of payment provided in any other Section of this Agreement, no payment, distribution or benefit under this Agreement that constitutes a distribution of deferred compensation (within the meaning of Treasury Regulation Section 1.409A-1(b)) upon separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), after taking into account all available exemptions, that would otherwise be payable during the six (6) month period after separation from service, will be made during such six (6) month period, and any such payment, distribution or benefit will instead be paid on the first business day after such six (6) month period. |
(a) | If any payments or benefits paid or provided or to be paid or provided to the Employee or for his benefit pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his employment with the Company or its subsidiaries or the termination thereof (a Payment and, collectively, the Payments) would be subject to the excise tax (the Excise Tax) imposed by Section 4999 of the Code, then, except as otherwise provided in this Subsection 10(a), the Employee will be entitled to receive an additional payment (a Gross-Up Payment) in an amount such that, after payment by the Employee of all income taxes, all employment taxes and any Excise Tax imposed upon the Gross-Up Payment (including any related interest and penalties), the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax (including any related interest and penalties) imposed upon the Payments. Notwithstanding the foregoing, if the amount of the Payments does not exceed by more than three percent (3%) the amount that would be payable to the Employee if the Payments were reduced to one dollar less than what would constitute a parachute payment under Section 280G of the Code (the Scaled Back Amount), then the Payments shall be reduced, in a manner determined by the Employee, to the Scaled Back Amount, and the Employee shall not be entitled to any Gross-Up Payment. | ||
(b) | An initial determination of (i) whether a Gross-Up Payment is required pursuant to this Agreement, and, if applicable, the amount of such Gross-Up Payment or (ii) whether the Payments must be reduced to the Scaled Back Amount and, if so, the amount of such reduction, will be made at the Companys expense by an accounting firm selected by the Company. The accounting firm will provide its determination, together with detailed supporting calculations and documentation, to the Company and the Employee within ten (10) business days after the date of |
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termination of the Employees employment, or such other time as may be reasonably requested by the Company or the Employee. If the accounting firm determines that no Excise Tax is payable by the Employee with respect to a Payment or Payments, it will furnish the Employee with an opinion to that effect. If a Gross-Up Payment becomes payable, such Gross-Up Payment will be paid by the Company to the Employee within thirty (30) business days of the receipt of the accounting firms determination. If a reduction in Payments is required, such reduction shall be effectuated within thirty (30) business days of the receipt of the accounting firms determination. Within ten (10) business days after the accounting firm delivers its determination to the Employee, the Employee will have the right to dispute the determination. The existence of a dispute will not in any way affect the Employees right to receive a Gross-Up Payment in accordance with the determination. If there is no dispute, the determination will be binding, final, and conclusive upon the Company and the Employee. If there is a dispute, the Company and the Employee will together select a second accounting firm, which will review the determination and the Employees basis for the dispute and then will render its own determination, which will be binding, final, and conclusive on the Company and on the Employee for purposes of determining whether a Gross-Up Payment is required pursuant to this Subsection 10(b) or whether a reduction to the Scaled Back Amount is required, as the case may be. If as a result of any dispute pursuant to this Subsection 10(b) a Gross-Up Payment is made or additional Gross-Up Payments are made, such Gross-Up Payment(s) will be paid by the Company to the Employee within thirty (30) business days of the receipt of the second accounting firms determination. The Company will bear all costs associated with the second accounting firms determination, unless such determination does not result in additional Gross-Up Payments to the Employee or unless such determination does not mitigate the reduction in Payments required to arrive at the Scaled Back Amount, in which case all such costs will be borne by the Employee. | |||
(c) | For purposes of determining the amount of the Gross-Up Payment and, if applicable, the Scaled Back Amount, the Employee will be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made or the Scaled Back Amount is determined, as the case may be, and applicable state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employees residence on the date of termination of the Employees employment, net of the maximum reduction in federal income taxes that would be obtained from deduction of those state and local taxes. | ||
(d) | As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that Gross-Up Payments which will not have been made by the Company should have been made, the Employees Payments will be reduced to the Scaled Back Amount when they should not have been or the Employees Payments are reduced to a greater extent than they should have been (an Underpayment) or Gross-Up Payments are made by the Company which should not have been made, the Employees Payments are not reduced to the Scaled Back Amount when they |
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should have been or they are not reduced to the extent they should have been (an Overpayment). If it is determined that an Underpayment has occurred, the accounting firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of the Employee. If it is determined that an Overpayment has occurred, the accounting firm shall determine the amount of the Overpayment that has occurred and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company; provided , however , that if the Company determines that such repayment obligation would be or result in an unlawful extension of credit under Section 13(k) of the Exchange Act, repayment shall not be required. The Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contest or disputes with the Internal Revenue Service in connection with the Excise Tax. | |||
(e) | The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require a payment resulting in an Underpayment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: |
(i) | give the Company any information reasonably requested by the Company relating to such claim, | ||
(ii) | take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, | ||
(iii) | cooperate with the Company in good faith in order to effectively contest such claim, and | ||
(iv) | permit the Company to participate in any proceeding relating to such claim; | ||
provided , however , that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including related interest and penalties) |
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imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Subsection 10(e), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided , however , that if the Company directs the Employee to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Employee, on an interest-free basis and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including related interest or penalties) imposed with respect to such advance or with respect to any imputed income with respect to such advance. The Companys control of the contest shall be limited to issues that may impact Gross-Up Payments or reduction in Payments under this Section 10, and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. |
(f) | If, after the receipt by the Employee of an amount advanced by the Company pursuant to Subsection 10(e), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Companys complying with the requirements of Subsection 10(e)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to Subsection 10(e), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid. |
(g) | Any payment under this Section 10 must be made by the Company no later than the end of the Employees tax year following the Employees tax year in which the Employee remits the related tax payments. |
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(a) | During Employment Term . The Employee agrees that, during the Employment Term, he will devote such business time, attention and energies reasonably necessary to the diligent and faithful performance of the services to the Company and its affiliates, and he will not engage in any way whatsoever, directly or indirectly, in any business that is a direct competitor with the Companys or its affiliates principal business, nor solicit customers, suppliers or employees of the Company or affiliates on behalf of, or in any other manner work for or assist any business which is a direct competitor with the Companys or its affiliates principal business. In addition, during the Employment Term, the Employee will undertake no planning for or organization of any business activity competitive with the work he performs as an employee of the Company, and the Employee will not combine or conspire with any other employee of the Company or any other person for the purpose of organizing any such competitive business activity. | ||
(b) | After Employment Term . The parties acknowledge that the Employee will acquire substantial knowledge and information concerning the business of the Company and its affiliates as a result of his employment. The parties further acknowledge that the scope of business in which the Company and its affiliates are engaged as of the Effective Date is national and very competitive and one in which few companies can successfully compete. Competition by the Employee in that business after the Employment Term would severely injure the Company and its affiliates. Accordingly, for a period of one (1) year after the Employees employment terminates for any reason whatsoever, except as otherwise stated herein below, the Employee agrees: (i) not to become an employee, consultant, advisor, principal, partner or substantial shareholder of any firm or business that directly competes with the Company or its affiliates in their principal products and markets; and (ii), on behalf of any such competitive firm or business, not to solicit any person or business that was at the time of such termination and remains a customer or prospective customer, a supplier or prospective supplier, or an employee of the Company or an affiliate. Notwithstanding any of the foregoing provisions to the contrary, the Employee shall not be subject to the restrictions set |
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forth in this Subsection 13(b) if: (A) the Employees employment is terminated by the Company without Cause; (B) the Employee terminates employment for Good Reason; (C) the Employees employment is terminated as a result of the Companys unwillingness to extend the Employment Term; or (D) the Employee terminates employment without Good Reason, any time during the six (6) month period beginning on the first day following the six (6) month anniversary of a Change in Control. | |||
(c) | Exclusion . Working, directly or indirectly, for any of the following entities shall not be considered competitive to the Company or its affiliates for the purpose of this Section 13: (i) Fidelity National Information Services, Inc., its affiliates or their successors; (ii) Lender Processing Services, Inc., its affiliates or their successors; or (iii) the Company, its affiliates or their successors if this Agreement is assumed by a third party as contemplated in Section 21. |
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FIDELITY NATIONAL FINANCIAL, INC.
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By: | /s/ Alan L. Stinson | |||
Its: | Chief Executive Officer | |||
WILLIAM P. FOLEY, II
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/s/ William P. Foley, II | ||||
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1. | member of the Companys Board as Chairman; | ||
2. | strategic planning and initiatives; | ||
3. | mergers and acquisitions; | ||
4. | business development; | ||
5. | budget and long range planning advice; | ||
6. | presiding over meetings of the Board and shareholders as Chairman of the Board; | ||
7. | planning the contents and agenda of such meetings with the assistance of Company management; | ||
8. | supervising the Companys communications with its shareholders; | ||
9. | participating in customer relations and public relations. |
(a) | the standard Company benefits enjoyed by the Companys other top executives as a group; | ||
(b) | medical and other insurance coverage (for the Employee and any covered dependents) provided by the Company to its other top executives as a group; | ||
(c) | supplemental disability insurance sufficient to provide two-thirds of the Employees pre-disability Annual Base Salary; | ||
(d) | an annual incentive bonus opportunity under the Companys annual incentive plan (Annual Bonus Plan) for each calendar year included in the Employment Term, with such opportunity to be earned based upon attainment of performance objectives established by the Committee (Annual Bonus). The Employees target Annual Bonus under the Annual Bonus Plan shall be no less than 150% of the Employees Annual Base Salary (collectively, the target and maximum are referred to as the Annual Bonus Opportunity). The Employees Annual Bonus Opportunity may be periodically reviewed and increased (but not decreased without the Employees express written consent) at the discretion of the Committee. The Annual Bonus shall be paid no later than the March 15 th first following the calendar year to which the Annual Bonus relates. Unless provided otherwise herein or the Board determines otherwise, no Annual Bonus shall be paid to the Employee unless the Employee is employed by the Company, or an affiliate thereof, on the Annual Bonus payment date; and | ||
(e) | participation in the Companys equity incentive plans. |
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(a) | Notice of Termination . Any purported termination of the Employees employment (other than by reason of death) shall be communicated by written Notice of Termination (as defined herein) from one party to the other in accordance with the notice provisions contained in Section 25. For purposes of this Agreement, a Notice of Termination shall mean a notice that indicates the Date of Termination (as that term is defined in Subsection 8(b)) and, with respect to a termination due to Disability (as that term is defined in Subsection 8(e)), Cause (as that term is defined in Subsection 8(d)), or Good Reason (as that term is defined in Subsection 8(f)), sets forth in reasonable detail the facts and circumstances that are alleged to provide a basis for such termination. A Notice of Termination from the Company shall specify whether the termination is with or without Cause or due to the Employees Disability. A Notice of Termination from the Employee shall specify whether the termination is with or without Good Reason. | ||
(b) | Date of Termination . For purposes of this Agreement, Date of Termination shall mean the date specified in the Notice of Termination (but in no event shall such date be earlier than the thirtieth (30 th ) day following the date the Notice of Termination is given) or the date of the Employees death. | ||
(c) | No Waiver . The failure to set forth any fact or circumstance in a Notice of Termination, which fact or circumstance was not known to the party giving the Notice of Termination when the notice was given, shall not constitute a waiver of the right to assert such fact or circumstance in an attempt to enforce any right under or provision of this Agreement. | ||
(d) | Cause . For purposes of this Agreement, a termination for Cause means a termination by the Company based upon the Employees: (i) persistent failure to perform duties consistent with a commercially reasonable standard of care (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (ii) willful neglect of duties (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (iii) conviction of, or pleading nolo contendere to, criminal or other illegal activities involving dishonesty; (iv) material breach of this Agreement; or (v) failure to materially cooperate with or impeding an investigation authorized by the Board. The Employees termination for Cause shall be effective when and if a resolution is duly adopted by an affirmative vote of at least 3 / 4 of the Board (less the Employee), stating that, in the good faith opinion of the Board, the Employee is guilty of the conduct described in the Notice of Termination and such conduct constitutes Cause under this Agreement; provided , however , that the Employee shall have been given reasonable |
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opportunity (A) to cure any act or omission that constitutes Cause if capable of cure and (B), together with counsel, during the thirty (30) day period following the receipt by the Employee of the Notice of Termination and prior to the adoption of the Boards resolution, to be heard by the Board. |
(e) | Disability . For purposes of this Agreement, a termination based upon Disability means a termination by the Company based upon the Employees entitlement to long-term disability benefits under the Companys long-term disability plan or policy, as the case may be, as in effect on the Date of Termination. | ||
(f) | Good Reason . For purposes of this Agreement, a termination for Good Reason means a termination by the Employee during the Employment Term based upon the occurrence (without the Employees express written consent) of any of the following: |
(i) | a material diminution in the Employees position or title, or the assignment of duties to the Employee that are materially inconsistent with the Employees position or title; | ||
(ii) | a material diminution in the Employees Annual Base Salary or Annual Bonus Opportunity; | ||
(iii) | within six (6) months immediately preceding or within two (2) years immediately following a Change in Control: (A) a material adverse change in the Employees status, authority or responsibility ( e.g. , the Company has determined that a change in the department or functional group over which the Employee has managerial authority would constitute such a material adverse change); (B) a material adverse change in the position to whom the Employee reports (including any requirement that the Employee report to a corporate officer or employee instead of reporting directly to the Board) or to the Employees service relationship (or the conditions under which the Employee performs his duties) as a result of such reporting structure change, or a material diminution in the authority, duties or responsibilities of the position to whom the Employee reports; (C) a material diminution in the budget over which the Employee has managing authority; or (D) a material change in the geographic location of the Employees principal place of employment ( e.g. , the Company has determined that a relocation of more than thirty-five (35) miles would constitute such a material change); or | ||
(iv) | a material breach by the Company of any of its obligations under this Agreement. |
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(a) | Termination by the Company for a Reason Other than Cause, Death or Disability and Termination by the Employee for Good Reason . If the Employees employment is terminated by: (1) the Company for any reason other than Cause, Death or Disability; or (2) the Employee for Good Reason: |
(i) | the Company shall pay the Employee the following (collectively, the Accrued Obligations): (A) within five (5) business days after the Date of Termination, any earned but unpaid Annual Base Salary; (B) within a reasonable time following submission of all applicable documentation, any expense reimbursement payments owed to the Employee for expenses incurred prior to the Date of Termination; and (C) no later than March 15 th of the year in which the Date of Termination occurs, any earned but unpaid Annual Bonus payments relating to the prior calendar year; | ||
(ii) | the Company shall pay the Employee no later than March 15 th of the calendar year following the year in which the Date of Termination occurs, a prorated Annual Bonus based upon the actual Annual Bonus that would have been earned by the Employee for the year in which the Date of Termination occurs (based upon the target Annual Bonus Opportunity in the year in which the Date of Termination occurred, or the prior year if no target Annual Bonus Opportunity has yet been determined, and the actual satisfaction of the applicable performance measures, but ignoring any requirement under the Annual Bonus plan that the Employee must be employed on the payment date) multiplied by the percentage of the calendar year completed before the Date of Termination; | ||
(iii) | the Company shall pay the Employee, no later than the sixty-fifth (65 th ) calendar day after the Date of Termination, a lump-sum payment equal to 200% of the sum of: (A) the Employees Annual Base Salary in effect immediately prior to the Date of Termination (disregarding any reduction in Annual Base Salary to which the Employee did not expressly consent in writing); and (B) the highest Annual Bonus paid to the Employee by the Company within the three (3) years preceding his termination of employment or, if higher, the target Annual Bonus Opportunity in the year in which the Date of Termination occurs; |
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(iv) | all stock option, restricted stock and other equity-based incentive awards granted by the Company that were outstanding but not vested as of the Date of Termination shall become immediately vested and/or payable, as the case may be, unless the equity incentive awards are based upon satisfaction of performance criteria (not based solely on the passage of time); in which case, they will only vest pursuant to their express terms; and | ||
(v) | the Company shall provide the Employee with certain continued welfare benefits as follows: |
(A) | Any life insurance coverage provided by the Company shall terminate at the same time as life insurance coverage would normally terminate for any other employee that terminates employment with the Company, and the Employee shall have the right to convert that life insurance coverage to an individual policy under the regular rules of the Companys group policy. In addition, if the Employee is covered under or receives life insurance coverage provided by the Company on the Date of Termination, then within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly life insurance premiums based on the monthly premiums that would be due assuming that the Employee had converted his Company life insurance coverage that was in effect on the Notice of Termination into an individual policy. | ||
(B) | As long as the Employee pays the full monthly premiums for COBRA coverage, the Company shall provide the Employee and, as applicable, the Employees eligible dependents with continued medical and dental coverage, on the same basis as provided to the Companys active executives and their dependents until the earlier of: (i) three (3) years after the Date of Termination; or (ii) the date the Employee is first eligible for medical and dental coverage (without pre-existing condition limitations) with a subsequent employer. In addition, within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly medical and dental COBRA premiums based on the level of coverage in effect for the Employee ( e.g. , employee only or family coverage) on the Date of Termination. |
(b) | Termination by the Company for Cause and by the Employee without Good Reason . If the Employees employment is terminated (i) by the Company for Cause or (ii) by the Employee without Good Reason, the Companys only obligation under this Agreement shall be payment of any Accrued Obligations. |
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(c) | Termination due to Death or Disability . If the Employees employment is terminated due to death or Disability, the Company shall pay the Employee (or to the Employees estate or personal representative in the case of death), within thirty (30) business days after the Date of Termination: (i) any Accrued Obligations, plus (ii) a prorated Annual Bonus based upon the target Annual Bonus opportunity in the year in which the Date of Termination occurred (or the prior year if no target Annual Bonus Opportunity has yet been determined) multiplied by the percentage of the calendar year completed before the Date of Termination. | ||
(d) | Definition of Change in Control . For purposes of this Agreement, the term Change in Control shall mean that the conditions set forth in any one of the following subsections shall have been satisfied: |
(i) | the acquisition, directly or indirectly, by any person (within the meaning of Section 3(a)(9) of the Securities and Exchange Act of 1934, as amended (the Exchange Act) and used in Sections 13(d) and 14(d) thereof) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company; | ||
(ii) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation; | ||
(iii) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger; | ||
(iv) | during any period of two (2) consecutive years during the Employment Term or any extensions thereof, individuals, who, at the beginning of such period, constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; | ||
(v) | the sale, transfer or other disposition (in one transaction or a series of related transactions) of assets of the Company that have a total fair market value equal to or more than one-third of the total fair market value of all of |
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the assets of the Company immediately prior to such sale, transfer or other disposition, other than a sale, transfer or other disposition to an entity (A) which immediately following such sale, transfer or other disposition owns, directly or indirectly, at least fifty percent (50%) of the Companys outstanding voting securities or (B) fifty percent (50%) or more of whose outstanding voting securities is immediately following such sale, transfer or other disposition owned, directly or indirectly, by the Company. For purposes of the foregoing clause, the sale of stock of a subsidiary of the Company (or the assets of such subsidiary) shall be treated as a sale of assets of the Company; or |
(vi) | the approval by the stockholders of a plan or proposal for the liquidation or dissolution of the Company. |
(e) | Six-Month Delay . To the extent the Employee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance promulgated thereunder and any elections made by the Company in accordance therewith, notwithstanding the timing of payment provided in any other Section of this Agreement, no payment, distribution or benefit under this Agreement that constitutes a distribution of deferred compensation (within the meaning of Treasury Regulation Section 1.409A-1(b)) upon separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), after taking into account all available exemptions, that would otherwise be payable during the six (6) month period after separation from service, will be made during such six (6) month period, and any such payment, distribution or benefit will instead be paid on the first business day after such six (6) month period. |
(a) | If any payments or benefits paid or provided or to be paid or provided to the Employee or for his benefit pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his employment with the Company or its subsidiaries or the termination thereof (a Payment and, collectively, the Payments) would be subject to the excise tax (the Excise Tax) imposed by Section 4999 of the Code, then, except as otherwise provided in this Subsection 10(a), the Employee will be entitled to receive an additional payment (a Gross-Up Payment) in an amount such that, after payment by the Employee of all income taxes, all employment taxes and any Excise Tax imposed upon the Gross-Up Payment (including any related interest and penalties), the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax (including any related interest and penalties) imposed upon the Payments. Notwithstanding the foregoing, if the amount of the Payments does not exceed by more than three percent (3%) the amount that would be payable to the Employee if the Payments were reduced to one dollar less than what would constitute a parachute payment under Section 280G of the Code (the Scaled Back Amount), then the Payments shall be reduced, in a manner determined by the Employee, to the Scaled Back Amount, and the Employee shall not be entitled to any Gross-Up Payment. |
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(b) | An initial determination of (i) whether a Gross-Up Payment is required pursuant to this Agreement, and, if applicable, the amount of such Gross-Up Payment or (ii) whether the Payments must be reduced to the Scaled Back Amount and, if so, the amount of such reduction, will be made at the Companys expense by an accounting firm selected by the Company. The accounting firm will provide its determination, together with detailed supporting calculations and documentation, to the Company and the Employee within ten (10) business days after the date of termination of the Employees employment, or such other time as may be reasonably requested by the Company or the Employee. If the accounting firm determines that no Excise Tax is payable by the Employee with respect to a Payment or Payments, it will furnish the Employee with an opinion to that effect. If a Gross-Up Payment becomes payable, such Gross-Up Payment will be paid by the Company to the Employee within thirty (30) business days of the receipt of the accounting firms determination. If a reduction in Payments is required, such reduction shall be effectuated within thirty (30) business days of the receipt of the accounting firms determination. Within ten (10) business days after the accounting firm delivers its determination to the Employee, the Employee will have the right to dispute the determination. The existence of a dispute will not in any way affect the Employees right to receive a Gross-Up Payment in accordance with the determination. If there is no dispute, the determination will be binding, final, and conclusive upon the Company and the Employee. If there is a dispute, the Company and the Employee will together select a second accounting firm, which will review the determination and the Employees basis for the dispute and then will render its own determination, which will be binding, final, and conclusive on the Company and on the Employee for purposes of determining whether a Gross-Up Payment is required pursuant to this Subsection 10(b) or whether a reduction to the Scaled Back Amount is required, as the case may be. If as a result of any dispute pursuant to this Subsection 10(b) a Gross-Up Payment is made or additional Gross-Up Payments are made, such Gross-Up Payment(s) will be paid by the Company to the Employee within thirty (30) business days of the receipt of the second accounting firms determination. The Company will bear all costs associated with the second accounting firms determination, unless such determination does not result in additional Gross-Up Payments to the Employee or unless such determination does not mitigate the reduction in Payments required to arrive at the Scaled Back Amount, in which case all such costs will be borne by the Employee. | ||
(c) | For purposes of determining the amount of the Gross-Up Payment and, if applicable, the Scaled Back Amount, the Employee will be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made or the Scaled Back Amount is determined, as the case may be, and applicable state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employees residence on the date of termination of the Employees employment, net of the maximum reduction in federal income taxes that would be obtained from deduction of those state and local taxes. |
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(d) | As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that Gross-Up Payments which will not have been made by the Company should have been made, the Employees Payments will be reduced to the Scaled Back Amount when they should not have been or the Employees Payments are reduced to a greater extent than they should have been (an Underpayment) or Gross-Up Payments are made by the Company which should not have been made, the Employees Payments are not reduced to the Scaled Back Amount when they should have been or they are not reduced to the extent they should have been (an Overpayment). If it is determined that an Underpayment has occurred, the accounting firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of the Employee. If it is determined that an Overpayment has occurred, the accounting firm shall determine the amount of the Overpayment that has occurred and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company; provided , however , that if the Company determines that such repayment obligation would be or result in an unlawful extension of credit under Section 13(k) of the Exchange Act, repayment shall not be required. The Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contest or disputes with the Internal Revenue Service in connection with the Excise Tax. | ||
(e) | The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require a payment resulting in an Underpayment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: |
(i) | give the Company any information reasonably requested by the Company relating to such claim, | ||
(ii) | take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, | ||
(iii) | cooperate with the Company in good faith in order to effectively contest such claim, and |
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(iv) | permit the Company to participate in any proceeding relating to such claim; |
(f) | If, after the receipt by the Employee of an amount advanced by the Company pursuant to Subsection 10(e), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Companys complying with the requirements of Subsection 10(e)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to Subsection 10(e), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid. | ||
(g) | Any payment under this Section 10 must be made by the Company no later than the end of the Employees tax year following the Employees tax year in which the Employee remits the related tax payments. |
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(a) | During Employment Term . The Employee agrees that, during the Employment Term, he will devote such business time, attention and energies reasonably necessary to the diligent and faithful performance of the services to the Company and its affiliates, and he will not engage in any way whatsoever, directly or indirectly, in any business that is a direct competitor with the Companys or its affiliates principal business, nor solicit customers, suppliers or employees of the Company or affiliates on behalf of, or in any other manner work for or assist any business which is a direct competitor with the Companys or its affiliates principal business. In addition, during the Employment Term, the Employee will undertake no planning for or organization of any business activity competitive with the work he performs as an employee of the Company, and the Employee will not combine or conspire with any other employee of the Company or any other person for the purpose of organizing any such competitive business activity. | ||
(b) | After Employment Term . The parties acknowledge that the Employee will acquire substantial knowledge and information concerning the business of the Company and its affiliates as a result of his employment. The parties further acknowledge that the scope of business in which the Company and its affiliates are engaged as of the Effective Date is national and very competitive and one in which few companies can successfully compete. Competition by the Employee in that business after the Employment Term would severely injure the Company and its affiliates. Accordingly, for a period of one (1) year after the Employees employment terminates for any reason whatsoever, except as otherwise stated herein below, the Employee agrees: (i) not to become an employee, consultant, |
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advisor, principal, partner or substantial shareholder of any firm or business that directly competes with the Company or its affiliates in their principal products and markets; and (ii), on behalf of any such competitive firm or business, not to solicit any person or business that was at the time of such termination and remains a customer or prospective customer, a supplier or prospective supplier, or an employee of the Company or an affiliate. Notwithstanding any of the foregoing provisions to the contrary, the Employee shall not be subject to the restrictions set forth in this Subsection 13(b) if: (A) the Employees employment is terminated by the Company without Cause; (B) the Employee terminates employment for Good Reason; or (C) the Employees employment is terminated as a result of the Companys unwillingness to extend the Employment Term. |
(c) | Exclusion . Working, directly or indirectly, for any of the following entities shall not be considered competitive to the Company or its affiliates for the purpose of this Section 13: (i) Fidelity National Information Services, Inc., its affiliates or their successors; (ii) Lender Processing Services, Inc., its affiliates or their successors; or (iii) the Company, its affiliates or their successors if this Agreement is assumed by a third party as contemplated in Section 21. |
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FIDELITY NATIONAL FINANCIAL, INC.
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By: | /s/ William P. Foley, II | |||
Its: | Chairman of the Board | |||
ALAN L. STINSON
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/s/ Alan L. Stinson | ||||
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(a) | the standard Company benefits enjoyed by the Companys other top executives as a group; |
(b) | payment by the Company of the Employees initiation and membership dues in all social and/or recreational clubs as deemed necessary and appropriate by the Company to maintain various business relationships on behalf of the Company; provided, however, that the Company shall not be obligated to pay for any of the Employees personal purchases and expenses at such clubs; | ||
(c) | medical and other insurance coverage (for the Employee and any covered dependents) provided by the Company to its other top executives as a group; | ||
(d) | supplemental disability insurance sufficient to provide two-thirds of the Employees pre-disability Annual Base Salary; | ||
(e) | an annual incentive bonus opportunity under the Companys annual incentive plan (Annual Bonus Plan) for each calendar year included in the Employment Term, with such opportunity to be earned based upon attainment of performance objectives established by the Committee (Annual Bonus). The Employees bonus factor under the Annual Bonus Plan shall be not less than 150% of the Employees Annual Base Salary. The Employees bonus factor may be periodically reviewed and increased (but not decreased without the Employees express written consent) at the discretion of the Committee. The Annual Bonus shall be paid no later than the March 15 th first following the calendar year to which the Annual Bonus relates. Unless provided otherwise herein or the Board determines otherwise, no Annual Bonus shall be paid to the Employee unless the Employee is employed by the Company, or an affiliate thereof, on the Annual Bonus payment date; and | ||
(f) | participation in the Companys equity incentive plans. |
(a) | Notice of Termination . Any purported termination of the Employees employment (other than by reason of death) shall be communicated by written Notice of Termination (as defined herein) from one party hereto to the other party |
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hereto in accordance with the notice provisions contained in Section 25. For purposes of this Agreement, a Notice of Termination shall mean a notice that indicates the Date of Termination (as that term is defined in Section 7(b)) and, with respect to a termination due to Disability (as that term is defined in Section 7(e)), Cause (as that term is defined in Section 7(d)) or Good Reason (as that term is defined in Section 7(f)), sets forth in reasonable detail the facts and circumstances that are alleged to provide a basis for such termination. A Notice of Termination from the Company shall specify whether the termination is with or without Cause or due to the Employees Disability. A Notice of Termination from the Employee shall specify whether the termination is with or without Good Reason or due to Disability. |
(b) | Date of Termination . For purposes of this Agreement, Date of Termination shall mean the date specified in the Notice of Termination (but in no event shall such date be earlier than the 30th day following the date the Notice of Termination is given, unless expressly agreed to by the parties hereto) or the date of the Employees death. | ||
(c) | No Waiver . The failure to set forth any fact or circumstance in a Notice of Termination, which fact or circumstance was not known to the party giving the Notice of Termination when the notice was given, shall not constitute a waiver of the right to assert such fact or circumstance in an attempt to enforce any right under or provision of this Agreement. | ||
(d) | Cause . For purposes of this Agreement, a termination for Cause means a termination by the Company based upon the Employees (i) persistent failure to perform duties consistent with a commercially reasonable standard of care (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (ii) willful neglect of duties (other than due to a physical or mental impairment or due to an action or inaction directed by the Company that would otherwise constitute Good Reason); (iii) conviction of, or pleading nolo contendere to, criminal or other illegal activities involving dishonesty; (iv) material breach of this Agreement; or (v) impeding, or failing to materially cooperate with, an investigation authorized by the Board. The Employees termination for Cause shall be effective when and if a resolution is duly adopted by an affirmative vote of at least 3 / 4 of the Board (less the Employee), stating that, in the good faith opinion of the Board, the Employee is guilty of the conduct described in the Notice of Termination and such conduct constitutes Cause under this Agreement; provided, however, that the Employee shall have been given reasonable opportunity (i) to cure any act or omission that constitutes Cause if capable of cure and (ii), together with counsel, during the thirty (30) day period following the receipt by the Employee of the Notice of Termination and prior to the adoption of the Boards resolution, to be heard by the Board. | ||
(e) | Disability . For purposes of this Agreement, a termination based upon Disability means a termination by the Company based upon the Employees entitlement to |
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long-term disability benefits under the Companys long-term disability plan or policy, as the case may be, as in effect on the Date of Termination. |
(f) | Good Reason . For purposes of this Agreement, a termination for Good Reason means a termination by the Employee during the Employment Term based upon the occurrence (without the Employees express written consent) of any of the following: |
(i) | a material diminution in the Employees position or title, or the assignment of duties to the Employee that are materially inconsistent with the Employees position or title; | ||
(ii) | a material diminution in the Employees Annual Base Salary or Annual Bonus Opportunity; | ||
(iii) | within six (6) months immediately preceding or within two (2) years immediately following a Change in Control: (A) a material adverse change in the Employees status, authority or responsibility ( e.g. , the Company has determined that a change in the departments or functional groups over which the Employee has managerial authority would constitute such a material adverse change); (B) a material adverse change in the position to whom the Employee reports (including any requirement that the Employee report to a corporate officer or employee instead of reporting directly to the CEO) or to the Employees service relationship (or the conditions under which the Employee performs his duties) as a result of such reporting structure change, or a material diminution in the authority, duties or responsibilities of the position to whom the Employee reports; (C) a material diminution in the budget over which the Employee has managing authority; or (D) a material change in the geographic location of the Employees principal place of employment ( e.g. , the Company has determined that a relocation of more than thirty-five (35) miles would constitute such a material change); or | ||
(iv) | the material breach by the Company of any of its other obligations under this Agreement. |
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(a) | Termination by the Company for other than Cause, Death or Disability or Termination by the Employee for Good Reason . If the Employees employment is terminated by the Company for any reason, other than Cause, Death or Disability or by the Employee for Good Reason: |
(i) | the Company shall pay to the Employee, (A) within five (5) business days after the Date of Termination, any earned but unpaid Annual Base Salary and any expense reimbursement payments owed to the Employee, and (B) no later than March 15 of the year in which the Date of Termination occurs, any earned but unpaid Annual Bonus payments relating to the prior calendar year (the Accrued Obligations); | ||
(ii) | the Company shall pay to the Employee no later than March 15 of the calendar year following the year in which the Date of Termination occurs, a prorated Annual Bonus based upon the actual Annual Bonus that would have been earned by the Employee for the year in which the Date of Termination occurs (based upon the target Annual Bonus opportunity in the year in which the Date of Termination occurred, or the prior year if no target Annual Bonus opportunity has yet been determined, and the actual satisfaction of the applicable performance measures, but ignoring any requirement under the Annual Bonus Plan that the Employee must be employed on the payment date) multiplied by the percentage of the calendar year completed before the Date of Termination; | ||
(iii) | the Company shall pay to the Employee, no later than the sixty-fifth (65 th ) calendar day after the Date of Termination, a lump-sum payment equal to 200% of the sum of (x) the Employees Annual Base Salary in effect immediately prior to the Date of Termination (disregarding any reduction in Annual Base Salary to which the Employee did not expressly consent in writing) and (y) the highest Annual Bonus paid to the Employee by the Company within the three (3) years preceding his termination of employment or, if higher, the target Annual Bonus opportunity in the year in which the Date of Termination occurs; | ||
(iv) | all stock option, restricted stock and other equity-based incentive awards granted by the Company that were outstanding but not vested as of the Date of Termination shall become immediately vested and/or payable, as the case may be, unless the equity incentive awards are based upon satisfaction of performance criteria (not based solely on the passage of time); in which case, they will only vest pursuant to their express terms; and |
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(v) | the Company shall provide the Employee with certain continued welfare benefits as follows: |
(a) | Any life insurance coverage provided by the Company shall terminate at the same time as life insurance coverage would normally terminate for any other employee that terminates employment with the Company, and the Employee shall have the right to convert that life insurance coverage to an individual policy under the regular rules of the Companys group policy. In addition, if the Employee is covered under or receives life insurance coverage provided by the Company on the Date of Termination, then within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly life insurance premiums based on the monthly premiums that would be due assuming that the Employee had converted his Company life insurance coverage that was in effect on the Notice of Termination into an individual policy. | ||
(b) | As long as the Employee pays the full monthly premiums for COBRA coverage, the Company shall provide the Employee and, as applicable, the Employees eligible dependents with continued medical and dental coverage, on the same basis as provided to the Companys active executives and their dependents until the earlier of: (i) three (3) years after the Date of Termination; or (ii) the date the Employee is first eligible for medical and dental coverage (without pre-existing condition limitations) with a subsequent employer. In addition, within thirty (30) business days after the Date of Termination, the Company shall pay the Employee a lump sum cash payment equal to thirty-six (36) monthly medical and dental COBRA premiums based on the level of coverage in effect for the Employee ( e.g. , employee only or family coverage) on the Date of Termination. |
(b) | Termination by the Company for Cause or by the Employee without Good Reason . If the Employees employment is terminated (i) by the Company for Cause or (ii) by the Employee without Good Reason, the Companys only obligation under this Agreement shall be payment of any earned but unpaid Annual Base Salary and any expense reimbursement payments owed to the Employee. | ||
(c) | Termination due to Death or Disability . If the Employees employment is terminated due to death or Disability, the Company shall pay to the Employee (or to the Employees estate or personal representative in the case of the Employees death), within thirty (30) business days after the Date of Termination, (i) any Accrued Obligations and (ii) a prorated Annual Bonus based on (A) the target Annual Bonus opportunity in the year in which the Date of Termination occurs or |
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the prior year if no target Annual Bonus opportunity has yet been determined and (B) the fraction of the year the Employee was employed. |
(d) | Definition of Change in Control . For purposes of this Agreement, the term Change in Control shall mean that the conditions set forth in any one of the following subsections shall have been satisfied: |
(i) | the acquisition, directly or indirectly, by any person (within the meaning of Section 3(a)(9) of the Securities and Exchange Act of 1934, as amended (the Exchange Act) and used in Sections 13(d) and 14(d) thereof) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company; | ||
(ii) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation; | ||
(iii) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger; | ||
(iv) | during any period of two (2) consecutive years during the Employment Term or any extensions thereof, individuals, who, at the beginning of such period, constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; | ||
(v) | the sale, transfer or other disposition (in one transaction or a series of related transactions) of assets of the Company that have a total fair market value equal to or more than one-third of the total fair market value of all of the assets of the Company immediately prior to such sale, transfer or other disposition, other than a sale, transfer or other disposition to an entity (x) which immediately following such sale, transfer or other disposition owns, directly or indirectly, at least 50% of the Companys outstanding voting securities or (y) 50% or more of whose outstanding voting securities is immediately following such sale, transfer or other disposition owned, |
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directly or indirectly, by the Company. For purposes of the foregoing clause, the sale of stock of a subsidiary of the Company (or the assets of such subsidiary) shall be treated as a sale of assets of the Company; or |
(vi) | the approval by the stockholders of a plan or proposal for the liquidation or dissolution of the Company. |
(e) | Six-Month Delay . To the extent the Employee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance promulgated thereunder and any elections made by the Company in accordance therewith, notwithstanding the timing of payment provided in any other Section of this Agreement, no payment, distribution or benefit under this Agreement that constitutes a distribution of deferred compensation (within the meaning of Treasury Regulation Section 1.409A-1(b)) upon separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), after taking into account all available exemptions, that would otherwise be payable during the six (6) month period after separation from service, will be made during such six (6) month period, and any such payment, distribution or benefit will instead be paid on the first business day after such six (6) month period |
(a) | If any payments or benefits paid or provided or to be paid or provided to the Employee or for his benefit pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his employment with the Company or its subsidiaries or the termination thereof (a Payment and, collectively, the Payments) would be subject to the excise tax (the Excise Tax) imposed by Section 4999 of the Code, then, except as otherwise provided in this Section 9(a), the Employee will be entitled to receive an additional payment (a Gross-Up Payment) in an amount such that, after payment by the Employee of all income taxes, all employment taxes and any Excise Tax imposed upon the Gross-Up Payment (including any related interest and penalties), the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax (including any related interest and penalties) imposed upon the Payments. Notwithstanding the foregoing, if the amount of the Payments does not exceed by more than 3% the amount that would be payable to the Employee if the Payments were reduced to one dollar less than what would constitute a parachute payment under Section 280G of the Code (the Scaled Back Amount ), then the Payments shall be reduced, in a manner determined by the Employee, to the Scaled Back Amount, and the Employee shall not be entitled to any Gross-Up Payment. | ||
(b) | An initial determination of (i) whether a Gross-Up Payment is required pursuant to this Agreement, and, if applicable, the amount of such Gross-Up Payment or (ii) whether the Payments must be reduced to the Scaled Back Amount and, if so, the amount of such reduction, will be made at the Companys expense by an accounting firm selected by the Company. The accounting firm will provide its determination, together with detailed supporting calculations and documentation, |
8
to the Company and the Employee within ten (10) business days after the date of termination of Employees employment, or such other time as may be reasonably requested by the Company or the Employee. If the accounting firm determines that no Excise Tax is payable by the Employee with respect to a Payment or Payments, it will furnish the Employee with an opinion to that effect. If a Gross-Up Payment becomes payable, such Gross-Up Payment will be paid by the Company to the Employee within thirty (30) business days of the receipt of the accounting firms determination. If a reduction in Payments is required, such reduction shall be effectuated within thirty (30) business days of the receipt of the accounting firms determination. Within ten (10) business days after the accounting firm delivers its determination to the Employee, the Employee will have the right to dispute the determination. The existence of a dispute will not in any way affect the Employees right to receive a Gross-Up Payment in accordance with the determination. If there is no dispute, the determination will be binding, final, and conclusive upon the Company and the Employee. If there is a dispute, the Company and the Employee will together select a second accounting firm, which will review the determination and the Employees basis for the dispute and then will render its own determination, which will be binding, final, and conclusive on the Company and on the Employee for purposes of determining whether a Gross-Up Payment is required pursuant to this Section 9(b) or whether a reduction to the Scaled Back Amount is required, as the case may be. If as a result of any dispute pursuant to this Section 9(b) a Gross-Up Payment is made or additional Gross-Up Payments are made, such Gross-Up Payment(s) will be paid by the Company to the Employee within thirty (30) business days of the receipt of the second accounting firms determination. The Company will bear all costs associated with the second accounting firms determination, unless such determination does not result in additional Gross-Up Payments to the Employee or unless such determination does not mitigate the reduction in Payments required to arrive at the Scaled Back Amount, in which case all such costs will be borne by the Employee. |
(c) | For purposes of determining the amount of the Gross-Up Payment and, if applicable, the Scaled Back Amount, the Employee will be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made or the Scaled Back Amount is determined, as the case may be, and applicable state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employees residence on the date of termination of Employees employment, net of the maximum reduction in federal income taxes that would be obtained from deduction of those state and local taxes. | ||
(d) | As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that Gross-Up Payments which will not have been made by the Company should have been made, the Employees Payments will be reduced to the Scaled Back Amount when they should not have been or the Employees Payments are reduced to a greater extent than they should have been (an Underpayment) or Gross-Up Payments are made by the Company which should not have been made, |
9
the Employees Payments are not reduced to the Scaled Back Amount when they should have been or they are not reduced to the extent they should have been (an Overpayment). If it is determined that an Underpayment has occurred, the accounting firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. If it is determined that an Overpayment has occurred, the accounting firm shall determine the amount of the Overpayment that has occurred and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company; provided, however, that if the Company determines that such repayment obligation would be or result in an unlawful extension of credit under Section 13(k) of the Exchange Act, repayment shall not be required. The Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contest or disputes with the Internal Revenue Service in connection with the Excise Tax. |
(e) | The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require a payment resulting in an Underpayment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall: |
(i) | give the Company any information reasonably requested by the Company relating to such claim, | ||
(ii) | take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, | ||
(iii) | cooperate with the Company in good faith in order effectively to contest such claim, and | ||
(iv) | permit the Company to participate in any proceeding relating to such claim; |
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with |
10
such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including related interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(e), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Employee to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Employee, on an interest-free basis and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including related interest or penalties) imposed with respect to such advance or with respect to any imputed income with respect to such advance. The Companys control of the contest shall be limited to issues that may impact Gross-Up Payments or reduction in Payments under this Section 9, and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. |
(f) | If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 9(e), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Companys complying with the requirements of Section 9(e)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 9(e), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid. | ||
(g) | Any payment under this Section 9 must be made by the Company no later than the end of the Employees tax year following the Employees tax year in which the Employee remits the related tax payments. |
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(a) | if the Employees employment is terminated by the Company without Cause; |
12
(b) | if the Employees employment is terminated as a result of the Companys unwillingness to extend the Employment Term; | ||
(c) | if the Employee terminates employment for Good Reason; or | ||
(d) | if the Employee terminates employment without Good Reason, any time during the one (1) year period immediately following a Change in Control. |
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14
15
FIDELITY NATIONAL FINANCIAL, INC.
By: /s/ Alan L. Stinson Its: Chief Executive Officer RAYMOND R. QUIRK |
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/s/ Raymond R. Quirk | ||||
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Fidelity National Financial, Inc. Deferred Compensation Plan
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Article
I
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Establishment and Purpose
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1 | |||
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Article
II
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Definitions
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1 | |||
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Article
III
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Eligibility and Participation
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7 | |||
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Article
IV
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Deferrals
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8 | |||
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Article
V
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Company Contributions
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10 | |||
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Article
VI
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Benefits
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11 | |||
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Article
VII
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Modifications to Payment Schedules
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15 | |||
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Article
VIII
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Valuation of Account Balances; Investments
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16 | |||
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Article
IX
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Administration
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17 | |||
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Article
X
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Amendment and Termination
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18 | |||
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Article
XI
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Informal Funding
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19 | |||
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Article
XII
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Claims
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19 | |||
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Article
XIII
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General Provisions
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24 |
2.1 | Account. Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(l) of ERISA. |
2.2 | Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date. | |
2.3 | Adopting Employer. Adopting Employer means an organization that, with the consent of the Company, has adopted the Plan for the benefit of its eligible employees. | |
2.4 | Affiliate. Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c). | |
2.5 | Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participants spouse, if living, otherwise the Participants estate, shall be the Beneficiary if: (i) the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant. If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participants spouse and returned to the Committee. | |
A former spouse shall have no interest under the Plan, as Beneficiary or otherwise, unless the Participant designates such person as a Beneficiary after dissolution of the marriage, except to the extent provided under the terms of a domestic relations order as described in Code Section 414(p)(l)(B). | ||
2.6 | Business Day. A Business Day is each day on which the New York Stock Exchange is open for business. | |
2.7 | Change in Control . Change in Control, with respect to a Participating Employer that is organized as a corporation, occurs on the date on which any of the following events occur (i) a change in the ownership of the Participating Employer; (ii) a change in the effective control of the Participating Employer; (iii) a change in the ownership of a substantial portion of the assets of the Participating Employer. | |
For purposes of this Section, a change in the ownership of the Participating Employer occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Participating Employer. A change in the effective control of the Participating Employer occurs on the date on which either (i) a person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer possessing 30% or more of the total voting power of the stock of the Participating Employer, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a majority of the members of the Participating Employers Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election, but |
only if no other corporation is a majority shareholder of the Participating Employer . A change in the ownership of a substantial portion of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Participating Employer, acquires assets from the Participating Employer that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Participating Employer immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition. | ||
An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Participating Employer that has experienced the Change in Control, or the Participants relationship to the affected Participating Employer otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii). | ||
The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Code Section 409A. | ||
2.8 | Claimant. Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan. | |
2.9 | Code. Code means the Internal Revenue Code of 1986, as amended from time to time. | |
2.10 | Code Section 409A. Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder. | |
2.11 | Committee. Committee means the committee appointed by the Board of Directors of the Company (or the appropriate committee of such board) to administer the Plan. If no designation is made, the Chief Executive Officer of the Company or his delegate shall have and exercise the powers of the Committee. | |
2.12 | Company. Company means Fidelity National Financial, Inc. | |
2.13 | Company Contribution. Company Contribution means a credit by a Participating Employer to a Participants Account(s) in accordance with the provisions of Article V of the Plan. Company Contributions are credited at the sole discretion of the Participating Employer and the fact that a Company Contribution is credited in one year shall not obligate the Participating Employer to continue to make such Company Contribution in subsequent years. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution. | |
2.14 | Compensation. Compensation means a Participants base salary, bonus, commission, Directors Fees and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan. Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A. |
2.15 | Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies (i) the amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts. The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer up to 75% of their Annual Base Salary, up to 100% of their Annual Bonus, up to 100% of their quarterly bonuses, up to 75% of their Commissions, and up to 100% of Directors Fees for a Plan Year. A Compensation Deferral Agreement may also specify the investment allocation described in Section 8.4. | |
2.16 | Death Benefit. Death Benefit means the benefit payable under the Plan to a Participants Beneficiary(ies) upon the Participants death as provided in Section 6.1 of the Plan. | |
2.17 | Deferral. Deferral means a credit to a Participants Account(s) that records that portion of the Participants Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals. | |
Deferrals shall be calculated with respect to the gross cash Compensation payable to the Participant prior to any deductions or withholdings, but shall be reduced by the Committee as necessary so that it does not exceed 100% of the cash Compensation of the Participant remaining after deduction of all required income and employment taxes, 401(k) and other employee benefit deductions, and other deductions required by law. Changes to payroll withholdings that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A. | ||
2.18 | Director. Director means a non-Employee member of the Board of Directors of the Company or an Adopting Employer. | |
2.19 | Earnings. Earnings means an adjustment to the value of an Account in accordance with Article VIII. | |
2.20 | Effective Date. Effective Date means January 1, 2009. | |
2.21 | Eligible Employee. Eligible Employee means a member of a select group of management or highly compensated employees of a Participating Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(l) of ERISA, as determined by the Committee from time to time in its sole discretion. | |
2.22 | Employee. Employee means a common-law employee of an Employer. |
2.23 | Employer . Employer means, with respect to Employees it employs, each Participating Employer and any Affiliate of such Participating Employer. | |
2.24 | ERISA . ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. | |
2.25 | Fiscal Year Compensation . Fiscal Year Compensation means Compensation earned during one or more consecutive fiscal years of a Participating Employer, all of which is paid after the last day of such fiscal year or years. | |
2.26 | Grandfathered Account . Grandfathered Account means amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004. | |
2.27 | Participant . Participant means an Eligible Employee or a Director who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee or a Director. A Participants continued participation in the Plan shall be governed by Section 3.2 of the Plan. | |
2.28 | Participating Employer . Participating Employer means the Company and each Adopting Employer. | |
2.29 | Payment Schedule . Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made. | |
2.30 | Performance-Based Compensation . Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least twelve consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than ninety (90) days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as Performance-Based Compensation will be made in accordance with Treas. Reg. Section 1.409A-l(e) and subsequent guidance. | |
2.31 | Plan . Generally, the term Plan means the Fidelity National Financial, Inc. Deferred Compensation Plan as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409 A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-l(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section. Plan, in the appropriate context, refers to the |
portion of this Plan represented by each Adopting Employers liabilities with respect to its Employees and Directors. | ||
2.32 | Plan Year . Plan Year means January 1 through December 31. | |
2.33 | Retirement. Retirement means a Participants Separation from Service after attainment of age 60. | |
2.34 | Retirement Benefit. Retirement Benefit means the benefit payable to a Participant under the Plan following the Retirement of the Participant. | |
2.35 | Retirement/Termination Account . Retirement/Termination Account means an Account established by the Committee to record the amounts payable to a Participant upon Separation from Service. | |
2.36 | Separation from Service . An Employee incurs a Separation from Service upon termination of employment with the Employer. A Director incurs a Separation from Service when he or she no longer serves on the Board of Directors of the Company. Whether a Separation from Service has occurred shall be determined by the Committee in accordance with Code Section 409 A. | |
Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months), disregarding periods during which the Employee was on a bona fide leave of absence. | ||
An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of (i) the six-month anniversary of the commencement of the leave or (ii) the expiration of the Employees right, if any, to reemployment under statute or contract. | ||
For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.23 of the Plan, except that for purposes of determining whether another organization is an Affiliate of the Company, common ownership of at least 50% shall be determinative. | ||
The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction. Such determination shall be made in accordance with the requirements of Code Section 409A. |
2.37 | Specified Date Account. A Specified Date Account means an Account established by the Committee to record the amounts payable at a future date as specified in the Participants Compensation Deferral Agreement. Unless otherwise determined by the Committee, a Participant may maintain no more than five Specified Date Accounts. A Specified Date Account may be identified in enrollment materials as an In-Service Account or such other name without affecting the meaning of this Section. | |
2.38 | Specified Date Benefit. Specified Date Benefit means the benefit payable to a Participant under the Plan in accordance with Section 6.1(c). | |
2.39 | Substantial Risk of Forfeiture. Substantial Risk of Forfeiture shall have the meaning specified in Treas. Reg. Section 1.409A-l(d). | |
2.40 | Termination Benefit. Termination Benefit means the benefit payable to a Participant under the Plan following the Participants Separation from Service prior to Retirement. | |
2.41 | Unforeseeable Emergency. An Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participants spouse, the Participants dependent (as defined in Code section 152, without regard to section 152(b)(l), (b)(2), and (d)(l)(B)) or a Beneficiary; loss of the Participants property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee. | |
2.42 | Valuation Date. Valuation Date shall mean each Business Day. |
3.1 | Eligibility and Participation. An Eligible Employee or a Director becomes a Participant upon the earlier to occur of (i) a credit of Company Contributions under Article V or (ii) receipt of notification of eligibility to participate. | ||
3.2 | Duration. A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant remains an Eligible Employee or a Director. A Participant who is no longer an Eligible Employee or a Director but has not Separated from Service may not file a Compensation Deferral Agreement under Article IV, but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero and during such time may continue to make allocation elections as provided in Section 8.4. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid. |
4.1 | Deferral Elections, Generally. |
(a) | A Participant may elect to defer Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation. The Committee may modify or cancel any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2. | ||
(b) | The Participant shall specify on his or her Compensation Deferral Agreement the amount of Deferrals and whether to allocate Deferrals to a Retirement/Termination Account or to a Specified Date Account. If no designation is made, Deferrals shall be allocated to the Retirement/Termination Account. A Participant may also specify in his or her Compensation Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the Payment Schedule is not specified in a Compensation Deferral Agreement, the Payment Schedule shall be the Payment Schedule specified in Section 6.2. |
4.2 | Timing Requirements for Compensation Deferral Agreements. |
(a) | First Year of Eligibility. In the case of the first year in which an Eligible Employee or a Director becomes eligible to participate in the Plan, he has up to 30 days following his initial eligibility to submit a Compensation Deferral Agreement with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this paragraph becomes irrevocable upon the end of such 30-day period. The determination of whether an Eligible Employee or a Director may file a Compensation Deferral Agreement under this paragraph shall be determined in accordance with the rules of Code Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7). | ||
A Compensation Deferral Agreement filed under this paragraph applies to Compensation earned on and after the date the Compensation Deferral Agreement becomes irrevocable. | |||
(b) | Prior Year Election. Except as otherwise provided in this Section 4.2, Participants may defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned. |
(c) | Performance-Based Compensation. Participants may file a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that: |
(i) | the Participant performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Compensation Deferral Agreement is submitted; and | ||
(ii) | the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed. |
A Compensation Deferral Agreement becomes irrevocable with respect to Performance-Based Compensation as of the day immediately following the latest date for filing such election. Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participants death or disability (as defined in Treas. Reg. Section 1.409A-l(e)) or upon a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5)) prior to the satisfaction of the performance criteria, will be void. | |||
(d) | Sales Commissions. Sales commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(i)) are considered to be earned in the taxable year of the Participant in which the sale occurs. The Compensation Deferral Agreement must be filed before the last day of the year preceding the year in which the sales commissions are earned and becomes irrevocable after that date. | ||
(e) | Short-Term Deferrals. Compensation that meets the definition of a short-term deferral described in Treas. Reg. Section 1.409A-l(b)(4) may be deferred in accordance with the rules of Article VII, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 7.3 shall not apply to payments attributable to a change in control (as defined in Treas. Reg. Section 1.409A- 3(i)(5)). | ||
(f) | Certain Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participants continued services for a period of at least twelve months from the date the Participant obtains the legally binding right, an election to defer such Compensation may be made on or before the 30th day after the Participant obtains the legally binding right to the Compensation, provided that the election is made at least twelve months in advance of the earliest date at which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable after such 30th day. If the forfeiture condition applicable to the payment lapses before the end of the required service period as a result of the Participants death or disability (as defined in Treas. Reg. Section |
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1.409A-3(i)(4)) or upon a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5)), the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section. | |||
(g) | Company Awards. Participating Employers may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of Company awards (such as sign-on, retention, or severance pay) may be negotiated with a Participant prior to the date the Participant has a legally binding right to such Compensation. |
4.3 | Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to one or more Specified Date Accounts and/or to the Retirement/Termination Account. The Committee may, in its discretion, establish a minimum deferral period for Specified Date Accounts (for example, the fourth Plan Year following the year Compensation subject to the Compensation Deferral Agreement is earned). | |
4.4 | Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participants Compensation. | |
4.5 | Vesting. Participant Deferrals shall be 100% vested at all times. | |
4.6 | Cancellation of Deferrals. The Committee may cancel a Participants Deferrals (i) for the balance of the Plan Year in which an Unforeseeable Emergency occurs, (ii) if the Participant receives a hardship distribution under the Employers qualified 401(k) plan, through the end of the Plan Year in which the six-month anniversary of the hardship distribution falls, and (iii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months (a Disability), provided cancellation occurs by the later of the end of the taxable year of the Participant or the 15 th day of the third month following the date the Participant incurs the Disability. |
5.1 | Discretionary Company Contributions. The Participating Employer may, from time to time in its sole and absolute discretion, credit Company Contributions to any Participant in any amount determined by the Participating Employer. Such contributions will be credited to a Participants Retirement/Termination Account. | |
5.2 | Vesting. Company Contributions described in Section 5.1, above, and the Earnings thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at the time that the Company Contribution is made. All Company Contributions shall become 100% vested upon the occurrence of the earliest of: (i) the death of the Participant while actively employed; (ii) the disability of the Participant, (iii) |
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Retirement of the Participant, or (iv) a Change in Control (except to the extent vesting would result in tax under Code Section 280G). The Participating Employer may, at any time, in its sole discretion, increase a Participants vested interest in a Company Contribution. The portion of a Participants Accounts that remains unvested upon his or her Separation from Service after the application of the terms of this Section 5.2 shall be forfeited. | ||
5.3 | Company Make-Up Contributions . For each year a Participant is entitled to a matching contribution under the Companys 401(k) Plan, the Company shall credit at the end of the Plan Year to such Participants Retirement/Termination Account under this Plan an amount equal to (a) minus (b) plus (c): |
(a) | The amount of matching contribution that would have been made by the Company to a Participants account in the Company 401(k) plan for the 401(k) Plan Year if the Participant had made no deferrals into this Plan (assuming Deferrals reduce compensation for purposes of computing the maximum company match in the 401(k) plan). | ||
(b) | The actual amount of Company matching contributions to such Participants 401(k) plan for the Plan Year. | ||
(c) | The amount or any lost matching contribution to the Participants account in the Company 401(k) plan due to ACP testing pursuant to Code Section 401(m). |
Company Make-Up Contributions shall vest in accordance to the Companys 401(k) plan vesting schedule. |
6.1 | Benefits, Generally . A Participant shall be entitled to the following benefits under the Plan: |
(a) | Retirement Benefit. Upon the Participants Separation from Service due to Retirement, he or she shall be entitled to a Retirement Benefit. The Retirement Benefit shall be equal to the vested portion of the Retirement/Termination Account and any Specified Date Accounts that have not commenced payments. The Retirement Benefit shall be based on the value of such Accounts as of the January 31 or July 31 immediately preceding the payment commencement date, or such other date determined by the Committee. If the Participant Separates from Service during the first half of the year (January-June), then payment will commence February 1 st of the following year. If the Participant Separates from Service during the second half of the year (July-December), then payment will commence August 1 st of the following year. If payments are to be made in annual |
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installments, each installment will be paid on each anniversary of the payment commencement date described above. | |||
(b) | Termination Benefit. Upon the Participants Separation from Service for reasons other than death or Retirement, he or she shall be entitled to a Termination Benefit. The Termination Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid Specified Date Accounts that have not commenced payments. The Termination Benefit shall be based on the value of such Accounts as of the January 31 or July 31 immediately preceding the payment commencement date, or such other date determined by the Committee. If the Participant Separates from Service during the first half of the year (January-June), then payment will commence February 1 st of the following year. If the Participant Separates from Service during the second half of the year (July-December), then payment will commence August 1 st of the following year. If payments are to be made in annual installments, each installment will be paid on each anniversary of the payment commencement date described above. | ||
(c) | Specified Date Benefit. If the Participant has established one or more Specified Date Accounts, he or she shall be entitled to a Specified Date Benefit with respect to each such Specified Date Account. The Specified Date Benefit shall be equal to the vested portion of the Specified Date Account, based on the value of that Account as of the January 31 following the Plan Year designated by the Participant. Payment of the Specified Date Benefit will be made within 2-1/2 months following the end of such Plan Year. For purposes of Article VII and Treas. Reg. Section 1.409A-3(d), the payment date of a Specified Date Account is December 31 of the Plan Year designated by the Participant. | ||
(d) | Death Benefit. In the event of the Participants death, his or her designated Beneficiary(ies) shall be entitled to a Death Benefit. The Death Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid Specified Date Accounts that have not commenced payments. The Death Benefit shall be based on the value of the Accounts as of the end of the month in which death occurred, with payment made the first day of the following month. | ||
(e) | Unforeseeable Emergency Payments. A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Accounts. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participants assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this |
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Plan. If an emergency payment is approved by the Committee, the amount of the payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the vested portion of the Participants Retirement/Termination Account until depleted and then from the vested Specified Date Accounts, beginning with the Specified Date Account with the latest payment commencement date. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee. | |||
(f) | Voluntary Withdrawals of Grandfathered Accounts. A Participant may elect at any time to voluntarily withdraw only the entire amount credited to his or her Grandfathered Account. If such a withdrawal is requested, the Participant shall forfeit an amount equal to 10% of the balance of the Grandfathered Account, and he or she shall not be permitted to make Deferrals to the Plan in the Plan Year following the Plan Year in which the withdrawal is made. |
6.2 | Form of Payment. |
(a) | Retirement Benefit. A Participant who is entitled to receive a Retirement Benefit shall receive payment of such benefit in a single lump sum, unless the Participant elects on his or her initial Compensation Deferral Agreement to have such benefit paid in one of the following alternative forms of payment (i) substantially equal annual installments over a period of five (5), ten (10), or fifteen (15) years, as elected by the Participant; or (ii) a lump sum payment of a percentage of the balance in the Retirement/Termination Account, with the balance paid in substantially equal annual installments over a period of five (5), ten (10), or fifteen (15) years, as elected by the Participant. | ||
(b) | Termination Benefit. A Participant who is entitled to receive a Termination Benefit shall receive payment of such benefit in substantially equal annual installments over a period of five years. | ||
(c) | Specified Date Benefit. The Specified Date Benefit shall be paid in a single lump sum, unless the Participant elects on the Compensation Deferral Agreement with which such Specified Date Account was established to have such Account paid in substantially equal annual installments over a period of two to five years, as elected by the Participant. Notwithstanding any election of a form of payment by the Participant, Specified Date Benefits that have not commenced as of the Participants Separation from Service will be paid according to the payment schedule for the Retirement Benefit, Termination Benefit or Death Benefit, whichever applies to the Participant upon his or her Separation from Service. However, if the Retirement, Termination or Death Benefit is payable in a lump sum, the unpaid balance of all Specified Date Accounts (regardless of such |
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Accounts payment status) will be payable in a lump sum. | |||
(d) | Death Benefit. If the Participant dies prior to the payment commencement date of his or her Retirement Benefit, his or her designated Beneficiary shall receive payment of such benefit in a single lump sum, unless the Participant elects on his or her initial Compensation Deferral Agreement to have the Death Benefit paid in one of the following alternative forms of payment (i) substantially equal annual installments over a period of five (5), ten (10), or fifteen (15) years, as elected by the Participant; or (ii) a lump sum payment of a percentage of the Death Benefit, with the balance paid in substantially equal annual installments over a period of five (5), ten (10), or fifteen (15) years, as elected by the Participant. | ||
If the Participant dies on or after his Retirement Benefit payment commencement date, his or her designated Beneficiary shall receive the remaining payments under the payment schedule in effect for the Retirement Benefit. | |||
(e) | Change in Control. A Participant will receive a single lump sum payment equal to the unpaid balance of all of his or her Accounts in the event of a Separation from Service within 24 months following a Change in Control. Accounts will be valued and paid under the payment timing rules described in Section 6.1(b). In addition to the foregoing, a Participant who has incurred a Separation from Service prior to a Change in Control and any Beneficiary of such Participant who is receiving or is scheduled to receive payments at the time of a Change in Control, will receive the balance of all unpaid Accounts in a single lump sum on the next scheduled payment date described in Section 6.1. | ||
(f) | Small Account Balances. The Committee may, in its sole discretion which shall be evidenced in writing no later than the date of payment, elect to pay the value of the Participants Accounts upon a Separation from Service in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(l)(B), provided the payment represents the complete liquidation of the Participants interest in the Plan. | ||
(g) | Rules Applicable to Installment Payments. If a Payment Schedule specifies installment payments, annual payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the Valuation Date and (b) equals the remaining number of installment payments, | ||
For purposes of Article VII, installment payments will be treated as a single form of payment. If a lump sum equal to less than 100% of the Retirement/Termination Account is paid, the payment commencement date for the installment form of payment will be the first anniversary of the payment of the lump sum. |
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6.3 | Acceleration of or Delay in Payments . The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). |
7.1 | Participants Right to Modify. A Participant may modify any or all of the alternative Payment Schedules with respect to an Account, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Article VII. | |
7.2 | Time of Election. The date on which a modification election is submitted to the Committee must be at least twelve months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification. | |
7.3 | Date of Payment under Modified Payment Schedule. Except with respect to modifications that relate to the payment of a Death Benefit, the date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the original Payment Schedule. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A. | |
7.4 | Effective Date. A modification election submitted in accordance with this Article VII is irrevocable upon receipt by the Committee and becomes effective 12 months after such date. | |
7.5 | Effect on Accounts. An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts. | |
7.6 | Modifications to Grandfathered Accounts. Notwithstanding the preceding provisions of this Article VII, a Participant may modify the time or form of payment applicable to a Grandfathered Account at any time, provided the modification is submitted in writing at least 13 months in advance of the date the Grandfathered Account is scheduled to be paid. |
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8.1 | Valuation. Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Retirement/Termination Account at the times determined by the Committee. Valuation of Accounts shall be performed under procedures approved by the Committee. | |
8.2 | Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participants investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VIII (investment allocation). | |
8.3 | Investment Options. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change. | |
8.4 | Investment Allocations. A Participants investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participants investment allocation. A Participants investment allocation shall be used solely for purposes of adjusting the value of a Participants Account Balances. | |
A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee. Allocation among the investment options must be designated in increments of 1%. The Participants investment allocation will become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day. | ||
A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day, and shall be applied prospectively. | ||
8.5 | Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee. |
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9.1 | Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII. | |
9.2 | Administration Upon Change in Control. Upon a Change in Control affecting the Company, the Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Committee. The individual who was the Chief Executive Officer of the Company (or if such person is unable or unwilling to act, the next highest ranking officer) prior to the Change in Control shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee. | |
Upon such Change in Control, the Company may not remove the Committee, unless 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement Committee. Notwithstanding the foregoing, neither the Committee nor the officer described above shall have authority to direct investment of trust assets under any rabbi trust described in Section 11.2. | ||
The Participating Employer shall, with respect to the Committee identified under this Section, (I) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee) against any costs, expenses and liabilities including, without limitation, attorneys fees and expenses arising in connection with the performance of the Committee hereunder, except with respect to matters resulting from the Committees gross negligence or willful misconduct and (iii) supply full and timely information to the Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably require. | ||
9.3 | Withholding. The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan. | |
9.4 | Indemnification. The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which |
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Arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise. | ||
9.5 | Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company. | |
9.6 | Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. |
10.1 | Amendment and Termination. The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article X. Each Participating Employer may also terminate its participation in the Plan. | |
10.2 | Amendments. The Company, by action taken by its Board of Directors, may amend the Plan at any time and for any reason, provided that any such amendment shall not reduce the vested Account Balances of any Participant accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary Separation from Service on such date) or reduce any rights of a Participant under the Plan or other Plan features with respect to Deferrals made prior to the date of any such amendment or restatement without the consent of the Participant. The Board of Directors of the Company may delegate to the Committee the authority to amend the Plan without the consent of the Board of Directors for the purpose of (I) conforming the Plan to the requirements of law, (ii) facilitating the administration of the Plan, (iii) clarifying provisions based on the Committees interpretation of the document and (iv) making such other amendments as the Board of Directors may authorize. | |
10.3 | Termination. The Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). If a Participating Employer terminates its participation in the Plan, the benefits of affected Employees shall be paid at the time provided in Article VI. |
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11.1 | General Assets. Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article XI. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer. |
11.2 | Rabbi Trust. A Participating Employer may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan. |
12.1 | Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the Claimant). |
(a) | In General. Notice of a denial of benefits will be provided within ninety (90) days of the Committees receipt of the Claimants claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial ninety (90) day period. The extension will not be more than ninety (90) days from the end of the initial ninety (90) day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision. | ||
(b) | Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The notice shall (i) cite the pertinent provisions of the Plan document and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimants |
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right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review. |
12.2 | Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the Appeals Committee). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered relevant if the information (i) was relied upon in making a benefits determination, (ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal. |
(a) | In General. Appeal of a denied benefits claim must be filed in writing with the Appeals Committee no later than sixty (60) days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within sixty (60) days following receipt of the appeal (or within one hundred and twenty (120) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. | ||
(b) | Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The decision on review shall set forth (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimants claim, and (iv) a statement describing any voluntary appeal procedures offered by the plan and a statement of the Claimants right to bring an action under Section 502(a) of ERISA. |
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12.3 | Claims Appeals Upon Change in Control . Upon a Change in Control, the Appeals Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Appeals Committee. Upon such Change in Control, the Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement. | |
The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure. | ||
Each Participating Employer shall, with respect to the Committee identified under this Section, (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committees gross negligence or willful misconduct and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require. | ||
12.4 | Legal Action. A Claimant may not bring any legal action, including a suit in state or federal court or commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures. In no event may legal action be brought more than five years after the events giving rise to the claim have occurred. | |
If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Participating Employer shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a Change in Control, or a change in control as defined in a rabbi trust described in Section 11.2, the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participants or Beneficiarys Account Balance. | ||
12.5 | Discretion of Appeals Committee . All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive. |
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12.6 | Arbitration. |
(a) | Prior to Change in Control. If, prior to a Change in Control, any claim or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in Article XII, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator. Arbitration shall be conducted in accordance with the following procedures: | ||
The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within twenty one (21) days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten (10) Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Associate (AAA) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected. | |||
Unless the parties agree otherwise, within sixty (60) days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within thirty (30) days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrators award. | |||
In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing partys costs (including but not limited to the arbitrators compensation), expenses, and attorneys fees. The arbitrator shall |
have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation. | |||
The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator. | |||
The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction. | |||
This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan. | |||
Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief. | |||
Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail. | |||
If any of the provisions of this Section 12.6(a) are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 12.6(a) are not absolutely |
binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law. | |||
The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary. | |||
(b) | Upon Change in Control. If, upon the occurrence of a Change in Control, any dispute, controversy or claim arises between a Participant or Beneficiary and the Participating Employer out of or relating to or concerning the provisions of the Plan, such dispute, controversy or claim shall be finally settled by a court of competent jurisdiction which, notwithstanding any other provision of the Plan, shall apply a de novo standard of review to any determination made by the Company or its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee. |
13.1 | Assignment. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(l)(B)). | |
The Company may assign any or all of its liabilities under this Plan in connection with any organizational restructuring, recapitalization, sale of assets (including a sale with respect to which an agreement under Treas. Reg. Section 1.409A-l(h)(4) has been entered into) or other similar transaction affecting a Participating Employer without the consent of the Participants. | ||
13.2 | Accounts Taxable Under Code Section 409A. The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A. | |
13.3 | No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to |
dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participants beneficiaries resulting from a deferral of income pursuant to the Plan. | ||
13.4 | No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer. | |
13.5 | Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to: |
Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of the Participant. | ||
13.6 | Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control. | |
13.7 | Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included. | |
13.8 | Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored. | |
13.9 | Facility of Payment to a Minor. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its discretion, make such distribution (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or committee or, if |
none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, and the Plan from further liability on account thereof. | ||
13.10 | Governing Law. To the extent not preempted by ERISA, the laws of the State of Florida shall govern the construction and administration of the Plan. |
IN WITNESS WHEREOF, the undersigned executed this Plan as of the 28 th day of July 2008, to be effective as of the Effective Date. |
FIDELITY NATIONAL FINANCIAL, INC. | ||||
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By:
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/s/ Karen Harper | (Print Name) | ||
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Its:
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VP HR | (Title) | ||
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(Signature) | ||||
Director Relesement Plans
7/28/08 |
Page 26 of 26
COMPANY | INCORPORATION | |
Ceridian Corporation
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Delaware | |
Chicago Title and Trust Company
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Illinois | |
Chicago Title Company
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California | |
Chicago Title Insurance Company
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Missouri | |
Commonwealth Land Title Insurance Company | Nebraska | |
Fidelity National Title Group, Inc.
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Delaware | |
Fidelity National Title Insurance Company
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California | |
Lawyers Title Insurance Corporation | Nebraska | |
Micro General, LLC
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Delaware | |
National Alliance Marketing Group, Inc.
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California | |
Rocky Mountain Support Services, Inc.
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Arizona | |
Ticor Title Insurance Company of Florida
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Florida |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By:
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/s/ Alan L. Stinson | |||
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Alan L. Stinson | |||
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Chief Executive Officer |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By:
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/s/ Anthony J. Park | |||
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Anthony J. Park | |||
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Chief Financial Officer |
1. | The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. | |
2. | The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company. | |
In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below. |
/s/ Alan L. Stinson | ||||
Alan L. Stinson | ||||
Chief Executive Officer | ||||
1. | The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. | |
2. | The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Anthony J. Park | ||||
Anthony J. Park | ||||
Chief Financial Officer | ||||