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EMPLOYMENT AGREEMENT
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AGREEMENT dated as of May 2, 1997, by and between SELECTIVE INSURANCE
COMPANY OF AMERICA, a New Jersey corporation (the "Company"), having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, and XXXXX X.
XXXXXXX, XX., having an address of 00 Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (the "Executive").
In consideration of the premises and the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive, and the
Executive accepts employment with the Company, on the terms and
conditions set forth herein.
2. Term. The term of employment under this Agreement shall commence as
of the date hereof and, subject to Section 7 hereof, shall terminate
three (3) years after the date hereof.
3. Compensation. For all services rendered by the Executive under this
Agreement, the Company shall pay the Executive a fixed salary during
the term of employment under this Agreement at a rate of not less
than One Hundred Thirty Five Thousand Dollars ($135,000.00) per year
(the "Salary"), payable in installments in accordance with the
Company's policy from time to time in effect for payment of salary
to executives. The Salary shall be reviewed no less than
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annually by the Company's Board of Directors, and nothing contained
herein shall prevent the Company's Board of Directors from at any
time increasing the Salary or other benefits herein provided to be
paid or provided to Executive or from providing additional or
contingent benefits to Executive as it deems appropriate.
4. Duties.
(a) The Executive has been elected as a Senior Vice President of the
Company, and he agrees to serve as such during each year of the
term of this Agreement that he is elected to such office and
until his successor is elected and qualified. If at any time
prior to the expiration of this Agreement, the Board of
Directors of the Company shall fail to reelect Executive as a
Senior Vice President at the Company's Annual Organizational
Meeting (except as a result of termination pursuant to Section
7 hereof), Executive's employment hereunder shall terminate
ninety (90) days after the date of such meeting. During said
ninety-day (90-day) period the Executive shall continue to be
employed under this Agreement, shall cooperate fully with the
Company's Board of Directors and shall devote his full business
time and attention to such duties not inconsistent with the
provisions hereof as he shall be assigned by the Company's Board
of Directors. Upon termination of Executive's employment
hereunder pursuant to this Section 4(a), the Executive shall
resign as an officer
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of the Company and each of its subsidiaries of which he shall
then be a director and/or officer. Notwithstanding any such
termination, the Executive, provided he does not violate the
provisions of Section 9 hereof, shall be entitled to receive
(i) as severance pay an amount equal to his Salary, at the rate
in effect at the time of termination of employment hereunder,
for a period of two (2) years after the date of such
termination, payable in monthly installments, and (ii) the
certain benefits provided for in Section 8 hereof, for a period
of two (2) years after the date of such termination or such
shorter period as provided in Section 8. If Executive's
employment hereunder shall terminate pursuant to this Section
4(a), such termination shall not prevent Executive from
accepting other employment with the Company or otherwise after
the effective date of such termination.
(b) The Executive agrees to devote his entire business time,
attention and services exclusively to the business and affairs
of the Company and its subsidiaries and to perform his duties
with fidelity and to the best of his ability. Executive may
accept directorships on the Board of Directors of profit and
nonprofit corporations with the prior consent of the Board of
Directors of the Company.
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5. Deferred Compensation.
(a) The Executive may, from time to time during the term of
employment hereunder, request that the Company defer the whole
or any part of his Salary payable under Section 3, provided that
such request is received by the Company on or before the
December 31 of the calendar year immediately preceding the
calendar year in respect of which such Salary is due (or such
other date as may be required from time to time by applicable
law). If so requested by the Executive, the Company shall defer
payment of the amount so specified and credit on the first day
of each month during the year in respect of which the deferred
Salary is due, the pro rata share of the amount of Salary
deferred for such year to a deferred compensation account
established on its corporate books of account. Such account
shall be called the "Xxxxx X. Xxxxxxx, Xx. Deferred
Compensation Account" (the "Account") and shall be an unfunded,
unsecured liability of the Company to be satisfied from its
general corporate funds. The Company agrees to credit the
Account semiannually on June 30 and December 31 of each year
with interest at a rate equal to the rate announced from time to
time by Xxxxxx Guaranty Trust Company of New York as its prime
rate.
(b) Except as herein provided in this Section 5b), the Company shall
distribute to the Executive all amounts credited to the Account
in ten (10) approximately equal
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annual installments commencing on the first day of January
immediately succeeding the date of termination of the
Executive's employment under this Agreement for any reason
whatsoever. In the event of the Executive's death prior to the
time he shall have received the full amount due under the
preceding sentence, the remaining payments due under such
sentence shall be paid on the respective due dates thereof to
any beneficiary or beneficiaries designated by the Executive to
the Company in writing or, in the absence of such designation,
to the Executive's legal representative. It is agreed that the
benefits to be paid as deferred compensation pursuant to this
Section 5 shall not be forfeited by the Executive.
(c) Nothing contained in this Section 5 and no action taken pursuant
to this Section 5 shall create or be construed to create a trust
of any kind for the benefit of any person or a fiduciary
relationship between the Company and any person.
6. Benefits During Employment. During the term of Executive's
employment under this Agreement, the Company shall (a) permit the
Executive to participate in the Selective Insurance Stock Option Plan
and the Selective Insurance Stock Option Plan II, Thrift Plan for
Employees of Selective Insurance Company of America and Subsidiaries,
and incentive compensation, stock option, stock appreciation right,
stock bonus, pension, group insurance and other benefit plans, if
any, in accordance with
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the respective provisions thereof, from time to time in effect
(collectively, the "Plans"), and (b) provide the Executive with
suitable offices, secretarial and other services, and other
perquisites applicable to executives of the Company, all in
accordance with the Company's policies with respect thereto from
time to time in effect. The Executive shall also be entitled,
during the term of his employment under this Agreement, to
vacations and reimbursements for ordinary and necessary travel and
entertainment expenses in accordance with the Company's policies on
such matters from time to time in effect.
7. Termination.
(a) The Executive's employment under this Agreement shall be
terminated upon the Executive's death or if the Executive
shall be adjudicated legally incompetent by a court of
competent jurisdiction. In such event, the Executive or
his legal representative shall be entitled to receive (i)
as severance pay an amount equal to Executive's Salary, at
the rate in effect at the time of termination of employment
hereunder, for a period of one (1) year after the date of such
termination, payable in monthly installments, and (ii) the
certain benefits provided for in Section 8 hereof, for a
period of one (1) year after the date of such termination or
such shorter period as provided in Section 8.
(b) The Company may, at its option, terminate the Executive's
employment under this Agreement if the Executive
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shall fail, or if the majority of the Board of Directors
shall find on the basis of medical evidence reasonably
satisfactory to it that the Executive is unable, by virtue
of or by reason of some physical or mental impairment, to
perform his duties hereunder for a period of ninety (90)
consecutive days or more or for a period of one hundred
eighty(180) days or more during any 270-day period. In the
event that this Agreement is terminated pursuant to this
paragraph 7(b), Executive shall be entitled to receive, in
monthly installments, for a period of one (1) year from the
date of such termination, an amount which, together with any
disability insurance benefits to which Executive is entitled
under disability insurance policies with respect to which the
premiums were paid by the Company, is equal to Executive's
Salary at the rate in effect at the time of such termination.
In that regard, Executive, following such termination of this
Agreement, shall be considered an employee solely for the
purpose of applying for and receiving disability payments
(both the temporary and long-term disability) in accordance
with the terms and conditions of such disability plans in
effect at the time.
(c) The Company may, at its option upon resolution of a majority
of the entire Board of Directors, terminate the Executive's
employment under this Agreement for cause, upon: (A) the
Executive's conviction of a felony
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(as evidenced by a binding and final judgment, order or
decree of a court of competent jurisdiction, in effect
after exhaustion or lapse of all rights of appeal), (B) the
continued willful failure by the Executive to perform
substantially his duties with the Company (other than any
such failure resulting from his incapacity due to physical
injury or physical or mental illness) for a period of thirty
(30) days after a demand for substantial performance
is delivered to the Executive by the Board of Directors of
the Company which specifically identifies the manner in which
the Board of Directors believes that the Executive has not
substantially performed his duties, or (c) willful misconduct
in the performance of the Executive's duties and obligations
to the Company which constitute common law fraud or other
gross malfeasance of duty. In the event of termination of the
Executive's employment pursuant to this paragraph 7(c),
Executive shall be entitled to receive (i) his Salary accrued
to the date of such termination and (ii) benefits accrued to
Executive under the Plans to the date of such termination, to
the extent that such benefits may be payable to Executive under
the provisions of the Plans in effect on the date of
termination of employment.
(d) Notwithstanding anything to the contrary in this Agreement,
the Company may, by action duly taken by the Board of
Directors, terminate the Executive's employment hereunder at
any time and for any reason.
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In such event, the Executive, provided he does not violate
the provisions of Section 9 hereof, shall be entitled to
receive (i) as severance pay an amount equal to his Salary,
at the rate in effect at the time of termination of employment
hereunder, for a period of two (2) years after the date of
such termination, payable in monthly installments, and (ii)
the certain benefits provided for in Section 8 hereof, for a
period of two (2) years after the date of such termination or
such shorter period as provided in Section 8.
8. Certain Benefits After Termination of Employment. Upon the
termination of Executive's employment pursuant to Section 4(a),
Section 7(a),Section 7(b) or Section 7(d) hereof, Executive (or his
legal representative) shall receive the benefits, if any, to which
Executive is entitled under the provisions of the Plans in effect at
the time of such termination. In addition, the Company shall
maintain in full force and effect for the continued benefit of the
Executive and his dependents for a period terminating on the earlier
of (i) the termination of the period of such post-termination
benefits set forth in Section 4(a), Section 7(a), Section 7(b) or
Section 7(d), as applicable, or (ii) the commencement date of
equivalent benefits from a new employer (the "Extended Benefit
Period"), all insured and self-insured employee welfare benefit
plans in which the Executive was entitled to participate
immediately prior to the date of termination, provided that the
Executive's continued participation is not barred
under the general terms and provisions of such plans.
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In the event that the Executive's participation in any such plan is
barred by its terms, the Company, at its sole cost and expense,
shall arrange to have issued for the benefit of the Executive and
his dependents individual policies of insurance providing benefits
substantially similar (on an after-tax basis) to those which the
Executive otherwise would have been entitled to receive under such
plans pursuant to this Section 8. If, at the end of the Extended
Benefit Period, the Executive has not previously received or is not
receiving equivalent benefits from a new employer, or is not
otherwise receiving such benefits, the Company shall arrange, at its
sole cost and expense, to enable him to convert his and his
dependents' coverage under such plans to individual policies or
programs upon the same terms as employees of the Company may apply
for such conversions upon termination of employment.
9. Nondisclosure of Confidential Information and Trade Secrets. The
Executive agrees that he will not, either during the term of
employment under this Agreement or thereafter, disclose to any
other person or entity any confidential information or trade secret
of the Company or its subsidiaries, except for disclosures to
directors, officers, key employees, independent accountants and
counsel of the Company and its subsidiaries as may be necessary or
appropriate in the performance of his duties hereunder. The
Executive agrees not to take with him upon leaving the employ of the
Company any document or paper relating to any confidential
information or trade secret of the Company and its subsidiaries.
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10. Other Employees. The Executive agrees that, for a period of two (2)
years after the termination of employment under this Agreement, he
will not directly or indirectly solicit or induce or attempt to
solicit or induce or cause any of the employees of the Company or
the Company's subsidiaries to leave the employ of the Company or
of such subsidiaries.
11. Injunctive Relief. The Executive acknowledges that monetary
damages will not adequately compensate the Company for any
violation of Sections 9 or 10 hereof and consents to the entry of
an injunction in any court of competent jurisdiction to enforce the
provisions of Section 9 or Section 10 hereof.
12. Representations. The Executive represents and warrants that neither
the execution and delivery of this Agreement nor the performance of
his duties hereunder violates the provisions of any other agreement
to which he is a party or by which he is bound.
13. Nonassignability. No right or benefit under this Agreement shall be
assigned, transferred, pledged or encumbered (a) by the Executive
except by a beneficiary designation made in the manner provided
herein or by will or the laws of descent and distribution, (b) by
any beneficiary designated in the manner provided herein except by
will or the laws of descent and distribution, or (c) by the Company
except that the Company may assign this Agreement and all of its
rights hereunder to any entity with which it may merge or
consolidate or to which
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it may sell all or substantially all of its assets provided said
entity shall assume (by contract or by operation of law) the Company
obligations hereunder. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Executive, his heirs, legal
representatives and any beneficiary or beneficiaries designated
hereunder.
14. Notice. Any notice, request, or other communication given
hereunder shall be in writing, and, if given by the Executive to
the Company, shall be delivered personally or sent by certified or
registered mail, return receipt requested, postage prepaid,
addressed to the Company at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxxxx 00000, Attention: President. If given by the Company to
the Executive, it shall be delivered personally or sent by
certified or registered mail, return receipt requested, postage
prepaid, addressed to the Executive at Executive's address
hereinabove set forth. Either party may change the address to
which notices, requests and other communications are to be
addressed by notice given to the other in accordance with the
provisions of this Section 14. Notices, requests and other
communications shall be deemed to be given when received, which,
in the case of notice given by mail, shall be the time indicated on
the receipt therefor.
15. Severability. If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity
and unenforceability shall not affect
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the remaining provisions hereof which shall remain in full force
and effect.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey applicable
to contracts made and performed in New Jersey.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Executive and on behalf of the Company by its duly authorized officer, all
as of the day and year first above written.
SELECTIVE INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx,
Chairman, President and
Chief Executive Officer
/s/ Xxxxx X. Xxxxxxx, Xx.
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Xxxxx X. Xxxxxxx, Xx.
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In consideration of the covenants of the Executive hereinabove set
forth, Selective Insurance Group, Inc., holder of all of the issued and
outstanding capital stock of the Company, hereby guarantees to the
Executive the full performance by the Company of all of its obligations
under the foregoing Employment Agreement.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx,
Chairman, President and
Chief Executive Officer
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