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TERMINATION AGREEMENT
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TERMINATION AGREEMENT dated as of May 2, 1997, by and between
SELECTIVE INSURANCE COMPANY OF AMERICA (the "Company"), a New Jersey
corporation, having an office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx
00000, and XXXXX X. XXXXXXX, XX. (the "Executive"), having an address of 00
Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company recognizes the Executive to be a valuable
management employee of the Company; and WHEREAS, the Company recognizes
that a change in control of Selective Insurance Group, Inc., the Company's
parent corporation ("Selective"), could occur in the future, and that it
is of importance to the Company and to Selective and its stockholders to
provide for the continuity of management and its uninterrupted attention
and dedication to the business affairs of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that appropriate steps should be taken to encourage the
continued attention and dedication of principal members of the Company's
management to their assigned duties in circumstances arising from the
possibility of a change in control of Selective; and
WHEREAS, the Company has determined that an arrangement of the type
set forth herein will serve the purpose of attracting desirable persons for
executive positions with the Company, will induce the Executive to remain
with the Company, and will enhance the Executive's ability to assess and
advise the Board as to whether any proposal involving a change in the
control would be in
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the best interests of the Company, Selective and its shareholders and to
take such other action regarding such proposal without being influenced by
the prospects of his own future employment with the Company; and
WHEREAS, the Company and the Executive wish to set forth their
agreements as to the subject and procedures contemplated hereunder
acknowledging, however, that this Agreement supplements any employment
agreement that may be in effect from time to time between the Executive
and the Company and sets forth the severance benefits which the Company
agrees will be provided to the Executive in the event the Executive's
employment with the Company is terminated subsequent to a change of
control of Selective under the circumstances hereinbelow described.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:
1. Term of Agreement.
The term of this Agreement (the "Term") shall commence on the date
hereof and shall continue in effect until May 2, 2000, provided, however,
that commencing on May 2, 2000 and each May 2 thereafter (each such May 2
being hereinafter referred to as an "Extension Date"), the Term shall
automatically be extended for one (1) additional year, unless at least
twenty-four (24) months prior to an Extension Date, the Company or the
Executive shall have given written notice in the manner hereinafter
prescribed that the Term shall not be extended as of the next Extension
Date; "and, provided further, that if a "Change in Control" of Selective,
as defined in Section 2 hereof, shall have occurred during the term, as
the same may be extended, this Agreement shall terminate on the last day
of the twenty-four (24) month period commencing on the date that such
Change in Control shall have occurred. Notwithstanding anything in this
Section 1 to the contrary, this Agreement shall terminate if the Executive
or the Company terminates the Executive's employment
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prior to the date on which a Change in Control shall occur.
2. Change in Control.
(a) For the purposes of this Agreement, a "change in control of
Selective" (a "Change in Control") shall mean the occurrence of an event of
a nature that would be required to be reported in response to Item 1(a) of
a Current Report on Form 8-K, as in effect on the date hereof, pursuant to
Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") provided, however, that a Change in Control shall, in
any event, conclusively be deemed to have occurred upon the first to occur
of any one of the following events:
(i) The acquisition by any person or group, including, without
limitation, any current shareholder or shareholders of
Selective, of securities of Selective resulting in such
person's or group's owning of record or beneficially
twenty-five percent (25%) or more, of any class of voting
securities of Selective;
(ii) The acquisition by any person or group, including, without
limitation, any current shareholder or shareholders of
Selective, of securities of Selective resulting in such
person's or group's owning of record or beneficially
twenty percent (20%) or more, but less than twenty-five
percent (25%), of class of voting securities of Selective,
if the Board adopts a resolution that such acquisition
constitutes a Change in Control;
(iii)The sale or disposition of all or substantially all of
the assets of Selective;
(iv) The reorganization, recapitalization, merger,
consolidation or other business
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combination involving Selective the result of which is
the ownership by the shareholders of Selective of less
than eighty percent (80%) of those voting securities of
the resulting or acquiring entity having the power to
elect a majority of the board of directors of such entity;
or
(v) A change in the membership in the Board of Directors of
Selective (the "Selective Board") which, taken in
conjunction with any other prior or concurrent changes,
results in twenty percent (20%) or more of the Selective
Board's membership being persons not nominated by
Selective's management or Selective's Board as set forth
in Selective's then most recent proxy statement, excluding
changes resulting from substitutions by Selective's Board
because of retirement or death of a director or directors,
removal of a director or directors by Selective's Board or
resignation of a director or directors due to demonstrated
disability or incapacity.
(b) Notwithstanding anything in the foregoing Section 2(a) to the
contrary, no Change in Control shall be deemed to have occurred for the
purposes of this Agreement by virtue of any transaction which results in the
Executive, or a group of persons which includes the Executive, acquiring,
directly or indirectly, voting securities of Selective.
(c) For the purpose of Section 2(a) the following definitions shall
apply:
(i) the terms "person" and "beneficial owner"
shall have the meanings set forth in Regulation 13D under
the Exchange Act, as such
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Regulation exists on the date hereof;
(ii) the term "voting security" shall include any security that
has, or may have upon an event of default or in respect to
any transaction, a right to vote on any matter upon which
the holder of any class of common stock of Selective would
have a right to vote;
(iii)the term "group" shall have the meaning set forth in
Section 13(d)(3) of the Exchange Act; and
(iv) the term "substantially all of the assets of Selective"
shall mean more than fifty percent (50%) of Selective's
assets on a consolidated basis, as shown in Selective's
most recent audited balance sheet.
3. Continuation of Employment.
Notwithstanding any termination date specified in the Executive's
Employment Agreement with the Company dated as of May 2, 1997, or any
amendment or modification thereof, or any other employment agreement between
the Company and the Executive from time to time (collectively, the
"Employment Agreement"), in the event of a Change in Control, the Company
agrees to continue to employ the Executive, and, subject to the provisions
of Section 4 hereof, the Executive agrees to continue in the employ of the
Company, in the capacity in which the Executive was serving, and with the
duties, responsibilities and status of the Executive immediately prior to
such Change in Control or in such other capacity as shall be agreeable to
the Executive, for a term commencing on the date on which the Change in
Control shall have occurred and ending three (3) years after the date on
which the Change in Control shall have occurred. Commencing on the date
three (3) years after the date on which the Change in Control shall have
occurred and each anniversary date of the Change in Control
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thereafter (each such date being hereinafter referred to as a "Renewal
Date"), the term of the Executive's employment shall automatically be
renewed for one (1) additional year unless at least twenty-four (24) months
prior to a Renewal Date the Company or the Executive shall have given
written notice in the manner hereinafter prescribed that such employment
shall not be renewed as of such Renewal Date. The provisions of this
Section 3 shall survive any termination of this Agreement pursuant to
Section 1 hereof after a Change in Control and shall continue in full force
and effect.
4. Termination of Employment Following Change in Control.
The Executive shall be entitled to the benefits provided in Section 5
hereof upon the termination of his employment during the term of this
Agreement, as the same may be extended, after a Change in Control has
occurred, unless such termination is: (a) due to the Executive's death or
Retirement, (b) by the Company for Cause or Disability, or (c) by the
Executive other than for Good Reason (as such foregoing capitalized terms
are hereinafter defined).
(i) Termination by the Executive or by the Company of the
Executive's employment based on "Retirement" shall mean
termination: (A) at such age as shall be established by
the Board prior to a Change in Control for mandatory or
normal retirement of Company executives in general, which
shall not be less than age 65, or (B) at any other
retirement age set by mutual agreement of the Company and
the Executive and approved by the Board.
(ii) Termination by the Company of the Executive's employment
based on "Disability" shall mean termination because of
the Executive's physical injury or physical or mental
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illness which causes him to be absent from his duties with
the Company on a full-time basis for a continuous period
in excess of the greater of: (A) the period of disability
constituting permanent disability as specified under the
Company's long-term disability insurance coverage
applicable to the Executive prior to a Change in Control
or (B) six (6) calendar months, unless within thirty (30)
days after Notice of Termination (as hereinafter defined)
is thereafter given the Executive shall have returned to
the full-time performance of his duties.
(iii)Termination by the Company of the Executive's employment
based on "Cause" shall mean termination upon: (A) the
Executive's conviction of a felony (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
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Executive's duties and obligations to the Company
which constitute common law fraud or other gross
malfeasance of duty; provided, however, that no
termination for Cause pursuant to clauses (B) or
(C) shall occur unless and until there shall have
been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than
sixty-six and two thirds percent (66 2/3%) of the entire
membership of the Board, excluding the Executive, at a
meeting of the Board called and held for the purpose
(after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel,
to be heard before the Board), finding that in good faith
opinion of the Board the Executive was guilty of the
conduct set forth in such clause (B) or (C) and specifying
the particulars thereof in reasonable detail. For
purposes of this clause (iii), no act, or failure to act,
on the part of the Executive shall be considered "willful"
unless done or omitted to be done by the Executive in bad
faith and without reasonable belief that his action or
omission was in, or not opposed to, the best interests of
the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by
the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to have been done
or omitted to have been done by the Executive in good
faith and in the best
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interests of the Company.
(iv) Termination by the Executive of his employment for "Good
Reason" shall mean (A) termination by the Executive based
on: (1) any reduction in his base salary below the
annualized rate in effect on the date preceding the date
on which a Change in Control shall have occurred or the
Company's failure to increase (within 12 months of the
Executive's last increase in base salary) the Executive's
base salary after a Change in Control in an amount which
at least equals, on a percentage basis, changes in the
Consumer Price Index, all items, for New Jersey in the
preceding twelve (12) months; or (2) a failure by the
Company to continue in effect, or the material reduction
of any of Executive's benefits under, any Plan (as
hereinafter defined) in which the Executive was
participating on the date preceding the date on which a
Change in Control shall have occurred (or Plans providing
the Executive with at least substantially similar
benefits) other than as a result of the normal expiration
of any such Plan in accordance with its terms as in effect
on the date preceding the date on which a Change in
Control shall have occurred, or the taking of any action,
or the failure to act, by the Company which would
adversely affect the Executive's continued participation
in any of such Plans on at least as favorable a basis to
him as was the case on the date preceding the date on
which a Change in Control shall
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have occurred or which would materially reduce the
Executive's benefits in the future under any such Plans
or deprive the Executive of any material benefit enjoyed
by him at the time of the Change in Control; or (3)
without the Executive's express prior written consent,
the assignment to the Executive of any duties inconsistent
with his positions, duties, responsibilities and status
with the Company immediately prior to a Change in Control,
or any diminution in the Executive's responsibilities as an
executive of the Company as compared with those he had as an
executive of the Company immediately prior to a Change in
Control, or any change in the Executive's titles or office as
in effect immediately prior to a Change in Control, or any
removal of the Executive from, or failure to re-elect him
to, any of such positions, except in connection with the
termination of the Executive's employment for Cause,
Disability or Retirement or as a result of the Executive's
death or by his termination of his employment other than
for Good Reason; or (4) without the Executive's express
prior written consent, the imposition of a requirement by
the Company that the Executive be based anywhere other
than where the Executive's office is located on the date
preceding the date on which a Change in Control shall have
occurred; or (5) without the Executive's express prior
written consent, any reduction in the number of paid
vacation days to which the Executive was
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entitled as of the date preceding the date on which a Change
in Control shall have occurred; or (6) a failure by the Company
to provide the Executive with office, secretarial, computer
and other support services and facilities consistent with
his position in the Company and substantially equivalent
to those available to the Executive on the date preceding
the date on which a Change in Control shall have occurred;
or (7) the failure by the Company to obtain from any
successor to the business of the Company, as set forth in
Section 13, the assent to this Agreement, as described in
such Section 13; or (8) subsequent to a Change in Control,
any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination
(as hereinafter defined) satisfying the requirements of
Section 4(v) (and, if applicable, Section 4(iii)), and for
purposes of this Agreement no such purported termination
shall be effective; or (9) any breach by the Company of
any of the terms and conditions of any employment
agreement between the Company and the Executive or any
agreement between the Company and the Executive providing
for incentive compensation, stock options, stock
appreciation rights, stock bonuses, pension benefits,
group insurance or any similar benefits; or (10) any
requirement by the Company that the Executive be absent
from Executive's office on business travel or otherwise
more than forty-five (45) days in
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any calendar year or for more than fourteen (14) consecutive
days at any time, or (B) a voluntary termination by the
Executive upon Notice of Termination given by the Executive
to the Company no later than six (6) months after the occurrence
of a Change in Control, provided that Executive shall not
thereafter violate the provisions, if any, of Executive's
Employment Agreement with the Company relating to nondisclosure
of confidential information or noncompetition with the Company.
For purposes of this Agreement, a "Plan" shall mean any plan,
contract, authorization or arrangement, whether or not set
forth in any formal written documents, providing for compensation,
incentive compensation, non-qualified supplemental retirement
benefits, stock options (whether or not in tandem with stock
appreciation rights), stock appreciation rights, long-term
incentives, stock bonuses or restricted stock grants or any
employee benefit plan such as a pension, retirement, profit
sharing, medical, disability, accident, life insurance
plan or a relocation plan or policy or any other plan,
program, policy or arrangement of the Company intended to
benefit the Executive or employees of the Company
generally.
(v) Any termination of the Executive's employment by the
Company or by the Executive shall be communicated by a
Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination"
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shall mean a written notice given in the manner
hereinafter prescribed which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circum-
stances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated
and shall specify the date of termination in accordance
with this Agreement.
(vi) "Date of Termination" following a Change in Control shall
mean: (A) if the employment is to be terminated by the
Company for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall
not have returned to the performance of the Executive's
duties on a full-time basis during such thirty (30) day
period), or (B) if the employment is to be terminated by
either party for any other reason, the date on which
Notice of Termination is given.
(vii)In the event of dispute as to the Executive's termination
under Section 4(iv) the matter shall be forthwith
submitted to binding arbitration as hereinafter provided.
5. Payment of Benefits.
(a) If an event has occurred pursuant to Section 4 hereof which
entitles the Executive to the benefits and rights set forth in this Section
5, the Executive shall receive from the Company, or from the Escrow Agent
(as hereinafter defined), as the case may be, within five (5) days following
the Date of Termination (except as otherwise provided) all of the following
benefits, other than those
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benefits which he specifically elects by written notice to the Company or to
the Escrow Agent, as the case may be, not to receive:
(i) earned but unpaid base salary through the Date of
Termination at the rate in effect immediately prior to
the time a Notice of Termination is given plus any
incentive compensation, benefits or awards (including
both the cash and stock components) which pursuant to
the terms of any Plans have been accrued, earned or have
become payable, but which have not yet been paid to the
Executive (including any amounts which previously had
been deferred at the Executive's request); and
(ii) as severance pay and in lieu of any further salary for
periods subsequent to the Date of Termination (including
any payments of salary provided for by any employment
agreement with the Company), an amount in cash equal to
the Executive's "annualized includible compensation for
the base period" (as defined in Section 280G(d)(1) of
the Internal Revenue Code of 1986, as amended (the
"Code")), multiplied by a factor of 2.99.
(b) If an event has occurred pursuant to Section 4 hereof which
entitles the Executive to the benefits and rights set forth in this Section
5, the Executive shall be entitled to the benefits of any stock options,
stock appreciation rights, restricted stock grants, stock bonuses or other
benefits theretofore granted by the Company to the Executive under any Plan,
whether or not provided for in any agreement with the Company, provided,
however, that, except to the extent requiring approval of Selective's
stockholders, (i) all unvested stock options, stock appreciation rights,
restricted stock grants, stock bonuses, long-term incentives and similar
benefits shall be deemed to be vested in full on the Date
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of Termination, notwithstanding any provision to the contrary or any
provision requiring any act or acts by the Executive in any agreement with
the Company or Selective or any Plan, and (ii) to the extent that any such
stock options, stock appreciation rights, restricted stock grants, stock
bonuses, long-term incentives or similar benefits shall require by its terms
the exercise thereof by the Executive, the last date to exercise the same
shall, notwithstanding any provision to the contrary in any agreement or any
Plan, shall be the later to occur of (A) the last date provided for such
exercise in any agreement or Plan evidencing any such stock options, stock
appreciation rights, restricted stock grants, stock bonuses, long-term
incentives or similar benefits or (B) the close of business on the date
which shall be one hundred twenty (120) days after the Date of Termination
and (iii) if the vesting pursuant hereto of any such stock options, stock
appreciation rights, restricted stock grants, stock bonuses, long-term
incentives or similar benefits shall have the effect of subjecting the
Executive to liability under Section 16(b) of the Exchange Act or any
similar provision of law, the vesting date thereof shall be deemed to be the
first day after the Termination Date on which such vesting may occur without
subjecting the Executive to such liability.
(c) If an event has occurred pursuant to Section 4 hereof which
entitles the Executive to the benefits and rights set forth in this Section
5, 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
earliest of:
(i) three (3) years after the Date of Termination or (ii) the commencement
date of equivalent benefits from a new employer, 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 5(c). If, at
the end of three (3)years after the Termination Date, 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.
(d) Except as specifically provided in Section 5(c) above, the amount
of any payment provided for in this Section 5 shall not be reduced, offset
or subject to recovery by the Company by reason of any compensation earned
by the Executive as the result of employment by another employer after the
Date of Termination, or otherwise. The Executive shall not be required to
mitigate any amounts payable or benefits provided under this Agreement by
seeking or accepting other employment.
(e) The rights and benefits provided herein shall be in addition to,
and not (except as provided in this Agreement) to the exclusion of, any
other rights and benefits that may be available to the Executive in regard
to or arising out of the termination of the Executive's employment,
including claims for breach of contract or for violation of relevant
employment worker's compensation or employee benefits laws. The prosecution
or enforcement of rights granted by this Agreement or the election to take
benefits under this Agreement shall in no manner constitute an election of
rights or remedies by the Executive other than in respect of this
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Agreement.
(f) Notwithstanding anything in this Agreement to the contrary, if any
of the payments or benefits provided for in this Agreement, together with
any other payments or benefits which the Executive has the right to receive
from the Company (including, without limitation, any amounts payable under
any employment contract with the Company), would constitute a "parachute
payment"(as defined in Section 280G(b)(2) of the Code), the payments and
benefits due to the Executive shall be reduced, in such order of priority
and amount as the Executive shall elect, to the largest amount as will
result in no portion of such payments being subject to the excise tax
imposed by Section 4999 of the Code. Notwithstanding anything in the
foregoing to the contrary, any dispute or controversy regarding whether any
payments under this Agreement must be reduced pursuant to this Section 5(f)
shall be conclusively settled by an independent accounting firm acceptable
to each of the parties hereto, or, if no firm is acceptable to both parties
hereto, each of the Executive and the Company shall select an accounting
firm acceptable to it, and such accounting firms shall together designate
an independent accounting firm to settle such dispute or controversy, and
such settlement shall be binding upon both parties, provided, however, that
any accounting firm designated to settle any dispute or controversy
hereunder shall not have been previously retained by either party for a
period of at least two (2) years subsequent to the date of this settlement
of such dispute or controversy. The Company or the Escrow Agent, as the
case may be, may withhold from any benefits payable under this Agreement
all federal, state, city or other taxes as shall be required pursuant to
any law or governmental regulation or ruling.
(g) In the event that a court of competent jurisdiction shall determine
that any portion of the payment and benefits paid to the Executive pursuant
to this Agreement shall have constituted a "parachute payment" (as defined
in Section 280G(b)(2) of the
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Code) and subject to an excise tax under Section 4999(a) of the Code, the
Company shall pay to the Executive in cash such additional amount as is
necessary so that the total amount received by the Executive under this
Agreement, after payment of any applicable taxes on such total amount
(including, without limitation, federal, state or local income taxes, any
taxes imposed by Section 4999(a) of the Code and any taxes in respect of any
amount payable to the Executive under this Section 5(g)) shall not be less
than the net after tax amount that the Executive would have been entitled to
receive under this Agreement had such excise tax under Section 4999(a) not
been imposed. The Company shall pay such additional amount to the Executive
within thirty (30) days after the Executive gives written notice to the
Company that such determination has been made by a court of competent
jurisdiction.
6. Escrow of Benefits.
(a) At any time after the occurrence of a Change in Control, the
Company shall, upon the written request of the Executive, promptly deliver
to a bank or other institution acceptable to the Executive, as escrow agent
(the "Escrow Agent"), an amount of cash or certificates of deposit, treasury
bills or irrevocable letters of credit adequate to fully fund the
obligations of the Company under this Agreement.
(b) The escrow agreement or arrangement between the Company and the
Escrow Agent shall provide that amounts payable to the Executive under this
Agreement shall be paid by the Escrow Agent to the Executive five (5) days
after written demand therefore by the Executive to the Escrow Agent, with a
copy to the Company, certifying that such amounts are due and payable under
this Agreement because of the occurrence of an event specified under
Section 4 hereof. Such escrow agreement or arrangements shall also provide
that if the Company shall, prior to payment by the Escrow Agent, object in
writing to the Escrow Agent, with a copy to the Executive, as to the payment
of any amounts demanded by the
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Executive under this Agreement, certifying that such amounts are not due and
payable to the Executive because an event specified in Section 4 hereof has
not occurred, such dispute shall be resolved by binding arbitration as
hereinafter set forth.
(c) Such escrow agreement or arrangements shall further provide that
any dispute described in Section 6(b) hereof shall be forthwith submitted to
binding arbitration as hereinafter provided.
7. Arbitration.
Any disputes arising under Section 4(iv) or Section 6(b) hereof shall be
forthwith submitted to binding arbitration by three (3) arbitrators in
Newark, New Jersey, under the expedited rules of the American Arbitration
Association then obtaining. One such arbitrator shall be selected by each
of the Company and the Executive, and the two arbitrators so selected shall
elect the third arbitrator. Selection of all three arbitrators shall be
made within thirty (30) days after the date the dispute arose. Such
arbitration shall be limited solely to a determination of whether or not an
event has occurred pursuant to Section 4 of this Agreement which entitles
the Executive to the benefits and rights set forth in Section 5 of this
Agreement. The written decision of the arbitrators shall be rendered within
ninety (90) days after selection of the third arbitrator. The decision of
the arbitrators shall be final and binding on the Company and the Executive
and may be entered by either party in any court having jurisdiction.
8. Enforcement of Rights.
The Company, and any survivor of any business combination with the
Company causing rights to accrue to the Executive under this Agreement,
shall pay all the Executive's legal, accounting and arbitration fees and
expenses and costs as they become due, which the Executive may become
obligated to pay in obtaining, enforcing, retaining or defending any right
or benefit provided by this Agreement, whether in respect of any enforcement
undertaken or demand made by the Executive that is successful or in respect
of
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any enforcement undertaken or demand made in good faith by the Executive
that is not successful. If judgment is rendered against any of such
persons, it will pay the Executive, unless expressly included in the
judgment, prejudgment interest from the date of the Notice of Termination
at the prime rate being charged by PNC Bank NA New Jersey on the date of
the Notice of Termination.
9. Executive's Commitment.
The Executive agrees that subsequent to his period of employment with
the Company, he will not at any time communicate or disclose to any
unauthorized person, without the written consent of the Company, any
proprietary or confidential information concerning the business affairs,
products or customers of the Company which, if disclosed, would have a
material adverse effect upon the business or operations of the Company and
its subsidiaries, taken as a whole; it being understood, however, that the
obligations of this Section 9 shall not apply to the extent that the
aforesaid matters: (a) are disclosed in circumstances where the Executive
is legally required to do so or (b) become generally known to and available
for use by the public otherwise than by the Executive's wrongful act or
omission.
10. Severability.
If any one or more of the provisions (or any part thereof) of this
Agreement would be, invalid, illegal or unenforceable in any respect under
applicable law, then such provision (or any part thereof) shall be deemed
modified to the extent necessary to render it valid while most nearly
preserving its original intent; no provision (or any part thereof) of this
Agreement shall be affected by another provision (or any part thereof) of
this Agreement being held invalid.
11. Notice.
For the purposes of this Agreement, notices, requests, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given: (i) when
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delivered personally, or (ii) three (3) days after having been mailed by
registered or certified mail, return receipt requested, or (iii) one (1)
day after having been sent by telegraph or mailed by express mail or other
overnight courier service, postage, telegraph, courier and registry fees,
as the case may be, prepaid and addressed to the addresses set forth in the
first paragraph of this Agreement or to such other address as either party
may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt. All
notices to the Company shall be directed to the attention of the President
of the Company.
12. Merger; Amendment; Waiver.
(a) This Agreement supersedes all other agreements, arrangements and
understandings, and merges all negotiations and discussions, with respect to
the subject matter hereof; provided, however, that this Agreement shall not,
except to the extent specifically provided herein, supersede or limit the
rights, duties or obligations that the Executive may have under any written
employment agreement with the Company.
(b) This Agreement may be amended or modified only by a writing signed
by both parties. No further agreement between the parties shall be deemed
to supersede, amend or modify this Agreement unless a statement to that
effect is made in such future agreement or the enforcement of such agreement
would give rise to conflicting obligations between the Executive on the one
hand and the Company, its successor or other bound party on the other hand;
in the latter case, however, this Agreement shall be deemed to be
superseded, amended or modified only to the extent necessary to avoid such
conflict.
(c) The waiver of the non-performance of any obligation under this
Agreement shall apply to that non-performance only and shall not constitute
a waiver, modification or amendment of this provision giving rise to such
obligation.
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13. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by merger, consolidation or other combination other than a sale of
assets) to the business of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of
the Company to obtain such agreement prior to the effectiveness of any such
succession shall constitute Good Reason for termination by the Executive of
his employment, and, if a Change in Control shall have occurred, the
Executive shall be entitled to the benefits set forth in Section 5 of this
Agreement, except that for purposes of implementing the foregoing, the date.
On which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, the "Company" shall mean the
Company as hereinbefore defined, and any successor and assign to its
business as aforesaid which executes and delivers the agreement provided for
in this Section 13 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be enforceable by
the personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees of the Executive. If
the Executive should die while any amount would still be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee or other designee or, if
there be no such designee, to his estate.
14. Governing Law.
This Agreement is being made in the State of New Jersey and shall be
governed by, and interpreted and construed with reference to, the laws of
New Jersey.
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15. Headings.
Headings in this Agreement are for convenience of reference only and
shall not be used to construe or interpret this Agreement.
16. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereunder have executed this Agreement
as of the date first above written.
SELECTIVE INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxxx,
Chairman, President and
Chief Executive Officer
/s/ Xxxxx X. Xxxxxxx, Xx.
---------------------------
Xxxxx X. Xxxxxxx, Xx.
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In consideration of the covenants of the Executive hereinabove set
forth, Selective hereby guarantees to the Executive the full performance by
the Company of all of its obligations under the foregoing Termination
Agreement.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxxx,
Chairman, President and
Chief Executive Officer
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