PAGE
EXHIBIT 10-16S
AMENDMENT NO. 2 TO TERMINATION AGREEMENT
----------------------------------------
AMENDMENT NO. 2, dated as of December 31, 1998 among SELECTIVE
INSURANCE GROUP, INC., a New Jersey corporation ("Selective"), having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, SELECTIVE
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("XXXX"), having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, and XXXXX X.
XXXXXXXXX, having an address of X.X. Xxx 0000, Xxxxxxxxxxx, Xxx Xxxxxx
00000 (the "Executive"), to Termination Agreement dated as of September 1,
1993 among XXXX and the Executive, as previously amended by Amendment No. 1
thereto dated as of January 31, 1994 (as so amended, the "Termination
Agreement").
WHEREAS, XXXX and the Executive have executed and delivered the
Termination Agreement, and Selective has guaranteed all of the obligations
of XXXX under the Termination Agreement; and
WHEREAS, the parties hereto desire to amend the Termination Agreement
as provided herein.
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Subsection 5(f) of the Termination Agreement is hereby
deleted in its entirety, and replaced with a new subsection 5(f) to read
in its entirety as follows:
(f) In the event that any payments or benefits
which the Executive is entitled to receive from
the Company under this Agreement, together with
any other payments or benefits which the Executive
is entitled to receive from the Company (including,
without limitation, any amounts payable under any
employment contract with the Company or any stock
option, stock bonus, incentive compensation or other
employee benefit plan of the Company), in the
aggregate would constitute an "excess parachute
payment" (as defined in Section 280G(b) of the
Code), the Company shall pay to the Executive an
amount constituting the greater to the Executive
on a net after-tax basis (as hereinafter provided)
of (i) the amount of payments
PAGE
and benefits which the Executive is entitled to
receive from the Company under this Agreement,
together with any other payments and benefits
which the Executive is entitled to receive from
the Company, reduced, in such order of priority
and amounts as the Executive shall elect, to the
largest amount as will result in no portion of the
aggregate of such payments being subject to the
excise tax imposed by Section 4999 of the Code,
or any successor or substitute provision of the
Code (the "Section 4999 Tax"), or (ii) the amount
of payments and benefits to which the Executive is
entitled to receive from the Company under this
Agreement, together with such other payments and
benefits which the Executive is entitled to receive
from the Company, plus an amount in cash equal to
(x) the amount of such "excess parachute payment"
multiplied by (y) twenty percent (20%). The
aggregate amounts described in clause (i) and in
clause (ii) of this subsection 5(f) shall be
calculated on a net after-tax basis giving effect
to the obligation of the Executive to pay any
applicable taxes on such aggregate amounts
(including, without limitation, all federal,
state and local income taxes at the maximum
applicable rates, any Section 4999 Tax and any
other tax payable thereon at the maximum
applicable rate).
2. Subsection 5(g) of the Termination Agreement is hereby deleted
in its entirety and replaced with a new subsection 5(g) to read in its
entirety as follows:
(g) In the event that the Executive shall
receive from the Company the amount specified
in clause (i) of subsection 5(f) and the
Internal Revenue Service (the "IRS") or a
court of competent jurisdiction shall
determine that any portion of the payments
and benefits paid or payable to the Executive
pursuant to this Agreement shall constitute
an "excess parachute payment" subject to a
Section
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PAGE
4999 tax, the Company shall pay to the
Executive in cash such additional amount as
is necessary so that the aggregate amounts
received by the Executive under this Agreement,
after giving effect to the obligation of the
Executive to pay any applicable taxes on such
aggregate amounts (including, without limitation
all federal, state and local income taxes, any
Section 4999 Tax and any other taxes payable
thereon), shall not be less than the net
after-tax amount which the Executive would have
been entitled to receive under clause (i) of
subsection 5(f) had such Section 4999 Tax 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 the IRS or
a court of competent jurisdiction.
3. The following new Section 5(h) is hereby added to the
Agreement:
(h) Any dispute or controversy between the
Executive and the Company regarding payments
under this Section 5 of this Agreement 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
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PAGE
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.
4. The capitalized defined terms used in this Amendment shall
have the same meanings as are ascribed to them in the Termination Agreement
unless otherwise defined herein.
5. Except as amended herein, the Termination Agreement shall
continue in full force and effect on and after the date hereof.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
Executive and on behalf of Selective and XXXX by their duly authorized
officers, as of the date and year first above written.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
SELECTIVE INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
/s/ Xxxxx X. Xxxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxxx
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PAGE
AMENDMENT NO. 2 TO TERMINATION AGREEMENT
----------------------------------------
AMENDMENT NO. 2, dated as of December 31, 1998 among SELECTIVE
INSURANCE GROUP, INC., a New Jersey corporation ("Selective"), having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, SELECTIVE
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("XXXX"),having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000,
and THORNTON R. LAND, having an address at 00 Xxxxxxxxx Xxxx, Xxxxxxx,
Xxx Xxxx 00000 (the "Executive"), to Termination Agreement dated
as of September 1, 1993 among XXXX and the Executive, as previously amended
by Amendment No. 1 thereto dated as of January 31, 1994 (as so amended, the
"Termination Agreement").
WHEREAS, XXXX and the Executive have executed and delivered the
Termination Agreement, and Selective has guaranteed all of the obligations
of XXXX under the Termination Agreement; and
WHEREAS, the parties hereto desire to amend the Termination Agreement
as provided herein.
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Subsection 5(f) of the Termination Agreement is hereby deleted
in its entirety, and replaced with a new subsection 5(f) to read in its
entirety as follows:
(f) In the event that any payments or benefits which
the Executive is entitled to receive from the Company
under this Agreement, together with any other payments
or benefits which the Executive is entitled to receive
from the Company (including, without limitation, any
amounts payable under any employment contract with the
Company or any stock option, stock bonus, incentive
compensation or other employee benefit plan of the
Company), in the aggregate would constitute an "excess
parachute payment" (as defined in Section 280G(b) of
the Code), the Company shall pay to the Executive an
amount constituting the greater to the Executive on a
net after-tax basis (as hereinafter
PAGE
provided) of (i) the amount of payments and benefits
which the Executive is entitled to receive from the
Company under this Agreement, together with any other
payments and benefits which the Executive is entitled
to receive from the Company, reduced, in such order of
priority and amounts as the Executive shall elect, to
the largest amount as will result in no portion of the
aggregate of such payments being subject to the excise
tax imposed by Section 4999 of the Code, or any
successor or substitute provision of the Code (the
"Section 4999 Tax"), or (ii) the amount of payments
and benefits to which the Executive is entitled to
receive from the Company under this Agreement,
together with such other payments and benefits which
the Executive is entitled to receive from the Company,
plus an amount in cash equal to (x) the amount of such
"excess parachute payment" multiplied by (y) twenty
percent(20%). The aggregate amounts described in
clause (i) and in clause (ii) of this subsection 5(f)
shall be calculated on a net after-tax basis giving
effect to the obligation of the Executive to pay any
applicable taxes on such aggregate amounts (including,
without limitation, all federal, state and local income
taxes at the maximum applicable rates, any Section 4999
Tax and any other tax payable thereon at the maximum
applicable rate).
2. Subsection 5(g) of the Termination Agreement is hereby
deleted in its entirety and replaced with a new subsection 5(g) to read
in its entirety as follows:
(g) In the event that the Executive shall receive from
the Company the amount specified in clause (i) of
subsection 5(f) and the Internal Revenue Service (the
"IRS") or a court of competent jurisdiction shall
determine that any portion of the payments and
benefits paid or payable to the Executive pursuant
to this Agreement shall constitute an "excess
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PAGE
parachute payment" subject to a Section 4999 tax,
the Company shall pay to the Executive in cash such
additional amount as is necessary so that the
aggregate amounts received by the Executive under
this Agreement, after giving effect to the obligation
of the Executive to pay any applicable taxes on such
aggregate amounts (including, without limitation all
federal, state and local income taxes, any Section
4999 Tax and any other taxes payable thereon), shall
not be less than the net after-tax amount which the
Executive would have been entitled to receive under
clause (i) of subsection 5(f) had such Section 4999
Tax 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 the
IRS or a court of competent jurisdiction.
3. The following new Section 5(h) is hereby added to the Agreement:
(h) Any dispute or controversy between the Executive
and the Company regarding payments under this
Section 5 of this Agreement 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
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PAGE
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.
4. The capitalized defined terms used in this Amendment shall
shall have the same meanings as are ascribed to them in the Termination
Agreement unless otherwise defined herein.
5. Except as amended herein, the Termination Agreement shall
continue in full force and effect on and after the date hereof.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
Executive and on behalf of Selective and XXXX by their duly authorized
officers, as of the date and year first above written.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and Chief
Executive Officer
SELECTIVE INSURANCE COMPANY
F AMERICA
By:/s/ Xxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and Chief
Executive Officer
/s/ Thornton R. Land
-------------------------
Thornton R. Land
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