EMPLOYMENT AGREEMENT
Exhibit
10.4
This
Employment Agreement, (the “Agreement”) is made as of the
23rd day of December, 2008, between Selective Insurance Company of
America, a New Jersey corporation with a principal place of business at
00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000 (the “Company”) and Xxxxx X. Xxxxxxx, an
individual residing at [Address Intentionally Omitted] (the “Executive”).
SECTION
1. DEFINITIONS.
1.1. Definitions. For purposes of
this Agreement, the following terms shall have the meanings set forth
below:
“Accounting Firm” has the
meaning given to such term in Section 3.6(b) hereof.
“Agreement” has the meaning
given to such term in the Preamble hereto.
“Board” means the Board of
Directors of the Company’s Parent.
“Cause” means any one or more
of the following:
(i) the
Executive shall have been convicted by a court of competent jurisdiction of, or
pleaded guilty or nolo contendere to, any felony under, or within the meaning
of, applicable United States federal or state law;
(ii) the
Executive shall have breached in any respect any one or more of the material
provisions of this Agreement, including, without limitation, any failure to
comply with the Code of Conduct, and, to the extent such breach may be cured,
such breach shall have continued for a period of thirty (30) days after written
notice by the Company’s Chief Executive Officer to the Executive specifying such
breach; or
(iii) the
Executive shall have engaged in acts of insubordination, gross negligence or
willful misconduct in the performance of the Executive’s duties and obligations
to the Company.
For
purposes of clauses (ii) and (iii) of this definition of “Cause”, no act, or
failure to act, on the part of the Executive shall be considered grounds for
“Cause” under such clauses if such act, or such failure to act, was done or
omitted to be done based upon authority or express direction given by the Chief
Executive Officer or based upon the advice of counsel for the
Company.
“Change in Control” means the
occurrence of an event of a nature that would be required to be reported by the
Company’s Parent in response to Item 5.01 of a Current Report on Form 8-K, as in
effect on the date thereof, pursuant to Section 13 or 15(d) of the Securities
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” (as such terms are used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act or any successor provisions
to either of the foregoing), including, without limitation, any current
shareholder or shareholders of the Company’s Parent, of securities of the
Company’s Parent resulting in such person or group being a “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act) of twenty-five
percent (25%) or more of any class of Voting Securities of the Company’s
Parent;
(ii) The
acquisition by any “person” or “group” (as such terms are used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act or any successor provisions
to either of the foregoing), including, without limitation, any current
shareholder or shareholders of the Company’s Parent, of securities of the
Company’s Parent resulting in such person or group being a “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act) of twenty percent
(20%) or more, but less than twenty-five percent (25%), of any class of Voting
Securities of the Company’s Parent, if the Board adopts a resolution that such
acquisition constitutes a Change in Control;
(iii) The
sale or disposition of more than fifty percent (50%) of the Company’s Parent’s
assets on a consolidated basis, as shown in the Company’s Parent’s then most
recent audited consolidated balance sheet;
(iv) The
reorganization, recapitalization, merger, consolidation or other business
combination involving the Company’s Parent the result of which is the ownership
by the shareholders of the Company’s Parent of less than eighty percent (80%) of
those Voting Securities of the resulting or acquiring Person having the power to
vote in the elections of the board of directors of such Person; or
(v) A
change in the membership in the Board which, taken in conjunction with any other
prior or concurrent changes, results in twenty percent (20%) or more of the
Board’s membership being persons not nominated by the Company’s Parent’s
management or the Board as set forth in the Company’s Parent’s then
most recent proxy statement, excluding changes resulting from substitutions
by the Board because of retirement or death of a director or
directors, removal of a director or directors by the Board or resignation of a
director or directors due to demonstrated disability or incapacity.
(vi) Anything
in this definition of Change in Control to the contrary notwithstanding, no
Change in Control shall be deemed to have occurred for 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 the Company’s Parent.
“Code” means the Internal
Revenue Code of 1986, as amended from time to time.
“Code of Conduct” has the
meaning given to such term in Section 2.3(a) hereof.
“Commencement Date” has the
meaning given to such term in Section 2.2 hereof.
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“Company” has the meaning given
to such term in the Preamble hereto and includes any Person which shall succeed
to or assume the obligations of the Company hereunder pursuant to Section 5.6
hereof.
“Company’s Parent” means
Selective Insurance Group, Inc., a publicly traded New Jersey corporation with a
principal office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx
00000.
“Covered Employee” means a
covered employee, within the meaning of Section 162(m)(3) of the Code, of the
Company.
“Determination” has the meaning
given to such term in Section 3.6(b) hereof.
“Disability” means the
Executive’s physical injury or physical or mental 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: (i) the period of disability
constituting permanent disability as specified under the Company’s long-term
disability insurance coverage applicable to the Executive at the time of the
determination of the existence of a disability (or, if such determination is
made after the occurrence of a Change in Control, as specified under the
long-term disability insurance coverage applicable to the Executive prior to a
Change in Control) or (ii) 180 days, unless within thirty (30) days after a
Notice of Termination is thereafter given the Executive shall have returned to
the full-time performance of his duties.
“Early Termination” has the
meaning given to such term in Section 3.2 hereof.
“Excise Tax” has the meaning
given to such term in Section 3.6(a) hereof.
“Executive” has the meaning
given to such term in the Preamble hereto.
“Extended Benefit Period” has
the meaning given to such term in Section 3.3(c) hereof.
“Good Reason” means the
occurrence of any one or more of the following conditions; provided, however,
that no such condition shall be deemed to constitute “Good Reason” unless the
Executive provides notice of such condition to the Company within ninety (90)
days of its initial existence, and the Company shall have failed to remedy the
condition within thirty (30) days of its receipt of such notice:
(i) any
material diminution in the Executive’s Salary below the annualized rate in
effect on the date on which a Change in Control shall have occurred, unless such
reduction is implemented for the senior executive staff generally, provided, however
that such reduction shall constitute Good Reason even if implemented for senior
executive staff generally if such reduction occurs within two years after a
Change in Control;
(ii) any
material negative change in the aggregate benefits the Executive receives, other
than as a result of the normal expiration of any Plan as to other eligible
employees in accordance with its terms as in effect on the date
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preceding the date on which a Change in Control shall have occurred, or unless
such change affects all participants of such Plan generally;
(iii) without
the Executive’s express prior written consent, a material diminution of the
Executive’s position, duties, responsibilities and status with the Company
immediately prior to a Change in Control, or any material 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 material negative change in the Executive’s titles or office as
in effect immediately prior to a Change in Control, 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;
(iv) without
the Executive’s express prior written consent, the imposition of a requirement
by the Company that the Executive be based at any location in excess of fifty
(50) miles from the location of the Executive’s office on the date preceding the
date on which a Change in Control shall have occurred;
(v) the
failure by the Company’s Parent to obtain from any Person with which it may
merge or consolidate or to which it may sell all or substantially all of its
assets, the agreement of such Person as set forth in the proviso in Section 5.6
hereof; provided that such
merger, consolidation or sale constitutes a Change in Control; or
(vi) within
two years after a Change in Control shall have occurred, any action or inaction
that constitutes a material breach by the Company of any of the terms and
conditions of this Agreement.
“Gross-Up Payment” has the
meaning given to such term in Section 3.6(a) hereof.
“Notice of Termination” means a
written notice which shall (i) indicate the specific termination provision in
this Agreement relied upon, (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and, (iii) specify the date of
termination in accordance with this Agreement (other than for a termination for
Cause).
“Overpayments” has the meaning
given to such term in Section 3.6(c) hereof.
“Person” means an individual,
partnership, corporation, association, limited liability company, trust, joint
venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.
“Plans” has the meaning given
to such term in Section 2.4(b) hereof.
“Rabbi Trust” has the meaning
given to such term in Section 3.4(d) hereof.
“Release” has the meaning given
to such term in Section 3.5 hereof.
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“Restrictive Covenants” has the
meaning given to such term in Section 3.5 hereof.
“Retirement” means a
termination of the Executive’s employment by the Company or the Executive (i) at
such age as shall be established by the Company’s Board for mandatory or normal
retirement of Company executives in general (which age shall be, if the
determination of Retirement is made after the occurrence of a Change in Control,
the age established by the Company’s Board prior to a Change in Control), which
shall not be less than age 65, or (ii) at any other retirement age set by mutual
agreement of the Company and the Executive and approved by the Company’s
Board.
“Salary” has the meaning given
to such term in Section 2.4(a) hereof.
“Section 409A” means Section
409A of the Code and the regulations of the Treasury and other applicable
guidance promulgated thereunder.
“Section 409A Tax” has the
meaning given to such term in Section 3.7 hereof.
“Securities Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Term” has the meaning given to
such term in Section 2.2 hereof.
“Termination Date” means the
date of the Executive’s termination of employment with the Company and its
affiliates. If the Executive’s employment is to be terminated by the
Company for Disability, the Executive’s employment shall terminate thirty (30)
days after a 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.
“Total Payments” has the
meaning given to such term in Section 3.6(a) hereof.
“Triggering Event” has the
meaning given to such term in Section 3.4(d) hereof.
“Trustee” has the meaning given
to such term in Section 3.4(d) hereof.
“Underpayments” has the meaning
given to such term in Section 3.6(c) hereof.
“Voting Securities” means, with
respect to a specified Person, any security of such Person 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 such Person
would have a right to vote.
1.2. Terms
Generally. Unless the context of this Agreement requires
otherwise, words importing the singular number shall include the plural and vice
versa, and any pronoun shall include the corresponding masculine, feminine and
neuter forms.
1.3. Cross-References. Unless
otherwise specified, references in this Agreement to any Paragraph or Section
are references to such Paragraph or Section of this Agreement.
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SECTION
2. EMPLOYMENT
AND COMPENSATION. The following terms and conditions will
govern the Executive’s employment with the Company throughout the
Term.
2.1. Employment. The
Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company, on the terms and conditions set forth
herein.
2.2. Term. The
term of employment of the Executive under this Agreement shall commence as of
the date hereof (the “Commencement Date”) and,
subject to Section 3.1 hereof, shall terminate on July 31, 2009, and shall
automatically be extended for additional one (1) year periods thereafter (any
such renewal periods, together with the initial three (3) year period, being
referred to as the “Term”) unless terminated by
either party by written notice to the other party.
2.3. Duties. (a) The Executive agrees to
serve as Executive Vice President and Chief Investment Officer of the Company
during the Term. In such capacity, the Executive shall have the
responsibilities and duties customary for such office(s) and such other
executive responsibilities and duties as are assigned by the Company’s Chief
Executive Officer which are consistent with the Executive’s
position(s). The Executive agrees to devote substantially all his
business time, attention and services to the business and affairs of the Company
and its affiliates and to perform his duties to the best of his
ability. At all times during the performance of this Agreement, the
Executive will adhere to the Code of Conduct of the Company (the “Code of Conduct”) that has
been or may hereafter be established and communicated by the Company to the
Executive for the conduct of the position or positions held by the
Executive. The Executive may not accept directorships on the board of
directors of for-profit corporations without the prior written consent of the
Chief Executive Officer of the Company. The Executive may accept
directorships on the board of directors of not-for-profit corporations without
the Chief Executive Officer’s prior, written consent so long as (a) such
directorships do not interfere with Executive’s ability to carry out his
responsibilities under this Agreement, and (b) Executive promptly notifies
the Chief Executive Officer in writing of the fact that he has accepted such a
non-profit directorship.
(b) If the
Company or the Executive elects not to renew the Term pursuant to Section 2.2,
the Executive shall continue to be employed under this Agreement until the
expiration of the then current Term (unless earlier terminated pursuant to
Section 3.1 hereof), shall cooperate fully with the Chief Executive Officer and
shall perform such duties not inconsistent with the provisions hereof as he
shall be assigned by the Chief Executive Officer.
2.4. Compensation.
(a) Salary. For
all services rendered by the Executive under this Agreement, the Company shall
pay the Executive a salary during the Term at a rate of not less than FOUR
HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($425,000) per year, which may be increased
but not decreased unless decreased for the senior executive staff generally (the
“Salary”), payable in
installments in accordance with the Company’s
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policy
from time to time in effect for payment of salary to executives. The
Salary shall be reviewed no less than annually by the Chief Executive Officer
and nothing contained herein shall prevent the Board from at any time increasing
the Salary or other benefits herein provided to be paid or provided to the
Executive or from providing additional or contingent benefits to the Executive
as it deems appropriate.
(b) Benefits. During
the Term, the Company shall permit the Executive to participate in or receive
benefits under the Selective Insurance Group, Inc. 2005 Omnibus Stock Plan, the
Selective Insurance Group, Inc. Cash Incentive Plan, the Selective Insurance
Retirement Savings Plan, the Retirement Income Plan For Selective Insurance
Company of America, as amended, the Selective Insurance Company of America
Deferred Compensation Plan, the Selective Insurance Supplemental Pension Plan
and any other incentive compensation, stock option, stock appreciation right,
stock bonus, pension, group insurance, retirement, profit sharing, medical,
disability, accident, life insurance plan, relocation plan or policy, or any
other plan, program, policy or arrangement of the Company intended to benefit
the employees of the Company generally, if any, in accordance with the
respective provisions thereof, from time to time in effect (collectively, the
“Plans”).
(c) Vacations
and Reimbursements. During the Term, the Executive shall be
entitled to vacation time off 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.
(d) Perquisites. During
the Term, the Company shall provide the Executive with suitable offices,
secretarial and other services, and other perquisites to which other executives
of the Company generally are (or become) entitled, to the extent as are suitable
to the character of the Executive’s position with the Company, subject to such
specific limits on such perquisites as may from time to time be imposed by the
Company’s Board and the Chief Executive Officer.
(e) Taxable
Reimbursements and Perquisites. Any taxable reimbursement of
business or other expenses, or any provision of taxable in-kind perquisites or
other benefits to the Executive, as specified under this Agreement, shall be
subject to the following conditions: (i) the expenses eligible for reimbursement
or the amount of in-kind benefits provided in one taxable year shall not affect
the expenses eligible for reimbursement or the amount of in-kind benefits
provided in any other taxable year; (ii) the reimbursement of an eligible
expense shall be made no later than the end of the year after the year in which
such expense was incurred; and (iii) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another
benefit.
SECTION
3. TERMINATION
AND SEVERANCE.
3.1. Termination. The
Executive’s employment hereunder shall commence on the Commencement Date and
continue until the expiration of the Term, except that the employment of the
Executive hereunder shall earlier terminate:
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(a) Death. Upon
the Executive’s death.
(b) Disability. At
the option of the Company, upon the Disability of the Executive.
(c) For
Cause. At the option of the Company, for Cause.
(d) Resignation. At
any time at the option of the Executive, by resignation (other than a
resignation for Good Reason).
(e) Without
Cause. At any time at the option of the Company, without
Cause; provided, that a
termination of the Executive’s employment hereunder by the Company based on
Retirement, death, or Disability shall not be deemed to be a termination without
Cause.
(f) Relocation. At
the option of the Executive at any time prior to a Change in Control and within
two years of the Company first imposing a requirement without the consent of the
Executive that the Executive be based at a location in excess of fifty (50)
miles from the location of the Executive’s office on the Commencement
Date.
(g) For Good
Reason. At any time at the option of the Executive within two
(2) years following the occurrence of a Change in Control, for Good
Reason.
3.2. Procedure
For Termination. Any termination of the Executive’s employment
by the Company or by the Executive prior to the expiration of the Term (an
“Early Termination”)
shall be communicated by delivery of a Notice of Termination to the other party
hereto given in accordance with Section 5.13 hereof. Any Early
Termination shall become effective as of the applicable Termination
Date.
3.3. Rights
and Remedies on Termination. The Executive will be entitled to
receive the payments and benefits specified below if there is an Early
Termination.
(a) Accrued
Salary. If the Executive’s employment is terminated pursuant
to any of the Paragraphs set forth in Section 3.1 hereof, then the Executive (or
his legal representative, as applicable) shall only be entitled to receive his
accrued and unpaid Salary through the Termination Date.
(b) Severance
Payments.
(i) If
the Executive’s employment is terminated pursuant to Paragraphs (a) or (b) in
Section 3.1 hereof, then the Executive (or his legal representative, as
applicable) shall be entitled to receive a severance payment from the Company in
an aggregate amount equal to the product of (A) 1.5 times (B) the
Executive’s Salary plus an amount equal
to the average of the three most recent annual cash
incentive payments (each an “ACIP”) made to the Executive; provided that any
such severance payment shall be reduced by the amount of payments the Executive
receives under any life or disability insurance policies with respect to which
the premiums were paid by the Company.
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(ii) If
the Executive’s employment is terminated pursuant to Paragraph (e) or (f) in
Section 3.1 hereof, then the Executive shall be entitled to receive a severance
payment from the Company in an aggregate amount equal to the product of
(A) 1.5 times (B) the
Executive’s Salary plus an amount equal
to the average of the three most recent ACIP payments made to the
Executive.
(iii) The
severance payment required to be paid by the Company to the Executive pursuant
to Paragraph (b)(i) or (b)(ii) above, shall, subject to Section 3.7, be paid in
equal monthly installments over the twelve (12) month period following the
Termination Date.
Notwithstanding
the foregoing, the Executive shall not be entitled to any ACIP for the year in
which the Termination Date occurs.
(c) Severance
Benefits.
(i) If
the Executive’s employment is terminated pursuant to any of the Paragraphs set
forth in Section 3.1 hereof, then the Executive (or his legal representative, as
applicable) shall be entitled to receive the benefits which the Executive has
accrued or earned or which have become payable under the Plans as of the
Termination Date, but which have not yet been paid to the
Executive. Payment of any such benefits shall be made in accordance
with the terms of such Plans.
(ii) If
the Executive’s employment is terminated pursuant to Paragraph (e) or (f) in
Section 3.1 hereof, then the Company shall, subject to Section 3.7, maintain in
full force and effect for the continued benefit of the Executive and his
dependents for a period terminating on the earlier of (A) eighteen (18) months
following the applicable Termination Date, or (B) the commencement date of
equivalent benefits from a new employer, (any such period being referred to as
the applicable “Extended
Benefit Period”) all insured and self-insured medical, dental, vision,
disability and life insurance employee benefit Plans in which the Executive was
entitled to participate immediately prior to the Termination Date; provided that the
Executive’s continued participation is not barred under the general terms and
provisions of such Plans. Notwithstanding the foregoing, the
Executive shall continue to participate in such Plans during the Extended
Benefit Period only to the extent that such Plans remain in effect for other
executives of the Company from time to time during the Extended Benefit Period
and subject to the terms of such Plans, including any modifications and
amendments thereto following the Termination Date. In the event
that the Executive’s participation in any such Plan is barred by its terms, the
Company shall arrange, at its sole cost and expense, to have issued for the
benefit of the Executive and his dependents during the Extended Benefit Period
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 Paragraph
(c)(ii). Executive shall be responsible for making any required
contributions to the cost of such coverage, on an after-tax basis, at the rate
which Executive was obligated to pay immediately prior to the Termination
Date.
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If, at
the end of the applicable 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 to enable
the Executive 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. In no
event shall the Company’s obligation to provide disability benefits hereunder be
reduced as a result of any individual disability policy purchased by the
Executive.
Any
portion of the continued or replacement welfare benefits coverage provided for
under this Section 3.3(c)(ii) which constitutes deferred compensation
subject to Section 409A shall be subject to the following conditions: (i) the
expenses eligible for reimbursement or the amount of in-kind benefits provided
in one taxable year shall not affect the expenses eligible for reimbursement or
the amount of in-kind benefits provided in any other taxable year (except with
respect to annual, lifetime or similar limits under arrangements providing for
the reimbursement of medical expenses under Section 105(b) of the Code); (ii)
the reimbursement of an eligible expense shall be made no later than the end of
the year after the year in which such expense was incurred; and (iii) the right
to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
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(d) Rights
Under Plans. If the Executive’s employment is terminated
pursuant to Paragraphs (a), (b), (e), or (f) in Section 3.1 hereof, 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 or the Company’s Parent to the Executive
under any Plan, whether or not provided for in any agreement with the Company or
the Company’s Parent; provided, however, that (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 Termination Date, notwithstanding any provision to the
contrary or any provision requiring any act or acts by the Executive in any
agreement with the Company or the Company’s Parent or any Plan; (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, be the earlier of (A) the later to occur of the fifteenth day of the
third month following the date at which, or the December 31 of the calendar year
in which, any such stock options, stock appreciation rights, restricted stock
grants, stock bonuses, long-term incentives or similar benefits would otherwise
have expired if not extended, or (B) the original expiration date had the
Executive’s employment not so terminated; and (iii) if the vesting or exercise
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
Securities 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.
(e) No Double
Dipping.
(i) The
severance payments and severance benefits the Executive may be entitled to
receive pursuant to this Section 3.3 shall be in lieu of any of the payments and
benefits the Executive may be entitled to receive pursuant to any other
agreement, plan or arrangement providing for the payment of severance payments
or benefits.
(ii) The
Executive expressly disclaims any interest he may have in the Selective
Insurance Company of America Severance Plan.
3.4. Rights
and Remedies on Termination After Change in Control. The
Executive will be entitled to receive the severance payments and severance
benefits specified below in the event there shall occur a termination of the
Executive’s employment pursuant to Paragraph (e) or (g) of Section 3.1 hereof
within two (2) years following the occurrence of a Change in
Control. The severance payments and benefits the Executive may be
entitled to receive pursuant to this Section 3.4 shall be in addition to, and
not in lieu of, any of the payments and benefits the Executive may be entitled
to receive pursuant to Section 3.3 hereof, unless expressly so stated to be in
lieu of such benefits and/or payments.
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(a) Severance
Payments. The Executive shall be entitled to receive a
severance payment from the Company in an aggregate amount equal to the product
of (i) 2; and (ii) the greater of:
(1) the
sum of the Executive’s Salary plus the Executive’s
target ACIP in effect as of the Termination Date, or
(2) the
sum of the Executive’s Salary in effect as of the Termination Date plus the
Executive’s average ACIP for the three calendar years prior to the calendar year
in which the Termination Date occurs.
Notwithstanding
the foregoing, the Executive shall not be entitled to any ACIP for the year in
which the Termination Date occurs.
Such
payment shall be made, subject to Section 3.7, sixty (60) business days
following the Termination Date. provided that the Executive has executed and
delivered a Release pursuant to Section 3.5 hereof and such Release has
become effective and irrevocable; and further provided that, if and to the
extent any portion of the payments under this Section 3.4 constitutes deferred
compensation subject to Section 409A, then, unless the Change in Control
qualifies as a change in the ownership of the Company’s Parent a change in
effective control of the Company’s Parent, or a change in the ownership of a
substantial portion of the assets of the Company’s Parent, as described in
Treasury Regulations Section 1.409A-3(i)(5), such portion of the payments shall
be paid at the times specified in Section 3.3(b)(iii) of the Employment
Agreement for payment of such portion.. The severance payment
required to be paid by the Company to the Executive pursuant to this Section
3.4(a) shall be in lieu of, and not in addition to, any other severance payments
which otherwise may have been required to be paid by the Company to the
Executive.
(b) Severance
Benefits. Subject to Section 3.7, 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)
twenty-four (24) months after the Termination Date or (ii) the commencement date
of equivalent benefits from a new employer (the “CIC Extended Benefit Period”),
all insured and self insured medical, dental, vision, disability and life
insurance employee welfare benefit plans in which the Executive was entitled to
participate immediately prior to the Termination Date; provided that the
Executive’s continued participation is not barred under the general terms and
provisions of such Plans. Notwithstanding the foregoing, the
Executive shall continue to participate in such Plans during the CIC Extended
Benefit Period only to the extent that such Plans remain in effect for other
executives of the Company from time to time during the CIC Extended Benefit
Period and subject to the terms of such Plans, including any modifications and
amendments thereto following the Termination Date. 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 Paragraph (b). Executive shall be responsible for
making any required
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contributions
to the cost of such coverage, on an after-tax basis, at the rate which Executive
was obligated to pay immediately prior to the Termination Date. If,
at the end of the applicable CIC 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 to enable
the Executive 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. The
severance benefits required to be provided by the Company to the Executive
pursuant to this Paragraph (b) shall be in lieu of, and not in addition to, any
severance benefits required to be provided to the Executive pursuant to Section
3.3(c)(ii) hereof. In no event shall the Company’s obligation to
provide disability benefits hereunder be reduced as a result of any individual
disability policy purchased by the Executive. Any portion of the
continued or replacement welfare benefits coverage provided for under this
Section 3.4(b) which constitutes deferred compensation subject to Section 409A
shall be subject to the following conditions: (i) the expenses eligible for
reimbursement or the amount of in-kind benefits provided in one taxable year
shall not affect the expenses eligible for reimbursement or the amount of
in-kind benefits provided in any other taxable year (except with respect to
annual, lifetime or similar limits under arrangements providing for the
reimbursement of medical expenses under Section 105(b) of the Code); (ii) the
reimbursement of an eligible expense shall be made no later than the end of the
year after the year in which such expense was incurred; and (iii) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
(c) Rights
Under Plans. 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 or the Company’s
Parent to the Executive under any Plan, whether or not provided for in any
agreement with the Company or the Company’s Parent; provided, however, that (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 Termination Date, notwithstanding any provision to the
contrary or any provision requiring any act or acts by the Executive in any
agreement with the Company or the Company’s Parent or any Plan; (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, be the earlier of (A) the later to occur of the fifteenth day of the
third month following the date at which, or the December 31 of the calendar year
in which, any such stock options, stock appreciation rights, restricted stock
grants, stock bonuses, long-term incentives or similar benefits would otherwise
have expired if not extended or (B) the original expiration date had the
Executive’s employment not so terminated; and (iii) if the vesting or exercise
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
Securities Exchange Act or any similar provision of law, the vesting date
thereof shall be deemed to be the first
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day after
the Termination Date on which such vesting may occur without subjecting the
Executive to such liability.
(d) Rabbi
Trust. The Company shall maintain a trust intended to be a
grantor trust within the meaning of subpart E, Part I, subchapter J, chapter 1,
subtitle A of the Code (the “Rabbi
Trust”). Coincident with the occurrence of a Change in
Control, the Company shall promptly deliver to a bank as trustee of the Rabbi
Trust (the “Trustee”),
an amount of cash or certificates of deposit, treasury bills or irrevocable
letters of credit adequate to fully fund the payment obligations of the Company
under this Section 3.4. The Company and Trustee shall enter into a
trust agreement that shall provide that barring the insolvency of the Company,
amounts payable to the Executive under this Section 3.4 (subject to Section 3.7)
shall be paid by the Trustee to the Executive five (5) days after written demand
therefor by the Executive to the Trustee, with a copy to the Company, certifying
that such amounts are due and payable under this Section 3.4 because the
Executive’s employment has been terminated pursuant to Paragraph (e) or (g) in
Section 3.1 hereof at a time which is within two (2) years following the
occurrence of a Change in Control (a “Triggering
Event”). Such trust agreement shall also provide that if the
Company shall, prior to payment by the Trustee, object in writing to the
Trustee, with a copy to the Executive, as to the payment of any amounts demanded
by the Executive under this Section 3.4, certifying that such amounts are not
due and payable to the Executive because a Triggering Event has not occurred,
such dispute shall be resolved by binding arbitration as set forth in Section
5.8 hereof.
3.5.
Conditions
to Severance Payments and Benefits.
(a) The
Executive’s right to receive the severance payments and benefits pursuant to
Sections 3.3 and 3.4 hereof, is expressly conditioned upon (a) receipt by the
Company of a written release (a “Release”) executed by the
Executive in the form of Exhibit A
hereto, and the expiration of the revocation period described therein without
such Release having been revoked, and (b) the compliance by the Executive with
the covenants, terms or provisions of Sections 4.1 and 4.2 hereof (the “Restrictive
Covenants”). If the Executive shall fail to deliver a Release
in accordance with the terms of this Section 3.5 or shall breach any of the
Restrictive Covenants, the Company’s obligation to make the severance payments
and to provide the severance benefits pursuant to Sections 3.3 and 3.4 hereof
shall immediately and irrevocably terminate.
(b) Except
where the Executive’s employment is terminated pursuant to Section 3.1(a) or
(b), upon the expiration of the initial three (3) year period of the Term,
during any calendar year in which the Executive is a Covered Employee, if any
stock-based awards of the Executive are intended to qualify as “performance
based compensation” within the meaning of Section 162(m) of the Code, then the
Executive’s entitlement, if any, to accelerated vesting of his stock-based
awards pursuant to Section 3.3 or 3.4 of this Agreement shall apply only to the
accelerated lapse of any service requirement, and the Executive shall be
entitled to such stock-based awards, or to the vesting thereof, only if and to
the extent that the applicable performance criteria applicable to such awards
are satisfied.
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3.6. Tax
Effect of Payments.
(a) Gross-Up
Payment. In the event that it is determined that any payment,
distribution or other benefit of any type to or for the Executive’s benefit made
by the Company, by any of its affiliates, by any Person who acquires ownership
or effective control of the Company’s Parent or ownership of a substantial
portion of the Company’s Parent’s assets (within the meaning of Section 280G of
the Code and the regulations thereunder) or by any affiliate of such Person,
whether paid or payable or distributed or distributable or otherwise made
available pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest or penalties, are collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes imposed upon the
Gross-Up Payment, including any Excise Tax, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed on the Total
Payments.
(b) Determination
by Accountant. All mathematical determinations and all
determinations of whether any of the Total Payments are “parachute payments”
(within the meaning of Section 280G of the Code) that are required to be made
under this Section, including all determinations of whether a Gross-Up Payment
is required, of the amount of such Gross-Up Payment and of amounts relevant to
the last sentence of this Section (collectively, the “Determination”), shall be made
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, provided, however, that any
accounting firm so designated shall not have been previously retained by either
party for a period of a least two (2) years subsequent to the applicable
Termination Date. Any independent accounting firm selected by the
Executive and the Company or designated pursuant to this Paragraph (b) shall be
referred to herein as the “Accounting
Firm”. Subject to Section 3.6(c) and Section 3.7, if a
Gross-Up Payment is determined to be payable, it shall be paid by the Company to
the Executive within five (5) days after such Determination is delivered to the
Company, but in no event later than the end of the Executive’s taxable year next
following the taxable year in which he remits the related taxes to the
applicable taxing authority.. Subject to Section 3.6(c), any
Determination by the Accounting Firm shall be binding upon the Company and
Executive, absent manifest error. All of the costs and expenses of
the Accounting Firm shall be borne by the Company.
(c) Underpayments
and Overpayments. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made
by the Company should have been made (“Underpayments”) or that
Gross-Up Payments will have been made by the Company which should not have been
made (“Overpayments”). In
either event, the Accounting Firm shall determine the amount of the Underpayment
or Overpayment that has occurred. In the case of an Underpayment, the
amount of such Underpayment shall promptly be paid by the Company to or for the
Executive’s benefit. In the case of an Overpayment, the Executive
shall, at the direction and expense of the
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Company,
take such steps as are reasonably necessary (including the filing of returns and
claims for refund), follow reasonable instructions from, and procedures
established by, the Company and otherwise reasonably cooperate with the Company
to correct such Overpayment; provided, however, that (i) the
Executive shall in no event be obligated to return to the Company an amount
greater than the net after-tax portion of the Overpayment that the Executive has
retained or has received as a refund or has received the benefit of from the
applicable taxing authorities and (ii) this provision shall be interpreted in a
manner consistent with the intent of this Section, which is to make the
Executive whole, on an after-tax basis, for the application of the Excise Tax,
it being understood that the correction of an Overpayment may result in the
Executive’s repaying to the Company an amount which is less than the
Overpayment. Anything herein to the
contrary notwithstanding, in the event of a final determination as to the
liability for the Excise Tax applicable to the Total Payments such determination
shall be the basis for determining whether there have been Underpayments or
Overpayments pursuant to this Section 3.6. For this purpose, a final
determination shall mean a final agreement reached with the Internal Revenue
Service or a final determination by a court with jurisdiction from which there
is no appeal, in either case, concluded in accordance with the provisions of
this Paragraph (c).
3.7. Section
409A Tax. Notwithstanding anything herein to the contrary, to
the extent any payment or provision of benefits under this Agreement upon the
Executive’s “separation from service” is subject to Section 409A of the Code, no
such payment shall be made, and Executive shall be
responsible for the full cost of such benefits, for six (6) months
following the Executive's "separation from service" if the Executive is a
"specified employee" of the Company on the date of such separation from
service. On the expiration of such six (6) month period, any payments
delayed, and an amount sufficient to reimburse the Executive for the cost of
benefits met by the Executive, during such period shall be aggregated (the
“Make-Up Amount”) and
paid in full to the Executive, and any succeeding payments and benefits shall
continue as scheduled hereunder. The
Company shall credit the Make-Up Amount with interest at no less than the
interest rate it pays for short-term borrowed funds, such interest to accrue
from the date on which payments would have been made, or benefits would have
been provided, by the Company to the Executive absent the six month
delay. The terms "separation from service" and "specified
employee" shall have the meanings set forth under Section 409A and the
regulations and rulings issued thereunder. Furthermore, the Company
shall not be required to make, and the Executive shall not be required to
receive, any severance or other payment or benefit under Sections 3.3, 3.4 or
3.6 hereof if the making of such payment or the provision of such benefit or the
receipt thereof shall result in a tax to the Executive arising under Section
409A of the Code (a “Section
409A Tax”). For purposes of Section 409A, any right to a
series of installment payments or provision of benefits in
installments under Sections 3.3 and 3.4 of this Agreement shall be treated as a
right to a series of separate payments. For purposes of Section 409A,
any reference in this Agreement to the Executive’s “termination of employment”
or words of similar import shall mean the Executive’s “separation from service”
from the Company, and the Executive’s Termination Date shall mean the date of
his “separation from service” from the Company.
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SECTION
4. RESTRICTIVE
COVENANTS.
4.1. Confidentiality. The
Executive agrees that he will not, either during the Term or at any time after
the expiration or termination of the Term, disclose to any other Person any
confidential or proprietary information of the Company, the Company’s Parent, or
their subsidiaries, except for (a) disclosures to directors, officers, key
employees, independent accountants and counsel of the Company, the Company’s
Parent and their subsidiaries as may be necessary or appropriate in the
performance of the Executive’s duties hereunder, (b) disclosures which do not
have a material adverse effect on the business or operations of the Company, the
Company’s Parent and their subsidiaries, taken as a whole, (c) disclosures which
the Executive is required to make by law or by any court, arbitrator or
administrative or legislative body (including any committee thereof) with
apparent jurisdiction to order the Executive to disclose or make accessible any
information, (d) disclosures with respect to any other litigation,
arbitration or mediation involving this Agreement, and (e) disclosures of any
such confidential or proprietary information that is, at the time of such
disclosure, generally known to and available for use by the public otherwise
than by the Executive’s wrongful act or omission. 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, the Company’s Parent and their subsidiaries, except that Executive
shall be entitled to retain (i) papers and other materials of a personal
nature, including but limited to, photographs, correspondence, personal diaries,
calendars and Rolodexes (so long as such Rolodexes do not contain the Company’s
only copy of business contact information), personal files and phone books,
(ii) information showing his compensation or relating to his reimbursement
of expenses, (iii) information that he reasonably believes may be needed
for tax purposes, and (iv) copies of plans, programs and agreements
relating to his employment, or termination thereof, with the
Company.
4.2. Non-Solicitation
of Employees. The Executive agrees that, except in the course
of performing his duties hereunder, he will not, either during the Term and for
a period of two (2) years after the expiration or termination of the Term,
directly or indirectly, solicit or induce or attempt to solicit or induce or
cause any of the employees of the Company, the Company’s Parent or their
subsidiaries to leave the employ of the Company, the Company’s Parent or any of
their subsidiaries.
SECTION
5. MISCELLANEOUS
PROVISIONS.
5.1. No
Mitigation; Offsets. The Executive shall not be required to
mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise and no future income earned by the
Executive from employment or otherwise shall in any way reduce or offset any
payments due to the Executive hereunder. Assuming a payment or
otherwise is due Executive under this Agreement, the Company may offset against
any amount due Executive under this Agreement only those amounts due Company in
respect of any undisputed, liquidated obligation of Executive to the
Company.
5.2. Governing
Law. The provisions of this Agreement will be construed and
interpreted under the laws of the State of New Jersey, without regard to
principles of conflicts of law.
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5.3. Injunctive
Relief and Additional Remedy. The Executive acknowledges that
the injury that would be suffered by the Company, the Company’s Parent, or their
subsidiaries as a result of a breach of the provisions of Sections 4.1 and 4.2
hereof would be irreparable and that an award of monetary damages to the
Company, the Company’s Parent, or their subsidiaries for such a breach would be
an inadequate remedy. Consequently, the Company, the Company’s Parent, or their
subsidiaries will have the right, in addition to any other rights it may have,
to obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement, and the
Company, the Company’s Parent, or their subsidiaries will not be obligated to
post bond or other security in seeking such relief. Each of the
parties hereby irrevocably submits to the exclusive jurisdiction of the federal
and state courts of the State of New Jersey for the purpose of injunctive
relief.
5.4. Representations
and Warranties by Executive. The Executive represents and
warrants to the best of his knowledge that the execution and delivery by the
Executive of this Agreement do not, and the performance by the Executive of the
Executive’s obligations hereunder will not, with or without the giving of notice
or the passage of time, or both: (a) violate any judgment, writ,
injunction, or order of any court, arbitrator or governmental agency applicable
to the Executive or (b) conflict with, result in the breach of any provisions of
or the termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound.
5.5. Waiver. The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by either party in exercising any
right, power, or privilege under this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (b) no notice to or demand on one party will be deemed to be
a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement.
5.6. Assignment. No
right or benefit under this Agreement shall be assigned, transferred, pledged or
encumbered (a) by the Executive except by a beneficiary designation made by will
or the laws of descent and distribution or (b) by the Company except that the
Company may assign this Agreement and all of its rights hereunder to any Person
with which it may merge or consolidate or to which it may sell all or
substantially all of its assets; provided that such
Person shall, by agreement in form and substance satisfactory to the Executive,
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 merger, consolidation or sale had taken place. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
Company, the Company’s Parent and each of their successors and assigns, and the
Executive, his heirs, legal representatives and any beneficiary or beneficiaries
designated hereunder.
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5.7. Entire
Agreement; Amendments. This Agreement contains the entire
agreement between the Company (and the Company’s Parent) and Executive with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the Company (and the Company’s Parent)
and Executive with respect to the subject matter hereof, including but not
limited to the Employment Agreement between Executive and the Company’s Parent
dated August 1, 2006. This Agreement may not be amended orally, but
only by an agreement in writing signed by the parties hereto.
5.8. Arbitration. Any
dispute which may arise between the Executive and the Company with respect to
the construction, interpretation or application of any of the terms, provisions,
covenants or conditions of this Agreement or any claim arising from or relating
to this Agreement will be submitted to final and 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 select the third arbitrator. Selection of all three
arbitrators shall be made within thirty (30) days after the date the dispute
arose. 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 New Jersey federal or state
court having jurisdiction.
5.9. Legal
Costs. The Company shall pay any reasonable attorney’s fees
and costs incurred by the Executive in connection with any dispute regarding
this Agreement so long as Executive’s claim(s) or defense(s) in such action are
asserted in the good faith belief that they are not frivolous. The
Company shall pay any such fees and costs promptly following its receipt of
written requests therefor, which requests shall be made no more frequently than
once per calendar month. The Company shall bear all legal costs and expenses
incurred in the event the Company should contest or dispute the characterization
of any amounts paid pursuant to this Agreement as being nondeductible under
Section 280G of the Code or subject to imposition of an excise tax under Section
4999 of the Code, including, without limitation, the reasonable costs and
expenses of any counsel selected by the Executive to represent him in connection
with such a matter. The
Company shall pay any such legal costs and expenses that are incurred due to a
tax audit or litigation by the end of the calendar year following the year in
which the taxes that are the subject of the audit or litigation are remitted to
the applicable taxing authority, or, where as a result of such audit or
litigation no taxes are remitted, by the end of the calendar year following the
year in which the audit is completed or there is a final and nonappealable
settlement or other resolution of the litigation.
5.10. Severability. In
the case that any one or more of the provisions contained in this Agreement
shall, for any reason, be held invalid or unenforceable, the other provisions of
this Agreement shall remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree shall
remain in full force and effect to the extent not held invalid or
unenforceable.
5.11. Counterparts;
Facsimile. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all
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of which,
when taken together, will be deemed to constitute one and the same
agreement. This Agreement may be executed via facsimile.
5.12. Headings;
Interpretation. The various headings contained herein are for
reference purposes only and do not limit or otherwise affect any of the
provisions of this Agreement. It is the intent of the parties that
this Agreement not be construed more strictly with regard to one party than with
regard to any other party.
5.13. Notices. (a) All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and sent as follows:
If to the Company, to:
|
Selective
Insurance Company of America
00
Xxxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxx Xxxxxx 00000
Attn: General
Counsel
Fax: (000)
000-0000
|
If to the Executive, to:
|
Xxxxx
X. Xxxxxxx
[Address
Intentionally Omitted]
|
(b) All
notices and other communications required or permitted under this Agreement
which are addressed as provided in Paragraph (a) of this Section 5.13, (i) if
delivered personally against proper receipt shall be effective upon delivery,
(ii) if sent by facsimile transmission (with evidence supplied by the sender of
the facsimile’s receipt at a facsimile number designated for receipt by the
other party hereunder, which other party shall be obligated to provide such a
facsimile number) shall be effective upon dispatch, and (iii) if sent (A) by
certified or registered mail with postage prepaid or (B) by Federal Express or
similar courier service with courier fees paid by the sender, shall be effective
upon receipt. The parties hereto may from time to time change their
respective addresses and/or facsimile numbers for the purpose of notices to that
party by a similar notice specifying a new address and/or facsimile number, but
no such change shall be deemed to have been given unless it is sent and received
in accordance with this Section 5.13.
5.14. Withholding. All
amounts payable by the Company to the Executive hereunder (including, but not
limited to, the Salary or any amounts payable pursuant to Sections 3.3 and/or
3.4 hereof) shall be reduced prior to the delivery of such payment to the
Executive by an amount sufficient to satisfy any applicable federal, state,
local or other withholding tax requirements.
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IN
WITNESS WHEREOF, the Company and Executive have executed this Agreement as of
the Commencement Date.
|
SELECTIVE
INSURANCE COMPANY OF AMERICA
|
||||
|
By:
|
/s/
Xxxxxx X. Xxxxx
|
|||
|
Xxxxxx
X. Xxxxx
Its
Executive Vice President
|
||||
|
EXECUTIVE:
|
||||
|
/s/
Xxxxx X. Xxxxxxx
|
||||
|
Xxxxx
X. Xxxxxxx
|
||||
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EXHIBIT
A
FORM OF
RELEASE
Reference
is hereby made to the Employment Agreement, dated as of __________, 200_ (the
“Employment
Agreement”), by
and between ____________ (the “Executive”) and
Selective Insurance Company of America, a New Jersey corporation (the “Company”). Capitalized
terms used but not defined herein shall have the meanings specified in the
Employment Agreement.
Pursuant
to the terms of the Employment Agreement and in consideration of the payments to
be made to the Executive by the Company, which Executive acknowledges are in
excess of what Executive would otherwise be entitled to receive, the Executive
hereby releases and forever discharges and holds the Company, the Company’s
Parent and their subsidiaries (collectively, the “Company Parties” and each a
“Company Party”), and the
respective officers, directors, employees, partners, stockholders, members,
agents, affiliates, successors and assigns and insurers of each Company Party,
and any legal and personal representatives of each of the foregoing, harmless
from all claims or suits, of any nature whatsoever (whether known or unknown),
past, present or future, including those arising from the law, being directly or
indirectly related to the Executive’s employment by or the termination of such
employment by any Company Party, including, without limiting the foregoing, any
claims for notice, pay in lieu of notice, wrongful dismissal, severance pay,
bonus, overtime pay, incentive compensation, interest or vacation pay for the
Executive’s service as an officer or director to any Company Party through the
date hereof. The Executive also hereby agrees not to file a lawsuit
asserting any such claims. This release (this “Release”) includes,
but is not limited to, claims growing out of any legal restriction on any
Company Party’s right to terminate its employees and claims or rights under
federal, state, and local laws prohibiting employment discrimination (including,
but not limited to, claims or rights under Title VII of the Civil Rights Act of
1964, as amended by the Civil Rights Act of 1991, the Americans with Disabilities
Act, the Family and Medical Leave Act, the Fair Labor Standards Act,
the Uniformed Services Employment
and Reemployment Rights Act, the Employee Retirement Income Security Act,
the Equal Pay Act, the Age Discrimination in Employment Act of 1967, as amended
by the Older Workers Benefit Protection Act of 1990, and the laws of the State
of New Jersey against discrimination, or any other federal or state statutes
prohibiting discrimination on the basis of age, sex, race, color, handicap,
religion, national origin, and sexual orientation, or any other federal, state
or local employment law, regulation or other requirement) which arose
before the date this Release is signed, excepting only claims in the nature of
workers’ compensation, claims for vested benefits, and claims to enforce this
agreement. The Executive acknowledges that because this Release
contains a release of claims and is an important legal document, he has been
advised to consult with counsel before executing it, that he may take up to
[twenty-one
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(21)]1 [forty-five (45)]2 days to decide whether to
execute it, and that he may revoke this Release by delivering or mailing a
signed notice of revocation to the Company at its offices within seven (7) days
after executing it. If Executive executes this Release and does not
subsequently revoke the release within seven (7) days after executing it, then
this Release shall take effect as a legally binding agreement between Executive
and the Company.
If Executive does not deliver to the
Company an original signed copy of this Release by __________, or if Executive
signs and revokes this Release within seven (7) days as set forth above, the
Company will assume that Executive rejects the Release and Executive will not
receive the payments
referred to herein.
The
Executive acknowledges that there is a risk that after signing this Release he
may discover losses or claims that are released under this Release, but that are
presently unknown to him. The Executive assumes this risk and
understands that this Release shall apply to any such losses and
claims.
The
Executive understands that this Release includes a full and final release
covering all known and unknown, injuries, debts, claims or damages which have
arisen or may have arisen from Executive’s employment by or the termination of
such employment by any Company Party. The Executive acknowledges that
by accepting the benefits and payments set forth in the Employment Agreement, he
assumes and waives the risks that the facts and the law may be other than as he
believes.
Notwithstanding
the foregoing, this Release does not release, and the Executive continues to be
entitled to, (i) any rights to exculpation or indemnification that the Executive
has under contract or law with respect to his service as an officer or director
of any Company Party and (ii) receive the payments to be made to him by the
Company pursuant to Section 3.3 and/or 3.4 of the Employment Agreement
(including any plan, agreement or other arrangement that is referenced in or the
subject of the applicable Section), subject to the conditions set forth in
Section 3.5 of the Employment Agreement, (iii) any right the Executive may
have to obtain contribution as permitted by law in the event of entry of
judgment against him as a result of any act or failure to act for which he and
any Company Party are jointly liable, and (iv) any claim in respect of any
insurance policy with any Company Party entered into outside of the employment
relationship.
This
Release constitutes the release referenced in Section 3.5 of the Employment
Agreement.
The undersigned Executive, having had
the time to reflect, freely accepts and agrees to the above
Release. The Executive acknowledges and agrees that no
Company Party
____________________
1 Delete
brackets and use text enclosed therewith if 45 days is not otherwise required by
Section 7(f)(1)(F) of the Age Discrimination in Employment Act and/or 29 C.F.R.
Part 1625. If 45 days is so required, delete bracketed text in its
entirety.
2 Delete
brackets and use text enclosed therewith if 45 days is required by Section
7(f)(1)(F) of the Age Discrimination in Employment Act and/or 29 C.F.R. Part
1625. If 45 days is not so required, delete bracketed text in its
entirety.
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-
representative has made any
representation to or agreement with the Executive relating to this Release which
is not contained in the express terms of this Release. The Executive
acknowledges and agrees that the execution and delivery of this Release is based
upon the Executive’s independent review of this Release, and the Executive
hereby expressly waives any and all claims or defenses by the Executive against
the enforcement of this Release which are based upon allegations or
representations, projections, estimates, understandings or agreements by
any Company Party or any of their representatives or any assumptions by
the Executive that are not contained in the express terms of this
Release.
EXECUTIVE
______________________________________
Date:__________________________________
[Attach
disclosures required by the Older Workers Benefit Protection Act, if
required]
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