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EXHIBIT 10.16x
TERMINATION AGREEMENT
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TERMINATION AGREEMENT dated as of November 3, 1998, 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. Xxxxxxxx (the "Executive"), having an address at 0
Xxxxxxxx Xxxxx, Xxxxxxx, 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 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
PAGE
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 November 3, 2001, provided,
however, that commencing on November 3, 2001 and each November 3 thereafter
(each such November 3 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 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
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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
any 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
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
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 as may be specified in any
employment agreement in effect from time to time between the Company and the
Executive, 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 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 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 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 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
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 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 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 of any agreement between
the Executive and 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" 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 circumstances
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 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 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. 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 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 a
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 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 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
select 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 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 Midlantic National Bank 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 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.
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.
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 and
Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxx
----------------------
Xxxxx X. Xxxxxxxx
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 and
Chief Executive Officer
