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EXHIBIT 10.16y
AMENDMENT NO. 1 TO TERMINATION AGREEMENT
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AMENDMENT NO. 1, dated as of December 31, 1998 among SELECTIVE
INSURANCE GROUP, INC., a New Jersey corporation ("Selective"), having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, SELECTIVE
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("XXXX"), having an
office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, and XXXXX X.
XXXXXXXX, having an address at 0 Xxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000
(the "Executive"), to Termination Agreement dated as of November 3, 1998
among XXXX and the Executive (the "Termination Agreement").
WHEREAS, XXXX and the Executive have executed and delivered the
Termination Agreement, and Selective has guaranteed all of the obligations
of XXXX under the Termination Agreement; and
WHEREAS, the parties hereto desire to amend the Termination Agreement
as provided herein.
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Subsection 5(f) of the Termination Agreement is hereby deleted
in its entirety, and replaced with a new subsection 5(f) to read in its
entirety as follows:
(f) In the event that any payments or benefits which
the Executive is entitled to receive from the Company
under this Agreement, together with any other payments
or benefits which the Executive is entitled to receive
from the Company (including, without limitation, any
amounts payable under any employment contract with the
Company or any stock option, stock bonus, incentive
compensation or other employee benefit plan of the
Company), in the aggregate would constitute an "excess
parachute payment" (as defined in Section 280G(b) of
the Code), the Company shall pay to the Executive an
amount constituting the greater to the Executive on a
net after-tax basis (as hereinafter provided) of (i)
the amount of payments and benefits which the
Executive is
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entitled to receive from the Company under this
Agreement, together with any other payments and
benefits which the Executive is entitled to receive
from the Company, reduced, in such order of priority
and amounts as the Executive shall elect, to the
largest amount as will result in no portion of the
aggregate of such payments being subject to the
excise tax imposed by Section 4999 of the Code, or
any successor or substitute provision of the Code
(the "Section 4999 Tax"), or (ii) the amount of
payments and benefits to which the Executive is
entitled to receive from the Company under this
Agreement, together with such other payments and
benefits which the Executive is entitled to receive
from the Company, plus an amount in cash equal to (x)
the amount of such "excess parachute payment"
multiplied by (y) twenty percent (20%). The aggregate
amounts described in clause (i) and in clause (ii) of
this subsection 5(f) shall be calculated on a net
after-tax basis giving effect to the obligation of
the Executive to pay any applicable taxes on such
aggregate amounts (including, without limitation, all
federal, state and local income taxes at the maximum
applicable rates, any Section 4999 Tax and any other
tax payable thereon at the maximum applicable rate).
2. Subsection 5(g) of the Termination Agreement is hereby deleted
in its entirety and replaced with a new subsection 5(g) to read in its
entirety as follows:
(g) In the event that the Executive shall receive from
the Company the amount specified in clause (i) of
subsection 5(f) and the Internal Revenue Service
(the "IRS") or a court of competent jurisdiction
shall determine that any portion of the payments and
benefits paid or payable to the Executive pursuant
to this Agreement shall constitute an "excess
parachute payment" subject to a Section 4999 tax,
the Company shall pay to the
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Executive in cash such additional amount as is
necessary so that the aggregate amounts received
by the Executive under this Agreement, after giving
effect to the obligation of the Executive to pay any
applicable taxes on such aggregate amounts
(including, without limitation all federal, state
and local income taxes, any Section 4999 Tax and
any other taxes payable thereon), shall not be less
than the net after-tax amount which the Executive
would have been entitled to receive under clause (i)
of subsection 5(f) had such Section 4999 Tax not been
imposed. The Company shall pay such additional
amount to the Executive within thirty (30) days after
the Executive gives written notice to the Company
that such determination has been made by the IRS or a
court of competent jurisdiction.
3. The following new Section 5(h) is hereby added to the Agreement:
(h) Any dispute or controversy between the Executive
and the Company regarding payments under this Section 5
of this Agreement shall be conclusively settled by an
independent accounting firm acceptable to each of the
parties hereto, or, if no firm is acceptable to both
parties hereto, each of the Executive and the Company
shall select an accounting firm acceptable to it, and
such accounting firms shall together designate an
independent accounting firm to settle such dispute or
controversy, and such settlement shall be binding upon
both parties, provided, however, that any accounting
firm designated to settle any dispute or controversy
hereunder shall not have been previously retained by
either party for a period of at least two (2) years
subsequent to the date of this settlement of such
dispute or controversy. The
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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.
4. The capitalized defined terms used in this Amendment shall
have the same meanings as are ascribed to them in the Termination Agreement
unless otherwise defined herein.
5. Except as amended herein, the Termination Agreement shall
continue in full force and effect on and after the date hereof.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
Executive and on behalf of Selective and XXXX by their duly authorized
officers, as of the date and year first above written.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and Chief
Executive Officer
SELECTIVE INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and Chief
Executive Officer
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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