Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement, (the "Agreement") is made as of the 26th day
of April, 2006 between Selective Insurance Group, Inc., a New Jersey corporation
with a principal place of business at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx
00000 (the "Company") and Xxxxxxx X. Xxxxxx, an individual resident in New
Jersey with a mailing address of Xxxx Xxxxxx Xxx 0000, Xxxxxx, Xxx Xxxxxx 00000
(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.
"Cause" means that if the Board, after giving Executive, with his own
counsel, the opportunity to meet with it, shall determine in good faith, by
written resolution of not less than two-thirds percent (66.67%) of the entire
membership of the Board (excluding the Executive if the Executive is a member on
the Board) at a special meeting called for that purpose, that any one or more of
the following has occurred:
(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
Board to the Executive specifying such breach; or
(iii) the Executive shall have engaged in 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.
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 pursuant to a
resolution duly adopted by the Board 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 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, of securities of the Company 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;
(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, of securities of the Company 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, 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 assets on a consolidated basis, as shown in the
Company's then most recent audited consolidated balance sheet;
(iv) The reorganization, recapitalization, merger,
consolidation or other business combination involving the Company the
result of which is the ownership by the shareholders of the Company 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 management or the Board as set forth in
the Company'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.
"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.
"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.
"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:
(i) any reduction in the Executive's Salary 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) (A) a failure by the Company to continue in effect
benefits that are comparable in the aggregate to the benefits the
Executive receives under the Plans in which the Executive participates,
other than as a result of the normal expiration of any such Plan in
accordance with its terms as to other eligible employees, or (B) 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 such action or inaction shall have
occurred or which would materially reduce the Executive's benefits in
the future under any such Plans, unless, in any of the cases described
in sub-clauses (A) and (B) of this clause (ii), such failure to
continue in effect, taking of any action or failure to act affects all
participants of such Plan generally;
(iii) 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, 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,
or any change in the Executive's titles or office, or any removal of
the Executive from, 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;
(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;
(v) without the Executive's express prior written consent, any
reduction in the number of paid vacation days to which the Executive
was entitled;
(vi) 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 hereof;
(vii) the failure by the Company 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;
(viii) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination given in
accordance with Section 3.2 hereof;
(ix) any material breach by the Company of any of the terms
and conditions of this Agreement or any Plans referred to in clause
(ii) of this definition of "Good Reason" to which the Executive is
entitled to receive benefits thereunder provided, to the extent such
breach may be cured, such breach shall have continued for a period of
thirty (30) days after written notice of the Company specifying such
breach; or
(x) any requirement by the Company that the Executive be
absent from the Executive's office on business travel or otherwise
during any calendar year which is in excess of twenty percent (20%) of
the average number of days which the Executive was required to be
absent for the prior two (2) calendar years; provided, that the
Executive may be required to be absent for at least thirty (30) days in
any given calendar year.
"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.
"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 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 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
Board.
"Salary" has the meaning given to such term in Section 2.4(a) hereof.
"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 (i) if the Executive's employment is to be
terminated by the Company for Disability, 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; (ii) if the Executive's employment is to be terminated by the
Company for Cause, the date immediately following the day the Executive
(together with his counsel) has had an opportunity to be heard before the Board
after a Notice of Termination is given; and (iii) if the Executive's employment
is to be terminated by either the Company or the Executive for any other reason,
the date on which a Notice of Termination is given.
"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.
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 three (3) year(s) after the Commencement
Date, 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 has been elected as Chief Executive
Officer of the Company, and he agrees to serve as such during the Term. In such
capacity, the Executive shall have the responsibilities and duties customary for
such office and such other executive responsibilities and duties as are assigned
by the Board which are consistent with the Executive's position. The Executive
agrees to devote substantially all his business time, attention and services to
the business and affairs of the Company and its subsidiaries 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 Board 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 Board. The Executive may accept directorships on the board of
directors of not-for-profit corporations without the Board'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 Board 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 Board
and shall perform such duties not inconsistent with the provisions hereof as he
shall be assigned by the Board.
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 Nine Hundred Thousand Dollars ($900,000.00) 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 policy from time to time in effect for payment of salary to
executives. The Salary shall be reviewed no less than annually by the Board 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 Board.
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:
(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, if the Company imposes 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 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; provided, however, that in the event the Company terminates the
Executive's employment for Cause based upon the Board's determination that one
or both of the events described in clause (ii) or (iii) of the definition of
Cause shall have occurred, the Company shall also deliver, together with any
such Notice of Termination, a copy of the resolution of the Board making any
such determination. 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) two (2) times (B) the Executive's Salary plus an amount
equal to the average of the three most recent annual cash incentive
payment (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.
(ii) If the Executive's employment is terminated pursuant to
Paragraph (e), (f) or (g) 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) two (2) 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.
(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), (f) or (g) 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) twenty-four (24) 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. 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.
(d) Rights Under Plans. If the Executive's employment is
terminated pursuant to Paragraphs (a), (b), (e), (f) or (g) 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 to the Executive under any Plan,
whether or not provided for in any agreement with the Company; 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 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.
(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) 2.99; 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 (including
any such amount of compensation which is deferred pursuant to the
Selective Insurance Deferred Compensation Plan), 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 (including any such amount of compensation which is deferred
pursuant to the Selective Insurance Deferred Compensation Plan).
Such payment shall be made, subject to Section 3.7, thirty (30) 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. 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 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)
three (3) years 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 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. Notwithstanding the
foregoing, if the provision of self-insured health coverage (if any) during the
third year after the Termination Date is deemed to be deferred compensation
under Section 409A of the Code, the Company shall pay the Executive an amount
equal to Eleven Thousand Five Hundred Seventy Two Dollars ($11,572.00) in lieu
of such obligation. 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.
(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 to
the Executive under any Plan, whether or not provided for in any agreement with
the Company; 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
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.
(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. 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.
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 or ownership of a
substantial portion of the Company'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. 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 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).
(d) Application of Section 409A. Notwithstanding anything
contained in this Section 3.6, no portion of the Gross-Up Payment shall be paid
to the Executive so as to cause the Executive to be subject to tax under Section
409A of the Code. In particular, if necessary to avoid taxation under Code
Section 409A, the Gross-Up Payment shall be paid to Executive in a lump sum at
the same date that severance payments are paid to the Executive pursuant to
Section 3.4(a). If the amount of the Gross-Up Payment cannot be fully determined
pursuant to Section 3.6(b) by such date, the Company shall pay to the Executive
on such date an estimate of the Gross-Up Payment, as determined by the
Accounting Firm, and shall pay the remainder (or the Executive shall reimburse
the Company the difference) 30 days thereafter.
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." 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"). In
the event the Company cannot make a payment or provide a benefit under Sections
3.3, 3.4 or 3.6 hereof, or if the Executive cannot receive any such payment or
benefit, in accordance with the terms of such Sections, without the Executive
incurring a Section 409A Tax, then the Company and the Executive shall work
together in good faith to agree on an alternative payment schedule or an
alternative benefit of comparable economic value acceptable to both parties (and
to amend this Agreement, where necessary or desirable) such that the Executive
does not incur a Section 409A Tax or the Executive incurs the least amount of
Section 409A Tax as is possible under the circumstances. If a satisfactory
alternative payment schedule or benefit cannot be agreed to by the later to
occur of (i) the originally scheduled payment, distribution or benefit date and
(ii) six months following the date of the Executive's "separation from service,"
the Company shall provide such payment, distribution or benefit to the Executive
("409A Amount") on the originally scheduled date for such payment, distribution
or benefit together with an additional payment (a "409A Payment") in an amount
such that after payment by the Executive of all taxes imposed on the 409A
Payment (excluding any Excise Tax to which payment to the Executive is made
pursuant to Section 3.6(a)), the Executive retains an amount of the 409A Payment
equal to any taxes (including taxes, penalties and interest under Section 409A)
on the 409A Amount.
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 or its subsidiaries, except for (a) disclosures to directors, officers,
key employees, independent accountants and counsel of the Company and its
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 and its
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 and its 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 or the Company's
subsidiaries to leave the employ of the Company or of such 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.
5.3. Injunctive Relief and Additional Remedy. The Executive
acknowledges that the injury that would be suffered by the Company 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 for such a
breach would be an inadequate remedy. Consequently, the Company 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 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 and each
of its successors and assigns, and the Executive, his heirs, legal
representatives and any beneficiary or beneficiaries designated hereunder.
5.7. Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. 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.
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 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 Group, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
With a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to the Executive, to:
Xxxxxxx X. Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxx, XX 00000
(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.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the Commencement Date.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ J. Xxxxx Xxxxxxxx
--------------------------------------------
Name: J. Xxxxx Xxxxxxxx
Title: Chairman, Salary and Employee Benefits
Committee of the Board of Directors
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxx
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 Group, Inc., 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 and its 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 (21)](1) [forty-five (45)](2) days to decide whether to execute it,
and
------------------
(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.
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 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 the Company or any of
its 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]
