Contract

Exhibit 10.1 EMPLOYMENT AGREEMENT This Employment Agreement, (the “Agreement”) is made as of the 26th dayof April, 2006 between Selective Insurance Group, Inc., a New Jersey corporationwith a principal place of business at 40 Wantage Avenue, Branchville, New Jersey07890 (the “Company”) and Gregory E. Murphy, an individual resident in NewJersey with a mailing address of Post Office Box 1187, Sparta, New Jersey 07871(the “Executive”). SECTION 1. DEFINITIONS. 1.1. Definitions. For purposes of this Agreement, the following termsshall 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 owncounsel, the opportunity to meet with it, shall determine in good faith, bywritten resolution of not less than two-thirds percent (66.67%) of the entiremembership of the Board (excluding the Executive if the Executive is a member onthe Board) at a special meeting called for that purpose, that any one or more ofthe 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, orfailure 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 oromitted to be done based upon authority or express direction given pursuant to aresolution duly adopted by the Board or based upon the advice of counsel for theCompany. “Change in Control” means the occurrence of an event of a nature thatwould be required to be reported in response to Item 5.01 of a Current Report onForm 8-K, as in effect on the date thereof, pursuant to Section 13 or 15(d) ofthe 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 ofany 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 totime. “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 2.2hereof. “Company” has the meaning given to such term in the Preamble hereto andincludes any Person which shall succeed to or assume the obligations of theCompany 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 ormental illness which causes him to be absent from his duties with the Company ona full-time basis for a continuous period in excess of the greater of: (i) theperiod of disability constituting permanent disability as specified under theCompany’s long-term disability insurance coverage applicable to the Executive atthe time of the determination of the existence of a disability (or, if suchdetermination is made after the occurrence of a Change in Control, as specifiedunder the long-term disability insurance coverage applicable to the Executiveprior to a Change in Control) or (ii) 180 days, unless within thirty (30) daysafter a Notice of Termination is thereafter given the Executive shall havereturned to the full-time performance of his duties. “Early Termination” has the meaning given to such term in Section 3.2hereof. “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 Section3.3(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) indicatethe specific termination provision in this Agreement relied upon, (ii) set forthin reasonable detail the facts and circumstances claimed to provide a basis fortermination of the Executive’s employment under the provision so indicated and,(iii) specify the date of termination in accordance with this Agreement (otherthan 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 subdivisionthereof. “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 Section3.5 hereof. “Retirement” means a termination of the Executive’s employment by theCompany or the Executive (i) at such age as shall be established by the Boardfor mandatory or normal retirement of Company executives in general (which ageshall be, if the determination of Retirement is made after the occurrence of aChange in Control, the age established by the Board prior to a Change inControl), which shall not be less than age 65, or (ii) at any other retirementage set by mutual agreement of the Company and the Executive and approved by theBoard. “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 3.7hereof. “Securities Exchange Act” means the Securities Exchange Act of 1934, asamended, 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 beterminated by the Company for Disability, thirty (30) days after a Notice ofTermination is given; provided that the Executive shall not have returned to theperformance 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 theCompany for Cause, the date immediately following the day the Executive(together with his counsel) has had an opportunity to be heard before the Boardafter a Notice of Termination is given; and (iii) if the Executive’s employmentis 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, anysecurity of such Person that has, or may have upon an event of default or inrespect to any transaction, a right to vote on any matter upon which the holderof any class of common stock of such Person would have a right to vote. 1.2. Terms Generally. Unless the context of this Agreement requiresotherwise, words importing the singular number shall include the plural and viceversa, and any pronoun shall include the corresponding masculine, feminine andneuter forms. 1.3. Cross-References. Unless otherwise specified, references in thisAgreement to any Paragraph or Section are references to such Paragraph orSection of this Agreement. SECTION 2. EMPLOYMENT AND COMPENSATION. The following terms andconditions will govern the Executive’s employment with the Company throughoutthe Term. 2.1. Employment. The Company hereby employs the Executive, and theExecutive hereby accepts employment with the Company, on the terms andconditions set forth herein. 2.2. Term. The term of employment of the Executive under this Agreementshall commence as of the date hereof (the “Commencement Date”) and, subject toSection 3.1 hereof, shall terminate three (3) year(s) after the CommencementDate, and shall automatically be extended for additional one (1) year periodsthereafter (any such renewal periods, together with the initial three (3)-yearperiod, being referred to as the “Term”) unless terminated by either party bywritten notice to the other party. 2.3. Duties. (a) The Executive has been elected as Chief ExecutiveOfficer of the Company, and he agrees to serve as such during the Term. In suchcapacity, the Executive shall have the responsibilities and duties customary forsuch office and such other executive responsibilities and duties as are assignedby the Board which are consistent with the Executive’s position. The Executiveagrees to devote substantially all his business time, attention and services tothe business and affairs of the Company and its subsidiaries and to perform hisduties to the best of his ability. At all times during the performance of thisAgreement, the Executive will adhere to the Code of Conduct of the Company (the”Code of Conduct”) that has been or may hereafter be established andcommunicated by the Board to the Executive for the conduct of the position orpositions held by the Executive. The Executive may not accept directorships onthe board of directors of for-profit corporations without the prior writtenconsent of the Board. The Executive may accept directorships on the board ofdirectors of not-for-profit corporations without the Board’s prior, writtenconsent so long as (a) such directorships do not interfere with Executive’sability to carry out his responsibilities under this Agreement, and (b)Executive promptly notifies the Board in writing of the fact that he hasaccepted such a non-profit directorship. (b) If the Company or the Executive elects not to renew theTerm pursuant to Section 2.2, the Executive shall continue to be employed underthis Agreement until the expiration of the then current Term (unless earlierterminated pursuant to Section 3.1 hereof), shall cooperate fully with the Boardand shall perform such duties not inconsistent with the provisions hereof as heshall be assigned by the Board. 2.4. Compensation. (a) Salary. For all services rendered by the Executive underthis Agreement, the Company shall pay the Executive a salary during the Term ata 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 seniorexecutive staff generally (the “Salary”), payable in installments in accordancewith the Company’s policy from time to time in effect for payment of salary toexecutives. The Salary shall be reviewed no less than annually by the Board andnothing contained herein shall prevent the Board from at any time increasing theSalary or other benefits herein provided to be paid or provided to the Executiveor from providing additional or contingent benefits to the Executive as it deemsappropriate. (b) Benefits. During the Term, the Company shall permit theExecutive to participate in or receive benefits under the Selective InsuranceGroup, Inc. 2005 Omnibus Stock Plan, the Selective Insurance Group, Inc. CashIncentive Plan, the Selective Insurance Retirement Savings Plan, the RetirementIncome Plan For Selective Insurance Company of America, as amended, theSelective Insurance Company of America Deferred Compensation Plan, the SelectiveInsurance Supplemental Pension Plan and any other incentive compensation, stockoption, 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 ofthe Company intended to benefit the employees of the Company generally, if any,in accordance with the respective provisions thereof, from time to time ineffect (collectively, the “Plans”). (c) Vacations and Reimbursements. During the Term, theExecutive shall be entitled to vacation time off and reimbursements for ordinaryand necessary travel and entertainment expenses in accordance with the Company’spolicies on such matters from time to time in effect. (d) Perquisites. During the Term, the Company shall providethe Executive with suitable offices, secretarial and other services, and otherperquisites to which other executives of the Company generally are (or become)entitled, to the extent as are suitable to the character of the Executive’sposition with the Company, subject to such specific limits on such perquisitesas may from time to time be imposed by the Board. SECTION 3. TERMINATION AND SEVERANCE. 3.1. Termination. The Executive’s employment hereunder shall commenceon the Commencement Date and continue until the expiration of the Term, exceptthat 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 theDisability 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 employmenthereunder by the Company based on Retirement, death, or Disability shall not bedeemed to be a termination without Cause. (f) Relocation. At the option of the Executive at any timeprior to a Change in Control, if the Company imposes a requirement without theconsent of the Executive that the Executive be based at a location in excess offifty (50) miles from the location of the Executive’s office on the CommencementDate. (g) For Good Reason. At any time at the option of theExecutive for Good Reason. 3.2. Procedure For Termination. Any termination of the Executive’semployment by the Company or by the Executive prior to the expiration of theTerm (an “Early Termination”) shall be communicated by delivery of a Notice ofTermination to the other party hereto given in accordance with Section 5.13hereof; provided, however, that in the event the Company terminates theExecutive’s employment for Cause based upon the Board’s determination that oneor both of the events described in clause (ii) or (iii) of the definition ofCause shall have occurred, the Company shall also deliver, together with anysuch Notice of Termination, a copy of the resolution of the Board making anysuch determination. Any Early Termination shall become effective as of theapplicable Termination Date. 3.3. Rights and Remedies on Termination. The Executive will be entitledto receive the payments and benefits specified below if there is an EarlyTermination. (a) Accrued Salary. If the Executive’s employment isterminated pursuant to any of the Paragraphs set forth in Section 3.1 hereof,then the Executive (or his legal representative, as applicable) shall only beentitled 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 isterminated pursuant to Paragraphs (a), (b), (e), (f) or (g) in Section 3.1hereof, the Executive shall be entitled to the benefits of any stock options,stock appreciation rights, restricted stock grants, stock bonuses or otherbenefits 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 similarbenefits shall be deemed to be vested in full on the Termination Date,notwithstanding any provision to the contrary or any provision requiring any actor acts by the Executive in any agreement with the Company or any Plan; (ii) tothe extent that any such stock options, stock appreciation rights, restrictedstock grants, stock bonuses, long-term incentives or similar benefits shallrequire by its terms the exercise thereof by the Executive, the last date toexercise the same shall, notwithstanding any provision to the contrary in anyagreement or any Plan, be the earlier of (A) the later to occur of the fifteenthday of the third month following the date at which, or the December 31 of thecalendar year in which, any such stock options, stock appreciation rights,restricted stock grants, stock bonuses, long-term incentives or similar benefitswould otherwise have expired if not extended, or (B) the original expirationdate had the Executive’s employment not so terminated; and (iii) if the vestingor exercise pursuant hereto of any such stock options, stock appreciationrights, restricted stock grants, stock bonuses, long-term incentives or similarbenefits shall have the effect of subjecting the Executive to liability underSection 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 theTermination Date on which such vesting may occur without subjecting theExecutive 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. TheExecutive will be entitled to receive the severance payments and severancebenefits specified below in the event there shall occur a termination of theExecutive’s employment pursuant to Paragraph (e) or (g) of Section 3.1 hereofwithin two (2) years following the occurrence of a Change in Control. Theseverance payments and benefits the Executive may be entitled to receivepursuant to this Section 3.4 shall be in addition to, and not in lieu of, any ofthe payments and benefits the Executive may be entitled to receive pursuant toSection 3.3 hereof, unless expressly so stated to be in lieu of such benefitsand/or payments. (a) Severance Payments. The Executive shall be entitled toreceive a severance payment from the Company in an aggregate amount equal to theproduct 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 daysfollowing the Termination Date, provided that the Executive has executed anddelivered a Release pursuant to Section 3.5 hereof and such Release has becomeeffective and irrevocable. The severance payment required to be paid by theCompany 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 theCompany to the Executive. (b) Severance Benefits. Subject to Section 3.7, the Companyshall maintain in full force and effect, for the continued benefit of theExecutive and his dependents for a period terminating on the earlier of: (i)three (3) years after the Termination Date or (ii) the commencement date ofequivalent benefits from a new employer (the “CIC Extended Benefit Period”), allinsured and self insured medical, dental, vision, disability and life insuranceemployee welfare benefit plans in which the Executive was entitled toparticipate immediately prior to the Termination Date; provided that theExecutive’s continued participation is not barred under the general terms andprovisions of such Plans. Notwithstanding the foregoing, the Executive shallcontinue to participate in such Plans during the CIC Extended Benefit Periodonly to the extent that such Plans remain in effect for other executives of theCompany from time to time during the CIC Extended Benefit Period and subject tothe terms of such Plans, including any modifications and amendments theretofollowing the Termination Date. In the event that the Executive’s participationin any such Plan is barred by its terms, the Company, at its sole cost andexpense, shall arrange to have issued for the benefit of the Executive and hisdependents individual policies of insurance providing benefits substantiallysimilar (on an after-tax basis) to those which the Executive otherwise wouldhave been entitled to receive under such Plans pursuant to this Paragraph (b).Executive shall be responsible for making any required contributions to the costof such coverage, on an after-tax basis, at the rate which Executive wasobligated to pay immediately prior to the Termination Date. Notwithstanding theforegoing, if the provision of self-insured health coverage (if any) during thethird year after the Termination Date is deemed to be deferred compensationunder Section 409A of the Code, the Company shall pay the Executive an amountequal to Eleven Thousand Five Hundred Seventy Two Dollars ($11,572.00) in lieuof such obligation. If, at the end of the applicable CIC Extended BenefitPeriod, the Executive has not previously received or is not receiving equivalentbenefits from a new employer, or is not otherwise receiving such benefits, theCompany shall arrange to enable the Executive to convert his and his dependents’coverage under such Plans to individual policies or programs upon the same termsas employees of the Company may apply for such conversions upon termination ofemployment. The severance benefits required to be provided by the Company to theExecutive pursuant to this Paragraph (b) shall be in lieu of, and not inaddition to, any severance benefits required to be provided to the Executivepursuant to Section 3.3(c)(ii) hereof. In no event shall the Company’sobligation to provide disability benefits hereunder be reduced as a result ofany individual disability policy purchased by the Executive. (c) Rights Under Plans. The Executive shall be entitled to thebenefits of any stock options, stock appreciation rights, restricted stockgrants, stock bonuses or other benefits theretofore granted by the Company tothe Executive under any Plan, whether or not provided for in any agreement withthe Company; provided, however, that (i) all unvested stock options, stockappreciation rights, restricted stock grants, stock bonuses, long-termincentives and similar benefits shall be deemed to be vested in full on theTermination Date, notwithstanding any provision to the contrary or any provisionrequiring any act or acts by the Executive in any agreement with the Company orany Plan; (ii) to the extent that any such stock options, stock appreciationrights, restricted stock grants, stock bonuses, long-term incentives or similarbenefits shall require by its terms the exercise thereof by the Executive, thelast date to exercise the same shall, notwithstanding any provision to thecontrary in any agreement or any Plan, be the earlier of (A) the later to occurof the fifteenth day of the third month following the date at which, or theDecember 31 of the calendar year in which, any such stock options, stockappreciation rights, restricted stock grants, stock bonuses, long-termincentives or similar benefits would otherwise have expired if not extended or(B) the original expiration date had the Executive’s employment not soterminated ; and (iii) if the vesting or exercise pursuant hereto of any suchstock options, stock appreciation rights, restricted stock grants, stockbonuses, long-term incentives or similar benefits shall have the effect ofsubjecting the Executive to liability under Section 16(b) of the SecuritiesExchange Act or any similar provision of law, the vesting date thereof shall bedeemed to be the first day after the Termination Date on which such vesting mayoccur without subjecting the Executive to such liability. (d) Rabbi Trust. The Company shall maintain a trust intendedto 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 theoccurrence of a Change in Control, the Company shall promptly deliver to a bankas trustee of the Rabbi Trust (the “Trustee”), an amount of cash or certificatesof deposit, treasury bills or irrevocable letters of credit adequate to fullyfund the payment obligations of the Company under this Section 3.4. The Companyand Trustee shall enter into a trust agreement that shall provide that barringthe insolvency of the Company, amounts payable to the Executive under thisSection 3.4 (subject to Section 3.7) shall be paid by the Trustee to theExecutive five (5) days after written demand therefor by the Executive to theTrustee, with a copy to the Company, certifying that such amounts are due andpayable under this Section 3.4 because the Executive’s employment has beenterminated pursuant to Paragraph (e) or (g) in Section 3.1 hereof at a timewhich 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 Companyshall, prior to payment by the Trustee, object in writing to the Trustee, with acopy to the Executive, as to the payment of any amounts demanded by theExecutive under this Section 3.4, certifying that such amounts are not due andpayable to the Executive because a Triggering Event has not occurred, suchdispute shall be resolved by binding arbitration as set forth in Section 5.8hereof. 3.5. Conditions to Severance Payments and Benefits. The Executive’sright to receive the severance payments and benefits pursuant to Sections 3.3and 3.4 hereof, is expressly conditioned upon (a) receipt by the Company of awritten release (a “Release”) executed by the Executive in the form of Exhibit Ahereto, and the expiration of the revocation period described therein withoutsuch Release having been revoked, and (b) the compliance by the Executive withthe covenants, terms or provisions of Sections 4.1 and 4.2 hereof (the”Restrictive Covenants”). If the Executive shall fail to deliver a Release inaccordance with the terms of this Section 3.5 or shall breach any of theRestrictive Covenants, the Company’s obligation to make the severance paymentsand to provide the severance benefits pursuant to Sections 3.3 and 3.4 hereofshall immediately and irrevocably terminate. 3.6. Tax Effect of Payments. (a) Gross-Up Payment. In the event that it is determined thatany payment, distribution or other benefit of any type to or for the Executive’sbenefit made by the Company, by any of its affiliates, by any Person whoacquires ownership or effective control of the Company or ownership of asubstantial portion of the Company’s assets (within the meaning of Section 280Gof the Code and the regulations thereunder) or by any affiliate of such Person,whether paid or payable or distributed or distributable or otherwise madeavailable pursuant to the terms of this Agreement or otherwise (the “TotalPayments”), would be subject to the excise tax imposed by Section 4999 of theCode or any interest or penalties with respect to such excise tax (such excisetax, together with any such interest or penalties, are collectively referred toas the “Excise Tax”), then the Executive shall be entitled to receive anadditional payment (a “Gross-Up Payment”) in an amount such that after paymentby the Executive of all taxes imposed upon the Gross-Up Payment, including anyExcise Tax, the Executive retains an amount of the Gross-Up Payment equal to theExcise Tax imposed on the Total Payments. (b) Determination by Accountant. All mathematicaldeterminations and all determinations of whether any of the Total Payments are”parachute payments” (within the meaning of Section 280G of the Code) that arerequired to be made under this Section, including all determinations of whethera Gross-Up Payment is required, of the amount of such Gross-Up Payment and ofamounts relevant to the last sentence of this Section (collectively, the”Determination”), shall be made by an independent accounting firm acceptable toeach 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 acceptableto it, and such accounting firms shall together designate an independentaccounting firm, provided, however, that any accounting firm so designated shallnot have been previously retained by either party for a period of a least two(2) years subsequent to the applicable Termination Date. Any independentaccounting firm selected by the Executive and the Company or designated pursuantto 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 determinedto 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 Section3.6(c), any Determination by the Accounting Firm shall be binding upon theCompany and Executive, absent manifest error. All of the costs and expenses ofthe Accounting Firm shall be borne by the Company. (c) Underpayments and Overpayments. As a result of uncertaintyin the application of Section 4999 of the Code at the time of the initialdetermination by the Accounting Firm hereunder, it is possible that Gross-UpPayments not made by the Company should have been made (“Underpayments”) or thatGross-Up Payments will have been made by the Company which should not have beenmade (“Overpayments”). In either event, the Accounting Firm shall determine theamount of the Underpayment or Overpayment that has occurred. In the case of anUnderpayment, the amount of such Underpayment shall promptly be paid by theCompany to or for the Executive’s benefit. In the case of an Overpayment, theExecutive shall, at the direction and expense of the Company, take such steps asare reasonably necessary (including the filing of returns and claims forrefund), follow reasonable instructions from, and procedures established by, theCompany and otherwise reasonably cooperate with the Company to correct suchOverpayment; provided, however, that (i) the Executive shall in no event beobligated to return to the Company an amount greater than the net after-taxportion of the Overpayment that the Executive has retained or has received as arefund or has received the benefit of from the applicable taxing authorities and(ii) this provision shall be interpreted in a manner consistent with the intentof 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 correctionof an Overpayment may result in the Executive’s repaying to the Company anamount which is less than the Overpayment. Anything herein to the contrarynotwithstanding, in the event of a final determination as to the liability forthe Excise Tax applicable to the Total Payments such determination shall be thebasis for determining whether there have been Underpayments or Overpaymentspursuant to this Section 3.6. For this purpose, a final determination shall meana final agreement reached with the Internal Revenue Service or a finaldetermination by a court with jurisdiction from which there is no appeal, ineither case, concluded in accordance with the provisions of this Paragraph (c). (d) Application of Section 409A. Notwithstanding anythingcontained in this Section 3.6, no portion of the Gross-Up Payment shall be paidto the Executive so as to cause the Executive to be subject to tax under Section409A of the Code. In particular, if necessary to avoid taxation under CodeSection 409A, the Gross-Up Payment shall be paid to Executive in a lump sum atthe same date that severance payments are paid to the Executive pursuant toSection 3.4(a). If the amount of the Gross-Up Payment cannot be fully determinedpursuant to Section 3.6(b) by such date, the Company shall pay to the Executiveon such date an estimate of the Gross-Up Payment, as determined by theAccounting Firm, and shall pay the remainder (or the Executive shall reimbursethe 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 theExecutive’s “separation from service” is subject to Section 409A of the Code, nosuch payment shall be made, and Executive shall be responsible for the full costof such benefits, for six (6) months following the Executive’s “separation fromservice” if the Executive is a “specified employee.” On the expiration of suchsix (6) month period, any payments delayed, and an amount sufficient toreimburse the Executive for the cost of benefits met by the Executive, duringsuch period shall be aggregated (the “Make-Up Amount”) and paid in full to theExecutive, and any succeeding payments and benefits shall continue as scheduledhereunder. The Company shall credit the Make-Up Amount with interest at no lessthan the interest rate it pays for short-term borrowed funds, such interest toaccrue from the date on which payments would have been made, or benefits wouldhave been provided, by the Company to the Executive absent the six month delay.The terms “separation from service” and “specified employee” shall have themeanings set forth under Section 409A and the regulations and rulings issuedthereunder. Furthermore, the Company shall not be required to make, and theExecutive shall not be required to receive, any severance or other payment orbenefit under Sections 3.3, 3.4 or 3.6 hereof if the making of such payment orthe provision of such benefit or the receipt thereof shall result in a tax tothe Executive arising under Section 409A of the Code (a “Section 409A Tax”). Inthe event the Company cannot make a payment or provide a benefit under Sections3.3, 3.4 or 3.6 hereof, or if the Executive cannot receive any such payment orbenefit, in accordance with the terms of such Sections, without the Executiveincurring a Section 409A Tax, then the Company and the Executive shall worktogether in good faith to agree on an alternative payment schedule or analternative benefit of comparable economic value acceptable to both parties (andto amend this Agreement, where necessary or desirable) such that the Executivedoes not incur a Section 409A Tax or the Executive incurs the least amount ofSection 409A Tax as is possible under the circumstances. If a satisfactoryalternative payment schedule or benefit cannot be agreed to by the later tooccur 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, distributionor benefit together with an additional payment (a “409A Payment”) in an amountsuch that after payment by the Executive of all taxes imposed on the 409APayment (excluding any Excise Tax to which payment to the Executive is madepursuant to Section 3.6(a)), the Executive retains an amount of the 409A Paymentequal 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, eitherduring 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 theCompany or its subsidiaries, except for (a) disclosures to directors, officers,key employees, independent accountants and counsel of the Company and itssubsidiaries as may be necessary or appropriate in the performance of theExecutive’s duties hereunder, (b) disclosures which do not have a materialadverse effect on the business or operations of the Company and itssubsidiaries, taken as a whole, (c) disclosures which the Executive is requiredto make by law or by any court, arbitrator or administrative or legislative body(including any committee thereof) with apparent jurisdiction to order theExecutive to disclose or make accessible any information, (d) disclosures withrespect to any other litigation, arbitration or mediation involving thisAgreement, and (e) disclosures of any such confidential or proprietaryinformation that is, at the time of such disclosure, generally known to andavailable for use by the public otherwise than by the Executive’s wrongful actor omission. The Executive agrees not to take with him upon leaving the employof the Company any document or paper relating to any confidential information ortrade secret of the Company and its subsidiaries, except that Executive shall beentitled 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’sonly copy of business contact information), personal files and phone books, (ii)information showing his compensation or relating to his reimbursement ofexpenses, (iii) information that he reasonably believes may be needed for taxpurposes, and (iv) copies of plans, programs and agreements relating to hisemployment, or termination thereof, with the Company. 4.2. Non-Solicitation of Employees. The Executive agrees that, exceptin the course of performing his duties hereunder, he will not, either during theTerm and for a period of two (2) years after the expiration or termination ofthe Term, directly or indirectly, solicit or induce or attempt to solicit orinduce or cause any of the employees of the Company or the Company’ssubsidiaries 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 tomitigate damages or the amount of any payment provided for under this Agreementby seeking other employment or otherwise and no future income earned by theExecutive from employment or otherwise shall in any way reduce or offset anypayments due to the Executive hereunder. Assuming a payment or otherwise is dueExecutive under this Agreement, the Company may offset against any amount dueExecutive under this Agreement only those amounts due Company in respect of anyundisputed, liquidated obligation of Executive to the Company. 5.2. Governing Law. The provisions of this Agreement will be construedand interpreted under the laws of the State of New Jersey, without regard toprinciples of conflicts of law. 5.3. Injunctive Relief and Additional Remedy. The Executiveacknowledges that the injury that would be suffered by the Company as a resultof a breach of the provisions of Sections 4.1 and 4.2 hereof would beirreparable and that an award of monetary damages to the Company for such abreach would be an inadequate remedy. Consequently, the Company will have theright, in addition to any other rights it may have, to obtain injunctive reliefto restrain any breach or threatened breach or otherwise to specifically enforceany provision of this Agreement, and the Company will not be obligated to postbond or other security in seeking such relief. Each of the parties herebyirrevocably submits to the exclusive jurisdiction of the federal and statecourts of the State of New Jersey for the purpose of injunctive relief. 5.4. Representations and Warranties by Executive. The Executiverepresents and warrants to the best of his knowledge that the execution anddelivery by the Executive of this Agreement do not, and the performance by theExecutive of the Executive’s obligations hereunder will not, with or without thegiving of notice or the passage of time, or both: (a) violate any judgment,writ, injunction, or order of any court, arbitrator or governmental agencyapplicable to the Executive or (b) conflict with, result in the breach of anyprovisions of or the termination of, or constitute a default under, anyagreement to which the Executive is a party or by which the Executive is or maybe bound. 5.5. Waiver. The rights and remedies of the parties to this Agreementare cumulative and not alternative. Neither the failure nor any delay by eitherparty in exercising any right, power, or privilege under this Agreement willoperate as a waiver of such right, power, or privilege, and no single or partialexercise of any such right, power, or privilege will preclude any other orfurther exercise of such right, power, or privilege or the exercise of any otherright, 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 thespecific instance for which it is given; and (b) no notice to or demand on oneparty will be deemed to be a waiver of any obligation of such party or of theright of the party giving such notice or demand to take further action withoutnotice or demand as provided in this Agreement. 5.6. Assignment. No right or benefit under this Agreement shall beassigned, transferred, pledged or encumbered (a) by the Executive except by abeneficiary 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 ofits rights hereunder to any Person with which it may merge or consolidate or towhich it may sell all or substantially all of its assets; provided that suchPerson shall, by agreement in form and substance satisfactory to the Executive,expressly assume and agree to perform this Agreement in the same manner and tothe same extent that the Company would be required to perform it if no suchmerger, consolidation or sale had taken place. Subject to the foregoing, thisAgreement shall be binding upon and inure to the benefit of the Company and eachof its successors and assigns, and the Executive, his heirs, legalrepresentatives and any beneficiary or beneficiaries designated hereunder. 5.7. Entire Agreement; Amendments. This Agreement contains the entireagreement between the parties with respect to the subject matter hereof andsupersedes all prior agreements and understandings, oral or written, between theparties hereto with respect to the subject matter hereof. This Agreement may notbe amended orally, but only by an agreement in writing signed by the partieshereto. 5.8. Arbitration. Any dispute which may arise between the Executive andthe Company with respect to the construction, interpretation or application ofany of the terms, provisions, covenants or conditions of this Agreement or anyclaim arising from or relating to this Agreement will be submitted to final andbinding arbitration by three (3) arbitrators in Newark, New Jersey, under theexpedited rules of the American Arbitration Association then obtaining. One sucharbitrator shall be selected by each of the Company and the Executive, and thetwo arbitrators so selected shall select the third arbitrator. Selection of allthree arbitrators shall be made within thirty (30) days after the date thedispute arose. The written decision of the arbitrators shall be rendered withinninety (90) days after selection of the third arbitrator. The decision of thearbitrators shall be final and binding on the Company and the Executive and maybe entered by either party in any New Jersey federal or state court havingjurisdiction. 5.9. Legal Costs. The Company shall pay any reasonable attorney’s feesand costs incurred by the Executive in connection with any dispute regardingthis Agreement so long as Executive’s claim(s) or defense(s) in such action areasserted in the good faith belief that they are not frivolous. The Company shallpay any such fees and costs promptly following its receipt of written requeststherefor, which requests shall be made no more frequently than once per calendarmonth. The Company shall bear all legal costs and expenses incurred in the eventthe Company should contest or dispute the characterization of any amounts paidpursuant to this Agreement as being nondeductible under Section 280G of the Codeor subject to imposition of an excise tax under Section 4999 of the Code,including, without limitation, the reasonable costs and expenses of any counselselected 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 provisionscontained in this Agreement shall, for any reason, be held invalid orunenforceable, the other provisions of this Agreement shall remain in full forceand effect. Any provision of this Agreement held invalid or unenforceable onlyin part or degree shall remain in full force and effect to the extent not heldinvalid or unenforceable. 5.11. Counterparts; Facsimile. This Agreement may be executed in one ormore counterparts, each of which will be deemed to be an original copy of thisAgreement and all of which, when taken together, will be deemed to constituteone and the same agreement. This Agreement may be executed via facsimile. 5.12. Headings; Interpretation. The various headings contained hereinare for reference purposes only and do not limit or otherwise affect any of theprovisions of this Agreement. It is the intent of the parties that thisAgreement not be construed more strictly with regard to one party than withregard to any other party. 5.13. Notices. (a) All notices, requests, demands and othercommunications required or permitted under this Agreement shall be in writingand sent as follows: If to the Company, to: Selective Insurance Group, Inc. 40 Wantage Avenue Branchville, New Jersey 07890 Attn: General Counsel Fax: (973) 948-0282 With a copy to: Bingham McCutchen LLP 399 Park Avenue New York, NY 10022 Attn: Jonathan A. Kenter, Esq. Fax: (212) 702-3614 If to the Executive, to: Gregory E. Murphy Post Office Box 1187 Sparta, NJ 07871 (b) All notices and other communications required or permittedunder this Agreement which are addressed as provided in Paragraph (a) of thisSection 5.13, (i) if delivered personally against proper receipt shall beeffective upon delivery, (ii) if sent by facsimile transmission (with evidencesupplied by the sender of the facsimile’s receipt at a facsimile numberdesignated for receipt by the other party hereunder, which other party shall beobligated 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 thesender, shall be effective upon receipt. The parties hereto may from time totime change their respective addresses and/or facsimile numbers for the purposeof notices to that party by a similar notice specifying a new address and/orfacsimile number, but no such change shall be deemed to have been given unlessit is sent and received in accordance with this Section 5.13. 5.14. Withholding. All amounts payable by the Company to the Executivehereunder (including, but not limited to, the Salary or any amounts payablepursuant to Sections 3.3 and/or 3.4 hereof) shall be reduced prior to thedelivery of such payment to the Executive by an amount sufficient to satisfy anyapplicable federal, state, local or other withholding tax requirements. IN WITNESS WHEREOF, the Company and Executive have executed thisAgreement as of the Commencement Date. SELECTIVE INSURANCE GROUP, INC. By: /s/ J. Brian Thebault ——————————————– Name: J. Brian Thebault Title: Chairman, Salary and Employee Benefits Committee of the Board of Directors EXECUTIVE: /s/ Gregory E. Murphy ———————————————— Gregory E. Murphy 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 themeanings specified in the Employment Agreement. Pursuant to the terms of the Employment Agreement and in considerationof the payments to be made to the Executive by the Company, which Executiveacknowledges are in excess of what Executive would otherwise be entitled toreceive, the Executive hereby releases and forever discharges and holds theCompany 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 insurersof each Company Party, and any legal and personal representatives of each of theforegoing, harmless from all claims or suits, of any nature whatsoever (whetherknown or unknown), past, present or future, including those arising from thelaw, being directly or indirectly related to the Executive’s employment by orthe termination of such employment by any Company Party, including, withoutlimiting the foregoing, any claims for notice, pay in lieu of notice, wrongfuldismissal, severance pay, bonus, overtime pay, incentive compensation, interestor vacation pay for the Executive’s service as an officer or director to anyCompany Party through the date hereof. The Executive also hereby agrees not tofile a lawsuit asserting any such claims. This release (this “Release”)includes, but is not limited to, claims growing out of any legal restriction onany Company Party’s right to terminate its employees and claims or rights underfederal, state, and local laws prohibiting employment discrimination (including,but not limited to, claims or rights under Title VII of the Civil Rights Act of1964, as amended by the Civil Rights Act of 1991, the Americans withDisabilities Act, the Family and Medical Leave Act, the Fair Labor StandardsAct, the Uniformed Services Employment and Reemployment Rights Act, the EmployeeRetirement Income Security Act, the Equal Pay Act, the Age Discrimination inEmployment Act of 1967, as amended by the Older Workers Benefit Protection Actof 1990, and the laws of the State of New Jersey against discrimination, or anyother 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 otherrequirement) which arose before the date this Release is signed, excepting onlyclaims in the nature of workers’ compensation, claims for vested benefits, andclaims to enforce this agreement. The Executive acknowledges that because thisRelease contains a release of claims and is an important legal document, he hasbeen 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 otherwiserequired by Section 7(f)(1)(F) of the Age Discrimination in Employment Actand/or 29 C.F.R. Part 1625. If 45 days is so required, delete bracketed text inits entirety.(2) Delete brackets and use text enclosed therewith if 45 days is required bySection 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 ofrevocation to the Company at its offices within seven (7) days after executingit. If Executive executes this Release and does not subsequently revoke therelease within seven (7) days after executing it, then this Release shall takeeffect as a legally binding agreement between Executive and the Company. If Executive does not deliver to the Company an original signed copy ofthis Release by __________, or if Executive signs and revokes this Releasewithin seven (7) days as set forth above, the Company will assume that Executiverejects the Release and Executive will not receive the payments referred toherein. The Executive acknowledges that there is a risk that after signing thisRelease he may discover losses or claims that are released under this Release,but that are presently unknown to him. The Executive assumes this risk andunderstands that this Release shall apply to any such losses and claims. The Executive understands that this Release includes a full and finalrelease covering all known and unknown, injuries, debts, claims or damages whichhave arisen or may have arisen from Executive’s employment by or the terminationof such employment by any Company party. The Executive acknowledges that byaccepting the benefits and payments set forth in the Employment Agreement, heassumes and waives the risks that the facts and the law may be other than as hebelieves. Notwithstanding the foregoing, this Release does not release, and theExecutive continues to be entitled to, (i) any rights to exculpation orindemnification that the Executive has under contract or law with respect to hisservice as an officer or director of any Company Party and (ii) receive thepayments to be made to him by the Company pursuant to Section 3.3 and/or 3.4 ofthe Employment Agreement (including any plan, agreement or other arrangementthat is referenced in or the subject of the applicable Section), subject to theconditions set forth in Section 3.5 of the Employment Agreement, (iii) any rightthe Executive may have to obtain contribution as permitted by law in the eventof entry of judgment against him as a result of any act or failure to act forwhich he and any Company party are jointly liable, and (iv) any claim in respectof any insurance policy with any Company party entered into outside of theemployment relationship. This Release constitutes the release referenced in Section 3.5 of theEmployment Agreement. The undersigned Executive, having had the time to reflect, freelyaccepts and agrees to the above Release. The Executive acknowledges and agreesthat no Company representative has made any representation to or agreement withthe Executive relating to this Release which is not contained in the expressterms of this Release. The Executive acknowledges and agrees that the executionand delivery of this Release is based upon the Executive’s independent review ofthis Release, and the Executive hereby expressly waives any and all claims ordefenses by the Executive against the enforcement of this Release which arebased upon allegations or representations, projections, estimates,understandings or agreements by the Company or any ofits representatives or any assumptions by the Executive that are not containedin the express terms of this Release. EXECUTIVE ———————————————— Date: —————————————— [Attach disclosures required by the Older Workers Benefit Protection Act, if required]