SELECTIVE INSURANCE SUPPLEMENTAL PENSION PLAN

Exhibit 10.1

SELECTIVE INSURANCE

SUPPLEMENTAL PENSION PLAN

As Amended and Restated Effective January 1, 2005

TABLE OF CONTENTS

 i 

SELECTIVE INSURANCE
SUPPLEMENTAL PENSION PLAN

As Amended and Restated Effective January 1, 2005

1.  Establishment . Selective Insurance Company of America (the “Company”) established the Selective Insurance Supplemental Pension Plan (the “Plan”) effective as of January 1, 1989. The Plan is hereby amended and restated, effective as of January 1, 2005, to reflect, among other things, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance of the Internal Revenue Service thereunder (together, “Section 409A”).

2.  Purpose and Intent . The purpose of the Plan is to provide retirement income and death benefits for certain key employees of the Company and those of its Affiliates who adopt the Plan to supplement the benefits provided under the Retirement Income Plan for Selective Insurance Company of America (the “Retirement Plan”). In general, the Plan provides covered employees with benefits approximately equal to the additional benefits they would have earned under the Retirement Plan in the absence of the annual pensionable compensation limits and maximum benefit limits imposed by Section 401(a)(17) and Section 415 , respectively, of the Code. It is intended that the Plan will assist the Company and other Participating Employers in attracting and retaining employees of exceptional ability.

3.  Unfunded Plan . The Plan is intended to qualify as an unfunded plan for the purposes of the Code and Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is maintained by the Company primarily for the purpose of providing certain deferred compensation benefits to a select group of management or highly compensated employees, as described in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA.

4.  Effective Date . The Plan, as hereby amended and restated, shall only apply to eligible employees who are credited with an Hour of Service on or after January 1, 2005. Eligible employees who are not credited with an Hour of Service on or after January 1, 2005 shall be subject to the Plan in effect as of the last date on which they were credited with an Hour of Service.

5.  Pre-2005 Benefits and Post-2004 Benefits . In order to comply with Section 409A of the Code, certain provisions of the Plan, as hereby amended and restated, apply only to Post-2004 Benefits, which are subject to Section 409A. It is not intended that Section 409A apply to Pre-2005 Benefits, and consequently certain provisions of the Plan, as hereby amended and restated, apply only to Pre-2005 Benefits. Nothing contained herein is intended to materially enhance a benefit or right existing as of October 3, 2004 with respect to Pre-2005 Benefits, or to add a new material benefit or right with respect to Pre-2005 Benefits.

6.  Definitions . As used herein, the following words and phrases have the meanings ascribed to them in this Section 6 unless a different meaning is plainly required by the context. Some of the words and phrases used in the Plan may not be defined in this Section 6, but, for convenience, may instead be defined as they are introduced into the text. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular, and words in the masculine gender shall be deemed to include the feminine gender.

(a) “ Accrued Benefit ” shall have the meaning set forth in Section 8.

(b) “ Actuarial Equivalent ” shall have the meaning set forth in the Retirement Plan, based upon assumptions used in the Retirement Plan for determining the amount of a benefit payable in an optional form.

(c) “ Administrator ” shall mean the Company or the organization, committee or individual to whom it has delegated the authority administer the Plan, as described in Section 14.

(d) “ Affiliate ” shall mean any corporation, trade, or business which is treated as a single employer with the Company under Code Sections 414(b), (c), (m) or (o), and any other entity designated as an “Affiliate” for purposes of the Plan by the Company.

(e) “ Annuity Starting Date ” shall have the meaning set forth in the Retirement Plan.

(f) “ Average Monthly Compensation ” shall have the meaning set forth in the Retirement Plan.

(g)  “Beneficiary ” shall mean any person, persons or entity designated in writing by a Member on a form prescribed by the Administrator to receive benefits under the Plan payable in the event of the death of the Member. If no such designation is in effect at the time of the death of the Member or if no person, persons or entity so designated shall survive the Member, the Beneficiary shall be deemed to be the Member’s spouse or, if none, the Member’s estate.

(h) “ Benefit Service ” shall have the meaning set forth in the Retirement Plan.

(i) “ Change of Control ” shall mean the occurrence of an event with respect to either the Company or Selective Insurance Group, Inc. (“SIGI”) 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 hereof, pursuant to Sections 13 or 15(d) of the Exchange Act; provided, however, that a Change of Control shall, in any event, conclusively be deemed to have occurred upon the first to occur of any one of the following events:

(i) The acquisition by any person or group, including, without limitation, any current stockholder or stockholders of the Company or SIGI, of securities of the Company or SIGI resulting in such person’s or group’s owning, of record or beneficially, twenty-five percent (25%) or more of any class of voting securities of the Company or SIGI;

(ii) The acquisition by any person or group, including, without limitation, any current stockholder or stockholders of the Company or SIGI, of securities of the Company or SIGI resulting in such person’s or group’s owning, of record or beneficially, twenty percent (20%) or more, but less than twenty-five percent (25%), of any class of voting securities of the Company or SIGI, if the Board adopts a resolution that such acquisition constitutes a Change of Control;

(iii) The sale or disposition of all or substantially all of the assets of the Company or SIGI;

(iv) A reorganization, recapitalization, merger, consolidation or other business combination involving the Company or SIGI, the result of which is the ownership by the stockholders of the Company or SIGI of less than eighty percent (80%) of the voting securities of the resulting or acquired entity having the power to elect a majority of the board of directors of such entity; or

(v) A change in the membership of the Board of Directors of SIGI which, taken in conjunction with any other prior or concurrent changes, results in twenty percent (20%) or more of the membership of such Board of Directors being persons not nominated by the Board of Directors as set forth in SIGI’s then most recent proxy statement, excluding changes resulting from substitutions by the Board of Directors because of retirement or death of a director or directors, removal of a director or directors by the Board of Directors or resignation of a director or directors due to demonstrated disability or incapacity.

Notwithstanding anything in this definition to the contrary, no Change of Control shall be deemed to have occurred under the Plan with respect to a particular Member by virtue of any transaction which results in the Member, or a group of persons which includes the Member acquiring, directly or indirectly, voting securities of the Company or SIGI.

(j) “ Early Retirement Age ” shall have the meaning set forth in the Retirement Plan.

(k) “ Early Retirement Date ” shall have the meaning set forth in the Retirement Plan.

(l) “ Hour of Service ” shall have the meaning set forth in the Retirement Plan.

(m) “ Joint and Survivor Annuity ” shall mean an annuity that is the Actuarial Equivalent of a Single Life Annuity and which provides a reduced monthly benefit for the lifetime of the Member and, upon his death, an annuity for the lifetime of his Beneficiary in a monthly amount equal to fifty percent (50%), seventy-five percent (75%), or one hundred percent (100%) of the amount payable to the Member during his lifetime.

(n) “ Member ” shall mean an eligible employee who becomes a Member in the Plan pursuant to Section 7.

(o) “ Normal Retirement Age ” shall have the meaning set forth in the Retirement Plan.

(p) “ Normal Retirement Date ” shall have the meaning set forth in the Retirement Plan.

(q) “ Participating Company ” shall have the meaning set forth in the Retirement Plan.

(r) “ Participating Employer ” shall mean the Company and any of its Affiliates who are Participating Companies in the Retirement Plan and who adopt the Plan pursuant to Section 17 with the consent of and subject to any conditions imposed by the Company.

(s) “ Plan Year ” shall mean the calendar year.

(t) “ Pre-2005 Benefit ” shall mean that portion of a Member’s Accrued Benefit under the Plan, if any, that was “deferred” before January 1, 2005 for purposes of Section 409A, as determined in accordance with Treasury Regulations Section 1.409A-6(a)(3)(i).

(u) “ Post-2004 Benefit ” shall mean that portion of a Member’s Accrued Benefit that is not a Pre-2005 Benefit.

(v) “ Retirement Plan Benefit ” shall mean a Member’s “Accrued Benefit,” as defined in the Retirement Plan, expressed, as set forth in the Retirement Plan, as the amount of each monthly payment under a Single Life Annuity form of payment commencing on the Member’s Normal Retirement Date.

(w) “ Selective Group ” shall mean the Company and all of its Affiliates.

(x) “ Separation from Service ” shall mean a Member’s “separation from service,” as defined in Code Section 409A(a)(2)(A)(i) and Treasury Regulations Section 1.409A-1(h), from his Participating Employer.

(y) “ Single Life Annuity ” shall have the meaning set forth in the Retirement Plan.

(z) “ Social Security Benefit ” shall have the meaning set forth in the Retirement Plan.

(aa) “ Specified Employee ” shall mean a “specified employee”, as defined in Code Section 409A(a)(2)(B)(i) and Treasury Regulations Section 1.409A-1(i), of the Company. The determination of whether a Member is a Specified Employee shall be made by the Administrator from time to time.

(bb) “ Surviving Spouse ” shall mean the Member’s spouse at the date of the Member’s death, to whom the Member has been legally married during the entire one (1) year period preceding the date of his death.

(cc) “ Ten Year Certain and Life Annuity ” shall mean an annuity that is the Actuarial Equivalent of a Single Life Annuity and which provides for a reduced monthly benefit for the lifetime of the Member ceasing upon his death; provided, however, that if the Member dies before he has received one hundred and twenty (120) monthly payments, monthly payments in the same amount shall continue to be paid to the Member’s Beneficiary until a total of one hundred and twenty payments, in aggregate, have been made to the Member and his Beneficiary.

(dd) “ Total Disability ” shall have the meaning set forth in the Retirement Plan.

(ee) “ Trust ” shall mean any grantor trust or trusts, within the meaning of Section 671 et seq. of the Code, established by the Company in connection with the Plan; provided, however, that the assets of the Trust contributed by each Participating Employer shall remain subject to the claims of the general creditors of each such Participating Employer.

7.  Eligibility and Participation . Each employee of a Participating Employer who is (a) entitled to a Retirement Plan Benefit that is limited by reason of Section 401(a)(17) or Section 415(b) of the Code; and (b) who is a member of a select group of management or highly compensated employees, within the meaning of Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA, of the Selective Group, shall be eligible to participate in the Plan. A Member shall remain a Member as long as he is entitled to an Accrued Benefit under the Plan.

8.  Amount of Accrued Benefit . A Member shall be entitled to the following amount of supplemental retirement income under the Plan, expressed as monthly payments in the form of a Single Life Annuity commencing on the Member’s Normal Retirement Date, and based on the Member’s Benefit Service, Average Monthly Compensation and Social Security Benefit as of the date of calculation (the “Accrued Benefit”):

(a) the Member’s Retirement Plan Benefit, but calculated without regard to the limitations upon annual pensionable compensation set forth in Section 401(a)(17) of the Code and the limitations on benefits set forth in Section 415(b) of the Code; minus

(b) the Member’s Retirement Plan Benefit.

9. Early, Disability and Late Retirement Benefits .

(a) The monthly benefits payable under the Plan to a Member who commences benefits upon an Early Retirement Date shall be adjusted for each month by which his Early Retirement Date precedes his Normal Retirement Date in accordance with the provisions of the Retirement Plan.

(b) The Accrued Benefit of a Member who incurs a Total Disability shall be calculated based upon the Member’s Retirement Plan Benefit which is determined upon his Total Disability.

(c) If a Member continues to perform Hours of Service after his Normal Retirement Age, Plan benefits for calendar months commencing on or after his Normal Retirement Age shall be permanently withheld in accordance with the suspension of benefits provisions of the Retirement Plan.

10.  Vesting . A Member shall become vested in his Accrued Benefit under the Plan at the same time and at the same rate as he becomes vested in his Retirement Plan Benefit.

11. Time and Form of Payment of Plan Benefits .

(a)  Benefits Commencing on or Before December 31, 2008 . The vested Accrued Benefit of a Member who, on or before December 31, 2008, has:

(i) qualified for an early retirement benefit, normal retirement benefit, disability retirement benefit, deferred vested retirement benefit or late retirement benefit under the Retirement Plan; and

(ii) commenced receiving payment of his Retirement Plan Benefit under the Retirement Plan on or before December 31, 2008,

shall be paid to the Member in monthly installments, commencing at the same time and payable in the same form, as the benefit which the Member has elected to receive under the Retirement Plan. Such time and form of payment shall not be subject to change after January 1, 2009 and shall not be affected by any changes in the time or form of payment of the benefit under the Retirement Plan that occur after December 31, 2008.

(b)  Benefits Commencing on or After January 1, 2009 . The vested Accrued Benefit of a Member, payment of which has not commenced on or before December 31, 2008 pursuant to paragraph (a) of this Section 11, shall be paid to the Member as follows:

(i) Pre-2005 Benefit . A Member’s vested Pre-2005 Benefit shall be paid to the Member in monthly installments, commencing at the same time, and payable in the same form, as the benefit which the Member has elected to receive under the Retirement Plan.

(ii) Post-2004 Benefit . Subject to any election by the Member in accordance with paragraphs (c), (d) or (f) of this Section 11, a Member’s vested Post-2004 Benefit shall be paid to him in a Single Life Annuity commencing on the first day of the month that is the later of the first day of the month next following the date of his Separation from Service and the date he attains Early Retirement Age.

(c)  Election of Alternative Benefit Commencement Date for Post-2004 Benefit . A Member who does not commence receiving payment of his Post-2004 Benefit on or before December 31, 2008 may elect an alternative benefit commencement date for payment of his Post-2004 Benefit by filing a written election in the form prescribed by the Administrator with the Administrator:

(i) on or before December 31, 2008, provided that the election: (A) applies only to amounts that would not otherwise be payable in the calendar year in which the election is made; and (B) does not cause an amount to be paid in the calendar year in which the election is made that would not otherwise be payable in such year; or

(ii) on or before the thirtieth (30th) day after the he first becomes eligible to participate in the Plan, within the meaning of Treasury Regulations Section 1.409A-2(a)(7).

A benefit commencement date may be the first day of any month; provided however that a Member may not elect a benefit commencement date that is: (x) earlier than the date on which he attains Early Retirement Age or, if later, the first day of the month following the date on which he incurs a Separation from Service; or (y) later than the date on which he attains Normal Retirement Age or, if later, the first day of the month following the date on which he incurs a Separation from Service.

(d)  Election of Form of Life Annuity for Post-2004 Benefit . A Member may elect, by filing a written election in the form prescribed by the Administrator with the Administrator on or before his benefit commencement date, to receive his Post-2004 Benefit in a 50%, 75% or 100% Joint and Survivor Annuity, a Ten Year Certain and Life Annuity, or a Single Life Annuity (each, a “Life Annuity”). Notwithstanding anything in this Section 11 to the contrary, a Member may revoke his election as to one form of Life Annuity and elect a different form of Life Annuity by filing a written election in the form prescribed by the Administrator with the Administrator on or before his benefit commencement date. In the absence of an election pursuant to this paragraph (d), a Member’s Post-2004 Benefit shall be payable to him in the form of a Single Life Annuity, as provided in paragraph (b) of this Section 11.

(e)  Six Month Delay For Specified Employees . Notwithstanding anything in the Plan to the contrary, except (i) where a Member incurs a Separation from Service by reason of death; and (ii) with respect to distributions commencing on or before December 31, 2008 pursuant to Section 11(a), no distribution of a Member’s vested Post-2004 Benefit shall be made upon the Member’s Separation from Service if he is a Specified Employee as of the date of his Separation from Service until the first business day of the seventh month after the date of the Specified Employee’s Separation from Service (or, if earlier, the date of his death). On such date, any payments which would have been made during the six-month period following the Member’s Separation from Service