SECURITIES AND EXCHANGE COMMISSION
of the Securities
Exchange Act of 1934
|
|
|
| |
|
| |
|
| |
|
| |
Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
xþ No fee required.
o
|
|
| Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transactions applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
|
| Fee paid previously with preliminary materials. |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1) | Amount Previously Paid: | |||
(2) | Form, Schedule or Registration Statement No.: | |||
| (3) | Filing Party: | |||
| (4) | Date Filed: |
 | Selective Insurance Group, Inc. 40 Wantage Avenue Branchville, New Jersey 07890 (973) 948-3000 |
AND PROXY STATEMENT
Selective Insurance Group, Inc.’s (“Selective”) 2006
1. | Elect five (5) Class III directors |
Four (4) Class II directors for terms expiring in 2009;
Two (2) Class III directors for terms expiring in 2008;
One (1) Class I director for a term expiring in 2007;
2. |
|
| Ratify the appointment of KPMG LLP as independent public accountants for the fiscal year ending December 31, |
Gregory E. Murphy
Chairman of the Board, President and Chief Executive Officer
Senior
Executive Vice President, General Counsel and Corporate Secretary
|
| |||
| 1 | |||
|
| 1 | ||
|
| 2 | ||
|
|
Security Ownership of Directors and Executive Officers and Certain Beneficial Owners and
|
| 2 | ||
|
| 3 | ||
|
| 5 | ||
|
| 10 | ||
|
| 11 | ||
|
| 11 | ||
| 13 | |||
|
| 13 | ||
|
| 14 | ||
|
| 17 | ||
|
| 18 | ||
|
|
Information about Proposal 2 – Approval of The Selective Insurance Group, Inc. Stock Purchase
|
| 18 | ||
|
| 28 | ||
|
| 29 | ||
|
| 31 | ||
|
| 32 | ||
|
| 32 | ||
|
| 33 | ||
| 35 | ||||
| 37 | ||||
| 39 | ||||
| 39 | ||||
| 40 | ||||
| 40 | ||||
| 41 | ||||
| 42 | ||||
| 43 |
TO BE HELD APRIL 26, 200624, 2008
Page 1
|
|
THE FOUR NOMINATED CLASS II DIRECTORS: A. DAVID BROWN; WILLIAM M. KEARNS, JR.; S. GRIFFIN MCCLELLAN III; AND J. BRIAN THEBAULT;
THE TWOFIVE NOMINATED CLASS III DIRECTORS: PAUL D. BAUER, JOHN C. BURVILLE, JOAN M. LAMM-TENNANT, MICHAEL J. MORRISSEY, AND JOHN F. ROCKART; AND
THE ONE NOMINATED CLASS I DIRECTOR: W. MARSTON BECKER.
You can find information about these nominees, as well as information about Selective’s Board of Directors, its committees, compensation for directors, and other related matters beginning on page 7.
5.
Vote in favor of all the nominees;
Withhold your votes as to all nominees; or
| § | Vote in favor of all the nominees; | ||
| § | Withhold your votes as to all nominees; or | ||
| § | Withhold your votes as to specific nominees. |
Withhold your votes as to specific nominees.
Assuming a quorum is present, to be elected, a candidate must receive a plurality of the votes cast at the Annual Meeting in person or by proxyproxy. Stockholders may not cumulate their votes. Abstentions and broker non-votes will have no effect on the outcome of the vote.
|
|
APPOINTMENT OF KPMG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2008.
40.
Vote in favor of Proposal 2;
Vote against Proposal 2; or
| § | Vote in favor of Proposal 2; | ||
| § | Vote against Proposal 2; or | ||
| § | Abstain from voting. |
Abstain from voting.
Assuming a quorum the proposalis present, Proposal 2 will pass if approved by owners of a majority of the stockholdersshares of stock present in person or represented by proxy and entitled to vote at the Annual Meeting. Abstentions will have the same effect as votes against Proposal 2 and broker non-votes will have no effect on the outcome of the vote.
|
|
THE BOARD RECOMMENDS THAT YOU VOTE TO RATIFY THE APPOINTMENT OF KPMG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006.
You can find information about Selective’s relationship with KPMG LLP beginning on page 33.
New Jersey law and Selective’s By-laws govern the vote on Proposal 3, on which you may:
Vote in favor of Proposal 3;
Abstain from voting.
Assuming a quorum, Proposal 3 will pass if approved by a majority of the stockholders present in person or represented by proxy and entitled to vote at the Annual Meeting. Abstentions will have the same effect as votes against Proposal 3 and broker non-votes will have no effect on the outcome of the vote.
Page 2
OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING
Page 2
1. | BY MAIL. Mark your voting instructions on, then sign and date the proxy card. Then return the proxy card in the postage-paid envelope provided. If you mail your proxy card, we must receive it before the beginning of the meeting. |
If we receive your signed proxy card, but you do not give voting instructions, the named proxies will vote your shares FOR Items 1, 2, and 3. If any other matters arise during the meeting that require a vote, the named proxies will exercise their discretion, to the extent permitted by applicable law and NASDAQ and SEC rules and regulations.
| If we receive your signed proxy card, but you do not give voting instructions, the named proxies will vote your shares FOR Proposals 1 and 2. If any other matters arise during the meeting which require a vote, the named proxies will exercise their discretion, to the extent permitted by applicable law and NASDAQ and SEC rules and regulations. | ||
| 2. | BY TELEPHONE. Call the toll-free number on your proxy card to vote by |
3. | BY INTERNET. Go to the website listed on your proxy card to vote through the Internet. Follow the instructions on your proxy card and the website. If you vote through the Internet, you may incur telephone and/or Internet access charges from your service providers. IF YOU VOTE BY INTERNET, YOU DO NOT NEED TO RETURN YOUR PROXY CARD. |
4. | IN PERSON. Attend the Annual Meeting, or send a personal representative with an appropriate proxy, in order to vote. |
Page 3
Page 3
Page 4
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS AND SECURITIES AUTHORIZED
FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
SECURITY OWNERSHIP OF MANAGEMENT
AS OF FEBRUARY 28, 2006
The following table shows:
How much Selective common stock each nominee for director, director, the Chairman of the Board, Chief Executive Officer and President (“CEO”), and the next four most highly compensated executive officers other than the CEO, own directly or beneficially.
How much Selective common stock the directors and executive officers of Selective own, directly or beneficially as a group.
|
| NUMBER OF |
|
| |
| NUMBER | SHARES | TOTAL |
| |
| OF SHARES | REGARDING | SHARES |
| |
| BENEFICIALLY | OPTIONS | BENEFICIALLY | PERCENT | |
NAME OF OWNER | OWNED | EXERCISABLE(1) | OWNED | OF CLASS | |
Bauer, Paul D. | 13,991 |
| 21,000 | 34,991 | * |
Becker, W. Marston | 103 |
| 0 | 103 | * |
Brown, A. David | 15,232 |
| 21,000 | 36,232 | * |
Burville, John C. | 119 |
| 0 | 119 | * |
Connell, Richard F. | 37,719 |
| 5,000 | 42,719 | * |
Kearns, William M., Jr. | 85,577 |
| 27,000 | 112,577 | * |
Lamm-Tennant, Joan M. | 15,611 |
| 27,000 | 42,611 | * |
McClellan, S. Griffin, III | 24,133 | (2) | 6,000 | 30,133 | * |
Murphy, Gregory E. | 137,016 |
| 34,825 | 171,841 | * |
Ochiltree, Jamie, III | 109,353 | (3) | 44,000 | 153,353 | * |
O’Kelley, Ronald L. | 1,969 |
| 3,000 | 4,969 | * |
Rockart, John F. | 3,530 |
| 9,000 | 12,530 | * |
Rue, William M. | 207,193 | (4) | 27,000 | 234,193 | * |
Thatcher, Dale A. | 38,038 |
| 5,000 | 43,038 | * |
Thebault, J. Brian | 19,755 | (5) | 27,000 | 46,755 | * |
Zaleski, Ronald J. | 40,734 |
| 16,996 | 57,730 | * |
All executive officers and directors as a group (20 persons) | 841,512 |
| 329,783 | 1,171,295 | 4.24 |
|
|
Page 5
HOLDERS OF 5% OR MORE OF SELECTIVE SECURITIES
The following table lists the only person or group known to Selective to be the beneficial owner of more than 5% of any class of Selective’s voting securities as of December 31, 2005, based on a Schedule 13G filed by the beneficial owner on February 6, 2006 with the SEC.
|
|
|
|
|
|
|
|
The following table sets forth certain information as of December 31, 2005,with respect to compensation plans under which shares of Selective’s common stock may be issued.(1)
Plan Category | (a) |
| (b) |
| (c) | |
Equity Compensation plans | 789,523 |
| $26.96 |
| 1,971,194 | (2) |
|
|
|
|
|
|
|
Equity Compensation plans not | — |
| — |
| 561,502 | (3) |
|
|
|
|
|
|
|
Total | 789,523 |
| $26.96 |
| 2,532,696 |
|
|
|
|
|
|
|
Page 6
Stock Purchase Plan for Independent Insurance Agents
History
Selective’s Board of Directors adopted the Selective Insurance Group Stock Purchase Plan for Independent Insurance Agents (the “Original Independent Agents Plan”) initially in May 1989 and most recently amended the Independent Agents Plan on July 24, 2000. At the Annual Meeting, the Board is seeking shareholder approval of a new Agencies Stock Purchase Plan, which, if approved, would replace the Original Independent Agents Plan. If the new Agencies Stock Purchase Plan is not approved by stockholders, the Original Independent Agents Plan will remain in effect. Please see Proposal 2 for information regarding the Agencies Stock Purchase Plan.
The Plan
Selective’s Board of Directors adopted the Original Independent Agents Plan to motivate persons performing independent insurance agency services for Selective by enabling them to participate in Selective’s long-term growth and success by purchasing shares of Selective’s common stock at a discounted price. The purchase price for shares offered under the Original Independent Agents Plan is the average of the high and low sale prices of Selective’s common stock quoted on NASDAQ on the date of purchase, less a discount of 10%.
Eligibility
Each independent insurance agency which is under contract with Selective’s insurance subsidiaries to promote and sell Selective insurance products is eligible to participate in the Original Independent Agents Plan and to purchase shares of Selective’s common stock under the plan. Also eligible to purchase shares under the Original Independent Agents Plan are: the principals of such agencies, general partners, officers and stockholders of eligible insurance agencies, key employees of eligible insurance agencies designated by the principals, general partners or officers of the agencies, their individual retirement plans, their Keogh plans, and employee benefit plans of eligible insurance agencies.
Restrictions on Shares Purchased under the Plan
Shares purchased under the Original Independent Agents Plan are restricted for a period of one year beginning on the date of the day after the purchase. During this one-year period, shares purchased under the Original Independent Agents Plan cannot be sold, transferred, pledged, assigned or disposed of in any way.
INFORMATION ABOUT PROPOSAL 1
The Board has set the number of members of the Board at twelve (12). John F. Rockart, having surpassed the eligibility age for election as a director, will retire from the Board on April 24, 2008, following the election of directors at the 2008 Annual Meeting of Stockholders. The Board thanks Mr. Rockart for his many years of service.
The Board also nominated two (2) Class III directors to stand for election at the Annual Meeting for a term expiring at the 2008 Annual Meeting or when a successor has been duly elected and qualified:Paul D. Bauer, John C. Burville, Joan M. Lamm-Tennant and John F. Rockart. Dr. BurvilleRonald L. O’Kelley (the incumbent directors) and Michael J. Morrissey. Mr. Morrissey was recommended to the Corporate Governance and Nominating Committee by a third party search firm and non-management directors of Selective and was appointed to the Board effective January 1, 2006. Dr. Rockart is presently a Class II director whose term expires at the 2006 Annual Meeting.
Page 7
The Board also nominated one (1) Class I director to stand for election at the Annual Meeting for a term expiring at the 2007 Annual Meeting or when a successor has been duly elected and qualified: W. Marston Becker. Mr. Becker was recommended by a third party search firm and non-management directors of Selective and was appointed to the Board effective February 13, 2006.
Selective.
| ||
| CLASS III – | Directors Nominated to Continue in Office Until the 2011 Annual Meeting of Stockholders |
Paul D. Bauer, 64 | • Retired Financial Executive. | |
| Independent Director, 1998 | • Executive Vice President and Chief Financial Officer of Tops Markets, Inc., 1970 to 1993. | |
• Director, Rosina Holdings Inc., since 2002. | ||
• Director, R.P. Adams Co., 1991 to 2004. | ||
• Director, IMC, Inc., 1995 to 2000. | ||
• Director, Catholic Health System of Western New York, since 1998. | ||
• Co-founder and President, Buffalo Inner-City Scholarship Opportunity Network. | ||
• Trustee, Holy Angels Academy, since 2005. | ||
• Graduate of Boston College (B.S. in Accounting). | ||
John C. Burville, 60 | • Insurance Consultant to the Bermuda Government, 2003 to 2007. | |
| Independent Director, 2006 | • Bermuda Insurance Advisory Committee, 1985 to 2003. | |
• Chief Actuary and Senior Rating Agency Manager of ACE Limited, 1992 to 2003. | ||
• Graduate of Leicester University in the United Kingdom (BSc and Ph.D.). | ||
• Fellow of the Institute of Actuaries. |
Page 5
Joan M. Lamm-Tennant, 55 Independent Director, 1993 | • Global Chief Economist & Risk Strategist, Guy Carpenter & Company, LLC, since May 2007. | |
• Senior Vice President, General Re Corporation, 1997 to April, 2007. | ||
• Adjunct Professor, the Wharton School of the University of Pennsylvania, since 2006. | ||
• Professor of Finance, Villanova University, 1988 to 2000. | ||
• Director, IVANS, Inc., since 2004. | ||
• Member, American Risk and Insurance Association. | ||
• Member, International Insurance Society. | ||
• Member, Association for Investment Management and Research. | ||
• Graduate of St. Mary’s University (B.B.A. and M.B.A.). | ||
• Graduate of the University of Texas (Ph.D.). | ||
Ronald L. O’Kelley, 63 | • Chairman and CEO, Atlantic Coast Venture Investments Inc., since 2003. | |
| Independent Director, 2005 | • Executive Vice President, CFO and Treasurer, State Street Corporation, 1995 to 2002. | |
• Director, U. S. Shipping Partners L.P., since 2004. | ||
• Director, Refco Inc., 2005 to 2006. | ||
• Advisory Director, Donald H. Jones Center for Entrepreneurship, Tepper School of Business, Carnegie Mellon University, since 2003. | ||
• Member, National Association of Corporate Directors. | ||
• Graduate of Duke University (A.B.). | ||
• Graduate of Carnegie Mellon University (M.B.A.). |
| CLASS III – | Director Nominee to Serve in Office until the 2011 Annual Meeting of Stockholders |
| Name, Age, Year Elected To Board of Directors | Occupation And Background | |
Michael J. Morrissey,60 | • Chairman and Chief Executive Officer, Firemark Investments, since 1983. | |
| Independent Director | • Director, CGA Group, Ltd., since 1998. | |
• President, Chief Operating Officer, Chief Investment Officer and Director, Manhattan Life Insurance Company, 1985 to 1987; Chief Executive Officer, Manhattan Capital Management, 1985. | ||
• Senior Vice President, Crum & Forster Insurance Group, 1978 to 1983. | ||
• Chartered Financial Analyst. | ||
• Graduate of Boston College (B.A.). | ||
• Graduate of Dartmouth College (M.B.A.). |
Page 6
| Name, Age, Year Elected To Board of Directors | Occupation And Background | |
A. David Brown , 65 | • Senior Vice President, Human Resources, Linens and Things, `Inc., since 2006. | |
| Independent Director, 1996 | • Managing Partner, Bridge Partners, LLC, an executive recruiting firm, 2003 to 2006. | |
• Partner, Whitehead Mann, executive recruiters, 1997 to 2003. | ||
• Director, Hanover Direct, 2003 to 2006. | ||
• Director, Zale Corporation, 1997 to 2006. | ||
• Director, The Sports Authority, Inc., 1998 to 2003. | ||
•
| ||
•
| ||
William M. Kearns, Jr.,
| • Chairman and Co-CEO and other executive positions of Keefe Managers, LLC, a money management firm, since 1998. | |
| Independent Director, 1975 | • President, W.M. Kearns & Co., Inc., a private investment company, since 1994. | |
| Lead Director | •
| |
• Trustee, AXA Enterprise Funds, since 2004. | ||
• Director, 2007. | ||
• Director, U. S. Shipping Partners L.P., 2002 to 2006; Lead Director, since 2007. | ||
• Advisory Director, Gridley and Company LLC, since 2001. | ||
• Advisory Director, 1997. | ||
• Advisory Director, Private Client Resources LLC, since 2004. | ||
• Executive Vice President, Greater NY Councils, Boy Scouts of America, since 1985. | ||
• Member,
Health Foundation, since 2005. | ||
• Honorary LLD, Gonzaga University. | ||
• Graduate of the University of Maine (B.A.). | ||
• Graduate of New York University (M.A.). | ||
S. Griffin McClellan III , 70 | • Retired Banking Executive. | |
| Independent Director, 1980 | •
| |
• Graduate of Harvard University (B.A.). |
Page 8
J. Brian Thebault , 56 | • Chairman, Earth-Thebault, since July 2007. | |
| Independent Director, 1996 | • Chairman and Chief Executive Officer, L.P. Thebault Company, | |
• President and Chief Executive Officer, L.P. Thebault Company, 1984 to 1998. | ||
•
| ||
• Trustee, The Delbarton School, 1990 to 2007. | ||
• Graduate of University of Southern California (B.S.). |
Page 7
| ||
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
, 55 | • Chairman and CEO, Max Capital Group Ltd., since October 2006; Director, since 2004. | |
| Independent Director, 2006 |
| |
|
|
| ||
|
| |
|
2002. | |
• Chairman and General Partner of West Virginia Media Holdings, since 2001. | ||
• Chairman and Chief Executive Officer, 2002 to 2005; Director, | ||
• Director, Mountain Companies, since 2007. | ||
• Director, Beazley Group plc, since 2006. | ||
• Director, West Virginia University, United Hospital System, since 2004. | ||
• 1986 to 1994. | ||
•
| ||
• Advisory Board Member, American Securities Funds, since 1997. | ||
• Graduate of West Virginia University (B.S. and J.D.).
| ||
Page 9
CONTINUING DIRECTORS
| ||
|
| |
Gregory E. Murphy | • Chairman, President and Chief Executive Officer of Selective, since May 2000. | |
| Employee Director, 1997 | • President and Chief Executive Officer of Selective, May 1999 to May 2000. | |
• President and Chief Operating Officer of Selective, 1997 to May 1999. | ||
• Other senior executive, management, and operational positions at Selective, since 1980. | ||
• Director, Newton Memorial Hospital Foundation, Inc., since 1999. | ||
• Director, Insurance Information Institute, since June 2000. | ||
• Director, American Insurance Association (AIA), 2002 to 2006. | ||
• Certified Public Accountant (New Jersey) (Inactive). | ||
• Trustee, the American Institute for CPCU (AICPCU) and the Insurance Institute of America (IIA), since June 2001. | ||
• Graduate of Boston College (B.S.). | ||
• Harvard University (Advanced Management Program). | ||
Page 8
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
William M. Rue
| • President, Rue Insurance, general insurance agency, since 1969. | |
| Non-Independent Director, 1977 | • President, Rue Financial Services, Inc., 2002 to 2006. | |
• Director, 1st Constitution Bank, since 1989, Secretary of the Board, since 2005. | ||
• Director, 1st Constitution Bancorp, since 1999, Secretary of the Board, since 2005. | ||
• Director, Robert Wood Johnson University Hospital at Hamilton, since 1994. | ||
• Trustee, Rider University, since 1993. | ||
• Director, Robert Wood Johnson University Hospital Foundation, since 1999. | ||
• Member, National Association of Securities Dealers. | ||
• Member, Council of Insurance Agents & Brokers. | ||
• Member, Society of CPCU. | ||
• Member, Professional Insurance Agents Association. | ||
• Graduate of Rider College (B.A.). |
Page 9
| § | The number of shares of Selective common stock beneficially owned by each nominee for director, director, the Chairman of the Board, President and Chief Executive Officer (the “CEO”), the Chief Financial Officer (the “CFO”), and the three most highly compensated executive officers other than the CEO and CFO (collectively, with the CEO and CFO, referred to as the “named executive officers”). | |
|
| ||
| § | The number of shares of Selective common stock beneficially owned by the directors (and nominee for director) and executive officers of Selective as a group. |
| Number of Shares | ||||||||||||||||
| Options Exercisable | Total Shares | Percent of | ||||||||||||||
| Name of Beneficial Owner | Common Stock(1) | within 60 days | Beneficially Owned | Class | ||||||||||||
| Bauer, Paul D. | 34,413 | 51,269 | 85,682 | * | ||||||||||||
| Becker, W. Marston | 8,637 | 9,269 | 17,906 | * | ||||||||||||
| Brown, A. David | 36,895 | 39,269 | 76,164 | * | ||||||||||||
| Burville, John C. | 5,106 | 9,269 | 14,375 | * | ||||||||||||
| Connell, Richard F. | 90,073 | 13,480 | 103,553 | * | ||||||||||||
| Guthrie, Kerry A. | 89,846 | (2) | 55,980 | 145,826 | * | |||||||||||
| Kearns, William M., Jr. | 194,321 | 51,269 | 245,590 | * | ||||||||||||
| Lamm-Tennant, Joan M. | 40,376 | 51,269 | 91,645 | * | ||||||||||||
| McClellan, S. Griffin, III | 40,859 | (3) | 21,269 | 62,128 | * | |||||||||||
| Morrissey, Michael J. | — | — | — | * | ||||||||||||
| Murphy, Gregory E. | 252,846 | 73,130 | 325,976 | 1 | % | |||||||||||
| Ochiltree, Jamie, III | 97,694 | (4) | 55,738 | 153,432 | * | |||||||||||
| O’Kelley, Ronald L. | 11,232 | 15,269 | 26,501 | * | ||||||||||||
| Rockart, John F. | 11,837 | 27,269 | 39,106 | * | ||||||||||||
| Rue, William M. | 408,116 | (5) | 51,269 | 459,385 | 1 | % | ||||||||||
| Thatcher, Dale A. | 95,866 | 13,480 | 109,346 | * | ||||||||||||
| Thebault, J. Brian | 49,145 | (6) | 57,269 | 106,414 | * | |||||||||||
| All executive officers, directors and nominee for director as a group (21 persons) | 1,651,868.63 | 651,679.00 | 2,303,548 | 4 | % | |||||||||||
| * | Less than 1% of the common stock outstanding. | ||
| (1) | Certain directors and executive officers hold Selective stock in margin accounts but, except as set forth in the footnotes to this table, no director or officer has pledged Selective stock for a loan or stock purchase. | ||
| (2) | 5,196 of the shares held by Kerry A. Guthrie, Selective’s Executive Vice President and Chief Investment Officer, are pledged as collateral for a loan made by Selective to purchase Selective stock in 1998, |
| |
| (3) | Includes 4,000 shares held by Mr. McClellan’s wife, for which Mr. McClellan disclaims beneficial ownership. | ||
| (4) | Includes: (i) 30,867 shares held by Mr. Ochiltree’s wife, for which Mr. Ochiltree disclaims beneficial ownership and (ii) 10,270 shares pledged as
| ||
| (5) | Includes: (i) 33,941 shares held by Chas. E. Rue & Sons, Inc. t/a Rue Insurance (“Rue Insurance”), a general insurance agency of which Mr. Rue is President and
| ||
| (6) | Includes: (i) 212 shares held in custody for and 208 shares held by Mr. Thebault’s son; (ii) 212 shares held in custody and 202 shares held by a daughter of |
Page 10
|
| Amount & Nature of
| ||||
|
| Name & Address of Beneficial Owner | Beneficial Ownership | Percentage of Class | ||
| Common Stock | Dimensional Fund Advisors LP | 4,533,862 shares | 8.35% | |||
| 1299 Ocean Avenue, 11th Floor | of common stock | |||||
| Santa Monica, CA 90401 | ||||||
| Common Stock | Barclays Global Investors, NA and
| 2,795,909 shares | 5.15% | |||
| 45 Fremont Street
| of
| |||||
| San Francisco, CA 94105 |
The Board of Directors has determined that all directors, except for Mr. Murphy and Mr. Rue, are independent as defined by the applicable NASDAQ and SEC rules and regulations. See the section entitled Certain Relationships and Related Transactions below for further information concerning Mr. Rue.
year ended December 31, 2007.
Rue Insurance wrote insurance policies accounting for $10.2 million in direct written premiums with Selective’s insurance subsidiaries and Selective’s insurance subsidiaries paid Rue Insurance $1.9 million in commissions.
Rue Insurance wrote contracts accounting for $64,000 in fees with Selective HR Solutions and Selective HR Solutions paid Rue Insurance $15,000 in commissions.
| • | Rue Insurance placed insurance policies with Selective’s insurance subsidiaries. Direct premiums written associated with these polices was $9.9 million in 2007, $9.5 million in 2006, and $10.2 million in 2005. In return, Selective’s insurance subsidiaries paid commissions to Rue Insurance of $1.7 million in 2007 and $1.9 million in 2006 and 2005. | ||
| • | Rue Insurance placed human resource outsourcing contracts with Selective HR Solutions resulting in revenues to Selective HR Solutions of $69,000 in 2007, $62,000 in 2006, and $64,000 in 2005. In return, Selective HR Solutions paid commissions to Rue Insurance of $15,000 in 2007, $14,000 in 2006, and $15,000 in 2005. | ||
| • | Rue Insurance placed insurance coverage for Selective with non-Selective insurance companies for which Rue Insurance was paid commission pursuant to its agreements with those carriers. Selective paid premiums for such insurance coverage of $0.5 million in 2007, $0.5 million in 2006, and $0.6 million in 2005. | ||
| • | Selective paid reinsurance commissions of $0.2 million in 2007, 2006, and 2005 to PL, LLC. PL, LLC is an insurance fund administrator of which Rue Insurance owns 26.67% and which places reinsurance through a Selective insurance subsidiary. |
Selective paid $0.2 million in reinsurance commissions to P.L. Services, LLC t/a Public Alliance Group Administrative Services, an insurance fund administrator of which Rue Insurance owns 20% and which places reinsurance through Selective Insurance Company of America (“SICA”), a Selective insurance subsidiary.
Selective paid $0.6 million in premiums for insurance coverages that Rue Insurance wrote with non-Selective insurance companies for Selective’s own operations, for which Rue Insurance was paid commission pursuant to its agreements with those carriers.
Page 11
The son of S. Griffin McClellan III, a Selective director, S. GriffinSamuel G. McClellan IV, is an Assistant Vice President of Selective’s subsidiary, SICA.insurance subsidiaries. In 2005,2007, Mr. S. Griffin McClellan IV received $140,229$139,346 in cash compensation, primarily comprised of salary bonus and tuition reimbursement, and a grant of 962 shares of restrictedan annual cash incentive payment. He also received long-term incentive awards, consistent with awards granted to other Selective common stock.employees. Mr. S. Griffin McClellan IV’s compensation was determined in accordance with SICA’sthe standard employee compensation practices.practices of Selective Insurance Company of America (“SICA”). Mr. S. Griffin McClellan III wasis not a member of the Audit Committee, the Corporate Governance and Nominating Committee, or the Salary and Employee Benefits Committee.
Page 11
Indebtednessa director’s independence; (iii) the availability of Management
Certain loans were previously made by Selectiveother sources for comparable products and services; (iv) the terms of the transaction; and (v) the terms available to executivesunrelated third parties or to employees generally.
Page 12
SEC rules and regulations.
Page 13
CODE OF CONDUCT
| • | Audit Committee. | ||
| • | Corporate Governance and Nominating Committee. | ||
| • | Executive Committee. | ||
| • | Finance Committee. | ||
| • | Salary and Employee Benefits. |
| Written Charter is available on the Corporate Governance section of www.selective.com | 2007 Meetings: 11 | ||
| Responsibilities: • Oversee the accounting and financial reporting processes and the audits of the financial statements. | |||
| • Review and discuss with Selective’s management and independent auditors Selective’s financial reports and other financial information provided to the public and filed with the SEC. | |||
| • Monitor the activities of Selective’s Internal Audit Department and the appointment, replacement, reassignment or dismissal of the Director of Internal Audit. | |||
| • Monitor Selective’s internal controls regarding finance, accounting and legal compliance. | |||
| • Appoint Selective’s independent public accountants and supervise the relationship between Selective and its independent auditors, including reviewing their performance, making decisions with respect to their compensation, retention and removal, reviewing and approving in advance their audit services and permitted non-audit services, and confirming the independence of the independent auditors. | |||
Director Members: | Independent | ||
| Paul D. Bauer, Chairperson and Designated Audit Committee Financial Expert under SEC Safe Harbor | Yes | ||
| Joan M. Lamm-Tennant | Yes | ||
| John F. Rockart | Yes | ||
| J. Brian Thebault | Yes | ||
Page 14
| Written Charter is available on the Corporate Governance section of www.selective.com | 2007 Meetings: 4 | ||
| Responsibilities: | |||
| • Establish criteria for the selection of directors and identify and recommend to the Board the nominees for director. | |||
| • Review and assess Selective’s Corporate Governance Guidelines and recommend any changes to the Board. | |||
| • Recommend to the Board the directors to serve on the various Board committees and as chairpersons of the respective committees. | |||
| • Advise the Board with respect to Board composition, procedures and committees. | |||
| • Review and update Selective’s Code of Conduct and review conflicts of interest or other issues that may arise under the Code of Conduct involving Selective’s officers or directors. | |||
| • Oversee the self-evaluations of the Board and each committee of the Board. | |||
| • Review, jointly with the Salary and Employee Benefits Committee, executive staff succession planning and professional development. | |||
Director Members: | Independent | ||
| A. David Brown, Chairperson | Yes | ||
| William M. Kearns, Jr. | Yes | ||
| Ronald L. O’Kelley | Yes | ||
| John F. Rockart | Yes | ||
| • | Directors and management; | ||
| • | Third party search firms that it may engage from time-to-time; and | ||
| • | Stockholders. |
| • | Personal and professional ethics, integrity, character, and values; | ||
| • | Professional and personal experience; | ||
| • | Subject matter expertise; | ||
| • | Independence; | ||
| • | Diversity; | ||
| • | Business judgment; | ||
| • | Insurance industry knowledge; | ||
| • | Willingness to dedicate and devote sufficient time to Board duties and activities; | ||
| • | Potential or actual conflicts of interest; and | ||
| • | Other appropriate and relevant factors, including the qualification and skills of the current members of the Board. |
Page 15
| 2007 Meetings: 2 | ||||||
| Responsibilities: | ||||||
| • Authorized by By-laws to exercise the Board of Directors’ powers and authority in the management of Selective’s business and affairs between Board meetings. | ||||||
| • Has the right and authority to exercise all the powers of the Board of Directors on all matters brought before it except matters concerning Selective’s investments. | ||||||
Director Members: | ||||||
| Gregory E. Murphy, Chairperson | William M. Kearns, Jr., Lead Director | |||||
| Paul D. Bauer | William M. Rue | |||||
| A. David Brown | J. Brian Thebault | |||||
| Written Charter is available on the Corporate Governance section of www.selective.com | 2007 Meetings: 4 | |||||
| Responsibilities: | ||||||
| • Review and approve changes to Selective’s investment policies, strategies, and programs. | ||||||
| • Review investment transactions made on behalf of Selective and review the performance of Selective’s investment portfolio. | ||||||
| • Review matters relating to the investment portfolios of the benefit plans of Selective and its subsidiaries, including the administration and performance of such portfolios. | ||||||
| • Appoint members of Selective’s Management Investment Committee. | ||||||
| • Review and make recommendations to the Board regarding payment of dividends. | ||||||
| • Review Selective’s capital structure and provide recommendations to the Board regarding financial policies and matters of corporate finance. | ||||||
Director Members: | ||||||
| William M. Rue, Chairperson | S. Griffin McClellan III | |||||
| W. Marston Becker | Gregory E. Murphy | |||||
| William M. Kearns, Jr. | Ronald L. O’Kelley | |||||
Page 16
| Written Charter is available on the Corporate Governance section of www.selective.com | 2007 Meetings: 6 | ||
| Responsibilities: | |||
| • Oversee, review, and administer all compensation, equity, and employee benefit plans and programs related to Selective’s and its subsidiaries’ employees and management. | |||
| • Review annually and approve corporate goals and objectives relevant to executive compensation and evaluate performance in light of those goals. | |||
| • Review annually and approve Selective’s compensation strategy for employees. | |||
| • Review annually and determine the individual elements of total compensation of the CEO and other members of Senior Management. | |||
| • Review and approve compensation for non-employee directors. | |||
Director Members: | Independent | ||
| J. Brian Thebault, Chairperson | Yes | ||
| Paul D. Bauer | Yes | ||
| John C. Burville | Yes | ||
| Ronald L. O’Kelley | Yes | ||
Page 1217
The Board
The Board has five (5) standing committees: Audit, Corporate Governance and Nominating,our Executive Finance, and Salary and Employee Benefits. Compensation Program
All of the members of the Audit Committee, the Corporate Governance and Nominating Committee, and the Salary and Employee Benefits Committee are independent directors as defined by NASDAQ and SEC rules and regulations.
All directors attended 75% or more(“SEBC”) of the meetings of the Board of Directors and the committees of which they are members in 2005.
It is Selective’s policy that all directors are expected to attend the Annual Meeting. All directors attended the 2005 Annual Meeting.
Page 13
The following table lists for each of these committees, its membership, a summary of its responsibilities, and the number of meetings it held in 2005:
|
|
|
|
|
|
|
|
|
Page 14
|
|
|
|
|
|
|
|
|
Page 15
DIRECTOR SELECTION PROCESS
The Corporate Governance and Nominating Committee is responsible for reviewing candidates for election to Selective’s Board of Directors, oversees executive compensation. Selective seeks to attract and retain talented and qualified executives by paying compensation that are identifiedis generally targeted at the 50th percentile or greater of compensation paid by Board members, management, and/or third party search firmscomparable companies in the property and selecting nominees for approval by the stockholders. In making selections, the Corporate Governancecasualty insurance industry. A primary purpose of our compensation programs is to motivate executives to achieve our corporate objectives and Nominating Committee reviews the attributesincrease shareholder value. Accordingly, we tie our annual incentive awards to pre-determined strategic and criteria required in light of current Board membership, including experience, skills, expertise, diversity, character,financial business judgment, time availability in light of other commitments, dedication, conflicts of interestobjectives and other relevant factors that the Corporate Governanceindividual objectives, and Nominating Committee consider appropriate. Candidates for election should be willing to devote sufficient time to carry out their duties and responsibilities effectively, and should possess the highest personal and professional ethics, integrity, and values. Candidates must be committed to representing thewe align our long-term interests of Selective and its stockholders. The Corporate Governance and Nominating Committee will consider nominees recommended by stockholders for election as directors at an Annual Meeting of Stockholders but does not solicit such recommendations. The Corporate Governance and Nominating Committee applies the same standards in considering candidates submitted by stockholders as it does in evaluating candidates identified by other sources. Stockholders who wish to propose a nominee for consideration by the Corporate Governance and Nominating Committee must do so in writing addressedcompensation to the Chairmangeneration of long-term stockholder value over time.
Page 16
DIRECTOR COMPENSATION
Compensation for non-employee directors in 2004 and 2005 is shown on the table below. Employee directors do not receive compensation for serving on the Board.
COMPENSATION |
| 2005 |
|
| 2004 |
Annual Retainer Fee (1) |
| $43,000 |
|
| $43,000 |
Annual Option Grant (in shares) (2) |
| $3,000 |
|
| $3,000 |
Board Meeting Attendance |
| $0 |
|
| $0 |
Committee Attendance Fee (3) |
| $1,500 $1,000 |
|
| $1,500 $1,000 |
Annual Chairperson Fee(4) |
| $10,000 $10,000 |
|
| $10,000 $10,000 |
Lead Director Fee(5) |
| $10,000 |
|
| $0 |
Expenses |
| Reasonable |
|
| Reasonable |
|
|
|
|
|
|
|
|
|
|
Page 17
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows how much compensation Selective’s CEO and the next four most highly compensatedother named executive officers. Historically, the SEBC had retained Hewitt Associates, LLC (“Hewitt”) as the Compensation Consultant. In April 2007, the SEBC was informed that the principal of the Compensation Consultant with primary responsibility for advising the SEBC would be leaving Hewitt to take a position with EXEQUITY, LLP (“EXEQUITY”). At that time, there was consensus by the SEBC to engage EXEQUITY as the Compensation Consultant, and enter into an agreement with EXEQUITY. In 2007, amounts paid to EXEQUITY and Hewitt for executive compensation consulting services were $7,751 and $20,288, respectively.
| • | Base salary; | ||
| • | Annual cash incentive payments; | ||
| • | Long-term incentive awards in the form of stock options, performance-based restricted stock, and performance-based cash incentive units; and | ||
| • | Retirement and deferred compensation plans. |
Page 18
| • | Market/Product Group — organizations that compete with Selective in the sale of products and services; | ||
| • | Size Group — companies of similar size; | ||
| • | Property and Casualty Insurance Compensation Survey (PCICS); and | ||
| • | McLagan Partners Investment Management Survey. |
| Market/Product Group | Peer Size Group | |
| The Chubb Corporation | Arch Capital Group, Ltd. | |
| Cincinnati Financial Corporation | Commerce Group, Inc. | |
| CNA Financial Corporation | Hanover Group | |
| EMC Insurance Group Inc. | MaxCapital Group Ltd. | |
| Hanover Group | Mercury General Corporation | |
| Harleysville Group, Inc. | Ohio Casualty Corporation | |
| Hartford Financial Services Group | Old Republic International Corporation | |
| Ohio Casualty Corporation | Radian Group Inc. | |
| PMA Capital Corporation | Unitrin, Inc. | |
| Safeco Corporation | Zenith National Insurance Corp. | |
| The Travelers Companies, Inc. | ||
| State Auto Financial Corporation |
Page 19
| ACE | Great American Insurance Group | |
| Acuity | Hanover Group | |
| Allstate Insurance Company | Harleysville Group, Inc. | |
| American Family Insurance | Hartford Financial Services Group | |
| American International Group | Liberty Mutual Insurance Group | |
| Argonaut Group, Inc. | Main Street America Group | |
| The Auto Club Group | Mercury General Corporation | |
| Automobile Club of Southern California | MetLife | |
| California State Automobile Association | Nationwide | |
| Central Insurance Companies | Ohio Casualty Corporation | |
| The Chubb Corporation | One Beacon Insurance Company | |
| CNA Financial Corporation | PMA Capital Corporation | |
| Country Insurance & Financial Services | Safeco Corporation | |
| Crum & Forster | Sentry Insurance | |
| Erie Indemnity Company | The Travelers Companies, Inc. | |
| Farmers Insurance Group | State Farm Insurance Company | |
| FBL Financial Group, Inc. | USAA | |
| Fireman’s Fund Insurance Company | Utica National Insurance Group | |
| GEICO | Winterthur North America | |
| GE Insurance | Zenith National Insurance Corp. | |
| Zurich North America |
| 40/86 Advisors, Inc | Mutual of Omaha | |
| Advantus Captial Management, Inc | Nationwide Insurance | |
| AEGON USA | New York Life Investment Management LLC | |
| Aetna, Inc. | Northwestern Mutual Life Insurance Company | |
| AIG Global Investment Group | OneAmerica Financial Partners | |
| Allianz Life Insurance of North America | Opus Investment Management (Hanover Ins) | |
| Allstate Investments, LLC | Pacific Life Insurance Company | |
| Assurant, Inc | PartnerRe Asset Management Company | |
| AVIVA USA (formerly AmerUs) | PPM America, Inc. | |
| AXA Equitable | Principal Global Investors | |
| The Chubb Corporation | Progressive Corporation | |
| CIGNA Investment Management | Prudential Financial | |
| Country Insurance & Financial Services | Security Benefit Corporation | |
| CUNA Mutual Group | Sentinel Asset Management, Inc. | |
| FBL Financial Group | Sentry Insurance | |
| Genworth Financial | Standard Life Investments (USA) Limited | |
| Guardian Life Insurance Company | State Farm Insurance Companies | |
| Hartford Investment Management Company | Sun Life Financial | |
| ING Investment Managment | Swiss Re | |
| Liberty Mutual | TIAA-CREF | |
| MBIA Asset Management | The Travelers Companies, Inc. | |
| MetLife Investments | USAA Investment Management Company | |
| MFC Global Investment Management | ||
| Mutual of Omaha | ||
| Modern Woodmen of America |
Page 20
| • | the functional role of the position; | ||
| • | the level of responsibility; | ||
| • | growth of the executive in the role, including skills and competencies; | ||
| • | the contribution and performance of the executive; and | ||
| • | the organization’s ability to replace the executive. |
Page 21
| o | Specified number of new agency appointments |
| o | Commercial Lines: Designated percentage of certain agents achieving new business targets | ||
| o | Personal Lines: Increase average monthly auto quote activity to a targeted monthly rate | ||
| o | Targeted increase in designated Business Owner Policy accounts, priced within a specified range |
| o | Specified improvement in workers compensation managing price and retention by decile | ||
| o | Specified increase in total commercial lines renewal rate (including exposure) |
| o | Specified amount of new commercial premium entered via xSELerate® |
| o | Specified savings through workers compensation managed care initiatives |
| o | Produce targeted number of worksite lives through Selective agents |
| Officer | Title | Maximum ACIP Opportunity | ||||
| Gregory E. Murphy | Chairman, President & CEO | 200% of base salary | ||||
| Dale A. Thatcher | Executive Vice President & CFO | 150% of base salary | ||||
| Jamie Ochiltree, III | Senior Executive Vice President | 175% of base salary | ||||
| Richard F. Connell | Senior Executive Vice President | 175% of base salary |
Page 22
Page 23
Page 24
| • | Three-year vesting period; and | ||
| • | Achievement at any time during the vesting period of either: (i) a cumulative return on equity of twenty percent (20%) (excluding unrealized gain occurring after December 31, 2006), or (ii) a ten percent (10%) cumulative growth in net premiums written. |
| • | Three-year performance period; | ||
| • | The value of each cash incentive unit initially awarded increases or decreases to reflect total shareholder return on Selective common stock over the three-year performance period for the award; and | ||
| • | The number of cash incentive units ultimately earned increases or decreases based on: (i) cumulative three-year statutory net premium written growth relative to a peer index, and (ii) cumulative three-year statutory combined ratio relative to a peer index. Awards are earned at target level if these performance measures are between the 45th and 54.9th percentile of the peer group. If both measures are at or above the 80th percentile, 200% of the units initially awarded are earned. If both measures are below the 35th percentile, 0% of the units initially awarded are earned. |
| Auto-Owners Insurance Group | CNA Group LLC | |
| Liberty Mutual Group Inc. | The Travelers Companies, Inc. | |
| Hartford Fire Group | Harleysville Group Inc. | |
| Safeco Insurance Company of America | Utica National Insurance Group | |
| Erie Insurance Exchange | Hanover Insurance Group, Inc. | |
| Cincinnati Financial Corporation | W. R. Berkley Corporation | |
| Onebeacon Insurance Group LLC |
Page 25
| • | Each director shall, within five (5) years of his or her first election to the Board, beneficially own at least four (4) times the cash value of his or her annual retainer in shares of Selective common stock. Shares of Selective common stock currently owned, awards of restricted stock or restricted stock units not yet vested and shares of Selective common stock held in benefit plan investments (i.e.401(k) Plan) are considered in determining such ownership. Unexercised stock options are not counted in calculating ownership. Deferred stock units held in the accounts of Directors under the Deferred Compensation Plan for Directors are counted in calculating ownership. | ||
| • | The current requirements for certain officers of Selective are as follows: |
| Chairman, President & CEO | 4 x base salary | |
| Senior Executive Vice Presidents and Executive Vice Presidents | 2.5 x base salary | |
| Senior Vice Presidents | 1.5 x base salary |
Page 26
Page 27
| Non-Equity | Change in | ||||||||||||||||||||||||||||||||||||||||||||
| Incentive | Pension Value | ||||||||||||||||||||||||||||||||||||||||||||
| Plan | and Nonqualified | All Other | |||||||||||||||||||||||||||||||||||||||||||
| Name | Stock | Option | Compen- | Deferred | Compen- | ||||||||||||||||||||||||||||||||||||||||
| and | Salary | Bonus | Awards | Awards | sation | Compensation | sation | Total | |||||||||||||||||||||||||||||||||||||
| Principal Position | Year | ($)(1) | ($) | ($)(2) | ($)(3) | ($)(4) | Earnings ($)(5) | ($)(6) | ($) | ||||||||||||||||||||||||||||||||||||
Gregory E. Murphy | 2007 | 900,000 | 0 | 1,876,425 | 25,633 | 900,000 | 85,449 | 40,989 | 3,828,496 | ||||||||||||||||||||||||||||||||||||
| Chairman, President & Chief Executive Officer | 2006 | 876,923 | 0 | 2,460,513 | 28,066 | 1,500,000 | 158,637 | 42,900 | 5,067,039 | ||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 2007 | 405,000 | 0 | 207,953 | 15,664 | 300,000 | 13,696 | 18,428 | 960,741 | ||||||||||||||||||||||||||||||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | 2006 | 342,308 | 0 | 242,166 | 17,152 | 420,000 | 14,245 | 17,075 | 1,052,946 | ||||||||||||||||||||||||||||||||||||
Jamie Ochiltree, III | 2007 | 455,385 | 0 | 634,434 | 25,633 | 350,000 | 39,410 | 21,939 | 1,526,801 | ||||||||||||||||||||||||||||||||||||
| Senior Executive Vice President, Insurance Operations | 2006 | 423,846 | 0 | 400,384 | 19,561 | 580,000 | 46,900 | 23,727 | 1,494,418 | ||||||||||||||||||||||||||||||||||||
Richard F. Connell | 2007 | 411,538 | 0 | 561,175 | 24,318 | 350,000 | 49,037 | 19,250 | 1,415,318 | ||||||||||||||||||||||||||||||||||||
| Senior Executive Vice President and Chief Administrative Officer | 2006 | 375,385 | 0 | 327,237 | 18,351 | 485,000 | 44,406 | 17,755 | 1,268,134 | ||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 2007 | 392,615 | 0 | 607,940 | 25,633 | 495,000 | 49,640 | 20,762 | 1,591,590 | ||||||||||||||||||||||||||||||||||||
| Executive Vice President & Chief Investment Officer | 2006 | 347,077 | 0 | 338,280 | 20,047 | 400,000 | 59,761 | 18,263 | 1,183,428 | ||||||||||||||||||||||||||||||||||||
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| (3) | This column reflects amounts recognized as expense for the 2007 and 2006 option grants. The grant date fair value of | |
| (4) | Amounts in this column include ACIP awards earned in 2007 and paid in March 2008 under the Cash Incentive Plan for Messrs. Murphy, Thatcher, Ochiltree and Connell, and for Mr. |
|
| |
| (5) | Amounts in this column reflect the actuarial increase in the present value of each named executive officer’s pension benefits under all defined benefit pension plans of the company, determined using the same interest rate and mortality assumptions as |
Page 28
| those used for financial statement reporting purposes. There were no above-market or preferential earnings on deferred compensation under the company’s nonqualified deferred compensation program. | ||
| (6) | For 2006, amounts in this column for each named executive officer reflect the following: |
| • | Mr. Murphy: $33,075 of company matching contributions to | ||
| • | Mr. Thatcher: $13,312 of company matching contributions to Mr. Thatcher’s Deferred Compensation Plan, | ||
| • | Mr. Ochiltree: $9,535 of | ||
| • | Mr. Connell: $7,330 of company matching contributions to Mr. Connell’s Deferred Compensation Plan, $675 for tax preparation services, and $9,750 of company matching contributions to Mr. Connell’s 401(k) plan. | ||
| • | Mr. Guthrie: $12,936 of company matching contributions to Mr. Guthrie’s Deferred Compensation Plan, $1,660 for tax preparation services, $2,937 of company matching contributions to Mr. Guthrie’s 401(k) plan, and $730 representing the difference between the market rate of interest and the actual rate of interest on indebtedness to the company. |
| For 2007, amounts in this column for each named executive officer reflect the following: |
| • | Mr. Murphy: $30,875 of company matching contributions to Mr. Murphy’s Deferred Compensation Plan, and $10,114 of company matching contributions to Mr. Murphy’s 401(k) plan. | ||
| • | Mr. Thatcher: $15,569 of company matching contributions to Mr. Thatcher’s Deferred Compensation Plan, and $2,859 of company matching contributions to Mr. Thatcher’s 401(k) plan. | ||
| • | Mr. Ochiltree: $10,645 of company matching contributions to Mr. Ochiltree’s Deferred Compensation Plan, $10,075 of company matching contributions to Mr. Ochiltree’s 401(k) plan, and $1,219 representing the difference between the market rate of interest and the actual rate of interest on indebtedness to the company. | ||
| • | Mr. Connell: $8,650 of company matching contributions to Mr. Connell’s Deferred Compensation Plan, $525 for tax preparation services, and $10,075 of company matching contributions to Mr. Connell’s 401(k) plan. | ||
| • | Mr. Guthrie: $14,790 of company matching contributions to Mr. Guthrie’s Deferred Compensation Plan, $2,280 for tax preparation services, $3,075 of company matching contributions to Mr. Guthrie’s 401(k) plan, and $617 representing the difference between the market rate of interest and the actual rate of interest on indebtedness to the company. |
| Grant Date | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimated Future Payouts Under Equity | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||
| Incentive Plan Awards(2) | of Cash | |||||||||||||||||||||||||||||||||||||||||||||||||
| Estimated Future | Exercise | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||
| Payouts Under Non- | Restricted | or Base | Unit, | |||||||||||||||||||||||||||||||||||||||||||||||
| Grant | Equity Incentive Plan | Stock | Option | Price of | Restricted | |||||||||||||||||||||||||||||||||||||||||||||
| Name | Date | Awards(1) | Cash Incentive Unit Awards(3) | Awards (#) | Awards (#) | Option | Stock, | |||||||||||||||||||||||||||||||||||||||||||
| | Awards | and Option | ||||||||||||||||||||||||||||||||||||||||||||||||
| | Minimum | Maximum | Threshold | Target | Maximum | Maximum | Maximum | ($/Sh) | Awards(4) | |||||||||||||||||||||||||||||||||||||||||
| ($) | ($) | (#) | (#) | (#) | (#) | (#) | | ($) | ||||||||||||||||||||||||||||||||||||||||||
Gregory E. Murphy | 1/30/07 | 0 | 1,800,000 | 2,219 | 4,438 | 8,876 | 48,516 | 3,480 | 27.44 | 1,800,058 | ||||||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 1/30/07 | 0 | 622,500 | 738 | 1,476 | 2,952 | 16,128 | 3,480 | 27.44 | 615,132 | ||||||||||||||||||||||||||||||||||||||||
Jamie Ochiltree, III | 1/30/07 | 0 | 805,000 | 751 | 1,501 | 3,002 | 16,400 | 3,480 | 27.44 | 625,095 | ||||||||||||||||||||||||||||||||||||||||
Richard F. Connell | 1/30/07 | 0 | 717,500 | 719 | 1,438 | 2,876 | 15,718 | 3,480 | 27.44 | 600,081 | ||||||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 1/30/07 | 0 | 600,000 | 719 | 1,438 | 2,876 | 15,718 | 3,480 | 27.44 | 600,081 | ||||||||||||||||||||||||||||||||||||||||
| (1) | For Messrs. Murphy, Thatcher, Ochiltree, and Connell, amounts represent minimum and maximum potential ACIP award to each named executive officer under our Cash Incentive Plan for 2007. Maximum awards reflect the maximum ACIP award established by the SEBC pursuant to the requirements of Section 162(m) of the Internal Resource Code. For Mr. Guthrie, the amounts represent the minimum and maximum potential annual cash incentive award under the Investment Compensation Plan. Actual payouts of the |
Page 29
| above-referenced awards are included in the “Non-Equity Incentive Compensation Plan” column of the “Summary Compensation Table”. For information regarding the ACIP and the annual cash incentive payment under the Investment Compensation Plan, see the section of the Compensation Discussion and Analysis beginning on page 21 entitled “Annual Cash Incentive Payment.” | ||
| (2) | Performance-based cash incentive unit awards are granted under the Cash Incentive Plan, and performance-based restricted stock awards and stock option awards are granted under the Omnibus Stock Plan. For a description of the material terms of such | |
| (3) | The number of performance-based cash incentive units paid can range from 0-200%, and therefore, has the potential to | |
| (4) | This column includes restricted stock awards calculated at grant date fair value, cash incentive unit awards with an initial value of $100 per unit, and stock options valued at the Black-Scholes value on the date of grant. |
Page 30
Page 18
| Individual Grants |
|
| Potential Realizable Value | ||
Named Executive | Number of Securities Underlying | % of Total | Exercise | Expiration Date(4) | 5% ($) | 10% ($) |
Gregory E. Murphy | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Jamie Ochiltree, III | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Richard F. Connell | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Dale A. Thatcher | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Ronald J. Zaleski | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||||||||||
| Incentive | ||||||||||||||||||||||||||||||||||||||||
| Plan | ||||||||||||||||||||||||||||||||||||||||
| No. of | Awards: | |||||||||||||||||||||||||||||||||||||||
| Securities | No. of | Equity | Market or | |||||||||||||||||||||||||||||||||||||
| Under- | Securities | Incentive | Payout Value | |||||||||||||||||||||||||||||||||||||
| lying | Under- | Plan | of Unearned | |||||||||||||||||||||||||||||||||||||
| Unexer | lying | Market Value | Awards: No. of | Shares, Units | ||||||||||||||||||||||||||||||||||||
| cised | Unexer- | No. of Shares | of Shares or | Unearned | or Other | |||||||||||||||||||||||||||||||||||
| Options | cised | Option | or Units of | Units of Stock | Shares, Units | Rights That | ||||||||||||||||||||||||||||||||||
| (#) | Options (#) | Exercise | Option | Stock That | That Have Not | or Other Rights | Have Not | |||||||||||||||||||||||||||||||||
| Exercis- | Unexer- | Price | Expiration | Have Not | Vested | That Have Not | Vested | |||||||||||||||||||||||||||||||||
| Name | able | cisable(1) | ($/Sh)(2) | Date | Vested (#)(3)(4) | ($) | Vested | ($)(7) | ||||||||||||||||||||||||||||||||
Gregory E. Murphy | 6,832 | 7.594 | 02/03/2010 | 48,516 | 1,115,383 | 10,642 | (5) | 1,911,942 | ||||||||||||||||||||||||||||||||
| 21,062 | 11.1875 | 02/06/2011 | 4,438 | (6) | 726,856 | |||||||||||||||||||||||||||||||||||
| 10,362 | 10.375 | 02/05/2012 | ||||||||||||||||||||||||||||||||||||||
| 11,394 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||||||||||
| 10,000 | 17.395 | 02/03/2014 | ||||||||||||||||||||||||||||||||||||||
| 10,000 | 22.025 | 02/01/2015 | ||||||||||||||||||||||||||||||||||||||
| 1,160 | 2,320 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||||||||||
| 3,480 | 27.44 | 01/30/2017 | ||||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 10,000 | 22.025 | 02/01/2015 | 19,333 | 444,466 | 3,142 | (5) | 564,492 | ||||||||||||||||||||||||||||||||
| 1,160 | 2,320 | 28.74 | 01/30/2016 | 18,979 | 436,327 | 1,476 | (6) | 241,739 | ||||||||||||||||||||||||||||||||
| 3,480 | 24.77 | 01/30/2017 | 7,290 | 167,597 | ||||||||||||||||||||||||||||||||||||
| 16,128 | 370,783 | |||||||||||||||||||||||||||||||||||||||
Jamie Ochiltree, III | 7,500 | 9.375 | 11/03/2008 | 16,400 | 377,036 | 3,502 | (5) | 629,169 | ||||||||||||||||||||||||||||||||
| 7,120 | 7.594 | 02/03/2010 | 1,501 | (6) | 245,834 | |||||||||||||||||||||||||||||||||||
| 14,000 | 11.1875 | 02/06/2011 | ||||||||||||||||||||||||||||||||||||||
| 9,638 | 10.375 | 02/05/2012 | ||||||||||||||||||||||||||||||||||||||
| 14,000 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||||||||||
| 1,160 | 2,320 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||||||||||
| 3,480 | 27.44 | 01/30/2017 | ||||||||||||||||||||||||||||||||||||||
Richard F. Connell | 10,000 | 22.025 | 02/01/2015 | 19,333 | 444,466 | 3,292 | (5) | 591,441 | ||||||||||||||||||||||||||||||||
| 1,160 | 2,320 | 28.74 | 01/30/2016 | 18,979 | 436,327 | 1,438 | (6) | 235,516 | ||||||||||||||||||||||||||||||||
| 3,480 | 27.44 | 01/30/2017 | 7,638 | 175,598 | ||||||||||||||||||||||||||||||||||||
| 15,718 | 361,357 | |||||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 4,000 | 9.375 | 11/03/2008 | 15,718 | 361,357 | 2,842 | (5) | 510,594 | ||||||||||||||||||||||||||||||||
| 4,000 | 7.594 | 02/03/2010 | 1,438 | (6) | 235,516 | |||||||||||||||||||||||||||||||||||
| 4,500 | 11.1875 | 02/06/2011 | ||||||||||||||||||||||||||||||||||||||
| 10,000 | 10.375 | 02/05/2012 | ||||||||||||||||||||||||||||||||||||||
| 12,000 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||||||||||
| 8,000 | 17.395 | 02/03/2014 | ||||||||||||||||||||||||||||||||||||||
| 10,000 | 22.025 | 02/01/2015 | ||||||||||||||||||||||||||||||||||||||
| 1,160 | 2,320 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||||||||||
| 3,480 | 27.44 | 01/30/2017 | ||||||||||||||||||||||||||||||||||||||
|
| |
| (1) | The options listed in this column vest ratably over three years beginning on the first anniversary of | |
| (2) | The exercise price | |
| (3) | In the event of a termination of employment on or after an individual’s “Early Retirement Date,” as defined under the Retirement Income Plan for Selective Insurance Company of America, holders of performance-based restricted stock |
| ||
| (4) |
| As noted below, amounts in this column include shares attained through Selective’s Dividend Reinvestment and Stock Purchase Plan (“DRP”). Pursuant to equity grants made under Selective’s previous equity plans, the grantee can choose on the date of vesting to take the dividends on the granted |
Page 31
| stock. Shares included in this column that were acquired through the | ||
| (5) | Reflects number of | |
| (6) | Reflects number of performance-based cash incentive units initially granted in 2007 to the named executive officers for the three-year performance period ending December 31, 2009. In the event of a termination of employment on or after an individual’s Early Retirement Date, as defined under the Retirement Income Plan for Selective Insurance Company of America, holders of such awards are vested in such awards, with the initial number of units and the value of each unit subject to adjustment, based on the attainment of specified performance measures. Early Retirement Dates for the named executive officers are as follows: Mr. Murphy, 11/11/2002; Mr. Thatcher, 12/10/2015; Mr. Ochiltree, 10/2/2007; Mr. Connell, 2/7/2008; and Mr. Guthrie, 9/11/2007. Settlement of the 2007 cash incentive award would be made as soon as practicable in the 2010 calendar year, following the determination of the attainment of the applicable performance measures. | |
| (7) | The amounts in this column reflect (i) the maximum 200% unit multiplier for the number of |
|
|
|
|
Page 19
AND FISCAL YEAR-END OPTION VALUES
| Number of Securities | Value of Unexercised | ||||
Name | Shares on Exercise | Value | Exercisable | Unexercisable | Exercisable | Unexercisable |
Gregory E. Murphy | 13,200 | 349,032 | 29,825 | 5,000 | 882,369 | 45,250 |
Jamie Ochiltree, III | 7,932 | 207,453 | 39,000 | 5,000 | 1,179,258 | 45,250 |
Richard F. Connell | 5,000 | 112,975 | 0 | 5,000 | 0 | 45,250 |
Dale A. Thatcher | 24,000 | 570,150 | 0 | 5,000 | 0 | 45,250 |
Ronald J. Zaleski | 18,004 | 458,342 | 11,996 | 5,000 | 337,027 | 45,250 |
| Option Awards | Stock Awards(1) | |||||||||||||||
| Number of | Number of | |||||||||||||||
| Shares Acquired | Value Realized | Shares Acquired | Value Realized | |||||||||||||
| on Exercise | on Exercise | on Vesting | on Vesting | |||||||||||||
| Name | (#) | ($) | (#) | ($) | ||||||||||||
Gregory E. Murphy | 0 | 0 | 171,135 | 4,216,731 | ||||||||||||
Dale A. Thatcher | 0 | 0 | 17,220 | 443,758 | ||||||||||||
Jamie Ochiltree, III | 7,500 | 129,196 | 62,566 | 1,543,852 | ||||||||||||
Richard F. Connell | 0 | 0 | 17,220 | 443,758 | ||||||||||||
Kerry A. Guthrie | 0 | 0 | 56,747 | 1,399,445 | ||||||||||||
|
| |
| (1) | In the |
|
|
Page 20
Selective
Page 32
PENSION PLAN TABLE I
(EMPLOYEES WITH FIVE YEARS OF VESTING AS OF JULY 1, 2002
WHOSE AGE + YEARS OF VESTING SERVICE EQUALED OR EXCEEDED 55)
|
| Years of Service | ||||||||||||
Remuneration |
| 5 |
| 10 |
| 15 |
| 20 |
| 25 |
| 30 |
| 35 |
200,000 |
| 14,400 |
| 34,400 |
| 54,400 |
| 74,400 |
| 94,400 |
| 114,400 |
| 134,400 |
225,000 |
| 16,200 |
| 38,700 |
| 61,200 |
| 83,700 |
| 106,200 |
| 128,700 |
| 151,200 |
250,000 |
| 18,000 |
| 43,000 |
| 68,000 |
| 93,000 |
| 118,000 |
| 143,000 |
| 168,000 |
275,000 |
| 19,800 |
| 47,300 |
| 74,800 |
| 102,300 |
| 129,800 |
| 157,300 |
| 184,800 |
300,000 |
| 21,600 |
| 51,600 |
| 81,600 |
| 111,600 |
| 141,600 |
| 171,600 |
| 201,600 |
325,000 |
| 23,400 |
| 55,900 |
| 88,400 |
| 120,900 |
| 153,400 |
| 185,900 |
| 218,400 |
350,000 |
| 25,200 |
| 60,200 |
| 95,200 |
| 130,200 |
| 165,200 |
| 200,200 |
| 235,200 |
375,000 |
| 27,000 |
| 64,500 |
| 102,000 |
| 139,500 |
| 177,000 |
| 214,500 |
| 252,000 |
400,000 |
| 28,800 |
| 68,800 |
| 108,800 |
| 148,800 |
| 188,800 |
| 228,800 |
| 268,800 |
425,000 |
| 30,600 |
| 73,100 |
| 115,600 |
| 158,100 |
| 200,600 |
| 243,100 |
| 285,600 |
450,000 |
| 32,400 |
| 77,400 |
| 122,400 |
| 167,400 |
| 212,400 |
| 257,400 |
| 302,400 |
475,000 |
| 34,200 |
| 81,700 |
| 129,200 |
| 176,700 |
| 224,200 |
| 271,700 |
| 319,200 |
500,000 |
| 36,000 |
| 86,000 |
| 136,000 |
| 186,000 |
| 236,000 |
| 286,000 |
| 336,000 |
525,000 |
| 37,800 |
| 90,300 |
| 142,800 |
| 195,300 |
| 247,800 |
| 300,300 |
| 352,800 |
550,000 |
| 39,600 |
| 94,600 |
| 149,600 |
| 204,600 |
| 259,600 |
| 314,600 |
| 369,600 |
575,000 |
| 41,400 |
| 98,900 |
| 156,400 |
| 213,900 |
| 271,400 |
| 328,900 |
| 386,400 |
600,000 |
| 43,200 |
| 103,200 |
| 163,200 |
| 223,200 |
| 283,200 |
| 343,200 |
| 403,200 |
625,000 |
| 45,000 |
| 107,500 |
| 170,000 |
| 232,500 |
| 295,000 |
| 357,500 |
| 420,000 |
650,000 |
| 46,800 |
| 111,800 |
| 176,800 |
| 241,800 |
| 306,800 |
| 371,800 |
| 436,800 |
675,000 |
| 48,600 |
| 116,100 |
| 183,600 |
| 251,100 |
| 318,600 |
| 386,100 |
| 453,600 |
700,000 |
| 50,400 |
| 120,400 |
| 190,400 |
| 260,400 |
| 330,400 |
| 400,400 |
| 470,400 |
725,000 |
| 52,200 |
| 124,700 |
| 197,200 |
| 269,700 |
| 342,200 |
| 414,700 |
| 487,200 |
750,000 |
| 54,000 |
| 129,000 |
| 204,000 |
| 279,000 |
| 354,000 |
| 429,000 |
| 504,000 |
775,000 |
| 55,800 |
| 133,300 |
| 210,800 |
| 288,300 |
| 365,800 |
| 443,300 |
| 520,800 |
800,000 |
| 57,600 |
| 137,600 |
| 217,600 |
| 297,600 |
| 377,600 |
| 457,600 |
| 537,600 |
825,000 |
| 59,400 |
| 141,900 |
| 224,400 |
| 306,900 |
| 389,400 |
| 471,900 |
| 554,400 |
850,000 |
| 61,200 |
| 146,200 |
| 231,200 |
| 316,200 |
| 401,200 |
| 486,200 |
| 571,200 |
875,000 |
| 63,000 |
| 150,500 |
| 238,000 |
| 325,500 |
| 413,000 |
| 500,500 |
| 588,000 |
900,000 |
| 64,800 |
| 154,800 |
| 244,800 |
| 334,800 |
| 424,800 |
| 514,800 |
| 604,800 |
925,000 |
| 66,600 |
| 159,100 |
| 251,600 |
| 344,100 |
| 436,600 |
| 529,100 |
| 621,600 |
950,000 |
| 68,400 |
| 163,400 |
| 258,400 |
| 353,400 |
| 448,400 |
| 543,400 |
| 638,400 |
975,000 |
| 70,200 |
| 167,700 |
| 265,200 |
| 362,700 |
| 460,200 |
| 557,700 |
| 655,200 |
1,000,000 |
| 72,000 |
| 172,000 |
| 272,000 |
| 372,000 |
| 472,000 |
| 572,000 |
| 672,000 |
1,025,000 |
| 73,800 |
| 176,300 |
| 278,800 |
| 381,300 |
| 483,800 |
| 586,300 |
| 688,800 |
1,050,000 |
| 75,600 |
| 180,600 |
| 285,600 |
| 390,600 |
| 495,600 |
| 600,600 |
| 705,600 |
1,075,000 |
| 77,400 |
| 184,900 |
| 292,400 |
| 399,900 |
| 507,400 |
| 614,900 |
| 722,400 |
1,100,000 |
| 79,200 |
| 189,200 |
| 299,200 |
| 409,200 |
| 519,200 |
| 629,200 |
| 739,200 |
Page 21
Pension Monthly benefits payable under the Retirement Income Plan Table I illustrates annual pension benefits, including supplemental benefits, at normal retirement (age 65) for various years of credited service in the form of a single life annuity and prior to any offset for Social Security benefits for participants. As shown on the Summary Compensation Table on page 18, Salary is the only compensation covered by the Pension Plan; Bonus and Other Annual Compensation is not covered by the Pension Program.
The following table lists the estimated credited years of service for the named executive officers that qualify for the pension benefits depicted on Pension Plan Table I:
Named Executive Officer | Average Monthly | Years of Service as of |
Gregory E. Murphy | 53,432.69 | 24 |
Jamie Ochiltree, III | 28,255.77 | 10 |
Monthly Pension Program benefitsSERP at normal retirement age are computed by adding two calculations. The first is the former plan calculation which provides forcalculations: (i) 2% of “average monthly compensation”base salary” (based on the monthly average of the member’sparticipant’s compensation for the 60 months out of the most recent 120 months of employment preceding the member’sparticipant’s termination of employment for which the employee’s compensationbase salary is the highest) less 1 3/7% of a Social Security benefit multiplied by the number of years of benefit service through June 30, 2002 (up to a maximum of 35 years). The second calculation provides for; and (ii) 1.2% of average monthly compensationbase salary (as defined herein)described above) multiplied by the number of years of benefit service after June 30, 2002.
Page 22
PENSION PLAN TABLE II
(EMPLOYEES HIRED BEFORE JULY 1, 2001 WHO, AS OF JULY 1, 2002,
NEITHER (I) WERE AGE 50 AND HAD 5 YEARS OF VESTING SERVICE,
NOR (II) HAD 25 YEARS OF VESTING SERVICE)
|
| Years of Service | ||||||||||||
Remuneration |
| 5 |
| 10 |
| 15 |
| 20 |
| 25 |
| 30 |
| 35 |
200,000 |
| 12,000 |
| 26,000 |
| 46,000 |
| 66,000 |
| 86,000 |
| 106,000 |
| 126,000 |
225,000 |
| 13,500 |
| 29,250 |
| 51,750 |
| 74,250 |
| 96,750 |
| 119,250 |
| 141,750 |
250,000 |
| 15,000 |
| 32,500 |
| 57,500 |
| 82,500 |
| 107,500 |
| 132,500 |
| 157,500 |
275,000 |
| 16,500 |
| 35,750 |
| 63,250 |
| 90,750 |
| 118,250 |
| 145,750 |
| 173,250 |
300,000 |
| 18,000 |
| 39,000 |
| 69,000 |
| 99,000 |
| 129,000 |
| 159,000 |
| 189,000 |
325,000 |
| 19,500 |
| 42,250 |
| 74,750 |
| 107,250 |
| 139,750 |
| 172,250 |
| 204,750 |
350,000 |
| 21,000 |
| 45,500 |
| 80,500 |
| 115,500 |
| 150,500 |
| 185,500 |
| 220,500 |
375,000 |
| 22,500 |
| 48,750 |
| 86,250 |
| 123,750 |
| 161,250 |
| 198,750 |
| 236,250 |
400,000 |
| 24,000 |
| 52,000 |
| 92,000 |
| 132,000 |
| 172,000 |
| 212,000 |
| 252,000 |
425,000 |
| 25,500 |
| 55,250 |
| 97,750 |
| 140,250 |
| 182,750 |
| 225,250 |
| 267,750 |
450,000 |
| 27,000 |
| 58,500 |
| 103,500 |
| 148,500 |
| 193,500 |
| 238,500 |
| 283,500 |
475,000 |
| 28,500 |
| 61,750 |
| 109,250 |
| 156,750 |
| 204,250 |
| 251,750 |
| 299,250 |
500,000 |
| 30,000 |
| 65,000 |
| 115,000 |
| 165,000 |
| 215,000 |
| 265,000 |
| 315,000 |
525,000 |
| 31,500 |
| 68,250 |
| 120,750 |
| 173,250 |
| 225,750 |
| 278,250 |
| 330,750 |
550,000 |
| 33,000 |
| 71,500 |
| 126,500 |
| 181,500 |
| 236,500 |
| 291,500 |
| 346,500 |
575,000 |
| 34,500 |
| 74,750 |
| 132,250 |
| 189,750 |
| 247,250 |
| 304,750 |
| 362,250 |
600,000 |
| 36,000 |
| 78,000 |
| 138,000 |
| 198,000 |
| 258,000 |
| 318,000 |
| 378,000 |
625,000 |
| 37,500 |
| 81,250 |
| 143,750 |
| 206,250 |
| 268,750 |
| 331,250 |
| 393,750 |
650,000 |
| 39,000 |
| 84,500 |
| 149,500 |
| 214,500 |
| 279,500 |
| 344,500 |
| 409,500 |
675,000 |
| 40,500 |
| 87,750 |
| 155,250 |
| 222,750 |
| 290,250 |
| 357,750 |
| 425,250 |
700,000 |
| 42,000 |
| 91,000 |
| 161,000 |
| 231,000 |
| 301,000 |
| 371,000 |
| 441,000 |
725,000 |
| 43,500 |
| 94,250 |
| 166,750 |
| 239,250 |
| 311,750 |
| 384,250 |
| 456,750 |
750,000 |
| 45,000 |
| 97,500 |
| 172,500 |
| 247,500 |
| 322,500 |
| 397,500 |
| 472,500 |
775,000 |
| 46,500 |
| 100,750 |
| 178,250 |
| 255,750 |
| 333,250 |
| 410,750 |
| 488,250 |
800,000 |
| 48,000 |
| 104,000 |
| 184,000 |
| 264,000 |
| 344,000 |
| 424,000 |
| 504,000 |
825,000 |
| 49,500 |
| 107,250 |
| 189,750 |
| 272,250 |
| 354,750 |
| 437,250 |
| 519,750 |
850,000 |
| 51,000 |
| 110,500 |
| 195,500 |
| 280,500 |
| 365,500 |
| 450,500 |
| 535,500 |
875,000 |
| 52,500 |
| 113,750 |
| 201,250 |
| 288,750 |
| 376,250 |
| 463,750 |
| 551,250 |
900,000 |
| 54,000 |
| 117,000 |
| 207,000 |
| 297,000 |
| 387,000 |
| 477,000 |
| 567,000 |
925,000 |
| 55,500 |
| 120,250 |
| 212,750 |
| 305,250 |
| 397,750 |
| 490,250 |
| 582,750 |
950,000 |
| 57,000 |
| 123,500 |
| 218,500 |
| 313,500 |
| 408,500 |
| 503,500 |
| 598,500 |
975,000 |
| 58,500 |
| 126,750 |
| 224,250 |
| 321,750 |
| 419,250 |
| 516,750 |
| 614,250 |
1,000,000 |
| 60,000 |
| 130,000 |
| 230,000 |
| 330,000 |
| 430,000 |
| 530,000 |
| 630,000 |
1,025,000 |
| 61,500 |
| 133,250 |
| 235,750 |
| 338,250 |
| 440,750 |
| 543,250 |
| 645,750 |
1,050,000 |
| 63,000 |
| 136,500 |
| 241,500 |
| 346,500 |
| 451,500 |
| 556,500 |
| 661,500 |
1,075,000 |
| 64,500 |
| 139,750 |
| 247,250 |
| 354,750 |
| 462,250 |
| 569,750 |
| 677,250 |
1,100,000 |
| 66,000 |
| 143,000 |
| 253,000 |
| 363,000 |
| 473,000 |
| 583,000 |
| 693,000 |
Pension Plan Table II illustrates annual The earliest retirement age is age 55 with 10 years of service or the attainment of 70 points (age plus years of service). For a participant who retires at the earliest retirement age, the Retirement Income Plan’s early reduction factors are 6 2/3% per year for the first five years and 3 1/3% for the next five years and the reduction is actuarially equivalent for years earlier than age 55. At retirement, participants receive monthly pension payments and may choose among four joint and survivor payment options.
| Present Value of | Payments | ||||||||||||||||
| Number of Years | Accumulated | During Last | |||||||||||||||
| Early Retirement | Credited Service | Benefit | Fiscal Year | ||||||||||||||
| Name | Eligible | Plan Name | (#)(1) | ($)(2) | ($) | ||||||||||||
Gregory E. Murphy | Yes | Retirement Income Plan | 26.58 | 438,631 | 0 | ||||||||||||
| SERP | 26.58 | 1,248,811 | 0 | ||||||||||||||
Dale A. Thatcher | No | Retirement Income Plan | 6.67 | 52,342 | 0 | ||||||||||||
| SERP | 6.67 | 24,762 | 0 | ||||||||||||||
Jamie Ochiltree, III | Yes | Retirement Income Plan | 12.67 | 223,892 | 0 | ||||||||||||
| SERP | 12.67 | 206,069 | 0 | ||||||||||||||
Richard F. Connell | No | Retirement Income Plan | 6.33 | 135,484 | 0 | ||||||||||||
| SERP | 6.33 | 90,064 | 0 | ||||||||||||||
Kerry A. Guthrie | Yes | Retirement Income Plan | 19.00 | 265,213 | 0 | ||||||||||||
| SERP | 19.00 | 119,372 | 0 | ||||||||||||||
| (1) | The Retirement Income Plan imposes a one year waiting period for plan participation. | |
| (2) | Present value is calculated on the basis of normal retirement age of 65. A 6.5% discount rate is applied and the RP-2000 Mortality Table is used to calculate the values indicated. |
| Executive | Selective | Aggregate | Aggregate Balance | |||||||||||||||||
| Contributions | Contributions in | Aggregate | Withdrawals/ | at December 31, | ||||||||||||||||
| in 2007 | 2007 | Earnings in 2007 | Distributions | 2007 | ||||||||||||||||
| Name | ($)(1) | ($)(2) | ($)(3) | ($) | ($)(4) | |||||||||||||||
Gregory E. Murphy | 252,387 | 30,875 | (59,022 | ) | 0 | 728,998 | ||||||||||||||
Dale A. Thatcher | 40,500 | 15,569 | (1,242 | ) | 0 | 216,341 | ||||||||||||||
Jamie Ochiltree, III | 686,410 | 10,645 | 60,994 | 0 | 1,041,822 | |||||||||||||||
Richard F. Connell | 334,249 | 8,650 | 95,019 | 0 | 1,410,176 | |||||||||||||||
Kerry A. Guthrie | 171,200 | 14,790 | 97,973 | 0 | 645,441 | |||||||||||||||
Page 33
| (1) | Amounts in this column attributable to 2007 salary deferred by the named executive officers is included in the Salary column of the Summary Compensation Table. Such amounts are as follows: Mr. Murphy: $252,387; Mr. Thatcher: $40,500; Mr. Ochiltree: $129,610; Mr. Connell: $91,749; and Mr. Guthrie: $91,200. The balance of the amounts in this column, $556,800 for Mr. Ochiltree, $242,500 for Mr. Connell and $80,000 for Mr. Guthrie, are attributable to the deferral of a portion of their ACIP paid in March 2007. | |
| (2) | 100% of the information in this column is included in the All Other Compensation Column of the Summary Compensation Table. | |
| (3) | The information in this column is not included in the Summary Compensation Table because such earnings are not above market earnings. | |
| (4) | The portions of the amounts in this column attributed to the contributions of the named executive officers and SICA to the Deferred Compensation Plan are included in the Summary Compensation Table. |
Page 34
| Term | Three (3) years, automatically renewed for additional one (1) year periods unless terminated by either party with written notice. | ||
| Compensation | Base salary.(1) | ||
| Benefits | Eligible to participate in incentive compensation plan, stock plan, 401(k) plan, defined benefit pension plan and any other stock option, stock appreciation right, stock bonus, pension, group insurance, retirement, profit sharing, medical, disability, accident, life insurance, relocation plan or policy, or any other plan, program, policy or arrangement of Selective and SICA intended to benefit Selective employees generally. | ||
| Vacation and Reimbursements | Vacation time and reimbursements for ordinary travel and entertainment expenses in accordance with Selective policies. | ||
| Perquisites | Suitable offices, secretarial and other services, and other perquisites to which other Selective executives are generally entitled. | ||
| Severance and Benefits on Termination without Change in Control | • For Cause or Resignation by Executive other than for Good Reason: Salary and benefits accrued through termination date. | ||
• Death or Disability: Multiple(2) of: (i) Executive’s salary, plus (ii) average of three (3) most recent annual cash incentive payments; provided that any such severance payments be reduced by life or disability insurance payments under policies with respect to which Company paid premiums. | |||
• Without Cause by Company, Relocation of Office over Fifty (50) Miles (without Executive’s consent), Resignation for Good Reason by Executive: | |||
¡ Multiple(2) of: (i) Executive’s salary, plus (ii) average of three (3) most recent annual cash incentive payments. | |||
¡ Medical, dental, vision, disability and life insurance coverages in effect for Executive and dependents until the earlier of specified period of months(3) following termination or commencement of equivalent benefits from a new employer. | |||
• Stock Awards: Except for termination for Cause or resignation by the Executive other than for Good Reason, immediate vesting and possible extended exercise period, as applicable, for any previously granted stock options, stock appreciation rights, cash incentive units, restricted stock and stock bonuses. | |||
Page 35
| Severance and Benefits on Termination after Change in Control | For termination Without Cause or by Executive with Good Reason within two (2) years following a Change in Control (as defined in the Employment Agreement), Executive is entitled to: | ||
• Severance payment equal to multiple(4) of the greater of (i) Executive’s salary plus target annual cash incentive payment; or (ii) Executive’s salary plus the average of Executive’s three (3) immediately prior annual cash incentive payments. | |||
• Medical, dental, vision, disability and life insurance coverages in effect for Executive and dependents until the earlier of period of months(5) following termination or commencement of equivalent benefits from a new employer. | |||
| • Stock Awards, same as above, except that the initial number of cash incentive units is increased by 150%. | |||
• TaxGross-Up Payment, if necessary, to offset any excise tax imposed on Executive for such payments or benefits. | |||
| Release; Confidentiality and | • Receipt of severance payments and benefits conditioned upon: | ||
| Non-Solicitation | ¡ Entry into release of claims; and | ||
¡ No disclosure of confidential or proprietary information or solicitation of employees to leave Selective for a period of two (2) years following the termination of the Employment Agreement. | |||
| (1) | Effective January 31, 2008, the annual base salaries for the named executive officers were as follows: Mr. Murphy, $900,000; Mr. Thatcher, $475,000; Mr. Ochiltree, $460,000; Mr. Connell, $450,000; and Mr. Guthrie, $425,000. | |
| (2) | For Mr. Murphy the multiple is 2; for Messrs. Ochiltree and Connell the multiple is 1.75; and for Messrs. Thatcher and Guthrie the multiple is 1.5. | |
| (3) | For Mr. Murphy the period is 24 months; for Messrs. Ochiltree and Connell, 21 months; and for Messrs. Thatcher and Guthrie, 18 months. | |
| (4) | For Mr. Murphy the multiple is 2.99; for Messrs. Ochiltree and Connell the multiple is 2.5; and for Messrs. Thatcher and Guthrie the multiple is 2. | |
| (5) | For Mr. Murphy the period is 36 months; for Mr. Ochiltree, 30 months; and for Messrs. Connell, Thatcher, and Guthrie, 24 months. |
| Resignation | |||||||||||||||||||||||||
| or | |||||||||||||||||||||||||
| Termination | Death or | Termination | Change in | ||||||||||||||||||||||
| for Cause | Retirement | Disability | Without Cause | Control | |||||||||||||||||||||
| Name | ($) | ($)(1) | ($)(2) | ($)(3) | ($)(4)(5) | ||||||||||||||||||||
Gregory E. Murphy | 0 | 1,115,383 | 5,414,550 | 5,440,564 | 9,560,756 | ||||||||||||||||||||
Dale A. Thatcher | 0 | 1,419,173 | 2,518,173 | 2,539,197 | 3,517,212 | ||||||||||||||||||||
Jamie Ochiltree, III | 0 | 377,036 | 1,965,394 | 1,988,860 | 3,335,894 | ||||||||||||||||||||
Richard F. Connell | 0 | 1,417,748 | 2,854,790 | 2,856,772 | 4,093,148 | ||||||||||||||||||||
Kerry A. Guthrie | 0 | 361,357 | 1,448,857 | 1,453,347 | 2,376,925 | ||||||||||||||||||||
| (1) | This column includes the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would normally vest upon retirement for any participant in such plans. These amounts do not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which, as for any other participant, would fully vest upon retirement and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. | |
| (2) | This column includes the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would normally vest upon death or disability for any participant in such plans. This column also includes the severance payment provided for in each named executive officer’s Employment Agreement. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which, as for any other participant, would fully vest upon death or disability and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. |
Page 36
| (3) | This column includes: (i) the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would vest upon a termination Without Cause; (ii) the severance payment; and (iii) the value of medical, dental, vision, disability, and life insurance coverages, all as provided for in each named executive officer’s Employment Agreement. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which would fully vest and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award, as provided for in each named executive officer’s Employment Agreement. | |
| (4) | This column includes: (i) the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, and (ii) the value of 150% of the number of outstanding performance-based cash incentive units awarded to the named executive officers under the Cash Incentive Plan, calculated using a per unit value at December 31, 2007 of $89.83 for the 2006 grant and $81.89 for the 2007 grant, both of which would vest upon a change in control for any participant holding such awards under such plans. This column also includes the severance payment and the value of medical, dental, vision, disability, and life insurance coverages, as provided for in each named executive officer’s Employment Agreement. | |
| (5) | This column does not include the value of any tax gross-up payment, if necessary, to offset any excise tax imposed for the payment and benefits disclosed in this column. |
| Fees Earned or Paid | ||||||||||||||||
| in Cash | Stock Awards | Option Awards | Total | |||||||||||||
| Name | ($) | ($)(1) | ($)(2) | ($) | ||||||||||||
| Paul D. Bauer | 37,000 | 82,576 | 31,210 | 150,786 | ||||||||||||
| W. Marston Becker | 6,000 | 82,576 | 31,210 | 119,786 | ||||||||||||
| A. David Brown | 15,000 | 82,576 | 31,210 | 128,786 | ||||||||||||
| John C. Burville | 28,000 | 62,610 | 31,210 | 121,820 | ||||||||||||
| William M. Kearns, Jr. | 25,000 | 82,576 | 31,210 | 138,786 | ||||||||||||
| Joan M. Lamm-Tennant | 17,500 | 82,576 | 31,210 | 131,286 | ||||||||||||
| S. Griffin McClellan III | 31,000 | 57,598 | 31,210 | 119,808 | ||||||||||||
| Ronald L. O’Kelley | 16,500 | 82,576 | 31,210 | 130,286 | ||||||||||||
| John F. Rockart | 45,500 | 57,598 | 31,210 | 134,308 | ||||||||||||
| William M. Rue | 16,500 | 82,576 | 31,210 | 130,286 | ||||||||||||
| J. Brian Thebault | 37,000 | 82,576 | 31,210 | 150,786 | ||||||||||||
| (1) | This column reflects amounts recognized as expense for the 2007 grants of restricted stock to directors, based on a grant date fair market value of $24.54, and the portion of each director’s annual retainer paid in stock, 50% of which annual retainer, as set forth below, must be paid to a director in Selective common stock. | |
| (2) | This column reflects amounts recognized as expense for the 2007 option grants to directors. The grant date fair value of these grants of $6.20 is calculated using the Black-Scholes option valuation method, in accordance with FAS 123R. The aggregate number of options outstanding at December 31, 2007 for each director is as follows: Messrs. Bauer, Kearns and Rue and Ms. Lamm-Tennant 51,269; Messrs. Becker and Burville: 9,269; Mr. Brown: 39,269; Mr. McClellan: 21,269; Mr. O’Kelley: 15,269; Mr. Rockart: 27,269; and Mr. Thebault: 57,269. |
Page 2337
| Type of Compensation | Amount | |||
| Annual Retainer Fee | $ | 50,000 | ||
| Grant Date Fair Value of Annual Equity Award | $ | 32,500 | ||
| Black-Scholes Value of Annual Option Grant | $ | 32,500 | ||
| Board Meeting Attendance | $ | 0 | ||
| Committee Attendance Fee | ||||
| In person | $ | 1,500 | ||
| By telephone | $ | 1,000 | ||
| Annual Chairperson Fee | ||||
| Audit Committee | $ | 12,500 | ||
| Corporate Governance and Nominating Committee | $ | 7,500 | ||
| Finance Committee | $ | 7,500 | ||
| Salary & Employee Benefits Committee | $ | 12,500 | ||
| Lead Director Fee | $ | 15,000 | ||
| Expenses | Reasonable | |||
Named Executive Officer | Average Monthly | Years of Service as of |
Richard F. Connell | 25,387.82 | 4 |
Dale A. Thatcher | 20,579.81 | 4 |
Ronald J. Zaleski | 24,381.73 | 5 |
Monthly Pension Plan benefits at normal retirement age are computednon-employee directors, by comparing two calculations and providing the benefit which is the greaterDecember 20 of the two.prior year, must elect to receive the Annual Retainer Fee either (i) entirely in shares of common stock or (ii) in a combination of shares of common stock and cash, which cash amount must be 50% or less of the Annual Retainer Fee. The firstAnnual Retainer Fee is the former plan calculation which provides for 2% of “average monthly compensation” (basedpaid in equal quarterly installments on the monthly averagefirst (1st) day of January, April, July, and October. The number of shares of common stock issued in each quarterly installment is determined by multiplying the member’s compensation for the 60 months outamount of the most recent 120 months of employment preceding the member’s termination of employment for which the employee’s compensation is the highest) less 1 3/7% of a Social Security benefit multipliedAnnual Retainer Fee to be paid in stock by one-quarter (0.25) and dividing that product by the numberFair Market Value of yearsSelective’s common stock on the payment date.
Effective January 1, 2006, the Pension Plan closed to employees hired after December 31, 2005.
Page 24
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT,
AND CHANGE-IN-CONTROL AGREEMENTS
EMPLOYMENT AGREEMENTS
Messrs. Murphy, Ochiltree, Connell,grant of $32,500, which restricted stock and Thatcher have employment agreements with SICA, which contain similar terms and conditions. The agreement entered into between Mr. Murphy and SICA on August 1, 1995 was most recently amended on May 1, 2004. Pursuantoptions are granted pursuant to the terms of the agreement, Mr. Murphy receives an annual salaryOmnibus Stock Plan. Committee Attendance Fees and Annual Chairperson Fees, as listed in the table above, are paid in cash.
TERMINATION AGREEMENTS
Messrs. Murphy, Ochiltree, Connell, Thatcher, and Zaleski have termination agreements with SICA pursuant to which payments will be made under certain circumstances following a Change in Control (as defined in the agreements) of Selective. Each of these agreements is automatically renewable for successive one-year terms, unless prior written notice of non-renewal is given. Each agreement provides that, in the event of a Change in Control of Selective, SICA will continue to employ the executive officer in the capacities in which he was serving immediately prior to the Change in Control for a period of three (3) years, commencing on the date on which the Change in Control shall have occurred, which term will be automatically renewed for successive one-year periods unless prior written notice is given. Each agreement provides that if the executive officer’s employment is terminated as set forth in the agreement after a Change in Control occurs, other than (i) due to the executive officer’s death or retirement, (ii) by SICA for Cause or Disability (as defined in the agreement), or (iii) by the executive officer other than for Good Reason (as defined in the agreement), the executive officer will be entitled to receive earned but unpaid base salary through the date of termination, as well as any incentive compensation benefits or awards that have been accrued, earned, or become payable but which have not been paid, and as severance pay in lieu of any further salary for periods subsequent to the date of termination, an amount in cash equal to his “annualized includible compensationchairperson fee for the base period” (as definedAudit Committee was changed to $15,000 beginning in Section 280G(d)(1) of the Internal Revenue Code, multiplied by a factor of 2.99, provided that if any of the payments or benefits provided for in the agreement, together with any other payments or benefits that the executive officer has the right to receive would constitute a “parachute payment” (as defined in Section 280G(b) of the Internal Revenue Code), Selective will pay to the executive officer on a net after-tax basis the greater of (i) the payments and benefits due to the executive officer reduced in order of priority and amount as executive officer shall elect, to the largest amount as will result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Internal Revenue Code or (ii) payments and benefits due to the executive officer, plus an amount in cash equal to (x) the amount of such “excess parachute payments” multiplied by (y) twenty (20%) percent. Selective has guaranteed SICA’s performance of all its obligations under the termination agreements.
Page 2538
AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
During 2005, the following directors served as members
None of these individuals was employed in 2005 as an officer or an employee ofin 2007, (ii) is a former Selective officer, or one of its subsidiaries or was formerly an officer of Selective or(iii) entered into any of its subsidiaries. None of these individuals had any relationshiptransaction in 2007 requiring disclosure under the section entitled “Transactions with Selective other than service as a director or received compensation from Selective other than for Board of Directors service in 2005.
Related Persons.”
Page 26
Selective’s
2007. The following table summarizesSalary and Employee Benefits Committee (i) has reviewed and discussed the key policies, factors,Compensation Discussion and other compensation information thatAnalysis with management, and (ii) based on this review and discussion recommended to the SEBC used in determining executive compensation in 2005:
|
|
|
|
|
|
Page 27
|
|
In 2005, the SEBC retained an independent compensation consultant to provide advice on executive compensation matters, includingBoard approved, the base salary and incentive compensation levels for executive officers. The consulting firm furnished the SEBC with compensation surveys and data for purposes of comparing Selective’s executive compensation levels with those at companies within and outside the industry with which Selective competes for executive talent and is providing the SEBC with specific recommendations for maintaining Selective’s executive compensation at a level competitive with the marketplace.
Section 162(m)inclusion of the Internal Revenue Code disallows a tax deduction to publicly held companiesCompensation Discussion and Analysis in Selective’s Annual Report on Form 10-K for compensation paid to certain of their executive officers, to the extent that compensation exceeds $1 million per covered officer in any fiscal year ended December 31, 2007 and is not under a stockholder approved plan. The limitation applies only to compensation that is not considered to be performance-based. The SEBC intends, to the extent practicable, to preserve deductibility under the Internal Revenue Code for compensation paid to its executive officers while maintaining compensation programs to attract and retain highly qualified executives in a competitive environment.
this Proxy Statement.
A. David Brown, Chairperson
Paul D. Bauer
John C. Burville
J. Brian Thebault
Page 28
Performance Graph
| J. Brian Thebault, Chairperson Paul D. Bauer John C. Burville Ronald L. O’Kelley | ||||
Notwithstanding anything to the contrary set forth in any of Selective’s previous filingsfiling under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that might incorporate future filings made by Selective under those statutes, the preceding Report ofspecifically incorporates the Compensation Committee of the Board of Directors on Executive Compensation and Selective’s Stock Performance Graph will not be incorporatedReport by reference into any of those prior filings, nor will such report or graph be incorporated by reference into any future filings made by Selective under those statutes.
Page 2939
Approval of the Selective Insurance Group, Inc. Stock Purchase Plan for
Independent Insurance Agencies
Selective’ stockholders are being asked to approve the Selective Insurance Group, Inc. Stock Purchase Plan for Independent Insurance Agencies (the “Agencies Stock Purchase Plan”). The purpose of the Agencies Stock Purchase Plan is to motivate independent insurance agencies that sell products and services for the insurance company subsidiaries of Selective, by enabling them to participate in Selective’s long-term growth and success and to help align their success with those interests of Selective’s stockholders.
After approval and effective as of July 1, 2006, the Agencies Stock Purchase Plan will replace the
Selective Insurance Group Stock Purchase Plan for Independent Insurance Agents (the “Original Independent Agents Plan”) currently in effect and stock purchases will no longer be available under the Original Independent Agents Plan. If the Agencies Stock Purchase Plan is not approved by stockholders, the Original Independent Agents Plan will remain in effect.
The following table provides a summary of the Agencies Stock Purchase Plan, which is qualified in its entirety by the text of the Agencies Stock Purchase Plan, a copy of which is attached to this proxy statement as Appendix A.
|
|
|
|
|
|
Page 30
|
| |
|
| |
|
| |
| ||
|
| |
|
| |
| ||
|
| |
|
| |
|
| |
Page 31
|
|
|
|
NEW PLAN BENEFITS
There have been no awards granted under the Agencies Stock Purchase Plan to date. Selective cannot determine at this time the benefits that will be received by the Eligible Agencies and Eligible Persons if the Agencies Stock Purchase Plan is approved by stockholders because Selective cannot predict how many shares of Common Stock each Eligible Agency and Eligible Person will choose to purchase under the Agencies Stock Purchase Plan.
Page 32
INFORMATION ABOUT PROPOSAL 3
Ratification of Appointment of
Independent Public Accountants
2007.
The Audit Committee oversees Selective’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for overseeing preparation of the financial statements and the overall reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee has periodically met with and held discussions with management regarding the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in Selective’s financial statements. The Audit Committee reviewed the audited financial statements for the year ended December 31, 2005, included in the Annual Report with management. Management represented to the Audit Committee that (i) the financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and (ii) management had reviewed Selective’s disclosure controls and procedures and believes those controls are effective.
The Audit Committee reviewed with KPMG LLP, Selective’s independent public accountants who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality, not just the acceptability, of Selective’s accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including the Statement on Auditing Standards No. 61, as may be modified or supplemented. In addition, the Audit Committee has discussed with the independent auditors the auditors’ independence from management and Selective, including the matters in the written disclosures delivered to the Audit Committee and required by the Independence Standards Board in Standard No. 1 (Independence Discussion with Audit Committee), as may be modified or supplemented.
Page 33
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board approved) the inclusion of the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2005, for filing with the SEC. The Committee and the Board have also recommended, subject to stockholder approval, the selection of KPMG LLP as Selective’s independent public accountants.
Submitted by the Audit Committee of Selective’s Board of Directors
Paul D. Bauer, Chairperson
Joan M. Lamm-Tennant
S. Griffin McClellan III
John F. Rockart
J. Brian Thebault
The Audit Committee Report does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that Selective specifically incorporates the Audit Committee Report by reference therein.
Fees of Independent Public Accountants
Category | 2005 |
| 2004 |
Audit Fees | $1,039,800 |
| $1,263,850 |
Audit-Related Fees(1) | $173,000 |
| $88,750 |
Tax Fees | $0 |
| $0 |
All Other Fees | $0 |
| $0 |
TOTAL | $1,212,800 |
| $1,352,600 |
| Category | 2007 | 2006 | ||||||
| Audit Fees | $ | 1,353,500 | $ | 1,319,500 | ||||
Audit-Related Fees(1) | $ | 164,500 | $ | 132,000 | ||||
| Tax Fees | $ | 0 | $ | 0 | ||||
| All Other Fees | $ | 0 | $ | 0 | ||||
TOTAL | $ | 1,518,000 | $ | 1,451,500 | ||||
| (1) | Audit-Related Fees for |
Page 3440
| • | Periodically met with and held discussions with management regarding the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in Selective’s financial statements. | ||
| • | Reviewed and discussed the audited financial statements for the year ended December 31, 2007, included in the Annual Report with management, which represented to the Audit Committee that (i) the financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and (ii) management had reviewed Selective’s disclosure controls and procedures and believes those controls are effective. | ||
| • | Reviewed and discussed with KPMG LLP, Selective’s independent public accountants who are responsible for expressing an opinion on the conformity of those audited financial statements with the Statements of the Public Company Accounting Oversight Board (United States), their judgments as to the quality, not just the acceptability, of Selective’s accounting principles and such other matters as are required to be discussed with the Audit Committee under Statements of the Public Company Accounting Oversight Board, including the Statement on Auditing Standards No. 61, as amended. | ||
| • | Discussed with KPMG LLP, the independent accountant’s independence from Selective and its management, including the matters in the written disclosures from the independent accounts delivered to the Audit Committee as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). |
| Paul D. Bauer, Chairperson Joan M. Lamm-Tennant John F. Rockart J. Brian Thebault | ||||
Page 41
26, 2008.
24, 2009.
the business proposed to be brought before the annual meeting;
the reasons for conducting the business at the annual meeting;
| • | the business proposed to be brought before the annual meeting; | ||
| • | the reasons for conducting the business at the annual meeting; | ||
| • | any material interest of the stockholder in the business; | ||
| • | the beneficial owner, if any, on whose behalf the proposal is made; | ||
| • | the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and | ||
| • | the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner. |
any material interest of the stockholder in the business;
the beneficial owner, if any, on whose behalf the proposal is made;
the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and
the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner.
Selective’s By-laws require that the stockholder provide the following information in writing regarding any nomination for director:
all information relating to each person whom the stockholder proposes to nominate for election as a director as would be required to be disclosed in a solicitation of proxies for the election of such person as a director pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if so elected);
the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and
| • | all information relating to each person whom the stockholder proposes to nominate for election as a director as would be required to be disclosed in a solicitation of proxies for the election of such person as a director pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if so elected); | ||
| • | the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and | ||
| • | the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner. |
the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner.
Page 35
STOCKHOLDER COMMUNICATION WITH THE BOARD
Stockholders so desiring may send communications to the Board of Directors or individual directors by writing to Selective’s Corporate Secretary, Selective Insurance Group, Inc., 40 Wantage Avenue, Branchville, NJ 07890 or by e-mail to corporate.governance@selective.com. The Board has instructed the Corporate Secretary to use discretion in forwarding unsolicited advertisements, invitations to conferences, or other promotional material.
* * * * * * * *
Page 42
Senior
Executive Vice President, General Counsel
and Corporate Secretary
26, 2008
Branchville, New Jersey
Page 3643
Directions to Principal OfficesAPPENDIX ADIRECTIONSSELECTIVE INSURANCE GROUP, INC.STOCK PURCHASE PLAN FOR INDEPENDENT INSURANCE AGENCIES(Effective July 1, 2006)1.PURPOSE; GENERALThe purpose of the Selective Insurance Group, Inc. Stock Purchase Plan for Independent Insurance Agencies (the “Plan”) is to motivate independent insurance agencies that sell products and services for the insurance company subsidiaries of Selective Insurance Group, Inc., a New Jersey corporation (the “Company”), by enabling them to participate in the Company’s long-term growth and success and to help align their success with those interests of the Company’s stockholders.The Plan allows each Eligible Agency (as defined in Section 2(a) below) and those eligible Principals, Key Employees and Benefit Plans (each as defined in Section 2(a) below, and collectively referred to as the “Eligible Persons”) designated by the Eligible Agency to purchase shares of the common stock of the Company, par value $2.00 per share (“Common Stock”) at a discount as described below. An Eligible Agency or Eligible Person may elect to apply all or a portion of its Earned Cash Commissions (as defined in Section 2(c) below) and its distributions from the Company’s profit sharing commitment (the “Profit Sharing Plan”) to the purchase of shares of Common Stock under the Plan.Each Eligible Agency, together with its designated Eligible Persons (each such Eligible Agency and its designated Eligible Persons a “Participant”), may invest up to the applicable Maximum Contribution Amount (as described in the chart below) per calendar quarter under the Plan on certain Purchase Dates (as defined in Section 2(c) below), based upon the amount of total Written Premiums (as defined below) by such Eligible Agency during the previous calendar year with one or more of Selective’s insurance subsidiaries, as follows:Written PremiumsMaximum ContributionAmountsLess than $2,000,000$30,000$2,000,000 or more but less than $5,000,000$50,000$5,000,000 or more$75,000“Written Premiums” include all written premiums, less cancellations and returns, recorded by the Company and its insurance subsidiaries, but do not include:1.Premiums for policies written through pools, associations, or syndicates;2.Premiums for insurance written in any reinsurance facility, joint underwriting association, or other insurance program required by law;3.Policyholder dividends, expense fees, surcharges, and other like charges;4.Premiums from any accident and health, systems breakdown, and flood policies;5.Premiums for alternative market business, including, but not limited to, retrospectively rated policies and assumed business; and6.Premiums for policies, coverages, or plans that the Committee (as defined in Section 6 hereof) may exclude from this Plan.There is a $100 (one hundred dollar) minimum for purchases under the Plan by a Participant per calendar quarter. If a Participant does not purchase $100 (one hundred dollars) per a calendar quarter, any amounts below such minimum will be refunded, without interest, to such Participant by check as soon as practicable after the end of the quarter. The Company offers shares of Common Stock under the Plan at a 10% discount from Fair Market Value (as defined below) on the Purchase Date and Participants pay no brokerage commissions or other charges on purchases of such shares under the Plan. Fair Market Value is defined as the closing selling price for the Common Stock reported on the NASDAQ National Market on the applicable Purchase Date.2.PARTICIPATION IN THE PLAN(a)EligibilityEach eligible independent insurance agency that is under contract with any of the insurance subsidiaries of the Company to promote and sell Company’s subsidiaries’ insurance products, other than such agencies that promote and sell only the Company’s subsidiaries’ flood insurance products (each, an “Eligible Agency”) is eligible to participate in the Plan and to purchase shares of Common Stock under the Plan. Also eligible to purchase shares under the Plan in conjunction with an Eligible Agency are the following Eligible Persons:•principals, general partners, officers, and stockholders of, and designated by, an Eligible Agency (collectively, “Principals”);•key employees of an Eligible Agency designated by such Eligible Agency (“Key Employees”); and•individual retirement plans of Principals and Key Employees, Keogh plans of Principals and Key Employees, and employee benefit plans of, and designated by, an Eligible Agency (collectively, the “Benefit Plans”).No later than July 1, or the next business day following such day, of each year, each Eligible Agency shall provide to the Company, at the address contained in Section 2(c) hereof or by e-mail to agentstockplan@selective.com, a list of all Eligible Persons designated by such Eligible Agency as of such date for the next succeeding year. The Eligible Agency shall notify the Company of any deletions from such list no later the next Contribution Date (as defined in Section 2(c) hereof). Eligible Agencies may not add any Principals, Key Employees, or Benefit Plans to the list of Eligible Persons designated by such Eligible Agency until July 1 of the next succeeding year. The Committee or its designee shall, in its sole discretion, determine whether any Eligible Agency, or Eligible Person designated by an Eligible Agency, is ineligible to be a Participant in the Plan.Eligible Agencies and Eligible Persons are under no obligation to participate in the Plan or to purchase shares of Common Stock under the Plan. If an Eligible Agency and/or its Eligible Persons choose not to participate in the Plan, the Eligible Agency and/or its Eligible Persons, as applicable, shall receive the Earned Cash Commissions (as defined in Section 2(c) below) and the distributions from the Profit Sharing Plan to which they are entitled. The Plan is for the benefit only of the Participants. No other persons shall be direct or indirect beneficiaries or participants in the Plan. The Company shall not be obligated with respect to the Plan under any other arrangements between an Eligible Agency and any other person, including, but not limited to, the Eligible Agency’s Principals, Key Employees, and Benefit Plans.(b)Enrollment in the PlanThe Company shall send to each Eligible Agency:a copy of the Plan;an enrollment/purchase form;a copy of a prospectus and any prospectus supplements; anda copy of the most recent Annual Report of the Company.If an Eligible Person wishes to participate in the Plan, the Eligible Agency and each participating Eligible Person must complete and sign the enrollment/purchase form and return the form to the Company at the address contained in Section 2(c) hereof. Eligible Agencies may obtain additional forms by written or telephonic request to the Company, attention: “Accounts” at the address contained in Section 2(c) hereof or by calling (973) 948-3000.An Eligible Person shall become a Participant in the Plan only (i) after the Eligible Agency affiliated with such Eligible Person has received a copy of the Plan, a prospectus, any applicable prospectus supplement or supplements, and the most recent Annual Report of the Company, (ii) after the Company has received a properlycompleted enrollment/purchase form signed by such Eligible Agency and such Eligible Person, and (iii) if such Eligible Person has not been determined to be ineligible to become a Participant in the Plan by the Committee or its designee pursuant to Section 2(a) hereof. By returning a properly completed and signed form to the Company, the Eligible Agency and participating Eligible Person each acknowledge the receipt of the documents described in subsection (i) of the previous sentence.(c)Purchasing Shares of Common StockShares may generally be purchased by Participants under the Plan on the first day of March, June, September, and December of each year or the next succeeding business day (each a “Purchase Date” and collectively, the “Purchase Dates”), however, the Company does not guarantee that such days will be Purchase Dates and may designate other dates as Purchase Dates. The Company does not pay any interest on cash payments received under the Plan.Once each calendar quarter, and prior to a Contribution Date (as defined below), the Company shall provide enrollment/purchase forms to each Eligible Agency. Purchases shall be made under the Plan on the next applicable Purchase Date.Each Participant shall designate the dollar amount to be invested (the “Contribution Amount”) on the next Purchase Date on the appropriate sections of the enrollment/purchase form. Each Participant shall designate (i) the amount, if any, of the Contribution Amount that is to be paid in cash by check, (ii) the percentage, if any, that is to be deducted from monthly payments of Earned Cash Commissions (as defined below) and applied to the Contribution Amount, and (iii) the percentage, if any, that is to be deducted from the Participant’s distributions under the Profit Sharing Plan and applied to the Contribution Amount. The Contribution Amount designations regarding the Earned Cash Commissions and Profit Sharing Plan shall remain in effect until revoked or modified in writing by such Participant, which revocation or modification will take effect for the next practicable Purchase Date. The Contribution Amount designation regarding cash shall only remain in effect for the next Purchase Date.“Earned Cash Commissions” means those commissions that are fully earned and are due and payable to a participating Eligible Agency for personal and commercial direct bill policies after all offsetting debits and credits are applied, as determined by and solely from the records of the Company and its subsidiaries.For each Participant, the enrollment/purchase form must include:such Participant’s full name and address;such Participant’s social security or taxpayer identification number; andthe amount of cash, if any, and percentages of Earned Cash Commissions and/or Profit Sharing Plan payments, if any, to be invested in shares of Common Stock for each Eligible Person for whom purchase instructions are submitted.In addition, each Participant must sign their enrollment/purchase form and certify to the Company receipt of a copy of the Plan, any prospectus or supplements thereto, and a copy of the most recent Annual Report of the Company. The form must be signed by the applicable Eligible Agency and each affiliated Eligible Person listed on the form.Completed and signed enrollment/purchase forms must be sent to the Company at:Selective Insurance Group, Inc.40 Wantage AvenueBranchville, New Jersey 07890Attention: AccountsProperly completed forms and necessary payments must be received by the Company within 10 business days prior to the applicable Purchase Date (the “Contribution Date”). The Company will perform such necessary ministerial and clerical work regarding the forms as to effect the transaction and promptly forwardenrollment/purchase information to the Plan Agent (as defined in Section 2(d) hereof). If necessary payments are not received by the applicable Contribution Date, the purchase will not be effected and any payments received after the Contribution Date will be returned.(d)Purchased Shares and Participants’ AccountsThe Company shall record the ownership of the shares of Common Stock purchased through the Plan in book-entry form. When a Participant makes his or her first purchase of shares of Common Stock under the Plan, the Company shall establish an account for each such Participant with Wells Fargo Shareowner Services, the Company’s transfer agent and registrar (the “Plan Agent”). Each time a Participant purchases shares of Common Stock, the shares shall be credited to the Participant’s account and the Company shall record the shares on its Common Stock records. The Participant shall receive a written account statement following each purchase of shares. A Participant may vote all shares of Common Stock held in his or her account.(e)Restrictions on Shares Purchased under the PlanShares of Common Stock purchased under the Plan shall be restricted for a period of one year beginning on the Purchase Date and expiring upon the first anniversary of the Purchase Date (the “Restricted Period”). During the Restricted Period, the Participant may not sell, transfer, pledge, assign, or dispose of his or her shares of Common Stock in any way. During this period, the Plan Agent shall hold the Participant’s shares of Common Stock in the Participant’s account, but no share certificates shall be issued. However, a Participant shall be able to vote his or her shares of Common Stock during the Restricted Period and shall receive any dividends declared by the Board of Directors of the Company (the “Board”). The Participant shall own all of the shares in his or her account and none of the Participant’s shares of Common Stock shall be subject to forfeiture.Following the expiration of the Restricted Period, the Participant’s shares of Common Stock shall remain in his or her account until the Participant requests, in writing to the Plan Agent, that the shares be transferred, that the shares be sold, that certificates be issued to the Participant, or that the Participant’s account be closed.If an Eligible Agency closes its account, it may re-enroll in the Plan at any time it is eligible to participate by completing a new enrollment/purchase form. An Eligible Person may similarly re-enroll in the Plan, provided the Eligible Person is on the list of Eligible Persons designated by the Eligible Agency.3.SHARES AVAILABLE UNDER THE PLANThe maximum number of shares of Common Stock reserved for issuance under the Plan shall be 1,500,000 (one million five hundred thousand) and subject to adjustment as provided herein. The Company may make the shares available from authorized but unissued shares of Common Stock or authorized and issued shares of Common Stock held in the Company’s treasury, including shares purchased by the Company in the open market.In the event that the Board determines that any stock dividend or other distribution,extraordinary cash dividend, stock split or reverse stock split, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants, rights offering to purchase shares of Common Stock at a price substantially below fair market value, or other similar corporate transaction or event affects the Common Stock so that an adjustment is required in order to preserve the benefits or potential benefits intended to be made available under the Plan, then the Board may, in its sole and absolute discretion, adjust any or all of the number and type of shares which may be available under the Plan.4.DIVIDENDS; DIVIDEND REINVESTMENTThe Company pays dividends, as and when declared by the Board, to the record holders of shares of Common Stock. As the record holder of shares of Common Stock purchased under the Plan, a Participant shall receive dividends, if any, in cash for all shares registered in the Participant’s name on the record date. Such payment shall be made on the date that such dividend would be paid to the Company’s stockholders generally.Any dividend payable in Common Stock or any split shares distributed by the Company on shares purchased under the Plan shall be deposited in the Participant’s account with the Plan Agent. Any shares received as the result of a stock split shall be subject to the same restrictions on transfer as the shares purchased under the Plan. Shares received as dividends shall not be subjected to any transfer restrictions.Participants in the Plan are also eligible to participate in the Company’s dividend reinvestment plan pursuant to the terms and conditions of that plan. If a Participant elects to participate in the Company’s dividend reinvestment plan, the Participant shall be entitled to reinvest his or her dividends to purchase additional shares of Common Stock. There is no discount on the purchase price of shares under the Company’s dividend reinvestment plan. The transfer restrictions applicable to shares purchased under the Plan shall not apply to any shares purchased under the Company’s dividend reinvestment plan. Wells Fargo Shareowner Services is the plan administrator of the Company’s dividend reinvestment plan. Information about the Company’s dividend reinvestment plan may be obtained from the Company or from Wells Fargo Shareowner Services.5.OTHER STOCKHOLDER RIGHTS; INFORMATION REPORTINGIf the Company has a rights offering, Participants in the Plan shall be entitled to participate based upon their total share holdings. Rights on shares of Common Stock purchased under the Plan and registered in the name of a Participant shall be mailed directly to that Participant in the same manner as to stockholders not participating in the Plan.Each Participant in the Plan shall receive the Company’s annual and other periodic or quarterly reports issued to stockholders, notices of stockholder meetings, proxy statements and Internal Revenue Service information for reporting dividends paid and income resulting from the discount on the purchase of Common Stock under the Plan.Each Participant shall be entitled to vote the shares purchased under the Plan and registered in that Participant’s name on a record date for a meeting of stockholders. A Participant may vote in person or by proxy at any meeting of stockholders.6.ADMINISTRATION OF THE PLAN, INQUIRIES, AND CORRESPONDENCEThe Plan shall be administered by the Salary and Employee Benefits Committee of the Board (the “Committee”) or its designee. The Committee shall have the authority, in its sole discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to:construe and interpret the Plan;make adjustments in response to changes in applicable laws, regulations, or accounting principles, or for any other reason;prescribe, amend, and rescind rules and regulations relating to the Plan and appoint such agents as it shall deem appropriate for the proper administration of the Plan, in accordance with Section 7 hereof; andmake all other determinations deemed necessary or advisable for the administration of the Plan.Determinations of the Committee shall be final, conclusive, and binding on all persons, and the Committee will not be liable for any action or determination made in good faith with respect to the Plan.The Committee shall engage the Plan Agent to perform custodial and record-keeping functions for the Plan, such as holding record title to the Participants’ shares, maintaining an individual investment account for each Participant, and providing periodic account status reports to each Participant.All enrollment/purchase forms should be sent to the Company. All other inquiries and correspondence should be sent to:Wells Fargo Shareowner ServicesP.O. Box 64854St. Paul, Minnesota 55164-0854Telephone inquiries may be directed to the Company at (973) 948-3000 or to Wells Fargo Shareowner Services at (866) 877-6351.The Company pays all of its administrative expenses related to the Plan. Plan Participants pay no brokers commissions or administrative or other charges for purchases of Common Stock under the Plan.7.AMENDMENT OR TERMINATION OF THE PLANEither the Board or the Committee may amend, revise, suspend, or terminate the Plan at any time and in any respect whatsoever; provided, however, that stockholder approval shall be required for any such amendment if and to the extent such approval is required in order to comply with applicable law or any stock exchange listing requirement.8.RIGHTS NOT TRANSFERABLERights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution and are exercisable during the Participant’s lifetime only by the Participant.9.RIGHT TO CONTINUED EMPLOYMENT OR AGENCY STATUSNothing in the Plan or any enrollment/purchase form shall confer an obligation on the Company or any Eligible Agency to employ or continue the employment or service of any Participant for any specified period of time and shall not lessen, affect, or interfere with the Company’s or any Eligible Agency’s right to terminate the employment or service of any such Participant at any time or for any reason not prohibited by law.10.APPLICABLE OR GOVERNING LAW; SEVERABILITYExcept to the extent preempted by any applicable federal law, the Plan shall be construed and administered in accordance with the laws of the State of New Jersey without reference to its principles of conflicts of law.If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, NJ 07890-1000From East:Route I-80 West to Route 15 North to Route 206 North. Go about 2 miles from Route 15/Route 206 intersection, turn right at traffic light, then left on Route 630(Broad630 (Broad Street). Turn right at Post Office onto Wantage Avenue(RouteAvenue (Route 519). 1st entrance on right -— Northeast Operations. 2nd entrance on right -— Corporate office/main reception area.From West:Route I-80 East to Route 94 North to Route 206 North. RightTurn right at Branchville traffic light opposite "Our“Our Lady Queen of Peace"Peace” Catholic church, then left on Route 630(Broad630 (Broad Street). RightTurn right at Post Office onto Wantage Avenue(RouteAvenue (Route 519),. 1st entrance on right -— Northeast Operations. 2nd entrance on right -— Corporate office/main reception area.- or -Route I-78 East to Pa. Route 611 North to Route 94 North to Route 206 North. RightTurn right at Branchville traffic light opposite "Our“Our Lady Queen of Peace"Peace” Catholic church, then left on Route 630(Broad630 (Broad Street). RightTurn right at Post Office onto Wantage Avenue(RouteAvenue (Route 519),. 1st entrance on right -— Northeast Operations. 2nd entrance on right -— Corporate office/main reception area.- or -Route I-78 East to Route 31 North to Route 46 West to Route 94 North to Route 206 North. RightTurn right at Branchville traffic light opposite "Our“Our Lady Queen of Peace"Peace” Catholic church, then left on Route 630(Broad630 (Broad Street). RightTurn right at Post Office onto Wantage Avenue(RouteAvenue (Route 519),. 1st entrance on right -— Northeast Operations. 2nd entrance on right - Corporate office/main reception area.From North:Route I-84 (East or West) to PA Route 209 South to NJ Route 206 South. Left at Branchville traffic light opposite "Our“Our Lady Queen of Peace"Peace” Catholic church, then turn left on Route 630(Broad630 (Broad Street). RightTurn right at Post Office onto Wantage Avenue(RouteAvenue (Route 519),. 1st entrance on right -— Northeast Operations. 2nd entrance on right -— Corporate office/ main reception area.From South:Route 206 North or Route I-80 West to Route 15 to Route 206 North. RightTurn right at Branchville traffic light opposite "Our“Our Lady Queen of Peace"Peace” Catholic church, then left on Route 630(Broad630 (Broad Street). RightTurn right at Post Office onto Wantage Avenue(RouteAvenue (Route 519),. 1st entrance on right -— Northeast Operations. 2nd entrance on right -— Corporate office/main reception area.
11:24, 2008
9:00 a.m.
Branchville, New Jersey 07890
----------------------------------------------------------------------------------------------------
| ||||
 | Selective Insurance Group, Inc. 40 Wantage Avenue Branchville, New Jersey 07890 | proxy | ||
This proxy is solicited by the Board of Directors of Selective Insurance Group, Inc. for use at the Annual Meeting of Stockholders to be held on April 24, 2008. | ||||
| The undersigned, a stockholder of Selective Insurance Group, Inc. (the “Company”), hereby constitutes and appoints W. Marston Becker and William M. Rue and/or any one of them (with full power of substitution and the full power to act without the other), proxies to vote all the shares of the Common Stock of the Company, registered in the name of the undersigned at the Annual Meeting of Stockholders of the Company to be held on Thursday, April 24, 2008 at 9:00 a.m. in the auditorium at the headquarters of the Company at 40 Wantage Avenue, Branchville, New Jersey, and at any adjournment thereof. | ||||
| Specify your choices by marking the appropriate box (see reverse side), but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendations. The proxies cannot vote your shares unless you sign and return this proxy, submit a proxy by telephone or through the Internet, or attend the meeting and vote by ballot. | ||||
This proxy is solicited by the Board of Directors of Selective Insurance Group, Inc. for use at the Annual Meeting of Stockholders to be held on April 26, 2006.
The undersigned, a stockholder of Selective Insurance Group, Inc. (the “Company”) hereby constitutes and appoints Paul D. Bauer and Joan M. Lamm-Tennant and/or any one of them (with full power of substitution and the full power to act without the other), proxies to vote all the shares of the Common Stock of Selective Insurance Group, Inc. registered in the name of the undersigned at the Annual Meeting of Stockholders of the Company to be held on Wednesday, April 26, 2006 at 11:00 a.m. in the auditorium at the headquarters of the Company at 40 Wantage Avenue, Branchville, New Jersey, and at any adjournment thereof.
Specify your choices by marking the appropriate box (SEE REVERSE SIDE), but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendations. The proxies cannot vote your shares unless you sign and return this proxy, submit a proxy by telephone or through the Internet, or attend the meeting and vote by ballot.
Your vote is important. Please vote immediately.
COMPANY # |
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Selective Insurance Group, Inc., c/o Shareowner ServicesSM, P.O. Box 64873, St. Paul, MN 55164-0873.
| • | Mark, sign, and date your proxy card and return it in the postage-paid envelope provided or return it to Selective Insurance Group, Inc., c/o Shareowner ServicesSM, P.O. Box 64873, St. Paul, MN 55164-0873. |
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
| The Board of Directors Recommends a Vote FOR Items 1 and 2. |
1. | Election of |
|
| 01 John C. Burville 02 Paul D. Bauer | o | Vote FOR all nominees | o | Vote WITHHELD from all nominees | ||||
| 03 Joan M. Lamm-Tennant | (except as marked) |
|
| 04 Michael J. Morrissey 05 Ronald L. O’Kelley | ||||||||||
| (Instructions:To withhold authority to vote for any indicated nominee,write the number(s) of the nominee(s) in the box provided to the right.) | ||||||||||
|
|
|
|
|
|
|
| |||||||
| Ratify the appointment of KPMG LLP as independent public accountants for the fiscal year ending December 31, |
|
|
|
|
| o | Against | o | Abstain |
Address Change? Mark Box o Indicate changes below:
| ||||
| Address Change? Mark Box o Indicate changes below: | Date | |||
| Signature(s) in Box | ||||
| Please sign exactly as your name(s) appears on the proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy. |
Signature(s) in Box
Please sign exactly as your name(s) appears on the proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.