SECURITIES AND EXCHANGE COMMISSION
of the Securities
Exchange Act of 1934
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| Definitive Proxy Statement | |
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| Soliciting Material Pursuant to §240.14a-12 |
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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 three (3) Class II 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. |
| Approve the amended and restated Selective Insurance Group, Inc. Employee Stock Purchase Plan |
3. |
| Ratify the appointment of KPMG LLP as independent public accountants for the fiscal year ending December 31, |
4. | Consider and vote upon a stockholder proposal relating to the declassification of the Board of Directors. |
Gregory E. Murphy
Chairman of the Board, President and Chief Executive Officer
Michael H. Lanza
Senior Vice President, General Counsel and
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Security Ownership of Directors and Executive Officers and Certain Beneficial Owners and
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Information about Proposal 2 – Approval of The Selective Insurance Group, Inc. Stock Purchase
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A-1 |
TO BE HELD APRIL 26, 200629, 2009
Proxy Statement.
Page 1
PROPOSAL 1. | ELECTION OF DIRECTORS |
THE FOURTHREE NOMINATED CLASS II DIRECTORS: A. DAVID BROWN; WILLIAM M. KEARNS, JR.;BROWN, S. GRIFFIN MCCLELLAN III;MC CLELLAN III, AND J. BRIAN THEBAULT;
THE TWO NOMINATED CLASS III DIRECTORS: JOHN C. BURVILLE 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.
6.
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.
PROPOSAL 2. | APPROVAL OF |
PLAN (2009)
42.
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 an affirmative vote of a majority of the stockholders present in person or represented by proxy and entitled to votevotes cast at the Annual Meeting. AbstentionsUnder New Jersey law, in determining whether the proposal has received the requisite number of affirmative votes, abstentions and broker non-votes will have the same effectnot be counted as votes against Proposal 2 and, broker non-votesaccordingly, will have no effect on the outcome of the vote.
PROPOSAL 3. | RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS |
2009.
48.
Vote in favor of Proposal 3;
Vote against Proposal 3; or
• | Vote in favor of Proposal 3; | ||
• | Vote against Proposal 3; or | ||
• | Abstain from voting. |
Abstain from voting.
Assuming a quorum is present, Proposal 3 will pass if approved by an affirmative vote of a majority of the stockholders present in person or represented by proxy and entitled to votevotes cast at the Annual Meeting. AbstentionsUnder New Jersey law, in determining whether the proposal has received the requisite number of affirmative votes, abstentions and broker non-votes will have the same effectnot be counted as votes against Proposal 3cast and, broker non-votesaccordingly, will have no effect on the outcome of the vote.
Page 2
PROPOSAL 4. | STOCKHOLDER PROPOSAL RELATING TO THE DECLASSIFICATION OF THE BOARD OF DIRECTORS. |
• | Vote in favor of Proposal 4; | ||
• | Vote against Proposal 4; or | ||
• | Abstain from voting. |
Page 3
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, 2, 3, and 4. 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. |
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vote.
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AND CERTAIN BENEFICIAL OWNERS AND SECURITIES AUTHORIZED
PROXY MATERIALS FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
SECURITY OWNERSHIPTHE ANNUAL MEETING OF MANAGEMENTSTOCKHOLDERS TO BE HELD ON APRIL 29, 2009
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.
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| NUMBER | SHARES | TOTAL |
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| OF SHARES | REGARDING | SHARES |
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| 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 |
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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.
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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) |
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Equity Compensation plans | 789,523 |
| $26.96 |
| 1,971,194 | (2) |
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Equity Compensation plans not | — |
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| 561,502 | (3) |
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Total | 789,523 |
| $26.96 |
| 2,532,696 |
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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
Election of Directors
Effective as of the Annual Meeting, the Board has set the number of directors at eleven (11). William M. Kearns, Jr., having surpassed the eligibility age for election as a director, will retire from the Board on April 29, 2009, following the election of directors at the 2009 Annual Meeting of Stockholders. The Board thanks Mr. Kearns for his many years of service as a Director and Lead Independent Director of the Board.
The Board nominated four (4)ratified the Corporate Governance and Nominating Committee’s nomination of the following three (3) incumbent Class II directors to stand for election at the Annual Meeting for terms expiring at the 20092012 Annual Meeting or whenuntil a successor has been duly elected and qualified: A. David Brown; William M. Kearns, Jr.;Brown, S. Griffin McClellan III;III, and J. Brian Thebault.
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: John C. Burville and John F. Rockart. Dr. Burville was recommended 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.
CLASS II |
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
A. David Brown , 66 | • Senior Vice President, Human Resources, Linens ‘n Things, Inc., 2006 to 2009. In May 2008, Linens and Things, Inc. filed for protection under Chapter 11 of the U.S. Bankruptcy Code. | |
• 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. | ||
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S. Griffin McClellan III , 71 | • Retired Banking Executive. | |
Independent Director, 1980 | •
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• Graduate of Harvard University (B.A.). |
Page 86
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
J. Brian Thebault , 57 | • Chairman, Earth-Thebault, since 2007. | |
Independent Director, 1996 | • Partner, Thebault Associates, since 2007. | |
• Chairman and Chief Executive Officer, L.P. Thebault Company, | ||
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• Trustee, The Delbarton School, 1990 to 2007. | ||
• Graduate of University of Southern California (B.S.). |
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CLASS I | — | Directors Continuing in Office Until the 2010 Annual Meeting of Stockholders |
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
, 56 | •
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• Director, BrickStreet Mutual Insurance Company, since 2008. | ||
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2007. | ||
• Director, 2002. | ||
• Chairman and Chief Executive Officer, Trenwick Group, Ltd., 2002 to 2005; Director, Trenwick Group, Ltd., 1997 to 2003. | ||
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• Director, Beazley Group plc, 2006 to 2008. | ||
• CEO, McDonough-Caperton Insurance Group, 1986 to 1994. | ||
• Advisory Board Member, Conning Funds, since 1997. | ||
• Advisory Board Member, American Securities Funds, since 1997. | ||
• Graduate of West Virginia University (B.S. and J.D.).
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CONTINUING DIRECTORS
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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. | ||
• Certified Public Accountant (New Jersey) (Inactive). | ||
• Director, Newton Memorial Hospital Foundation, Inc., since 1999. | ||
• Director, | ||
• Director, Insurance 2000. | ||
• Trustee, the American Institute for CPCU (AICPCU) and the Insurance Institute of America (IIA), since | ||
• Graduate of Boston College (B.S. | ||
• Harvard University (Advanced Management Program). | ||
• M.I.T. Sloan School of Management. |
Page 7
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., since 2002. | |
• 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. | ||
• President, The Rue Foundation, since 2004. | ||
• Graduate of Rider College (B.A.). |
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CLASS III | — | Directors Continuing in Office Until the 2011 Annual Meeting of Stockholders |
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
Paul D. Bauer , 65 | • Retired financial executive. | |
Independent Director, 1998 | •
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• Director, Rosina Holdings Inc., since 2002. | ||
• Director, R.P. Adams Co., 1991 to 2004. | ||
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• 1995. | ||
• Trustee, 2005. | ||
• Graduate of Boston College (B.S. Accounting). | ||
John C. Burville, 61 | • 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 | ||
• Fellow of the Institute of Actuaries. |
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Name, Age, Year Elected To Board of Directors | Occupation And Background | |
Joan M. Lamm-Tennant , 56 | • Risk Strategist, Marsh & McLennan Companies, Inc., since Feb. 2009. | |
Independent Director, 1993 | • Global Chief Economist & Risk Strategist, Guy Carpenter & Company, LLC, since 2007. | |
• Senior Vice President, General | ||
• 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.). | ||
Michael J. Morrissey, 61 | • Chairman and Chief Executive Officer, Firemark Investments, since 1983. | |
Independent Director, 2008 | • 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.). | ||
Ronald L. O’Kelley , 64 | • President and Chief Executive Officer, U.S. Shipping Partners, L.P., since 2008. | |
Independent Director, 2005 | • Chairman and | |
• Executive Vice President, 1995 to 2002. | ||
• Director, 2004 to 2008. | ||
• Director, Refco Inc., 2005 | ||
• 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 |
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• | The number of shares of Selective common stock beneficially owned by each 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 executive officers of Selective as a group. |
Number of Shares | ||||||||||||||||
Options | ||||||||||||||||
Name of Beneficial | Exercisable Within | Total Shares | Percent of | |||||||||||||
Owner | Common Stock(1) | 60 Days | Beneficially Owned | Class | ||||||||||||
Bauer, Paul D. | 38,001 | 51,544 | 89,545 | * | ||||||||||||
Becker, W. Marston | 12,225 | 15,544 | 27,769 | * | ||||||||||||
Brown, A. David | 40,208 | 45,544 | 85,752 | * | ||||||||||||
Burville, John C. | 7,813 | 15,544 | 23,357 | * | ||||||||||||
Connell, Richard F. | 50,337 | 17,184 | 67,521 | * | ||||||||||||
Guthrie, Kerry A. | 63,559 | (2) | 55,684 | 119,243 | * | |||||||||||
Kearns, William M., Jr. | 201,579 | 51,544 | 253,123 | * | ||||||||||||
Lamm-Tennant, Joan M. | 45,373 | 51,544 | 96,917 | * | ||||||||||||
McClellan, S. Griffin, III | 40,825 | (3) | 27,544 | 68,369 | * | |||||||||||
Morrissey, Michael J. | 1,045 | 0 | 1,045 | * | ||||||||||||
Murphy, Gregory E. | 121,381 | 70,002 | 191,383 | * | ||||||||||||
O’Kelley, Ronald L. | 15,326 | 21,544 | 36,870 | * | ||||||||||||
Rue, William M. | 410,338 | (4) | 51,544 | 461,882 | 1 | % | ||||||||||
Thatcher, Dale A. | 53,494 | 17,184 | 70,678 | * | ||||||||||||
Thebault, J. Brian | 52,825 | (5) | 51,544 | 104,369 | * | |||||||||||
Zaleski, Ronald J., Sr. | 35,755 | 41,176 | 76,931 | * | ||||||||||||
All directors and executive officers, as a group (20 persons) | 1,242,405 | 600,457 | 1,842,862 | 3 | % |
* | 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, were pledged as collateral for a loan made by Selective to purchase Selective common stock in 1998, which loan is grandfathered under the Sarbanes-Oxley Act of 2002 and was authorized by the Board of Directors to encourage Selective stock ownership. This loan was repaid in full as of March 6, 2009. | |
(3) | Includes 4,000 shares held by Mr. McClellan’s wife, for which Mr. McClellan disclaims beneficial ownership. | |
(4) | Includes: (i) 34,727 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 owner of more than a 10% equity interest (see page 11 of this Proxy Statement for more information); and (ii) 1,980 shares held by Mr. Rue’s wife. | |
(5) | Includes: (i) 217 shares held in custody for and 213 shares held by Mr. Thebault’s son; (ii) 217 shares held in custody for and 207 shares held by a daughter of Mr. Thebault; and (iii) 210 shares held in custody for another daughter of Mr. Thebault. |
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SEC.
Amount & Nature of | Percentage of | |||||||||||||||
Title of Class | Name & Address of Beneficial Owner | Beneficial Ownership | Class | |||||||||||||
Common Stock | Dimensional Fund Advisors LP | 4,480,467 shares | 8.49 | % | ||||||||||||
Palisades West, Building One | of common stock | |||||||||||||||
6300 Bee Cave Road | ||||||||||||||||
Austin, TX 78746 | ||||||||||||||||
Common Stock | Barclays Global Investors, NA and Affiliates | 3,593,318 shares | 6.81 | % | ||||||||||||
400 Howard Street | of common stock | |||||||||||||||
San Francisco, CA 94105 | ||||||||||||||||
year ended December 31, 2008.
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 $8.3 million in 2008, $9.9 million in 2007, and $9.5 million in 2006. In return, Selective’s insurance subsidiaries paid commissions to Rue Insurance of $1.7 million in 2008 and 2007, and $1.9 million in 2006. | ||
• | Rue Insurance placed human resource outsourcing contracts with Selective HR Solutions resulting in revenues to Selective HR Solutions of approximately $79,000 in 2008, $69,000 in 2007, and $62,000 in 2006. In return, Selective HR Solutions paid commissions to Rue Insurance of $12,000 in 2008, $15,000 in 2007, and $14,000 in 2006. | ||
• | 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 2008, $0.5 million in 2007, and $0.5 million in 2006. | ||
• | Selective paid reinsurance commissions of $0.2 million in 2008, 2007, and 2006 to PL, LLC. PL, LLC is an insurance fund administrator of which Rue Insurance owns 33.33% 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.
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The son of S. Griffin McClellan III, a Selective director, S. GriffinSamuel G. McClellan IV, iswas an Assistant Vice President of Selective’s subsidiary, SICA.insurance subsidiaries through January 16, 2009. In 2005,2008, Mr. S. Griffin McClellan IV received $140,229$139,740 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 currently a member of the Audit Committee, the Corporate Governance and Nominating Committee, or the Salary and Employee Benefits Committee.
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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.
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regulations.
Page 13
• | Audit Committee; | ||
• | Corporate Governance and Nominating Committee; | ||
• | Executive Committee; | ||
• | Finance Committee; and | ||
• | Salary and Employee Benefits Committee. |
Written Charter is available on the Corporate Governance section of www.selective.com | 2008 Meetings: 6 | |
• | 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. |
• | Discuss significant financial risk exposures and the steps management has taken to monitor, control and report such exposures. |
• | 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 | |
Ronald L. O’Kelley | Yes | |
J. Brian Thebault | Yes |
Page 14
Written Charter is available on the Corporate Governance section of www.selective.com | 2008 Meetings: 4 | |
• | 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 | |
W. Marston Becker | Yes | |
William M. Kearns, Jr. | Yes |
Page 15
2008 Meetings: 1 | ||
• | 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 | 2008 Meetings: 5 |
• | 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 | Michael J. Morrissey | ||
William M. Kearns, Jr. | Ronald L. O’Kelley | ||
Joan M. Lamm-Tennant |
Page 16
Written Charter is available on the Corporate Governance section of www.selective.com | 2008 Meetings: 8 | |
• | 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 | |
Michael J. Morrissey | 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.
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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:
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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 is generally targeted at the 50th percentile or greater of compensation paid by comparable companies in the property and casualty insurance industry. Our compensation programs are identified by Board members, management, and/or third party search firmsdesigned to motivate executives to achieve our corporate objectives and selecting nominees for approval by the stockholders. In making selections, the Corporate Governanceincrease shareholder value. Accordingly, we tie our annual incentive awards to pre-determined strategic and Nominating Committee reviews the attributesfinancial business objectives and criteria required in light of current Board membership, including experience, skills, expertise, diversity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interestindividual objectives, and other relevant factors that the Corporate Governance 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 |
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| 2004 |
Annual Retainer Fee (1) |
| $43,000 |
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| $43,000 |
Annual Option Grant (in shares) (2) |
| $3,000 |
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| $3,000 |
Board Meeting Attendance |
| $0 |
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| $0 |
Committee Attendance Fee (3) |
| $1,500 $1,000 |
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| $1,500 $1,000 |
Annual Chairperson Fee(4) |
| $10,000 $10,000 |
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| $10,000 $10,000 |
Lead Director Fee(5) |
| $10,000 |
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| $0 |
Expenses |
| Reasonable |
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| Reasonable |
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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. In April 2007, the SEBC engaged EXEQUITY, LLP (“EXEQUITY”) as the Compensation Consultant, and entered into an agreement with EXEQUITY. For 2008, amounts incurred for EXEQUITY’s executive compensation consulting services were $33,563.31.
• | Base salary; | ||
• | Annual cash incentive payments; | ||
• | Long-term incentive awards in the form of stock options, performance-based restricted stock units, 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; | ||
• | McLagan Partners Investment Management Survey — Insurance Companies;and | ||
• | ClearSolutionsHR Actuarial Salary Surveys. |
Market/Product Group | 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 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 | OneBeacon Insurance Group, Ltd | |
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 Capital 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) | |
Allianz of America, Inc. | Pacific Life Insurance Company | |
Allstate Investments, LLC | PartnerRe Asset Management Company | |
Assurant, Inc | PPM America, Inc. | |
AVIVA USA (formerly AmerUs) | Principal Global Investors | |
AXA Equitable | Progressive Corporation | |
The Chubb Corporation | Prudential Financial | |
CIGNA Investment Management | Security Benefit Corporation | |
Country Insurance & Financial Services | Sentinel Asset Management, Inc. | |
CUNA Mutual Group | Sentry Insurance | |
FBL Financial Group | Standard Life Investments (USA) Limited | |
Fort Washington Investment Advisors, Inc. | State Farm Insurance Companies | |
Genworth Financial | Sun Life Financial | |
Guardian Life Insurance Company | Swiss Re | |
Hartford Investment Management Company | Thrivent Financial for Lutherans | |
ING Investment Management | TIAA-CREF | |
Liberty Mutual Group | The Travelers Companies, Inc. | |
MBIA Asset Management | USAA Investment Management Company | |
MEAG New York Corporation (Munich RE) | ||
MetLife Investments | ||
MFC Global Investment Management | ||
Mutual of Omaha | ||
Modern Woodmen of America |
Page 20
ACE INA | Harleysville Insurance | |
Acuity | The Hartford | |
Aipso | Insurance Services Office | |
Allstate Corporation | Liberty Mutual Group | |
American Family Insurance | The Main Street America Group | |
American International Group | Mercury Insurance Group | |
Argonaut Group, Inc. | MetLife Auto and Homeowners Insurance | |
Assurant Solutions | Michigan Education Employees Mutual | |
Automobile Club Group/AAA Michigan | Insurance Company | |
Automobile Club of Southern California | Munich Reinsurance America, Inc. | |
California Casualty Management | Nationwide Insurance | |
Association | NCCI Holdings, Inc. | |
California State Automobile Association | Ohio Casualty Corporation | |
The Chubb Corporation | Pennsylvania National Mutual Casualty | |
CNA | Insurance Company | |
Crum & Forster/US Fire Insurance | PMA Insurance Group | |
CUNA Mutual Group | Safeco Corporation | |
Employers Mutual Casualty Company | Selective Insurance Company of America | |
Erie Insurance Group | State Farm Insurance Companies | |
Farmer’s Insurance | Swiss Reinsurance Company | |
FBL Financial Group, Inc. | Towers-Perrin | |
Fireman’s Fund Insurance Company | Traveler | |
GEICO | United Services Automobile Association | |
GMAC Motors Insurance Corporation | White Mountains Reinsurance Services | |
GM Insurance Management Corporation | Winterhur U.S. Holdings | |
GM Reinsurance Corporation | XL Capital | |
Great American Insurance Company | Zurich North America | |
The Hanover Insurance Group |
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• | 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. |
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Officer | Title | Maximum ACIP Opportunity | |||||||
Gregory E. Murphy | Chairman, President & |
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Richard F. Connell | Senior Executive Vice President |
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Ronald | Executive Vice President & Chief Actuary |
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| Three-year vesting period; and | |
• | Achievement at any time during the vesting period of either: (i) a cumulative operating return on equity of fifteen percent (15%), computed by excluding from the determination of average equity any unrealized gain occurring after December 31, 2007, or (ii) a five percent (5%) cumulative growth in net premiums written. |
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• | 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, none 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, Ltd |
• | 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 |
Page 27
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 |
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Change in | ||||||||||||||||||||||||||||||||
Non-Equity | Pension Value | |||||||||||||||||||||||||||||||
Incentive | and Nonqualified | |||||||||||||||||||||||||||||||
Name | Stock | Option | Plan | Deferred | All Other | |||||||||||||||||||||||||||
And | Salary | Awards | Awards | Compensation | Compensation | Compensation | Total | |||||||||||||||||||||||||
Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | Earnings ($)(5) | ($)(6) | ($) | ||||||||||||||||||||||||
Gregory E. Murphy | 2008 | 900,000 | 1,708,294 | 23,139 | 650,000 | 459,931 | 42,150 | 3,783,514 | ||||||||||||||||||||||||
Chairman, President and Chief | 2007 | 900,000 | 1,876,425 | 25,633 | 900,000 | 85,449 | 40,989 | 3,828,496 | ||||||||||||||||||||||||
Executive Officer | 2006 | 876,923 | 2,460,513 | 28,066 | 1,500,000 | 158,637 | 42,900 | 5,067,039 | ||||||||||||||||||||||||
Dale A. Thatcher | 2008 | 465,769 | 164,747 | 12,662 | 250,000 | 43,062 | 21,193 | 957,433 | ||||||||||||||||||||||||
Executive Vice | 2007 | 405,000 | 207,953 | 15,664 | 300,000 | 13,696 | 18,428 | 960,741 | ||||||||||||||||||||||||
President, Chief | 2006 | 342,308 | 242,166 | 17,152 | 420,000 | 14,245 | 17,075 | 1,052,946 | ||||||||||||||||||||||||
Financial Officer and Treasurer | ||||||||||||||||||||||||||||||||
Richard F. Connell | 2008 | 450,000 | 597,923 | 23,139 | 275,000 | 96,035 | 21,491 | 1,463,588 | ||||||||||||||||||||||||
Senior Executive | 2007 | 411,538 | 561,175 | 24,318 | 350,000 | 49,037 | 19,250 | 1,415,318 | ||||||||||||||||||||||||
Vice President and | 2006 | 375,385 | 327,237 | 18,351 | 485,000 | 44,406 | 17,755 | 1,268,134 | ||||||||||||||||||||||||
Chief Administrative Officer | ||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 2008 | 421,154 | 543,683 | 23,139 | 325,000 | 151,006 | 19,279 | 1,483,261 | ||||||||||||||||||||||||
Executive Vice | 2007 | 392,615 | 607,940 | 25,633 | 495,000 | 49,640 | 20,762 | 1,591,590 | ||||||||||||||||||||||||
President and Chief | 2006 | 347,077 | 338,280 | 20,047 | 400,000 | 59,761 | 18,263 | 1,183,428 | ||||||||||||||||||||||||
Investment Officer | ||||||||||||||||||||||||||||||||
Ronald J. Zaleski | 2008 | 395,385 | 218,379 | 14,470 | 200,000 | 54,649 | 17,990 | 900,873 | ||||||||||||||||||||||||
Executive Vice | 2007 | 367,385 | 183,074 | 15,746 | 275,021 | 19,157 | 21,869 | 882,252 | ||||||||||||||||||||||||
President and Chief | 2006 | 349,923 | 219,045 | 17,152 | 390,000 | 22,178 | 21,162 | 1,019,460 | ||||||||||||||||||||||||
Actuary |
(1) | The amounts in this column include portions of salary that certain named executive officers |
(2) |
| This column reflects amounts recognized as expense for the 2008 grants of performance-based restricted stock units, 2007 and |
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(3) | This column reflects amounts recognized as expense for the 2008, 2007, and 2006 option grants. The grant date fair value of |
Page 30
(4) | Amounts in this column include: (i) ACIP awards earned in 2008 and paid in March 2009 under the Cash Incentive Plan for Messrs. Murphy, Thatcher, Connell, and Zaleski, and for Mr. Guthrie, includes the annual incentive compensation payment earned in 2008 and paid in March 2009 under the IDCP; (ii) ACIP awards earned in 2007 and paid in 2008 under the Cash Incentive Plan for Messrs. Murphy, | |
(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 those used for |
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(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. Connell: $7,330 of | ||
• | 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. | ||
• | Mr. Zaleski: $10,237 of |
• | 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. 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. | ||
• | Mr. Zaleski: $16,716 of company matching contributions to Mr. Zaleski’s Deferred Compensation Plan, $1,415 for tax preparation services, and $3,738 of company matching contributions to Mr. Zaleski’s 401(k) plan. |
• | Mr. Murphy: $30,875 of company matching contributions to Mr. Murphy’s Deferred Compensation Plan, $1,200 for tax preparation services, and $10,075 of company matching contributions to Mr. Murphy’s 401(k) plan. | ||
• | Mr. Thatcher: $11,118 of company matching contributions to Mr. Thatcher’s Deferred Compensation Plan, and $10,075 of company matching contributions to Mr. Thatcher’s 401(k) plan. | ||
• | Mr. Connell: $10,400 of company matching contributions to Mr. Connell’s Deferred Compensation Plan, $1,016 for tax preparation services, and $10,075 of company matching contributions to Mr. Connell’s 401(k) plan. | ||
• | Mr. Guthrie: $7,762 of company matching contributions to Mr. Guthrie’s Deferred Compensation Plan, $938 for tax preparation services, $10,075 of company matching contributions to Mr. Guthrie’s 401(k) plan, and $504 representing the difference between the market rate of interest and the actual rate of interest on indebtedness to the company. | ||
• | Mr. Zaleski: $7,915 of company matching contributions to Mr. Zaleski’s Deferred Compensation Plan, and $10,075 of company matching contributions to Mr. Zaleski’s 401(k) plan. |
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| Individual Grants |
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| Potential Realizable Value | ||
Named Executive | Number of Securities Underlying | % of Total | Exercise | Expiration Date(4) | 5% ($) | 10% ($) |
Gregory E. Murphy | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Jamie Ochiltree, III | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Richard F. Connell | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Dale A. Thatcher | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Ronald J. Zaleski | 5,000 | 4.62 | 44.05 | 2/1/2015 | 11,013 | 22,025 |
Grant Date | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Equity | All Other | of Cash | ||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plan Awards(2) | Option | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||
Re- | Awards: | Exercise | Unit, | |||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future | stricted | Number of | or Base | Restricted | ||||||||||||||||||||||||||||||||||||||||||||||||
Payouts Under Non- | Stock | Securities | Price of | Stock, and | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plan | Awards | Underlying | Option | Option | ||||||||||||||||||||||||||||||||||||||||||||||||
Awards(1) | Cash Incentive Unit Awards(3) | (#) | Options | Awards | Awards(4) | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Minimum($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Maximum (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||||||||||||||||||||||
Gregory E. Murphy | 2/6/2008 | $ | 0 | $ | 1,800,000 | 2,760 | 5,520 | 11,040 | 42,583 | 4,154 | $ | 24.07 | $ | 1,600,111 | ||||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 2/6/2008 | $ | 0 | $ | 712,500 | 923 | 1,845 | 3,690 | 14,228 | 4,154 | $ | 24.07 | $ | 550,106 | ||||||||||||||||||||||||||||||||||||||
Richard F. Connell | 2/6/2008 | $ | 0 | $ | 787,500 | 966 | 1,932 | 3,864 | 14,903 | 4,154 | $ | 24.07 | $ | 575,053 | ||||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 2/6/2008 | $ | 0 | $ | 797,160 | 879 | 1,757 | 3,514 | 13,553 | 4,154 | $ | 24.07 | $ | 525,059 | ||||||||||||||||||||||||||||||||||||||
Ronald J. Zaleski | 2/6/2008 | $ | 0 | $ | 600,000 | 748 | 1,495 | 2,990 | 11,528 | 4,154 | $ | 24.07 | $ | 450,117 | ||||||||||||||||||||||||||||||||||||||
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(1) | For Messrs. Murphy, Thatcher, Connell, and Zaleski, amounts represent minimum and maximum potential ACIP award to | |
(2) | Performance-based cash incentive unit awards are granted under the Cash Incentive Plan, and performance-based restricted stock unit awards and stock option awards are granted under the Omnibus Stock Plan. For a description of the material terms of such awards, see pages 25-27 of the Compensation Discussion & Analysis. | |
(3) | The number of performance-based cash incentive units paid can range from 0-200%, and therefore, has the potential to pay $0. The threshold selected represents 35-44.9th percentile of the Cash Incentive Unit Peer Group; the target represents 45-54.9th percentile of the Cash Incentive Unit Peer Group; and the maximum represents greater than or | |
(4) | This column includes restricted stock |
Page 32
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | No. of | No. of | Option | Option | No. of Shares | Market Value | Equity | Equity | ||||||||||||||||||||||||
Securities | Securities | Exercise | Expiration | or Units of | of Shares or | Incentive Plan | Incentive Plan | |||||||||||||||||||||||||
Under- | Under- | Price | Date | Stock That | Units of Stock | Awards: No. of | Awards: | |||||||||||||||||||||||||
lying | lying | ($/Sh)(2) | Have Not | That Have Not | Unearned | Market or | ||||||||||||||||||||||||||
Unexer- | Unexer- | Vested | Vested | Shares, Units | Payout Value | |||||||||||||||||||||||||||
cised | cised | (#)(3)(4) | ($) | or Other Rights | of Unearned | |||||||||||||||||||||||||||
Options | Options (#) | That Have Not | Shares, Units | |||||||||||||||||||||||||||||
(#) | Unexer- | Vested | or Other | |||||||||||||||||||||||||||||
Exercis- | cisable(1) | Rights That | ||||||||||||||||||||||||||||||
able | Have Not | |||||||||||||||||||||||||||||||
Vested | ||||||||||||||||||||||||||||||||
($)(8) | ||||||||||||||||||||||||||||||||
Gregory | 21,062 | 11.1875 | 02/06/2011 | 43,569 | 999,036 | 10,642 | (5) | 975,982 | ||||||||||||||||||||||||
E. | 10,362 | 10.375 | 02/05/2012 | 4,438 | (6) | 371,044 | ||||||||||||||||||||||||||
Murphy | 11,394 | 11.6175 | 02/04/2013 | 5,520 | (7) | 1,127,127 | ||||||||||||||||||||||||||
10,000 | 17.395 | 02/03/2014 | ||||||||||||||||||||||||||||||
10,000 | 22.025 | 02/01/2015 | ||||||||||||||||||||||||||||||
2,320 | 1,160 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||
1,160 | 2,320 | 27.44 | 01/30/2017 | |||||||||||||||||||||||||||||
4,154 | 24.07 | 02/06/2018 | ||||||||||||||||||||||||||||||
Dale A. | 10,000 | 22.025 | 02/01/2015 | 19,419 | 445,272 | 3,142 | (5) | 288,154 | ||||||||||||||||||||||||
Thatcher | 2,320 | 1,160 | 28.74 | 01/30/2016 | 7,290 | 167,160 | 1,476 | (6) | 123,403 | |||||||||||||||||||||||
1,160 | 2,320 | 27.44 | 01/30/2017 | 16,128 | 369,815 | 1,845 | (7) | 376,730 | ||||||||||||||||||||||||
4,154 | 24.07 | 02/06/2018 | 14,557 | 333,802 | ||||||||||||||||||||||||||||
Richard | 10,000 | 22.025 | 02/01/2015 | 15,248 | 349,638 | 3,292 | (5) | 301,911 | ||||||||||||||||||||||||
F. | 2,320 | 1,160 | 28.74 | 01/30/2016 | 1,438 | (6) | 120,226 | |||||||||||||||||||||||||
Connell | 1,160 | 2,320 | 27.44 | 01/30/2017 | 1,932 | (7) | 394,494 | |||||||||||||||||||||||||
4,154 | 24.07 | 02/06/2018 | ||||||||||||||||||||||||||||||
Kerry A. | 4,000 | 7.594 | 02/03/2010 | 13,867 | 317,966 | 2,842 | (5) | 260,641 | ||||||||||||||||||||||||
Guthrie | 4,500 | 11.1875 | 02/06/2011 | 1,438 | (6) | 120,226 | ||||||||||||||||||||||||||
10,000 | 10.375 | 02/05/2012 | 1,757 | (7) | 358,762 | |||||||||||||||||||||||||||
12,000 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||
8,000 | 17.395 | 02/03/2014 | ||||||||||||||||||||||||||||||
10,000 | 22.025 | 02/01/2015 | ||||||||||||||||||||||||||||||
2,320 | 1,160 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||
1,160 | 2,320 | 27.44 | 01/30/2017 | |||||||||||||||||||||||||||||
4,154 | 24.07 | 02/06/2018 | ||||||||||||||||||||||||||||||
Ronald J. | 9,638 | 10.375 | 02/05/2012 | 19,419 | 445,272 | 2,842 | (5) | 260,641 | ||||||||||||||||||||||||
Zaleski | 8,606 | 11.6175 | 02/04/2013 | 6,594 | 151,200 | 1,263 | (6) | 105,595 | ||||||||||||||||||||||||
5,748 | 17.395 | 02/03/2014 | 13,804 | 316,526 | 1,495 | (7) | 305,263 | |||||||||||||||||||||||||
10,000 | 22.025 | 02/01/2015 | 11,795 | 270,457 | ||||||||||||||||||||||||||||
2,320 | 1,160 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||
1,160 | 2,320 | 27.44 | 01/30/2017 | |||||||||||||||||||||||||||||
4,154 | 24.07 | 02/06/2018 |
(1) | The options listed in this column vest ratably over three years beginning on the first anniversary of the date of grant. | |
(2) | The exercise price of option grants issued under the Omnibus Stock Plan is the closing market price on the date of the | |
(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 (“Retirement Income Plan”), 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 33
forfeited on February 1, 2009 and 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, 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. Connell, 2/7/2008; Mr. Guthrie, 9/11/2007; and Mr. Zaleski, 12/9/2009. Settlement of the 2007 cash incentive award will be made as soon as practicable in the 2010 calendar year, following the determination of the attainment of the applicable performance measures. | |
(7) | Reflects number of performance-based cash incentive units initially granted in 2008 to the named executive officers for the three-year performance period ending December 31, 2010. In the event of a termination of employment on or after an individual’s Early Retirement Date, as defined under the Retirement Income Plan, 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. Connell, 2/7/2008; Mr. Guthrie, 9/11/2007; and Mr. Zaleski, 12/9/2009. Settlement of the 2008 cash incentive award will be made as soon as practicable in the 2010 calendar year, following the determination of the attainment of the applicable performance measures. | |
(8) | The amounts in this column reflect: (i) the target 100% 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 | 6,832 | 88,720 | 48,516 | 1,152,255 | ||||||||||||
Dale A. Thatcher | 0 | 0 | 19,333 | 459,154 | ||||||||||||
Richard F. Connell | 0 | 0 | 60,689 | 1,452,383 | ||||||||||||
Kerry A. Guthrie | 4,000 | 59,940 | 15,718 | 373,303 | ||||||||||||
Ronald J. Zaleski | 0 | 0 | 19,333 | 459,154 |
|
| |
(1) | In the |
|
|
Page 34
Page 20
Selective
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 | 27.58 | 537,053 | 0 | |||||||||||||||
SERP | 27.58 | 1,610,320 | 0 | |||||||||||||||||
Dale A. Thatcher | No | Retirement Income Plan | 7.67 | 72,989 | 0 | |||||||||||||||
SERP | 7.67 | 47,177 | 0 | |||||||||||||||||
Richard F. Connell | Yes | Retirement Income Plan | 7.33 | 182,966 | 0 | |||||||||||||||
SERP | 7.33 | 138,617 | 0 | |||||||||||||||||
Kerry A. Guthrie | Yes | Retirement Income Plan | 20.00 | 330,599 | 0 | |||||||||||||||
SERP | 20.00 | 204,992 | 0 | |||||||||||||||||
Ronald J. Zaleski | No | Retirement Income Plan | 8.25 | 116,995 | 0 | |||||||||||||||
SERP | 8.25 | 72,273 | 0 |
(1) | The Retirement Income Plan imposes a one-year waiting period for plan participation. | |
(2) | Present value as of December 31, 2008 is calculated on the basis of normal retirement age of 65. A 6.24% discount rate is applied and the RP-2000 Mortality Table is used to calculate the values indicated. |
Page 35
Executive | Selective | Aggregate | Aggregate Balance | |||||||||||||||||
Contributions | Contributions in | Aggregate | Withdrawals/ | at December 31, | ||||||||||||||||
in 2008 | 2008 | Earnings in 2008 | Distributions | 2008 | ||||||||||||||||
Name | ($)(1) | ($)(2) | ($)(3) | ($) | ($)(4) | |||||||||||||||
Gregory E. Murphy | 47,500 | 30,875 | (359,070 | ) | 0 | 548,856 | ||||||||||||||
Dale A. Thatcher | 46,577 | 11,118 | (149,556 | ) | 0 | 180,449 | ||||||||||||||
Richard F. Connell | 212,147 | 10,400 | (715,185 | ) | 0 | 1,032,602 | ||||||||||||||
Kerry A. Guthrie | 148,906 | 7,762 | (363,725 | ) | 0 | 506,981 | ||||||||||||||
Ronald J. Zaleski | 246,059 | 7,915 | (930,042 | ) | 0 | 1,159,024 |
(1) | Amounts in this column attributable to 2008 salary deferred by the named executive officers are included in the Salary column of the Summary Compensation Table. Such amounts are as follows: Mr. Murphy, $47,500; Mr. Thatcher, $46,577; Mr. Connell, $124,643; Mr. Guthrie, $74,656; and Mr. Zaleski, $108,548. The balance of the amounts in this column, $87,504 for Mr. Connell, $74,250 for Mr. Guthrie, and $137,511 for Mr. Zaleski, are attributable to the deferral of a portion of their ACIP paid in March 2008. | |
(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 Aggregate Balance as of December 31, 2008 includes the following contributions of the named executive officers and SICA to the Deferred Compensation Plan which are included in the Summary Compensation Table |
• | For 2006: Mr. Murphy, $329,498; Mr. Thatcher, $42,927; Mr. Connell, $470,907; Mr. Guthrie, $36,561; and Mr. Zaleski, $376,604. | ||
• | For 2007: Mr. Murphy, $283,262; Mr. Thatcher, $56,069; Mr. Connell, $342,899; Mr. Guthrie, $185,990; and Mr. Zaleski, $303,659. | ||
• | For 2008: Mr. Murphy, $78,375; Mr. Thatcher, $57,695; Mr. Connell, $222,547; Mr. Guthrie, $156,668; and Mr. Zaleski, $253,974. |
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Term | Continuation of the Prior Agreements’ initial three (3) year term,(1) automatically renewed for additional one (1) year periods unless terminated by either party with written notice. | ||||||||||||
Compensation | Base salary.(2) | ||||||||||||
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 or SICA intended to benefit SICA’s employees generally. | ||||||||||||
Vacation and Reimbursements | Vacation time and reimbursements for ordinary travel and entertainment expenses in accordance with SICA’s policies. | ||||||||||||
Perquisites | Suitable offices, secretarial and other services, and other perquisites to which other executives of SICA 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(3) 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 SICA paid premiums. | ||||||||||||
• | Without Cause by SICA, Relocation of Office over Fifty (50) Miles (without Executive’s consent), Resignation for Good Reason by Executive: | ||||||||||||
• | Multiple(3) of: (i) Executive’s salary, plus (ii) average of three (3) most recent annual cash incentive payments. | ||||||||||||
• | Medical, dental, vision, disability and life insurance coverage in effect for Executive and dependents until the earlier of specified period of months(4) 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. | ||||||||||||
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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(5) 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 coverage in effect for Executive and dependents until the earlier of period of months(6) 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%. | |||||||||
• | Tax Gross-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 the Registrant or its subsidiaries for a period of two (2) years following the termination of the Employment Agreement. |
(1) | Initial three (3) year term ends on April 25, 2009 for Mr. Murphy and July 31, 2009 for Messrs. Connell, Thatcher, Guthrie, and Zaleski. | |
(2) | As of January 31, 2009, the annual base salaries for the Executives were as follows: Mr. Murphy, $900,000; Mr. Thatcher, $475,000; Mr. Connell, $450,000; Mr. Guthrie, $425,000; and Mr. Zaleski, $400,000. | |
(3) | For Mr. Murphy the multiple is 2; for Mr. Connell the multiple is 1.75; and for Messrs. Thatcher, Guthrie, and Zaleski the multiple is 1.5. | |
(4) | For Mr. Murphy the period is 24 months; for Mr. Connell, 21 months; and for Messrs. Thatcher, Guthrie, and Zaleski, 18 months. | |
(5) | For Mr. Murphy the multiple is 2.99; for Mr. Connell the multiple is 2.5; and for Messrs. Thatcher, Guthrie, and Zaleski the multiple is 2. | |
(6) | For Mr. Murphy the period is 36 months; and for Messrs. Connell, Thatcher, Guthrie, and Zaleski, 24 months. |
Resignation(1) | ||||||||||||||||||||
or Termination | Death or | Termination | Change in | |||||||||||||||||
For Cause | Retirement(2) | Disability | Without Cause | Control | ||||||||||||||||
Name | ($) | ($) | ($)(3) | ($)(4) | ($)(5) | |||||||||||||||
Gregory E. Murphy | — | 2,909,625 | 7,309,625 | 7,328,733 | 14,512,045 | |||||||||||||||
Dale A. Thatcher | — | 1,915,970 | 3,188,470 | 3,204,258 | 5,629,276 | |||||||||||||||
Richard F. Connell | — | 969,021 | 2,491,531 | 2,493,748 | 4,854,803 | |||||||||||||||
Kerry A. Guthrie | — | 878,213 | 2,138,213 | 2,141,650 | 3,882,278 | |||||||||||||||
Ronald J. Zaleski | — | 1,702,300 | 2,872,310 | 2,885,303 | 4,832,953 |
(1) | Other than a resignation for “Good Reason” | |
(2) | This column includes the value of unvested restricted stock and restricted stock units granted under the Omnibus Stock Plan and any related accrued DEUs, all of which shares would normally vest upon retirement for any participant in such plans and be payable upon the achievement of the specified performance goals applicable to each such award. Also included is the current intrinsic 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 applicable three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. |
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(3) | This column includes the value of unvested restricted stock and restricted stock units granted under the Omnibus Stock Plan and any related accrued DEUs, all of which shares would normally vest upon death or disability for any participant in such plans. The restricted stock granted would be payable upon the achievement of the specified performance goals applicable to each such award. The restricted stock units granted would, in the event of death, be payable immediately and, in the event of disability, upon the achievement of the specified performance goals applicable to each such award. This column also includes the severance payment provided for in each named executive officer’s Employment Agreement. Also included is the current intrinsic 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 applicable three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. Payments in this column will be reduced by life or disability insurance payments under policies with respect to which SICA paid premiums. | |
(4) | Also applicable to resignation for Good Reason. This column includes: (i) the value of unvested restricted stock and restricted stock units granted under the Omnibus Stock Plan and any related accrued DEUs, all of which shares would vest upon a termination Without Cause or for Good Reason and be payable upon the achievement of the specified performance goals applicable to each such award; (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 also includes the current intrinsic 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 applicable three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. | |
(5) | This column includes: (i) the value of unvested restricted stock and restricted stock units granted under the Omnibus Stock Plan and any related accrued DEUs payable upon the achievement of the specified performance goals applicable to each such award, 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, 2008 of $91.71 for the 2006 grant, $83.61 for the 2007 grant, and $102.09 for the 2008 grant, all of which would vest upon a change in control for any participant holding such awards under such plans. This column also includes the severance payment and the value of medical, dental, vision, disability, and life insurance coverages, as provided for in each named executive officer’s Employment Agreement. This column also includes the value of any tax gross-up payment necessary to offset any excise tax imposed for the payment and benefits disclosed in this column. |
Fees Earned or | ||||||||||||||||
Paid in Cash | Stock Awards | Option Awards | Total | |||||||||||||
Name | ($) | ($)(1) | ($)(2) | ($) | ||||||||||||
Paul D. Bauer | 34,500 | 82,555 | 32,524 | 149,579 | ||||||||||||
W. Marston Becker | 8,000 | 82,555 | 32,524 | 123,079 | ||||||||||||
A. David Brown | 13,500 | 82,555 | 32,524 | 128,579 | ||||||||||||
John C. Burville | 30,000 | 62,552 | 32,524 | 125,076 | ||||||||||||
William M. Kearns, Jr. | 29,000 | 82,555 | 32,524 | 144,079 | ||||||||||||
Joan M. Lamm-Tennant | 9,500 | 82,555 | 32,524 | 124,579 | ||||||||||||
S. Griffin McClellan III | 32,000 | 57,560 | 32,524 | 122,084 | ||||||||||||
Michael J. Morrissey | 26,670 | 17,202 | 0 | 43,872 | ||||||||||||
Ronald L. O’Kelley | 31,500 | 70,069 | 32,524 | 134,093 | ||||||||||||
John F. Rockart | 11,898 | 40,432 | 32,524 | 84,854 | ||||||||||||
William M. Rue | 15,500 | 82,555 | 32,524 | 130,579 | ||||||||||||
J. Brian Thebault | 32,500 | 82,555 | 32,524 | 147,079 |
(1) | This column reflects amounts recognized as expense for the 2008 grants of restricted stock units to directors, based on a grant date fair market value of $23.93, 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 2008 option grants to directors using the Black Scholes option valuation method in accordance with FAS 123R. The grant date fair value of each of these grants is $150,161. The aggregate number of options outstanding at December 31, 2008 for each director is as follows: Messrs. Bauer, Kearns, and Rue: 51,544; Messrs. Becker and Burville: 15,544; Mr. Brown: 45,544; Mr. McClellan: 27,544; Mr. O’Kelley: 21,544; Mr. Rockart: 33,544; and Mr. Thebault and Ms. Lamm-Tennant: 57,544. |
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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 | $ | 15,000 | ||
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.
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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 followingage 70, or separation from service as 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 compensation for the base period” (as defined 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.
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director.
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 2008, (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 2008 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.”
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Selective’s
2008. The following table summarizesSalary and Employee Benefits Committee (i) has reviewed and discussed the key policies, factors, and other compensation information that the SEBC used in determining executive compensation in 2005:
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Discussion and Analysis with management; and (ii) based on this review and discussion recommended to
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In 2005, the SEBC retained an independent compensation consultant to provide advice on executive compensation matters, includingBoard of Directors, and the base salary and incentive compensation levels for executive officers. The consulting firm furnishedBoard approved, 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, 2008 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,
Paul D. Bauer
John C. Burville
Michael J. Brian Thebault
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Performance Graph
Morrissey
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 madeSelective specifically incorporates the Compensation Committee Report by Selective under those statutes, the preceding Reportreference therein.
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INFORMATION ABOUT PROPOSAL 2
Approval of the Selective Insurance Group, Inc. Stock Purchase Plan for
Independent Insurance Agencies
Selective’ stockholders are being askedThe ESPP’s administrator has full and exclusive discretionary authority to approveconstrue, interpret and apply the Selective Insurance Group, Inc. Stock Purchase Plan for Independent Insurance Agencies (the “Agencies Stock Purchase Plan”). The purposeterms of the Agencies Stock Purchase PlanESPP, to determine eligibility, to adjudicate all disputed claims filed under the ESPP, and to adopt rules and regulations for carrying out the terms of the ESPP.
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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 andour common stock purchases will no longer be available under the Original Independent Agents Plan. If the Agencies Stock Purchase Planat various future dates, it 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 attachedpossible to this proxy statement as Appendix A.
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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 Agenciesexecutive officers and Eligible Personsother employees if the Agencies Stock Purchase PlanAmended ESPP is approved by stockholders because Selective cannot predict how manythe stockholders. Non-employee directors are not eligible to participate in the Amended ESPP.
Name or Position | Dollar Value | |||
Gregory E. Murphy | $ | 5,447 | ||
Dale A. Thatcher | $ | 3,609 | ||
Richard F. Connell | $ | 0 | ||
Kerry A. Guthrie | $ | 2,511 | ||
Ronald J. Zaleski | $ | 0 | ||
Executive Officer Group | $ | 11,567 | ||
All other Employees | $ | 619,717 |
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Ratification of Appointment of
Independent Public Accountants
2008.
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 | 2008 | 2007 | ||||||
Audit Fees | $ | 1,215,000 | $ | 1,319,500 | ||||
Audit-Related Fees(1) | $ | 497,150 | $ | 132,000 | ||||
Tax Fees | $ | 0 | $ | 0 | ||||
All Other Fees | $ | 0 | $ | 0 | ||||
TOTAL | $ | 1,712,150 | $ | 1,451,500 |
(1) | Audit-Related Fees for |
Page 3448
• | 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, 2008, included in the Annual Report on Form 10-K, with management, which represented to the Audit Committee that: (i) the financial statements were prepared in accordance with U.S. generally accepted accounting principles; 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 registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited financial statements in accordance with U.S. generally accepted accounting principles, 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 registered public accounting firm’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 the applicable requirements of the Public Company Accounting Oversight Board. |
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26, 2009.
A
29, 2010.
Exchange Act.
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 such business at the annual meeting; | ||
• | any material interest of the stockholder in such 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.
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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.
* * * * * * * *
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Michael H. Lanza
Senior Vice President, General Counsel
and
26, 2009
Branchville, New Jersey
Page 3653
((2009)
Amended and Restated Effective July 1, 2006)2009
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2.1. | “Account” means a bookkeeping account established by the Company with respect to the funds that are accumulated for each individual Participant as a result of payroll deductions for the purpose of purchasing Shares under the Plan. The funds that are allocated to a Participant’s Account may be commingled with the general funds of the Company. | |
2.2. | Acquisition” means a merger or consolidation of Selective with and into another person or the sale, transfer, or other disposition of all or substantially all of the assets of Selective to one or more persons (other than any wholly-owned subsidiary Selective) in a single transaction or series of related transactions. | |
2.3. | “Base Pay” means a Participant’s regular annualized base salary or regular straight time base earnings, excluding payments for overtime, bonuses and other incentive compensation, commissions, pension, welfare and fringe benefits, and any other special, irregular or infrequent benefits or remuneration; provided, however, that Base Pay shall include remuneration paid by the Company for paid-time off (bank days) used while in the employ of the Company, short-term disability wage continuation payments, military leave payments, military leave differential payments and workers’ compensation wage continuation payments, as well as any salary deferral contributions made by the Participant to the Selective Insurance Retirement Savings Plan, the Selective Insurance Company of America “Selections” Plan, and the Selective Insurance Company of America Deferred Compensation Plan. | |
2.4. | “Board” means the Board of Directors of Selective. | |
2.5. | “Code” means the Internal Revenue Code of 1986, as amended. | |
2.6. | “Commencement Date” with respect to an Option means the first day of the Offering Period in which such Option was granted. | |
2.7. | “Committee” means the Salary and Employee Benefits Committee of the Board. |
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2.8. | “Company” means, collectively, Selective, Selective Insurance Company of America, Selective HR Solutions VI, Inc., and any Parent or other Subsidiary of Selective which adopts the Plan as a participating employer with the consent of and subject to any conditions imposed by Selective. Notwithstanding the foregoing, the Committee may exclude Selective Insurance Company of America, Selective HR Solutions, Inc. and/or any other Parent or Subsidiary of Selective adopting the Plan from participation in the Plan with respect to any Offering Period by written action prior to the commencement of such Offering Period. | |
2.9. | “Employee” means any common law employee of the Company, including an officer or a member of the Board of Directors of the Company, who is customarily employed by the Company more than five (5) months in a calendar year, and who (i) is regularly scheduled to work on a full-time basis; (ii) is regularly scheduled to work on a part-time basis; or (iii) is not regularly scheduled to work on either a full-time or part-time basis, but is customarily employed more than twenty (20) hours per week, all as set forth in the books and records of the Company. | |
2.10. | “Exercise Date” with respect to any Option means the last day of the Offering Period in which such Option was granted. | |
2.11. | “Fair Market Value” of the Shares on any given date shall be calculated as follows: (i) if the Shares are listed on a national securities exchange or traded on the NASDAQ National Market or the NASDAQ SmallCap Market and sale prices are regularly reported for the Shares, then the Fair Market Value shall be the closing selling price for a Share reported on the applicable composite tape or other comparable reporting system on the applicable date, or, if the applicable date is not a trading day, on the most recent trading day immediately prior to the applicable date; or (ii) if closing selling prices are not regularly reported for the Shares as described in clause (i) above but bid and asked prices for the Shares are regularly reported, then the Fair Market Value shall be the arithmetic mean between the closing or last bid and asked prices for the Shares on the applicable date or, if the applicable date is not a trading day, on the most recent trading day immediately prior to the applicable date; or (iii) if prices are not regularly reported for the Shares as described in clause (i) or (ii) above, then the Fair Market Value shall be such value as the Committee in good faith determines. | |
2.12. | “Offering Period” means any of the successive periods of time not to exceed one (1) year used for purposes of purchasing Shares by Participants under the Plan, as described in Section 4.1. | |
2.13. | “Option” means the right to purchase Shares under the Plan. | |
2.14. | “Parent” means a parent, as that term is defined under Section 424(e) of the Code. | |
2.15. | “Participant” means an Employee who has elected to participate in the Plan in accordance with Article V. | |
2.16. | “Plan” means this Selective Insurance Group, Inc. Employee Stock Purchase Plan (2009), as amended from time to time. | |
2.17. | “Selective” means Selective Insurance Group, Inc., or any successor. | |
2.18. | “Shares” mean shares of common stock of Selective, par value $2.00 per share, subject to adjustments which may be made in accordance with Article XV. | |
2.19. | “Subsidiary” means a subsidiary, as that term is defined under Section 424(f) of the Code. |
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3.1. | Any person who is an Employee during the enrollment period established by the Committee for an Offering Period and as of the first day of an Offering Period, shall be eligible to participate in the Plan with respect to such Offering Period, subject to the limitations imposed by Section 423 of the Code. | |
3.2. | Notwithstanding any provision of the Plan to the contrary, no Employee shall be granted an Option: |
(i) | if such Employee, immediately after the Option is granted, owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of Selective or of any Parent or Subsidiary of Selective (taking into account stock which would be attributed to such Employee pursuant to Section 424(d) of the Code); or | ||
(ii) | which gives the Employee the right to purchase stock under all “employee stock purchase plans” (within the meaning of Section 423 of the Code) of Selective and its Parents and Subsidiaries, including the Plan, to accrue at a rate which exceeds $25,000 of the Fair Market Value of such stock (determined as of the Commencement Date of the Offering Period to which the Option relates) for each calendar year in which such Option is outstanding at any time. The term “accrue” shall be interpreted in accordance with Section 423(b)(8) of the Code and the regulations thereunder. |
4.1. | Shares shall be offered for purchase under the Plan through a series of successive or non-overlapping Offering Periods until such time as: (i) the maximum number of Shares available for issuance under the Plan shall have been purchased; or (ii) the Plan shall have been sooner terminated. Each Offering Period shall be of such duration (not to exceed twelve (12) months) and commence on such dates as determined by the Committee prior to the Commencement Date of such Offering Period. At any time and from time to time, the Committee may change the duration and/or the frequency of Offering Periods or suspend operation of the Plan with respect to Offering Periods not yet commenced. Unless otherwise determined by the Committee from time to time, an Offering Period shall commence on the first business day in January and July of each year and end on the last business day in the following June and December, respectively. | |
4.2. | The Committee may at any time suspend any Offering Period if required by law or if the Committee shall deem such suspension to be in the best interests of the Company. |
5.1. | Any person who is an Employee during the enrollment period established by the Committee for an Offering Period and as of the Commencement Date of an Offering Period, may become a Participant in the Plan for such Offering Period by enrolling in the Plan and authorizing payroll deductions prior to the Commencement Date of such Offering Period in the manner provided by the Committee from time to time. | |
5.2. | Participation in one Offering Period under the Plan shall neither limit, nor require, participation in any other Offering Period. | |
5.3. | Participation in the Plan shall be voluntary. |
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6.1. | Upon enrollment in the Plan, a Participant shall authorize the Company to make payroll deductions of a whole percentage of his Base Pay each payroll period at a rate not in excess of ten percent (10%) of such payroll period Base Pay. The Committee may, from time, change the limitations on the maximum and/or minimum percentage or amount of payroll deductions that may be made by Participants; provided, however, that, except as provided in Articles XII and XV, a Participant’s existing rights under any Offering Period that has already commenced may not be adversely affected by such change. | |
6.2. | Payroll deductions for a Participant shall commence with the first regular payroll date occurring on or after the Commencement Date of the Offering Period for which a payroll deduction authorization has been filed. Payroll deductions shall end on the last payroll date that is on or prior to the Exercise Date, unless the Participant has discontinued his participation in the Plan with respect to that Offering Period earlier as provided in Article IX. | |
6.3. | At the conclusion of each Offering Period, the Company shall automatically re-enroll each Participant in the next Offering Period, and payroll deductions shall continue at the rate selected by the Participant in his payroll deduction authorization for the prior Offering Period, unless the Participant discontinues his participation in the Plan earlier as provided in Article IX, or increases or reduces his contribution percentage with respect to, and prior to the Commencement Date of, such subsequent Offering Period. | |
6.4. | All payroll deductions made for a Participant shall be credited to a payroll deduction Account in the name of the Participant under the Plan. The Participant may not make any separate cash payments into such Account nor may payment for Shares be made from other than the Participant’s Account. | |
6.5. | A Participant may elect to discontinue his participation in the Plan and terminate his payroll deduction authorization as provided in Article IX, but may not alter the amount or rate of payroll deductions during an Offering Period or make any other change during an Offering Period. | |
6.6. | No interest will be paid or allowed in respect of any payroll deduction amount under any circumstances. | |
6.7. | Notwithstanding anything in this Article VI to the contrary, to the extent necessary to comply with Section 423(b)(3) or Section 423(b)(8) of the Code and Section 3.2 herein, a Participant may be excluded from participating in an Offering Period, or a Participant’s payroll deductions may be limited, decreased or terminated during any Offering Period. Except to the extent required to ensure compliance with Section 423(b)(3) or Section 423(b)(8) of the Code and Section 3.2 herein, payroll deductions limited, decreased or terminated pursuant to this Section 6.7 shall re-commence automatically at the rate provided in such Participant’s payroll deduction authorization at the beginning of the next Offering Period, unless terminated by the Participant as provided in Article IX or modified by the Participant with respect to the next Offering Period. | |
6.8. | Notwithstanding anything in this Article VI to the contrary, in the event that an Employee who is a participant in any pension plan maintained by the Company or any of its affiliates which includes a cash or deferred arrangement pursuant to Section 401(k) of the Code takes a hardship distribution, within the meaning of Section 401(k)(2)(B)(i)(IV) of the Code, from such plan, the Committee may decrease the Employee’s payroll deductions under the Plan to zero percent (0%) during an Offering Period, and/or may restrict the Employee from participating in the Plan with respect to a new Offering Period, if and to the extent necessary to satisfy the requirements of Treasury Regulation Section 1.401(k)-1(d)(3)(iv)(E)(2). |
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7.1. | Options granted pursuant to the Plan shall be evidenced by agreements, if any, in such form, including electronic form, as the Committee shall require, and shall comply with and be subject to the terms and conditions set forth in this Article VII. All Employees shall have the same rights and privileges under the Plan. | |
7.2. | On the Commencement Date of each Offering Period, Selective shall grant to each Participant in such Offering Period an Option to purchase as many full Shares as may be purchased by such Participant with the amount credited to his Account at the Exercise Date for such Option, subject to the limitations of Section 7.4. A Participant shall be granted a separate purchase right for each Offering Period in which he participates. | |
7.3. | The Option price of the Shares shall be the lower of: |
(i) | 85% of the Fair Market Value of the Shares on the Commencement Date of the Offering Period; and | ||
(ii) | 85% of the Fair Market Value of the Shares on the Exercise Date for the Offering Period. |
7.4. | In no event may the number of Shares purchased by any Participant during an Offering Period exceed 2,400 shares, as the same may be adjusted pursuant to Article XV. |
8.1. | Unless a Participant has received a refund of or withdrawn the balance of his Account pursuant to Article IX, his Option for the purchase of Shares will be exercised automatically on the Exercise Date, and the maximum number of Shares shall be purchased at the applicable Option price with the accumulated payroll deductions in his Account. | |
8.2. | Any balance remaining in any Participant’s Account at the Exercise Date of an Offering Period equaling less than the sum required to purchase a full Share shall be used to purchase fractional Shares. |
9.1. | Upon termination of a Participant’s employment with the Company for any reason, including death, prior to an Exercise Date for an Offering Period, the payroll deductions credited to the Participant’s Account for such Offering Period shall be returned to him (or, in the event of the Participant’s death, to his estate) in cash, without interest. | |
9.2. | Subject to rules and procedures adopted by the Committee, a Participant may withdraw all but not less than all of the balance in his Account and thereby withdraw from participation in the Plan with respect to an Offering Period by giving written notice to the Committee no later than fourteen (14) business days prior to the last day of the Offering Period. Upon receipt of such notice: (a) the Participant’s Option for the Offering Period shall automatically terminate; (b) no further contributions to his Account shall be permitted for such Offering Period; and (c) as soon as administratively practicable, the Company shall refund to the Participant the funds that remain in the Participant’s Account, without interest. | |
9.3. | An Employee who has previously withdrawn from the Plan may re-enter by complying with the requirements of Article V. Upon compliance with such requirements, an Employee’s re- |
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entry into the Plan will become effective on the Commencement Date of the next Offering Period following the date the Employee complies with Article V with respect to the re-entry. |
10.1. | The Shares to be sold to Participants under this amended and restated Plan may, at the election of the Board, be either treasury Shares, Shares originally issued for such purpose, or issued and outstanding Shares purchased for such purpose in the open market. Subject to adjustment pursuant to Article XV, the aggregate number of Shares available for issuance under the Plan shall be the lesser of: (i) 4,500,000; and (ii) (A) 1,500,000plus(B) 2,882,890;plus(C) the number of Shares issued to Participants on the exercise of Options for the Offering Period ending June 30, 2009. For the avoidance of doubt, the aggregate number of Shares remaining available for issuance under the Plan with respect to Offering Periods commencing on or after July 1, 2009 shall be 1,500,000 (subject to adjustment pursuant to Article XV). | |
10.2. | If for any reason any Option under the Plan terminates or is cancelled in whole or in part, Shares that may have been purchased upon the exercise of such Option may be made subject to another Option under the Plan. | |
10.3. | If, on any date, the total number of Shares for which outstanding Options have been granted exceeds the number of Shares then available under this Article X after deduction of all Shares that have been purchased under the Plan, the Committee shall make a pro-rata allocation of the Shares that remain available in as nearly a uniform manner as shall be practicable and as it shall determine, in its sole judgment, to be equitable. In such event, the number of Shares each Participant may purchase shall be reduced and the Committee shall give to each Participant a written notice of such reduction. | |
10.4. | Selective shall deliver, or cause to be delivered, to each Participant, as promptly as practicable after any Exercise Date, a statement indicating the number of Shares, including any fractional Shares, purchased upon exercise of his Option that are being held in an account established by Selective for and in the Participant’s name. Notwithstanding the foregoing, the Committee may, in its sole discretion, issue certificates for Shares to a Participant, subject to payment by the Participant of such reasonable charge as the Committee may impose. | |
10.5. | A Participant will have no interest in Shares covered by his Option, and will have no rights as a stockholder and no voting rights with respect to any such Shares, until such Option has been exercised and such Shares issued to the Participant. |
11.1. | The Plan shall be administered by the Salary and Benefits Committee of Selective Insurance Group, Inc. For any period during which no such committee is in existence, “Committee” shall mean the Board, and all authority and responsibility assigned to the Committee under the Plan shall be exercised, if at all, by the Board. | |
11.2. | The Committee shall be vested with full and exclusive discretionary authority to administer the Plan, to construe, interpret and apply its terms, to determine eligibility to participate in the Plan, to adjudicate all disputed claims made with respect to the Plan and to adopt such rules and regulations as it deems necessary to administer the Plan. Without limiting the generality of the foregoing, the Committee may, at any time, change the timing of an Offering Period, limit the frequency and/or number of changes in the amount withheld during an Offering Period, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed |
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payroll deduction authorizations, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with amounts withheld from the Participant’s Base Pay, and establish such other limitations or procedures as the Committee determines in its sole discretion advisable which are consistent with the Plan. | ||
11.3. | Any determination, decision, or action of the Committee with respect to the construction, interpretation, administration, or application of the Plan, any Option agreement entered into pursuant to the Plan or any other forms or procedures used in connection with or relating to the Plan shall be final, conclusive, and binding on all persons having or claiming any interest under this Plan. | |
11.4. | The Committee may, at any time and in its sole discretion by action in writing, delegate to any individual, committee or entity any of its powers and responsibilities under the Plan. Without limiting the generality of the foregoing, the Committee may appoint an employee or employees of the Company and delegate to such employee(s) its authority to administer the day-to-day operations of the Plan. | |
11.5. | In addition to such other rights of indemnification as they may have as directors, officers, employees or members of the Committee, the members of the Committee shall be indemnified by Selective against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted thereunder, and against all amounts paid by them, or any of them, in settlement thereof (provided such settlement is approved by independent legal counsel selected by Selective) or in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee member is liable for negligence or misconduct in the performance of his duties; provided, that within 60 days after institution of any such action, suit or proceeding a Committee member shall in writing offer the Company the opportunity, at its own expenses, to handle and defend the same. |
12.1. | The Board may amend the Plan at any time in such respects as it shall deem advisable; provided, however, that stockholder approval will be required for any amendment that will increase the total number of Shares as to which Options may be granted under the Plan or for any amendment which, without such stockholder approval, would cause this Plan to fail to continue to qualify as an “employee stock purchase plan” under Section 423 of the Code. | |
12.2 | The Board may suspend or terminate this Plan at any time. Upon a suspension or termination of the Plan while an Offering Period is in progress, the Committee shall either shorten such Offering Period by setting a new Exercise Date before the date of such suspension or termination of the Plan, or shall refund to each Participant the balance, if any, of each Participant’s Account, without interest. | |
12.3 | Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected, the Committee, as administrator of the Plan, shall be entitled to make changes to the Offering Periods and other terms of participation in the Plan permitted by Article 11, including, without limitation, Section 11.2. |
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13.1. | Neither the Options, the payroll deductions credited to a Participant’s Account, nor any rights with regard to the exercise of an Option or the receipt of Shares under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by a Participant, other than by will or the laws of descent or distribution, and any such attempted assignment, transfer, pledge, or other disposition shall be null and void and without effect, but Selective may treat such act as an election to withdraw from the Plan in accordance with Article IX. No Option may be exercised during a Participant’s lifetime by any person other than the Participant. | |
13.2. | Unless otherwise determined by the Committee, Shares purchased under the Plan may be registered only in the name of the Participant, or, if such Participant so indicates on his payroll deduction authorization form, in his name jointly with a member of his family, with right of survivorship. A Participant who is a resident of a jurisdiction which does not recognize such a joint tenancy may have Shares registered in the Participant’s name as tenant in common with a member of the Participant’s family, without right of survivorship. |
14.1. | All payroll deductions received or held by the Company under this Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to, and shall not, segregate such payroll deductions. On each Exercise Date, sufficient funds to acquire the number of Shares being purchased by the Participants employed by each Company shall be transferred to Selective by the Company which employs such Participants. |
15.1. | Subject to any required action by the stockholders of Selective, the number of Shares covered by each Option under the Plan which has not yet been exercised and the number of Shares which have been authorized for issuance under the Plan but have not yet been placed under Option (collectively, the “Reserves”), as well as the maximum number of Shares which may be purchased by a Participant in an Offering Period, the number of Shares set forth in Sections 7.4 and 10.1 above, and the price per Share covered by each Option which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of the issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares (including any such change in the number of Shares effected in connection with a change in domicile of Selective), or any other increase or decrease in the number of Shares effected without receipt of consideration by Selective; provided however,that conversion of any convertible securities of Selective shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. | |
15.2. | In the event of a dissolution or liquidation of Selective, the Plan and the Offering Period then in progress will terminate immediately prior to the consummation of such action. Unless otherwise provided by the Committee, any outstanding Option granted with respect to the Offering Period then in progress will terminate immediately prior to the consummation of such action, and the entire amount credited to each Participant’s Account will be paid to him or her in cash without interest. | |
15.3. | In the event of an Acquisition, each Option outstanding under the Plan shall be assumed or an equivalent option shall be substituted by the successor corporation or a Parent or Subsidiary of such successor corporation. In the event that the successor corporation or |
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Parent or Subsidiary of such successor corporation refuses to assume or substitute for outstanding Options, then the Committee shall provide for either (i) or (ii) below to occur: |
(i) | The Offering Period then in progress shall be shortened and a new Exercise Date shall be set with respect to such Offering (the “New Exercise Date”), as of which date the Offering Period then in progress will terminate. The New Exercise Date shall be on or before the date of consummation of the transaction and the Committee shall notify each Participant in writing, at least ten (10) days prior to the New Exercise Date, that the Exercise Date for his Option has been changed to the New Exercise Date and that his Option will be exercised automatically on the New Exercise Date, unless prior to such date he has withdrawn from the Plan with respect to such Offering Period as provided in Article IX. | ||
(ii) | The Offering Period then in progress will terminate immediately prior to the consummation of the Acquisition, any outstanding Option granted with respect to the Offering Period then in progress will terminate, and the entire amount credited to each Participant’s Account will be paid to him or her in cash without interest. |
For purposes of this Article XV, an Option granted under the Plan shall be deemed to be assumed, without limitation, if, at the time of issuance of the stock or other consideration upon an Acquisition, each holder of an Option would be entitled to receive upon exercise of the Option the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to the transaction, the holder of the number of Shares covered by the Option at such time (after giving effect to any adjustments in the number of Shares covered by the Option as provided for in this Article XV); provided, however,that if the consideration received in the transaction is not solely common stock of the successor corporation or its Parent, the Committee may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the Option to be solely common stock of the successor corporation or its Parent equal in Fair Market Value to the per Share consideration received by holders of Shares in the transaction. | ||
15.4. | The Committee shall make an appropriate and proportionate adjustment, as determined in the exercise of its sole discretion, to the Reserves, as well as the price per Share and the kind of shares covered by each outstanding Option, in the event that Selective effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of Shares, and in the event of a merger or other consolidation of Selective with or into any other corporation. |
16.1. | Shares shall not be issued with respect to an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. | |
16.2. | As a condition to the exercise of an Option, the Committee may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Committee, such a representation is required by any of the aforementioned applicable provisions of law. |
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17.1. | A Participant may, if and to the extent permitted by the Committee, file a written designation of a beneficiary who is to receive any Shares and cash, if any, from the participant’s Account under the Plan in the event of such Participant’s death subsequent to the end of an Offering Period but prior to delivery to him of such Shares and cash. Any such beneficiary shall also be entitled to receive any cash from the Participant’s Account under the Plan in the event of such Participant’s death during an Offering Period. | |
17.2. | Such designation of beneficiary may be changed by the Participant at any time by written notice to the Committee. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Committee shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Committee), the Committee, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Committee, then to such other person as the Committee may designate. |
18.1. | If a Participant disposes of any Shares received by him pursuant to an Option within two (2) years after the Commencement Date or within one (1) year after the Exercise Date of the Offering Period to which such Option relates, the Participant shall notify Selective in writing within 30 days after the date of any such disposition, and shall provide such details of the disposition, including the date of the disposition, as the Committee may require. | |
18.2. | No provision of the Plan or transaction hereunder shall confer upon any Participant any right to be employed by the Company or any subsidiary or affiliate thereof, or to interfere in any way with the right of the Company to increase or decrease the amount of any compensation payable to such Participant. | |
18.3. | Each Participant who purchases Shares under the Plan shall thereby be deemed to have agreed that the Company shall be entitled to withhold, from any other amounts that may be payable to the Participant at or around the time of the purchase, such federal, state, local and foreign income, employment and other taxes which may be required to be withheld under applicable laws. In lieu of such withholding, the Company may require the Participant to remit such taxes to the Company as a condition of the purchase. | |
18.4. | In the event that any provision of the Plan shall be declared illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of the Plan but shall be fully severable, and the Plan shall be construed and enforced as if such illegal or invalid provision had never been a part of the Plan. | |
18.5. | The validity, construction, and effect of the Plan shall be determined in accordance with the laws of the State of New Jersey, without giving effect to principles of conflicts of laws, to the extent not preempted by federal law. | |
18.6. | Whenever used in the Plan, unless the context otherwise indicates, words in the masculine will be deemed to include the feminine, and the singular will be deemed to include the plural. |
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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:
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“Written Premiums” include all written premiums, less cancellations and returns, recorded by the Company and its insurance subsidiaries, but do not include:
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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.
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Each 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:
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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.
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The 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; and
a 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 properly
completed 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.
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Shares 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; and
the 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 Avenue
Branchville, New Jersey 07890
Attention: Accounts
Properly 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 forward
enrollment/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.
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The 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.
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Shares 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.
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The 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.
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The 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.
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If 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.
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The 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; and
make 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 Services
P.O. Box 64854
St. Paul, Minnesota 55164-0854
Telephone 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.
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Either 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.
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Rights 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.
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Nothing 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.
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Except 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.
Directions to Principal Offices
40 Wantage Avenue
Branchville, NJ 07890-1000
11:29, 2009
3:00 a.m.p.m.
Branchville, New Jersey 07890
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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 29, 2009. | ||||
The undersigned, a stockholder of Selective Insurance Group, Inc. (the “Company”), hereby constitutes and appoints John C. Burville and Ronald L. O’Kelley 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 Wednesday, April 29, 2009 at 3:00 p.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.
ADDRESS BLOCK | COMPANY # | |||||||
Vote by Internet, Telephone, or Mail 24 Hours a Day, 7 Days a Week | ||||||||
Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, and returned your proxy card. | ||||||||
INTERNET– www.eproxy.com/sigi Use the Internet to vote your proxy until 12:00 p.m. (CT) on April 28, 2009. Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available and follow the instructions to obtain your records and create an electronic ballot. | ||||||||
PHONE–1-800-560-1965 Use a touch-tone telephone to vote your proxy until 12:00 p.m. (CT) on April 28, 2009. Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available and follow the instructions. | ||||||||
MAIL– 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. | ||||||||
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. |
There are three ways to vote your proxy
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
VOTE BY PHONE — TOLL FREE — 1-800-560-1965 — QUICK *** EASY *** IMMEDIATE
Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week, until 12:00 noon (CT) on April 25, 2006.
Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions the voice provides you.
VOTE BY INTERNET — http://www.eproxy.com/sigi/ — QUICK *** EASY *** IMMEDIATE
Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 12:00 noon (CT) on April 25, 2006.
Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions to obtain your records and create an electronic ballot.
VOTE BY MAIL
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.
TO CHANGE YOUR VOTE
You may revoke your proxy by giving proper written notice of revocation to the Corporate Secretary of the Company before your proxy is exercised. Any subsequent timely and valid vote, by any means, will change your prior vote. For example, if you voted by telephone, a subsequent Internet vote will change your vote. The last vote received before 12:00 noon (CT), on April 25, 2006,28, 2009, will be the one counted. You may also change your vote by voting in person at the Annual Meeting.
Meeting of Stockholders.
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
The Board of Directors Recommends a Vote FOR Items 1, 2, 3, and 4. | |||||||||||||||||
1. | Election of three (3) Class II directors | 01 A. David Brown | o | Vote FOR | o | Vote WITHHELD | |||||||||||
for a term expiring in 2012: | 02 | all nominees | from all nominees | ||||||||||||||
03 J. Brian Thebault |
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(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.) |
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2. | Approve the amended and restated Selective Insurance Group, Inc. Employee Stock Purchase Plan |
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| o | Against | oAbstain | |||||||||
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3. | Ratify the appointment of KPMG LLP as independent public accountants for the fiscal year ending December 31, |
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| o | Against | oAbstain | |||||||||
4. | Stockholder proposal relating to the declassification of the Board of Directors. | o | For | o | Against | o Abstain | |||||||||||
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL. | |||||||||||||||||
Date | |||||||||||||||||
Address Change? Mark Box o Indicate changes below: | |||||||||||||||||
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. | |||||||||||||||||
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box o Indicate changes below:
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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.