SECURITIES AND EXCHANGE COMMISSION
Exchange Act of 1934
Filed by a Party other than the Registranto
|
|
|
|
|
|
|
|
|
|
SELECTIVE INSURANCE GROUP, INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
|
|
|
|
| Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transactions applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
Selective Insurance Group, Inc. 40 Wantage Avenue Branchville, New Jersey 07890
|
AND PROXY STATEMENT
1. | Elect |
2. | Ratify the appointment of KPMG LLP as independent public accountants for the fiscal year ending December 31, |
Gregory E. Murphy20062007 Annual Report to Stockholders. At the meeting, we will be making a brief presentation on operations and we will offer time for your comments and questions.13, 20075, 2008 are entitled to notice of and to vote at the meeting and any adjournment of it. A quorum is a majority of outstanding shares. YOUR VOTE IS IMPORTANT. WE URGE YOU TO VOTE YOUR SHARES BY (1) CALLING THE TOLL-FREE TELEPHONE NUMBER LISTED ON THE PROXY CARD; (2) ACCESSING THE INTERNET WEBSITE LISTED ON THE PROXY CARD; OR (3) COMPLETING, DATING, AND SIGNING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE ENCLOSED ENVELOPE. YOUR PROXY MAY BE REVOKED AT ANY TIME, AS DESCRIBED IN THE PROXY STATEMENT, PRIOR TO THE TIME IT IS VOTED AT THE 20072008 ANNUAL MEETING.
Chairman of the Board, President and Chief Executive OfficerSenior
Executive Vice President, General Counsel and Corporate Secretary
|
| |||
1 | ||||
1 | ||||
2 | ||||
2 | ||||
3 | ||||
5 | ||||
| 10 | |||
| 11 | |||
| 11 | |||
| 13 | |||
| 13 | |||
| 14 | |||
17 | ||||
18 | ||||
| 18 | |||
| 28 | |||
| 29 | |||
| 31 | |||
| 32 | |||
| 32 | |||
| 33 | |||
| 35 | |||
| 37 | |||
| 39 | |||
| 39 | |||
| 40 | |||
| 40 | |||
| 41 | |||
| 42 | |||
| 43 |
TO BE HELD APRIL 24, 20072008
_________________________
1 On January 30, 2007, Selective’s Board of Directors declared a two-for-one stock split effective February 20, 2007 for all stockholders of record as of the close of business on February 13, 2007. All prices and share numbers contained in this Proxy Statement have been adjusted to reflect the stock split.
Page 1
PROPOSAL 1. | ELECTION OF DIRECTORS |
RONALD L. O’KELLEY. PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS 2008. 40. Page 2THREEFIVE NOMINATED CLASS IIII DIRECTORS: W. MARSTON BECKER, GREGORY E. MURPHY,PAUL D. BAUER, JOHN C. BURVILLE, JOAN M. LAMM-TENNANT, MICHAEL J. MORRISSEY, AND WILLIAM M. RUE.•§Vote in favor of all the nominees; •§Withhold your votes as to all nominees; or;or•§Withhold your votes as to specific nominees. 2007.35.•§Vote in favor of Proposal 2; •§Vote against Proposal 2; or •§Abstain from voting. Inc. (“NASDAQ”) and United States Securities and Exchange Commission (“SEC”) rules and regulations, to vote on such matters according to their best judgment.3742 for next year’s meeting.
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 and 2. If any other matters arise during the meeting which require a vote, the named proxies will exercise their discretion, to the extent permitted by applicable law and NASDAQ and SEC rules and regulations.
| If we receive your signed proxy card, but you do not give voting instructions, the named proxies will vote your shares FOR Proposals 1 and 2. If any other matters arise during the meeting which require a vote, the named proxies will exercise their discretion, to the extent permitted by applicable law and NASDAQ and SEC rules and regulations. | ||
2. | BY TELEPHONE. Call the toll-free number on your proxy card to vote by telephone. Follow the instructions on your proxy card and the voice prompts. IF YOU VOTE BY TELEPHONE, YOU DO NOT NEED TO RETURN YOUR PROXY CARD. |
3. | BY INTERNET. Go to the website listed on your proxy card to vote through the Internet. Follow the instructions on your proxy card and the website. If you vote through the Internet, you may incur telephone and/or Internet access charges from your service providers. IF YOU VOTE BY INTERNET, YOU DO NOT NEED TO RETURN YOUR PROXY CARD. |
4. | IN PERSON. Attend the Annual Meeting, or send a personal representative with an appropriate proxy, in order to vote. |
Page 3
Page 4
The Board has set the number of members of the Board at twelve (12). John F. Rockart, having surpassed the eligibility age for election as a director, will retire from the Board on April 24, 2008, following the election of directors at the 2008 Annual Meeting of Stockholders. The Board thanks Mr. Rockart for his many years of service.
Ronald L. O’Kelley (the incumbent directors) and Michael J. Morrissey. Mr. Morrissey was recommended to the Corporate Governance and Nominating Committee by non-management directors of Selective.
CLASS | Directors |
| • Retired Financial Executive. | |
Independent Director, 1998 | • Executive Vice President and Chief Financial Officer of Tops Markets, Inc., 1970 to 1993. | |
• Director, Rosina Holdings Inc., since 2002. | ||
• Director, R.P. Adams Co., 1991 to 2004. | ||
• Director, IMC, Inc., 1995 to 2000. | ||
• Director, Catholic Health System of Western New York, since 1998. | ||
• Co-founder and President, Buffalo Inner-City Scholarship Opportunity Network. | ||
• Trustee, Holy Angels Academy, since 2005. | ||
• Graduate of Boston College (B.S. in Accounting). | ||
John C. Burville, 60 | • Insurance Consultant to the Bermuda Government, 2003 to 2007. | |
Independent Director, 2006 | • Bermuda Insurance Advisory Committee, 1985 to 2003. | |
• Chief Actuary and Senior Rating Agency Manager of ACE Limited, 1992 to 2003. | ||
• Graduate of Leicester University in the United Kingdom (BSc and Ph.D.). | ||
• Fellow of the Institute of Actuaries. |
Page 5
Joan M. Lamm-Tennant, 55 Independent Director, 1993 | • Global Chief Economist & Risk Strategist, Guy Carpenter & Company, LLC, since May 2007. | |
• Senior Vice President, General Re Corporation, 1997 to April, 2007. | ||
• Adjunct Professor, the Wharton School of the University of Pennsylvania, since 2006. | ||
• Professor of Finance, Villanova University, 1988 to 2000. | ||
• Director, IVANS, Inc., since 2004. | ||
• Member, American Risk and Insurance Association. | ||
• Member, International Insurance Society. | ||
• Member, Association for Investment Management and Research. | ||
• Graduate of St. Mary’s University (B.B.A. and M.B.A.). | ||
• Graduate of the University of Texas (Ph.D.). | ||
Ronald L. O’Kelley, 63 | • Chairman and CEO, Atlantic Coast Venture Investments Inc., since 2003. | |
Independent Director, 2005 | • Executive Vice President, CFO and Treasurer, State Street Corporation, 1995 to 2002. | |
• Director, U. S. Shipping Partners L.P., since 2004. | ||
• Director, Refco Inc., 2005 to 2006. | ||
• Advisory Director, Donald H. Jones Center for Entrepreneurship, Tepper School of Business, Carnegie Mellon University, since 2003. | ||
• Member, National Association of Corporate Directors. | ||
• Graduate of Duke University (A.B.). | ||
• Graduate of Carnegie Mellon University (M.B.A.). |
CLASS III – | Director Nominee to Serve in Office until the 2011 Annual Meeting of Stockholders |
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
Michael J. Morrissey,60 | • Chairman and Chief Executive Officer, Firemark Investments, since 1983. | |
Independent Director | • Director, CGA Group, Ltd., since 1998. | |
• President, Chief Operating Officer, Chief Investment Officer and Director, Manhattan Life Insurance Company, 1985 to 1987; Chief Executive Officer, Manhattan Capital Management, 1985. | ||
• Senior Vice President, Crum & Forster Insurance Group, 1978 to 1983. | ||
• Chartered Financial Analyst. | ||
• Graduate of Boston College (B.A.). | ||
• Graduate of Dartmouth College (M.B.A.). |
Page 6
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
A. David Brown, 65 | • Senior Vice President, Human Resources, Linens and Things, `Inc., since 2006. | |
Independent Director, 1996 | • Managing Partner, Bridge Partners, LLC, an executive recruiting firm, 2003 to 2006. | |
• Partner, Whitehead Mann, executive recruiters, 1997 to 2003. | ||
• Director, Hanover Direct, 2003 to 2006. | ||
• Director, Zale Corporation, 1997 to 2006. | ||
• Director, The Sports Authority, Inc., 1998 to 2003. | ||
• Trustee, Jackie Robinson Foundation. | ||
• Graduate of Monmouth University (B.S.). | ||
William M. Kearns, Jr., 72 | • Chairman and Co-CEO and other executive positions of Keefe Managers, LLC, a money management firm, since 1998. | |
Independent Director, 1975 | • President, W.M. Kearns & Co., Inc., a private investment company, since 1994. | |
Lead Director | • Trustee of EQ Advisors Trust (Equitable Life Assurance Society of the U.S.), AXA Financial, since 1997. | |
• Trustee, AXA Enterprise Funds, since 2004. | ||
• Director, Transistor Devices, Inc., 1991 to 2006; Lead Director, since 2007. | ||
• Director, U. S. Shipping Partners L.P., 2002 to 2006; Lead Director, since 2007. | ||
• Advisory Director, Gridley and Company LLC, since 2001. | ||
• Advisory Director, Proudfoot Consulting, PLC, since 1997. | ||
• Advisory Director, Private Client Resources LLC, since 2004. | ||
• Executive Vice President, Greater NY Councils, Boy Scouts of America, since 1985. | ||
• Member, Oncology Philanthropic Leadership Council, Carol G. Simon Cancer Center, Morristown Memorial Health Foundation, since 2005. | ||
• Honorary LLD, Gonzaga University. | ||
• Graduate of the University of Maine (B.A.). | ||
• Graduate of New York University (M.A.). | ||
S. Griffin McClellan III, 70 | • Retired Banking Executive. | |
Independent Director, 1980 | • Self-employed Consultant, 1994 to 2001. | |
• Graduate of Harvard University (B.A.). | ||
J. Brian Thebault, 56 | • Chairman, Earth-Thebault, since July 2007. | |
Independent Director, 1996 | • Chairman and Chief Executive Officer, L.P. Thebault Company, 1998 to July 2007. | |
• President and Chief Executive Officer, L.P. Thebault Company, 1984 to 1998. | ||
• Trustee, The Peck School, since 1994. | ||
• Trustee, The Delbarton School, 1990 to 2007. | ||
• Graduate of University of Southern California (B.S.). |
Page 7
Name, Age, Year Elected To Board of Directors | Occupation And Background | |
W. Marston Becker,
|
| •Chairman and CEO, Max |
Independent Director, 2006 |
|
|
| Chairman and CEO of LaSalle Re | |
| •Chairman and General Partner of West Virginia Media Holdings, since 2001. | |
| • Chairman and Chief Executive Officer, 2002 to 2005; Director, 1997-2003, Trenwick Group, Ltd., 1997-2003. In August 2003, Trenwick Group, Ltd. filed for protection under Chapter 11 of the U.S. Bankruptcy Code. | |
• Director, Mountain Companies, since 2007. | ||
•Director, Beazley Group plc, since 2006. | ||
| •Director, West Virginia University, United Hospital System, since 2004. | |
|
| |
| 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. |
Page 5
|
| |||||
Gregory E. Murphy,
|
| •Chairman, President and Chief Executive Officer of Selective, since May | ||||
Employee Director, 1997 |
| President and Chief Executive Officer of Selective, May 1999 to May 2000. | ||||
| President and Chief Operating Officer of Selective, 1997 to May 1999. | |||||
| Other senior executive, management, and operational positions at Selective, since 1980. | |||||
| Director, Newton Memorial Hospital Foundation, Inc., since 1999. | |||||
| Director, Insurance Information Institute, since June 2000. | |||||
| Director, American Insurance Association (AIA), 2002 to | |||||
| Certified Public Accountant (New Jersey) (Inactive). | |||||
| Trustee, the American Institute for CPCU (AICPCU) and the Insurance Institute of America (IIA), since June 2001. | |||||
| Graduate of Boston College (B.S.). | |||||
| Harvard University (Advanced Management Program). |
Page 8
Name, Age, Year Elected To Board of Directors | Occupation And Background | |||||
William M. Rue,
|
| •President, Rue Insurance, general insurance agency, since 1969. | ||||
Non-Independent Director, 1977 |
|
| President, Rue Financial Services, Inc., 2002 to 2006. | |||
| Director, 1st Constitution Bank, since | |||||
| ||||||
•Director, Robert Wood Johnson University Hospital at Hamilton, since | ||||||
| Trustee, Rider University, since 1993. | |||||
| Director, Robert Wood Johnson University Hospital Foundation, since 1999. | |||||
| Member, National Association of Securities Dealers. | |||||
| Member, Council of Insurance Agents & Brokers. | |||||
| Member, Society of CPCU. | |||||
| Member, Professional Insurance Agents Association. | |||||
| Graduate of Rider College (B.A.). | |||||
| ||||||
| ||||||
|
| |||||
|
|
| ||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
Page 9
Page 6
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
| ||
|
| |
|
|
|
|
| |
|
| |
|
|
Page 7
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Page 8
| The number of shares of Selective common stock beneficially owned by each nominee for director, director, the Chairman of the Board, President and Chief Executive Officer (the “CEO”), the Chief Financial Officer (the “CFO”), and the three most highly compensated executive officers other than the CEO and CFO (collectively, with the CEO and CFO, referred to as the “named executive officers”). | ||
| The number of shares of Selective common stock beneficially owned by the directors (and nominee for director) and executive officers of Selective as a group. |
Name of Beneficial Owner | Number of Shares | Percent of Class | |||
Common Stock(1) | Options Exercisable Within 60 Days | Total Shares Beneficially Owned | |||
Bauer, Paul D. | 31,018 |
| 46,238 | 77,256 | * |
Becker, W. Marston | 5,242 |
| 4,238 | 9,480 | * |
Brown, A. David | 33,500 |
| 40,238 | 73,738 | * |
Burville, John C. | 2,538 |
| 4,238 | 6,776 | * |
Connell, Richard F. | 87,421 |
| 11,160 | 98,581 | * |
Kearns, William M., Jr. | 181,474 |
| 52,238 | 233,712 | * |
Lamm-Tennant, Joan M. | 34,258 |
| 52,238 | 86,496 | * |
McClellan, S. Griffin, III | 38,498 | (2) | 16,238 | 54,736 | * |
Murphy, Gregory E. | 265,106 | (3) | 70,810 | 335,916 | * |
Ochiltree, Jamie, III | 185,545 | (4) | 60,918 | 246,463 | * |
O’Kelley, Ronald L. | 6,974 |
| 10,238 | 17,212 | * |
Rockart, John F. | 9,299 |
| 22,238 | 31,537 | * |
Rue, William M. | 395,345 | (5) | 52,238 | 447,583 | * |
Thatcher, Dale A. | 86,527 |
| 11,160 | 97,687 | * |
Thebault, J. Brian | 42,800 | (6) | 52,238 | 95,038 | * |
Zaleski, Ronald J. | 77,236 |
| 35,152 | 112,388 | * |
All executive officers and directors as a group (20 persons) | 1,671,813 | (7) | 606,958 | 2,278,771 | 4.1% |
Number of Shares | ||||||||||||||||
Options Exercisable | Total Shares | Percent of | ||||||||||||||
Name of Beneficial Owner | Common Stock(1) | within 60 days | Beneficially Owned | Class | ||||||||||||
Bauer, Paul D. | 34,413 | 51,269 | 85,682 | * | ||||||||||||
Becker, W. Marston | 8,637 | 9,269 | 17,906 | * | ||||||||||||
Brown, A. David | 36,895 | 39,269 | 76,164 | * | ||||||||||||
Burville, John C. | 5,106 | 9,269 | 14,375 | * | ||||||||||||
Connell, Richard F. | 90,073 | 13,480 | 103,553 | * | ||||||||||||
Guthrie, Kerry A. | 89,846 | (2) | 55,980 | 145,826 | * | |||||||||||
Kearns, William M., Jr. | 194,321 | 51,269 | 245,590 | * | ||||||||||||
Lamm-Tennant, Joan M. | 40,376 | 51,269 | 91,645 | * | ||||||||||||
McClellan, S. Griffin, III | 40,859 | (3) | 21,269 | 62,128 | * | |||||||||||
Morrissey, Michael J. | — | — | — | * | ||||||||||||
Murphy, Gregory E. | 252,846 | 73,130 | 325,976 | 1 | % | |||||||||||
Ochiltree, Jamie, III | 97,694 | (4) | 55,738 | 153,432 | * | |||||||||||
O’Kelley, Ronald L. | 11,232 | 15,269 | 26,501 | * | ||||||||||||
Rockart, John F. | 11,837 | 27,269 | 39,106 | * | ||||||||||||
Rue, William M. | 408,116 | (5) | 51,269 | 459,385 | 1 | % | ||||||||||
Thatcher, Dale A. | 95,866 | 13,480 | 109,346 | * | ||||||||||||
Thebault, J. Brian | 49,145 | (6) | 57,269 | 106,414 | * | |||||||||||
All executive officers, directors and nominee for director as a group (21 persons) | 1,651,868.63 | 651,679.00 | 2,303,548 | 4 | % |
| ||
* | Less than 1% of the common stock outstanding. | |
(1) | Certain directors and executive officers hold Selective stock in margin accounts but, except as set forth in the footnotes to this table, no director or officer has pledged Selective stock for a loan or stock purchase. | |
(2) | 5,196 of the shares held by Kerry A. Guthrie, Selective’s Executive Vice President and Chief Investment Officer, are pledged as collateral for a loan made by Selective to purchase Selective stock in 1998, which loan is grandfathered under the Sarbanes-Oxley Act of 2002 and was authorized by the Board of Directors to encourage Selective stock ownership. | |
(3) | Includes 4,000 shares held by Mr. McClellan’s wife, for which Mr. McClellan disclaims beneficial ownership. | |
(4) | Includes: (i) 30,867 shares held by Mr. Ochiltree’s wife, for which Mr. Ochiltree disclaims beneficial ownership and (ii) 10,270 shares pledged as collateral for a loan made by Selective to Mr. Ochiltree to purchase Selective 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. Upon his retirement from the company on March 7, 2008, Mr. Ochiltree paid off the balance of this loan. | |
(5) | Includes: (i) 33,941 shares held by Chas. E. Rue & Sons, Inc. t/a Rue Insurance (“Rue Insurance”), a general insurance agency of which Mr. Rue is President and 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. | |
(6) | Includes: (i) 212 shares held in custody for and 208 shares held by Mr. Thebault’s son; (ii) 212 shares held in custody and 202 shares held by a daughter of Mr. Thebault’s; and (iii) 205 shares held in custody for another daughter of Mr. Thebault. |
(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) Includes 4,000 shares held by Mr. McClellan’s wife, for which Mr. McClellan disclaims beneficial ownership.
(3) Includes 40,000 shares held by Wachovia Bank, N.A. in a collateral account. As of February 28, 2007, there was no loan outstanding on such account.
(4) Includes 30,868 shares held by Mr. Ochiltree’s wife, for which Mr. Ochiltree disclaims beneficial ownership. 10,270 of Mr. Ochiltree’s shares are pledged as collateral for a loan made by Selective to purchase Selective stock in 1998, which loan is grandfathered under the Sarbanes-Oxley Act of 2002 and was authorized by the Board of Director to encourage Selective stock ownership.
(5) Includes: (i) 33,247 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 5% equity interest (see page 10 of this proxy statement for more information); and (ii) 1,980 shares held by Mr. Rue’s wife.
(6) Includes: (i) 207 shares held in custody for and 204 shares held by Mr. Thebault’s son; (ii) 207 shares held in custody for Mr. Thebault’s daughter; and (iii) 201 shares held in custody for Mr. Thebault’s other daughter.
(7) 5,196 of the shares held by Kerry A. Guthrie, Selective’s Executive Vice President and Chief Investment Officer, are pledged as collateral for a loan made by Selective to purchase Selective stock in 1998, which loan is grandfathered under the Sarbanes-Oxley Act of 2002 and was authorized by the Board of Director to encourage Selective stock ownership.
Page 910
Amount & Nature of | ||||||
Title of Class | Name & Address of Beneficial Owner |
| Beneficial Ownership | Percentage of Class | ||
Common Stock | Dimensional Fund Advisors LP | 4,533,862 shares | 8.35% | |||
1299 Ocean Avenue, 11th Floor | of common stock | |||||
Santa Monica, CA 90401 |
|
| ||||
Common Stock | Barclays Global Investors, NA and Affiliates | 2,795,909 shares | 5.15% | |||
45 Fremont Street | of common stock | |||||
San Francisco, CA 94105 |
|
|
2007.
Rue Insurance wrote insurance policies accounting for $9.5 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 $62,000 in fees with Selective HR Solutions and Selective HR Solutions paid Rue Insurance $14,000 in commissions.
• | Rue Insurance placed insurance policies with Selective’s insurance subsidiaries. Direct premiums written associated with these polices was $9.9 million in 2007, $9.5 million in 2006, and $10.2 million in 2005. In return, Selective’s insurance subsidiaries paid commissions to Rue Insurance of $1.7 million in 2007 and $1.9 million in 2006 and 2005. | ||
• | Rue Insurance placed human resource outsourcing contracts with Selective HR Solutions resulting in revenues to Selective HR Solutions of $69,000 in 2007, $62,000 in 2006, and $64,000 in 2005. In return, Selective HR Solutions paid commissions to Rue Insurance of $15,000 in 2007, $14,000 in 2006, and $15,000 in 2005. | ||
• | Rue Insurance placed insurance coverage for Selective with non-Selective insurance companies for which Rue Insurance was paid commission pursuant to its agreements with those carriers. Selective paid premiums for such insurance coverage of $0.5 million in 2007, $0.5 million in 2006, and $0.6 million in 2005. | ||
• | Selective paid reinsurance commissions of $0.2 million in 2007, 2006, and 2005 to PL, LLC. PL, LLC is an insurance fund administrator of which Rue Insurance owns 26.67% and which places reinsurance through a Selective insurance subsidiary. |
Selective paid $0.2 million in reinsurance commissions to P.L. Services, LLC t/a Public Alliance Group Administrative Services, an insurance fund administrator of which Rue Insurance owns 20% and which places reinsurance through Selective Insurance Company of America (“SICA”), a Selective insurance subsidiary.
Selective paid $0.5 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.
The son of S. Griffin McClellan III, a Selective director, Samuel G. McClellan IV, is an Assistant Vice President of Selective’s insurance subsidiaries. In 2006,2007, Mr. McClellan IV received $136,597$139,346 in cash compensation, primarily comprised of salary bonus, and tuition reimbursement.an annual cash incentive payment. He also received long-term incentive awards, consistent with awards granted to other Selective employees. Mr. McClellan IV’s compensation was determined in accordance with SICA’sthe standard employee compensation practices.practices of Selective Insurance Company of America (“SICA”). Mr. McClellan III is not a member of the Audit Committee, the Corporate Governance and Nominating Committee, or the Salary and Employee Benefits Committee.
Page 1011
Page 1112
In addition, the
Page 1213
• | Audit Committee. | ||
• | Corporate Governance and Nominating Committee. | ||
|
| ||
• |
| Executive Committee. | |
• | Finance Committee. | ||
• | Salary and Employee Benefits. |
Written Charter is available on the Corporate Governance section of www.selective.com |
| 2007 Meetings: | |||
Responsibilities: | |||||
| Oversee the accounting and financial reporting processes and the audits of the financial statements. | ||||
• | Review and discuss with Selective’s management and independent auditors Selective’s financial reports and other financial information provided to the public and filed with the SEC. | ||||
• | Monitor the activities of Selective’s Internal Audit Department and the appointment, replacement, reassignment or | ||||
• | Monitor Selective’s internal controls regarding finance, accounting and legal | ||||
• | Appoint Selective’s independent public accountants and supervise the relationship between Selective and its independent auditors, including reviewing their performance, making decisions with respect to their compensation, retention and removal, reviewing and approving in advance their audit services and permitted non-audit services, and confirming the independence of the independent auditors. | ||||
Director Members: | Independent | ||||
Paul D. Bauer, Chairperson and Designated Audit Committee Financial Expert under SEC Safe Harbor | Yes | ||||
Joan M. Lamm-Tennant | Yes | ||||
John F. Rockart | Yes | ||||
J. Brian Thebault | Yes | ||||
Page 1314
Written Charter is available on the Corporate Governance section of www.selective.com |
| 2007 Meetings: 4 | |||
Responsibilities: | |||||
• | Establish criteria for the selection of directors and identify and recommend to the Board the nominees for director. | ||||
• | Review and assess Selective’s Corporate Governance Guidelines and recommend | ||||
• | 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 | ||||
• | Review and update Selective’s Code of Conduct and review conflicts of interest or | ||||
• | Oversee the self-evaluations of the Board and each committee of the Board. | ||||
|
| ||||
Director Members: | Independent | ||||
A. David Brown, Chairperson | Yes | ||||
William M. Kearns, Jr. | Yes | ||||
Ronald L. O’Kelley | Yes | ||||
John F. Rockart | Yes | ||||
• | Directors and management; | ||
• | Third party search firms that it may engage from time-to-time; and | ||
• | Stockholders. |
• | Personal and professional ethics, integrity, character, and values; | ||
• | Professional and personal experience; | ||
• | Subject matter expertise; | ||
|
| ||
• |
| Independence; | |
• | Diversity; | ||
• | Business judgment; | ||
• | Insurance industry knowledge; | ||
• | Willingness to dedicate and devote sufficient time to Board duties and activities; | ||
• | Potential or actual conflicts of interest; and | ||
• | Other appropriate and relevant factors, including the qualification and skills of the current members of the Board. |
Page 15
c/o Corporate Secretary of Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, NJ 07890
Page 14
| |||||||||
| 2007 Meetings: 2 | ||||||||
Responsibilities: | |||||||||
• | Authorized by By-laws to exercise the Board of Directors’ powers and authority in the management of Selective’s business and affairs between Board meetings. | ||||||||
• | Has the right and authority to exercise all the powers of the Board of Directors on all matters brought before itexcept matters concerning Selective’s investments. | ||||||||
Director Members: | |||||||||
Gregory E. Murphy, Chairperson | William M. Kearns, Jr., Lead Director | ||||||||
Paul D. Bauer | William M. Rue | ||||||||
A. David Brown | J. Brian Thebault | ||||||||
Written Charter is available on the Corporate Governance section of www.selective.com |
| 2007 Meetings: | |||||||
Responsibilities: | |||||||||
• | Review and approve changes to Selective’s investment policies, strategies, and programs. | ||||||||
• | Review investment transactions made on behalf of Selective and review | ||||||||
• Review matters relating to the investment portfolios of the benefit plans of Selective and its subsidiaries, including the administration and performance of such portfolios. | |||||||||
• Appoint members of Selective’s Management Investment Committee. | |||||||||
• | Review and make recommendations to the Board regarding payment of dividends. | ||||||||
• | Review Selective’s capital structure and provide recommendations to the Board regarding financial policies and matters of corporate finance. | ||||||||
Director Members: | |||||||||
William M. Rue, Chairperson | S. Griffin McClellan III | ||||||||
W. Marston Becker | Gregory E. Murphy | ||||||||
William M. Kearns, Jr. | Ronald L. O’Kelley | ||||||||
Page 1516
Written Charter is available on the Corporate Governance section of www.selective.com |
| 2007 Meetings: | ||||
Responsibilities: | ||||||
• | Oversee, review, and administer all compensation, equity, and employee benefit plans and programs related to Selective’s and its subsidiaries’ employees and management. | |||||
• | Review annually and approve corporate goals and objectives relevant to | |||||
• | Review annually and approve Selective’s compensation strategy for | |||||
• | Review annually and determine the individual elements of total compensation | |||||
• | Review and approve compensation for non-employee directors. | |||||
Director Members: | Independent | |||||
J. Brian Thebault, Chairperson | Yes | |||||
Paul D. Bauer | Yes | |||||
John C. Burville | Yes | |||||
| Yes | |||||
Page 1617
value over time.
$7,751 and $20,288, respectively.
• | Base salary; | ||
• | Annual cash incentive payments; | ||
• | Long-term incentive awards in the form of stock options, performance-based restricted stock, and performance-based cash incentive units; and | ||
• | Retirement and deferred compensation plans. |
Page 18
Page 17
|
|
• | Market/Product Group |
• |
| Size Group | ||
• | Property and Casualty Insurance Compensation Survey (PCICS); and | ||
• | McLagan Partners Investment Management Survey. |
|
| ||
|
| Peer Size Group | |
The Chubb Corporation | Arch Capital Group, Ltd. | ||
Cincinnati Financial Corporation | Commerce Group, Inc. | ||
CNA Financial Corporation | Hanover Group | ||
EMC Insurance Group Inc. | MaxCapital Group Ltd. | ||
Hanover Group | Mercury General Corporation | ||
Harleysville Group, Inc. | Ohio Casualty Corporation | ||
| Old Republic International Corporation | ||
| Radian Group Inc. | ||
PMA Capital Corporation | Unitrin, Inc. | ||
|
| Zenith National Insurance Corp. | |
|
| ||
|
| ||
| State Auto Financial Corporation |
Page 19
| Great American Insurance Group | ||
Acuity | Hanover Group | ||
Allstate Insurance Company | Harleysville Group, Inc. | ||
American Family Insurance | Hartford Financial Services Group | ||
American International Group | Liberty Mutual Insurance Group | ||
Argonaut Group, Inc. | Main Street America Group | ||
The Auto Club Group | Mercury General Corporation | ||
Automobile Club of Southern California | MetLife | ||
California State Automobile Association | Nationwide | ||
Central Insurance Companies | Ohio Casualty Corporation | ||
The Chubb Corporation | One Beacon Insurance Company | ||
CNA Financial Corporation | PMA Capital Corporation | ||
Country Insurance & Financial Services | Safeco Corporation | ||
Crum & Forster | Sentry Insurance | ||
Erie Indemnity Company | The Travelers Companies, Inc. | ||
| State Farm Insurance Company | ||
FBL Financial Group, Inc. |
| USAA | |
| Utica National Insurance Group |
| |
| Winterthur North America | ||
GE Insurance | Zenith National Insurance Corp. | ||
Zurich North America |
40/86 Advisors, Inc | Mutual of Omaha | |
Advantus Captial Management, Inc | Nationwide Insurance | |
AEGON USA | New York Life Investment Management LLC | |
Aetna, Inc. | Northwestern Mutual Life Insurance Company | |
AIG Global Investment Group | OneAmerica Financial Partners | |
Allianz Life Insurance of North America | Opus Investment Management (Hanover Ins) | |
Allstate Investments, LLC | Pacific Life Insurance Company | |
Assurant, Inc | PartnerRe Asset Management Company | |
AVIVA USA (formerly AmerUs) | PPM America, Inc. | |
AXA Equitable | Principal Global Investors | |
The Chubb Corporation | Progressive Corporation | |
CIGNA Investment Management | Prudential Financial | |
Country Insurance & Financial Services | Security Benefit Corporation | |
CUNA Mutual Group | Sentinel Asset Management, Inc. | |
FBL Financial Group | Sentry Insurance | |
Genworth Financial | Standard Life Investments (USA) Limited | |
Guardian Life Insurance Company | State Farm Insurance Companies | |
Hartford Investment Management Company | Sun Life Financial | |
ING Investment Managment | Swiss Re | |
Liberty Mutual | TIAA-CREF | |
MBIA Asset Management | The Travelers Companies, Inc. | |
MetLife Investments | USAA Investment Management Company | |
MFC Global Investment Management | ||
Mutual of Omaha | ||
Modern Woodmen of America |
Page 20
responsibilities.
The cornerstone and most stable component of
Page 18
• | the functional role of the position; | ||
• | the level of responsibility; | ||
• | growth of the executive in the role, including skills and competencies; | ||
• | the contribution and performance of the executive; and | ||
• | the organization’s ability to replace the executive. |
2007.
process, and for Mr. Connell, also reflects an additional increase in late 2007 provided in connection with his appointment as Chief Administrative Officer.
Most
Page 21
|
|
| Specified number of new agency appointments |
o |
| Commercial Lines: Designated percentage of | |
o | Personal Lines: Increase average monthly auto quote activity to a targeted monthly rate | ||
o | Targeted increase in designated Business Owner Policy accounts, priced within a specified range |
o | Specified improvement in workers compensation managing price and retention by decile | ||
o | Specified increase in total commercial lines |
|
|
Page 19
|
| Specified amount of new commercial premium entered via xSELerate® |
o |
| Specified savings through |
|
|
|
| Produce targeted number of worksite lives through Selective agents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The payment opportunities for the 20062007 ACIP for the CEO and the other named executive officers (other than the Chief Investment Officer) were based on competitive market pay levels and set as a percentage of annual base salary relative to corresponding levels of performance against our goals as follows:
| ||||||
Officer |
| Title | Maximum ACIP Opportunity | |||
| Chairman, President & CEO | 200% of base salary | ||||
| ||||||
Dale A. Thatcher | Executive Vice President & CFO | 150% of base salary | ||||
| ||||||
Jamie Ochiltree, III | Senior Executive Vice President | 175% of base salary | ||||
| ||||||
Richard F. Connell | Senior Executive Vice President | 175% of base salary | ||||
|
|
|
Page 22
Page 20
the company.
and included the following:
strengthen existing company practices.
upgrade in systems and systems support for Selective HR Solutions, the company’s affiliated professional employer organization operation. Mr. Connell – Completed workprovided oversight in the implementation of a treasury interface system and provided active leadership and direction for the Strategic Management Office.
Page 23
Mr. Zaleski – Completed work on a variety of actuarial matters, including all scheduled commercial lines pricing reviews and predictive models, personal automobile rating plans required by predictive models, scheduled system enhancements for reserving analysis, and supportamount of the strategic planning process, and Knowledge Management initiative. Successfully oversawtotal LTIP award pool, all individual target award amounts are aggregated. For employees below the budget and financial planning process.
officer level, participation in the LTIP is limited to a select group of high performers in the company.
Page 21
Long-term
Page 24
Forty
Three-year vesting period; and
• | Three-year vesting period; and | ||
• | Achievement at any time during the vesting period of either: (i) a cumulative return on equity of twenty percent (20%) (excluding unrealized gain occurring after December 31, 2006), or (ii) a ten percent (10%) cumulative growth in net premiums written. |
Achievement at any time during the vesting period of either: (i) a cumulative return on equity of fifteen percent (15%) (excluding unrealized gain occurring after December 31, 2005), or (ii) a ten percent (10%) cumulative growth in net premiums written.
Cash dividends are paid on performance-based restricted stock at the same dividend rate paid to all Selective stockholders. This use of restricted stock clearly aligns this component of executives’ compensation with overall corporate performance and stockholder interests.
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
• | Three-year performance period; | ||
• | The value of each cash incentive unit initially awarded increases or decreases to reflect total shareholder return on Selective common stock over the three-year performance period for the award; and | ||
• | The number of cash incentive units ultimately earned increases or decreases based on: (i) cumulative three-year statutory net premium written growth relative to a peer index, and (ii) cumulative three-year statutory combined ratio relative to a peer index. Awards are earned at target level if these performance measures are between the 45th and 54.9th percentile of the peer group. If both measures are at or above the 80th percentile, 200% of the units initially awarded are earned. If both measures are below the 35th percentile, 0% of the units initially awarded are earned. |
Page 22
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 | |
| Hanover Insurance Group, Inc. | |
Cincinnati Financial Corporation | W. R. Berkley Corporation | |
Onebeacon Insurance Group LLC |
|
Page 25
• | Each director shall, within five (5) years of his or her first election to the Board, beneficially own at least | ||
• | The current requirements for certain officers of Selective are as follows: |
The current requirements for certain officers of Selective are as follows:
Chairman, President & CEO |
| 4 x base salary |
Senior Executive Vice Presidents and Executive Vice Presidents | 2.5 x base salary | |
Senior Vice Presidents | 1.5 x base salary | |
|
| |
|
|
Page 262008,2013, or within five (5) years from the attainment of the above officer status, whichever is later. Please note that baseBase salary increases during the five (5) year period will require the ultimate ownership requirements to increase when shares are valued on the January 1December 31 following such increase. 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 stock ownership.Page 23certainthe Executive Vice President of Human Resources, executiveand certain other human resource officers, provide information to the SEBC regarding the overall design of the executive compensation program and its individual components.(includingconsisting of a supplemental employee retirement plan) a voluntarytax qualified defined contribution retirement savingsbenefit pension plan (the “Retirement Income Plan”) and a supplemental employee retirement plan and maintains health and welfare benefit plans in which eligible employees, including the named executive officers, participate. The pension program is more fully described underin the section entitled “Pension Benefits” beginning on page 28.32.
33.
Page 2427
Non-Equity | Change in | ||||||||||||||||||||||||||||||||||||||||||||
Incentive | Pension Value | ||||||||||||||||||||||||||||||||||||||||||||
Plan | and Nonqualified | All Other | |||||||||||||||||||||||||||||||||||||||||||
Name | Stock | Option | Compen- | Deferred | Compen- | ||||||||||||||||||||||||||||||||||||||||
and | Salary | Bonus | Awards | Awards | sation | Compensation | sation | Total | |||||||||||||||||||||||||||||||||||||
Principal Position | Year | ($)(1) | ($) | ($)(2) | ($)(3) | ($)(4) | Earnings ($)(5) | ($)(6) | ($) | ||||||||||||||||||||||||||||||||||||
Gregory E. Murphy | 2007 | 900,000 | 0 | 1,876,425 | 25,633 | 900,000 | 85,449 | 40,989 | 3,828,496 | ||||||||||||||||||||||||||||||||||||
Chairman, President & Chief Executive Officer | 2006 | 876,923 | 0 | 2,460,513 | 28,066 | 1,500,000 | 158,637 | 42,900 | 5,067,039 | ||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 2007 | 405,000 | 0 | 207,953 | 15,664 | 300,000 | 13,696 | 18,428 | 960,741 | ||||||||||||||||||||||||||||||||||||
Executive Vice President, Chief Financial Officer and Treasurer | 2006 | 342,308 | 0 | 242,166 | 17,152 | 420,000 | 14,245 | 17,075 | 1,052,946 | ||||||||||||||||||||||||||||||||||||
Jamie Ochiltree, III | 2007 | 455,385 | 0 | 634,434 | 25,633 | 350,000 | 39,410 | 21,939 | 1,526,801 | ||||||||||||||||||||||||||||||||||||
Senior Executive Vice President, Insurance Operations | 2006 | 423,846 | 0 | 400,384 | 19,561 | 580,000 | 46,900 | 23,727 | 1,494,418 | ||||||||||||||||||||||||||||||||||||
Richard F. Connell | 2007 | 411,538 | 0 | 561,175 | 24,318 | 350,000 | 49,037 | 19,250 | 1,415,318 | ||||||||||||||||||||||||||||||||||||
Senior Executive Vice President and Chief Administrative Officer | 2006 | 375,385 | 0 | 327,237 | 18,351 | 485,000 | 44,406 | 17,755 | 1,268,134 | ||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 2007 | 392,615 | 0 | 607,940 | 25,633 | 495,000 | 49,640 | 20,762 | 1,591,590 | ||||||||||||||||||||||||||||||||||||
Executive Vice President & Chief Investment Officer | 2006 | 347,077 | 0 | 338,280 | 20,047 | 400,000 | 59,761 | 18,263 | 1,183,428 | ||||||||||||||||||||||||||||||||||||
(1) | The amounts in this column include portions of salary that certain named executive officers have deferred into SICA’s Deferred Compensation Plan. Such amounts are also included in the Nonqualified Deferred Compensation table on page 33. | |
(2) | This column reflects amounts recognized as expense for the 2007 and 2006 grants of performance-based restricted stock and performance-based cash incentive unit awards. Grants of performance-based restricted stock were made pursuant to the Omnibus Stock Plan, under which such shares vest three years from the date of grant, conditioned upon the attainment of certain predetermined performance goals. Grants of cash incentive unit awards were made pursuant to the Cash Incentive Plan, under which such units vest at the payment date, which is as soon as practicable in the calendar year following the end of the calendar year coincident with the end of the 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. 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. Restricted stock and cash incentive unit awards are subject to forfeiture should the grantee resign or be terminated for cause prior to vesting. Amounts recognized as expense for performance-based restricted stock and performance-based cash incentive unit awards granted in 2006 to the named executive officers are as follows: Mr. Murphy: $709,476 restricted stock and $1,751,037 cash incentive units; Mr. Thatcher: $69,838 restricted stock and $172,328 cash incentive units; Mr. Ochiltree: $86,082 restricted stock and $314,302 cash incentive units; Mr. Connell: $77,237 restricted stock and $250,000 cash incentive units; and Mr. Guthrie: $71,067 restricted stock and $267,213 cash incentive units. Amounts recognized as expense for performance-based restricted stock and performance-based cash incentive unit awards granted in 2007 to the named executive officers are as follows: Mr. Murphy: $1,331,279 restricted stock and $545,146 cash incentive units; Mr. Thatcher: $147,518 restricted stock and $60,435 cash incentive units; Mr. Ochiltree: $450,016 restricted stock and $184,418 cash incentive units; Mr. Connell: $398,125 restricted stock and $163,050 cash incentive units; and Mr. Guthrie: $431,302 restricted stock and $176,638 cash incentive units. The expense reported in this column assumes the following: (i) the predetermined performance goals for the restricted stock grants are probable of being attained; (ii) per units values for the 2007 and 2006 cash incentive unit awards of $81.89 and $109.69, respectively; and (iii) a 150% peer group unit multiplier for the 2007 and 2006 grants. | |
(3) | This column reflects amounts recognized as expense for the 2007 and 2006 option grants. The grant date fair value of these grants is calculated using the Black-Scholes option valuation method, in accordance with FAS 123R. For a discussion of the weighted-average assumptions used in the valuation of these awards, see Item 8. Financial Statements and Supplementary Data, Note 18, Share-Based Payments, in Selective’s Annual Report on Form 10-K for the year ended December 31, 2007. Grants were made pursuant to the Omnibus Stock Plan, under which such options vest one-third each year, beginning the first anniversary of the grant date. The grants are subject to forfeiture should the grantee resign or be terminated for cause prior to vesting. | |
(4) | Amounts in this column include ACIP awards earned in 2007 and paid in March 2008 under the Cash Incentive Plan for Messrs. Murphy, Thatcher, Ochiltree and Connell, and for Mr. Guthrie, includes the annual incentive compensation payment earned in 2007 and paid in March 2008 under the Investment Compensation Program, and ACIP awards earned in 2006 and paid in 2007 to each of the named executive officers. | |
(5) | Amounts in this column reflect the actuarial increase in the present value of each named executive officer’s pension benefits under all defined benefit pension plans of the company, determined using the same interest rate and mortality assumptions as |
Page 28
Name and Principal Position | Year | Salary | Bonus | Stock ($)(2) | Option ($)(3) | Non-Equity Incentive Plan Compen-sation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All ($)(6) | Total ($) |
Gregory E. Murphy Chairman, President & Chief Executive Officer | 2006 | 876,923 | 0 | 2,460,513 | 28,066 | 1,500,000 | 158,637 | 42,900 | 5,067,039 |
Dale A. Thatcher Executive Vice President, Chief Financial Officer and Treasurer | 2006 | 342,308 | 0 | 242,166 | 17,152 | 420,000 | 14,245 | 17,075 | 1,052,946 |
Jamie Ochiltree, III Senior Executive Vice President, Insurance Operations | 2006 | 423,846 | 0 | 400,384 | 19,561 | 580,000 | 46,900 | 22,286 | 1,492,977 |
Richard F. Connell Senior Executive Vice President & Chief Information Officer | 2006 | 375,385 | 0 | 327,237 | 18,351 | 485,000 | 44,406 | 17,755 | 1,268,134 |
Ronald J. Zaleski Executive Vice President & Chief Actuary | 2006 | 349,923 | 0 | 219,045 | 17,152 | 390,000 | 22,178 | 21,162 | 1,019,460 |
(1) The amounts in this column include portions of salary that certain named executive officers have deferred into SICA’s Deferred Compensation Plan. Such amounts are also included in the Nonqualified Deferred Compensation table on page 29.
(2) This column reflects amounts recognized as expense for the 2006 grants of performance-based restricted stock and performance-based cash incentive unit awards. Grants of performance-based restricted stock were made pursuant to the Omnibus Stock Plan, under which such shares vest three years from the date of grant, conditioned upon the attainment of certain predetermined performance goals. Grants of cash incentive unit awards were made pursuant to the Cash Incentive Plan, under which such units vest three years from the date of grant. 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. 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. Restricted stock and cash incentive unit awards are subject to forfeiture should the grantee resign or be terminated for cause prior to vesting. Amounts recognized as expense for performance-based restricted stock and performance-based cash incentive unit awards granted in 2006 to the named executive officers are as follows: Mr. Murphy: $709,476 restricted stock and $1,751,037 cash incentive units; Mr. Thatcher: $69,838 restricted stock and $172,328 cash incentive units; Mr. Ochiltree: $86,082 restricted stock and $314,302 cash incentive units; Mr. Connell: $77,237 restricted stock and $250,000 cash incentive units; and Mr. Zaleski: $63,171 restricted stock and $155,874 cash incentive units.
(3) This column reflects amounts recognized as expense for the 2006 option grants. The grant date fair value of these grants is calculated using the Black-Scholes option valuation method, in accordance with FAS 123R. For a discussion of the weighted-average assumptions used in the valuation of these awards, see Item 8. Financial Statements and Supplementary Data, Note 18, Share-Based Payments, in Selective’s Annual Report on Form 10-K for the year ended December 31, 2006. Grants were made pursuant to the Omnibus Stock Plan, under which such options vest one-third each year, beginning the first anniversary of the grant date. The grants are subject to forfeiture should the grantee resign or be terminated for cause prior to vesting.
(4) Amounts in this column include ACIP awards earned in 2006 and paid in March 2007 under the Cash Incentive Plan for the named executive officers.
(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 financial statement reporting purposes. There were no above-market or preferential earnings on deferred compensation under the company’s nonqualified deferred compensation program.
(6) Amounts in this column for each named executive officer are as follows:
| ||
those used for financial statement reporting purposes. There were no above-market or preferential earnings on deferred compensation under the company’s nonqualified deferred compensation program. | ||
(6) | For 2006, amounts in this column for each named executive officer reflect the following: |
• | Mr. Murphy: $33,075 of company matching contributions to Mr. Murphy’s Deferred Compensation Plan, $3,000 for tax preparation services, and $6,825 of company matching contributions to Mr. Murphy’s 401(k) plan. | ||
• | Mr. Thatcher: $13,312 of company matching contributions to Mr. Thatcher’s Deferred Compensation Plan, $1,500 for tax preparation services, and $2,263 of company matching contributions to Mr. Thatcher’s 401(k) plan. |
Page 25
• | Mr. Ochiltree: | ||
• | Mr. Connell: $7,330 of company matching contributions to Mr. Connell’s Deferred Compensation Plan, $675 for tax preparation services, and $9,750 of company matching contributions to Mr. Connell’s 401(k) plan. | ||
• | Mr. |
For 2007, amounts in this column for each named executive officer reflect the following: |
• | Mr. Murphy: $30,875 of company matching contributions to Mr. Murphy’s Deferred Compensation Plan, and $10,114 of company matching contributions to Mr. Murphy’s 401(k) plan. | ||
• | Mr. Thatcher: $15,569 of company matching contributions to Mr. Thatcher’s Deferred Compensation Plan, and $2,859 of company matching contributions to Mr. Thatcher’s 401(k) plan. | ||
• | Mr. Ochiltree: $10,645 of company matching contributions to Mr. Ochiltree’s Deferred Compensation Plan, $10,075 of company matching contributions to Mr. Ochiltree’s 401(k) plan, and $1,219 representing the difference between the market rate of interest and the actual rate of interest on indebtedness to the company. | ||
• | Mr. Connell: $8,650 of company matching contributions to Mr. Connell’s Deferred Compensation Plan, $525 for tax preparation services, and $10,075 of company matching contributions to Mr. Connell’s 401(k) plan. | ||
• | Mr. Guthrie: $14,790 of company matching contributions to Mr. Guthrie’s Deferred Compensation Plan, $2,280 for tax preparation services, $3,075 of company matching contributions to Mr. Guthrie’s 401(k) plan, and $617 representing the difference between the market rate of interest and the actual rate of interest on indebtedness to the company. |
The following table shows the grants of plan based awards to our named executive officers in 2006:
Grant Date | ||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Equity | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plan Awards(2) | of Cash | |||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future | Exercise | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||
Payouts Under Non- | Restricted | or Base | Unit, | |||||||||||||||||||||||||||||||||||||||||||||||
Grant | Equity Incentive Plan | Stock | Option | Price of | Restricted | |||||||||||||||||||||||||||||||||||||||||||||
Name | Date | Awards(1) | Cash Incentive Unit Awards(3) | Awards (#) | Awards (#) | Option | Stock, | |||||||||||||||||||||||||||||||||||||||||||
| Awards | and Option | ||||||||||||||||||||||||||||||||||||||||||||||||
| Minimum | Maximum | Threshold | Target | Maximum | Maximum | Maximum | ($/Sh) | Awards(4) | |||||||||||||||||||||||||||||||||||||||||
($) | ($) | (#) | (#) | (#) | (#) | (#) | | ($) | ||||||||||||||||||||||||||||||||||||||||||
Gregory E. Murphy | 1/30/07 | 0 | 1,800,000 | 2,219 | 4,438 | 8,876 | 48,516 | 3,480 | 27.44 | 1,800,058 | ||||||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 1/30/07 | 0 | 622,500 | 738 | 1,476 | 2,952 | 16,128 | 3,480 | 27.44 | 615,132 | ||||||||||||||||||||||||||||||||||||||||
Jamie Ochiltree, III | 1/30/07 | 0 | 805,000 | 751 | 1,501 | 3,002 | 16,400 | 3,480 | 27.44 | 625,095 | ||||||||||||||||||||||||||||||||||||||||
Richard F. Connell | 1/30/07 | 0 | 717,500 | 719 | 1,438 | 2,876 | 15,718 | 3,480 | 27.44 | 600,081 | ||||||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 1/30/07 | 0 | 600,000 | 719 | 1,438 | 2,876 | 15,718 | 3,480 | 27.44 | 600,081 | ||||||||||||||||||||||||||||||||||||||||
Name | Grant | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Cash Incentive Unit, Restricted Stock, and Option Awards(3) | ||||
Cash Incentive Unit Awards(2) | Restricted Stock | Option |
|
| ||||
Threshold | Target | Maximum | Maximum | Maximum |
|
| ||
Gregory E. Murphy | 1/30/06 | 5,321 | 10,642 | 21,284 | 24,686 | 3,480 | $28.74 | 1,801,742 |
Dale A. Thatcher | 1/30/06 | 1,571 | 3,142 | 6,284 | 7,290 | 3,480 | $28.74 | 551,781 |
Jamie Ochiltree, III | 1/30/06 | 1,751 | 3,502 | 7,004 | 8,124 | 3,480 | $28.74 | 611,750 |
Richard F. Connell | 1/30/06 | 1,646 | 3,292 | 6,584 | 7,638 | 3,480 | $28.74 | 576,782 |
Ronald J. Zaleski | 1/30/06 | 1,421 | 2,842 | 5,684 | 6,594 | 3,480 | $28.74 | 501,778 |
(1) Performance-based cash incentive unit awards are granted under the Cash Incentive Plan, and performance-based restricted stock awards and stock option awards are granted under the Omnibus Stock Plan. For a description of the material terms of such awards, see pages 22-23 of the Compensation Discussion & Analysis.
(2) 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 40-49.9th percentile of the Cash Incentive Unit Peer Group; the target represents 50-59.9th percentile of the Cash Incentive Unit Peer Group; and the maximum represents greater than 80th percentile of the Cash Incentive Unit Peer Group.
(3) This column includes restricted stock awards calculated at grant date fair value, cash incentive unit awards with an initial value of $100 per unit, and stock options valued at the Black-Scholes value on the date of grant.
(1) | For Messrs. Murphy, Thatcher, Ochiltree, and Connell, amounts represent minimum and maximum potential ACIP award to each named executive officer under our Cash Incentive Plan for 2007. Maximum awards reflect the maximum ACIP award established by the SEBC pursuant to the requirements of Section 162(m) of the Internal Resource Code. For Mr. Guthrie, the amounts represent the minimum and maximum potential annual cash incentive award under the Investment Compensation Plan. Actual payouts of the |
Page 2629
above-referenced awards are included in the “Non-Equity Incentive Compensation Plan” column of the “Summary Compensation Table”. For information regarding the ACIP and the annual cash incentive payment under the Investment Compensation Plan, see the section of the Compensation Discussion and Analysis beginning on page 21 entitled “Annual Cash Incentive Payment.” | ||
(2) | Performance-based cash incentive unit awards are granted under the Cash Incentive Plan, and performance-based restricted stock awards and stock option awards are granted under the Omnibus Stock Plan. For a description of the material terms of such awards, see pages 24-25 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 80th percentile of the Cash Incentive Unit Peer Group. | |
(4) | This column includes restricted stock awards calculated at grant date fair value, cash incentive unit awards with an initial value of $100 per unit, and stock options valued at the Black-Scholes value on the date of grant. |
Page 30
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||||||
Plan | ||||||||||||||||||||||||||||||||||||||||
No. of | Awards: | |||||||||||||||||||||||||||||||||||||||
Securities | No. of | Equity | Market or | |||||||||||||||||||||||||||||||||||||
Under- | Securities | Incentive | Payout Value | |||||||||||||||||||||||||||||||||||||
lying | Under- | Plan | of Unearned | |||||||||||||||||||||||||||||||||||||
Unexer | lying | Market Value | Awards: No. of | Shares, Units | ||||||||||||||||||||||||||||||||||||
cised | Unexer- | No. of Shares | of Shares or | Unearned | or Other | |||||||||||||||||||||||||||||||||||
Options | cised | Option | or Units of | Units of Stock | Shares, Units | Rights That | ||||||||||||||||||||||||||||||||||
(#) | Options (#) | Exercise | Option | Stock That | That Have Not | or Other Rights | Have Not | |||||||||||||||||||||||||||||||||
Exercis- | Unexer- | Price | Expiration | Have Not | Vested | That Have Not | Vested | |||||||||||||||||||||||||||||||||
Name | able | cisable(1) | ($/Sh)(2) | Date | Vested (#)(3)(4) | ($) | Vested | ($)(7) | ||||||||||||||||||||||||||||||||
Gregory E. Murphy | 6,832 | 7.594 | 02/03/2010 | 48,516 | 1,115,383 | 10,642 | (5) | 1,911,942 | ||||||||||||||||||||||||||||||||
21,062 | 11.1875 | 02/06/2011 | 4,438 | (6) | 726,856 | |||||||||||||||||||||||||||||||||||
10,362 | 10.375 | 02/05/2012 | ||||||||||||||||||||||||||||||||||||||
11,394 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||||||||||
10,000 | 17.395 | 02/03/2014 | ||||||||||||||||||||||||||||||||||||||
10,000 | 22.025 | 02/01/2015 | ||||||||||||||||||||||||||||||||||||||
1,160 | 2,320 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||||||||||
3,480 | 27.44 | 01/30/2017 | ||||||||||||||||||||||||||||||||||||||
Dale A. Thatcher | 10,000 | 22.025 | 02/01/2015 | 19,333 | 444,466 | 3,142 | (5) | 564,492 | ||||||||||||||||||||||||||||||||
1,160 | 2,320 | 28.74 | 01/30/2016 | 18,979 | 436,327 | 1,476 | (6) | 241,739 | ||||||||||||||||||||||||||||||||
3,480 | 24.77 | 01/30/2017 | 7,290 | 167,597 | ||||||||||||||||||||||||||||||||||||
16,128 | 370,783 | |||||||||||||||||||||||||||||||||||||||
Jamie Ochiltree, III | 7,500 | 9.375 | 11/03/2008 | 16,400 | 377,036 | 3,502 | (5) | 629,169 | ||||||||||||||||||||||||||||||||
7,120 | 7.594 | 02/03/2010 | 1,501 | (6) | 245,834 | |||||||||||||||||||||||||||||||||||
14,000 | 11.1875 | 02/06/2011 | ||||||||||||||||||||||||||||||||||||||
9,638 | 10.375 | 02/05/2012 | ||||||||||||||||||||||||||||||||||||||
14,000 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||||||||||
1,160 | 2,320 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||||||||||
3,480 | 27.44 | 01/30/2017 | ||||||||||||||||||||||||||||||||||||||
Richard F. Connell | 10,000 | 22.025 | 02/01/2015 | 19,333 | 444,466 | 3,292 | (5) | 591,441 | ||||||||||||||||||||||||||||||||
1,160 | 2,320 | 28.74 | 01/30/2016 | 18,979 | 436,327 | 1,438 | (6) | 235,516 | ||||||||||||||||||||||||||||||||
3,480 | 27.44 | 01/30/2017 | 7,638 | 175,598 | ||||||||||||||||||||||||||||||||||||
15,718 | 361,357 | |||||||||||||||||||||||||||||||||||||||
Kerry A. Guthrie | 4,000 | 9.375 | 11/03/2008 | 15,718 | 361,357 | 2,842 | (5) | 510,594 | ||||||||||||||||||||||||||||||||
4,000 | 7.594 | 02/03/2010 | 1,438 | (6) | 235,516 | |||||||||||||||||||||||||||||||||||
4,500 | 11.1875 | 02/06/2011 | ||||||||||||||||||||||||||||||||||||||
10,000 | 10.375 | 02/05/2012 | ||||||||||||||||||||||||||||||||||||||
12,000 | 11.6175 | 02/04/2013 | ||||||||||||||||||||||||||||||||||||||
8,000 | 17.395 | 02/03/2014 | ||||||||||||||||||||||||||||||||||||||
10,000 | 22.025 | 02/01/2015 | ||||||||||||||||||||||||||||||||||||||
1,160 | 2,320 | 28.74 | 01/30/2016 | |||||||||||||||||||||||||||||||||||||
3,480 | 27.44 | 01/30/2017 | ||||||||||||||||||||||||||||||||||||||
(1) | The options listed in this column vest ratably over three years beginning on the first anniversary of 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 grant. The exercise price on options grants issued under previous equity plans is the average of the high and the low market price on the date of grant. | |
(3) | In the event of a termination of employment on or after an individual’s “Early Retirement Date,” as defined under the Retirement Income Plan for Selective Insurance Company of America, holders of performance-based restricted stock awards are fully vested in such awards subject to the attainment of applicable performance measures. Early Retirement Dates for the named executive officers are as follows: Mr. Murphy, 11/11/2002; Mr. Thatcher, 12/10/2015; Mr. Ochiltree, 10/2/2007; Mr. Connell, 2/7/2008; and Mr. Guthrie, 9/11/2007. | |
(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 shares in cash or in accumulated dividend reinvestment shares of Selective’s common |
Page 31
| Option Awards | Stock Awards | |||||||
Name | No. of Securities Under-lying Unexer-cised Options (#) Exercis-able | No. of Securities Under-lying Unexer-cised Options (#) Unexer-cisable(1) | Option Exercise Price ($/Sh)(2) | Option | Stock | No. of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: No. of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) |
Gregory E. Murphy | 6,832 21,062 10,362 11,394 10,000 10,000 |
3,480 | $7.594 $11.1875 $10.375 $11.6175 $17.395 $22.025 $28.74 | 02/03/2010 02/06/2011 02/05/2012 02/04/2013 02/03/2014 02/01/2015 01/30/2016 | 02/04/2007 02/03/2008 02/01/2009 01/30/2009 | 42,878 52,394 51,436 24,686 | $1,228,241 $1,500,828 $1,473,387 $707,130 | 10,642 | $2,334,716 |
Dale A. Thatcher | 10,000 |
3,480 | $22.025 $28.74 | 02/01/2015 01/30/2016 | 02/04/2007 02/03/2008 02/01/2009 01/30/2009 | 17,151 18,862 18,517 7,290 | $491,296 $540,298 $530,419 $208,822 | 3,142 | $689,314 |
Jamie Ochiltree, III | 15,000 7,120 14,000 9,638 14,000 |
3,480 | $9.375 $7.594 $11.1875 $10.375 $11.6175 $28.74 | 11/03/2008 02/03/2010 02/06/2011 02/05/2012 02/04/2013 01/30/2016 | 02/04/2007 02/03/2008 02/01/2009 01/30/2009 | 17,151 18,862 18,517 8,124 | $491,296 $540,298 $530,419 $232,712 | 3,502 | $768,293 |
Richard F. Connell | 10,000 |
3,480 | $22.025 $28.74 | 02/01/2015 01/30/2016 | 02/04/2007 02/03/2008 02/01/2009 01/30/2009 | 17,151 18,862 18,517 7,638 | $491,296 $540,298 $530,419 $218,791 | 3,292 | $722,222 |
Ronald J. Zaleski | 9,638 8,606 5,748 10,000 |
3,480 | $10.375 $11.6175 $17.395 $22.025 $28.74 | 02/05/2012 02/04/2013 02/03/2014 02/01/2015 01/30/2016 | 02/04/2007 02/03/2008 02/01/2009 01/30/2009 | 17,151 18,862 18,517 6,594 | $491,296 $540,298 $530,419 $188,885 | 2,842 | $623,498 |
(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 on option grants issued under the Omnibus Stock Plan is the closing market price on the date of the grant. The exercise price on options grants issued under previous equity plans is the average of the high and the low market price on the date of grant.
(3) The 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 shares in cash or in accumulated dividend reinvestment shares of Selective’s common stock. Shares included in this column that were attained through the DRP for the named executive officers are as follows:
|
| |
stock. Shares included in this column that were acquired through the DRP for Messrs. Thatcher and Connell are 1,333 on the share grants that vested on February 3, 2008 and 979 shares on the | ||
(5) | Reflects number of performance-based cash incentive units initially granted in 2006 to the named executive officers for the three-year performance period ending December 31, 2008. In the event of a termination of employment on or after an individual’s Early Retirement Date, as defined under the Retirement Income Plan for Selective Insurance Company of America, holders of such awards are vested in such awards, with the initial number of units and the value of each unit subject to adjustment, based on the | |
(6) | Reflects number of performance-based cash incentive units initially granted in 2007 to | |
(7) |
|
|
(4) The amounts in this column reflect (i) the maximum 200% unit multiplier for the number of cash incentive units granted based on performance against the Cash Incentive Unit Peer Group and (ii) a $109.69 per unit value based on total shareholder return at December 31, 2006. The maximum 200% unit multiplier is used in this calculation because 2006 performance exceeded the threshold amounts, which are identified in the Grants of Plan Based Awards table on page 26.
Page 27
Option Awards | Stock Awards(1) | |||||||||||||||||||
Number of | Number of | |||||||||||||||||||
Shares Acquired | Value Realized | Shares Acquired | Value Realized | |||||||||||||||||
| Option Awards | Stock Awards | on Exercise | on Exercise | on Vesting | on Vesting | ||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | (#) | ($) | (#) | ($) | ||||||||||||
Gregory E. Murphy | 0 | 0 | 21,967 | $595,251 | 0 | 0 | 171,135 | 4,216,731 | ||||||||||||
Dale A. Thatcher | 0 | 0 | 10,848 | $297,626 | 0 | 0 | 17,220 | 443,758 | ||||||||||||
Jamie Ochiltree, III | 28,242 | $266,326 | 10,848 | $297,626 | 7,500 | 129,196 | 62,566 | 1,543,852 | ||||||||||||
Richard F. Connell | 0 | 0 | 10,848 | $297,626 | 0 | 0 | 17,220 | 443,758 | ||||||||||||
Ronald J. Zaleski | 0 | 0 | 10,848 | $297,626 | ||||||||||||||||
Kerry A. Guthrie | 0 | 0 | 56,747 | 1,399,445 |
(1) | In the event of a termination of employment on or after an individual’s Early Retirement Date as defined under the Retirement Income Plan for Selective Insurance Company of America, holders of restricted stock awards become fully vested in such awards, provided any related performance measures have been attained. As a result, the value became subject to ordinary income taxation upon a holder attaining his Early Retirement Date, notwithstanding the continued employment of the holder by the company. Due to the imposition of this accelerated income tax liability, the SEBC determined it appropriate to fully vest and remove the restrictions on such shares. Accordingly, the numbers and amounts shown for Messrs. Murphy, Ochiltree and Guthrie reflect grants awarded to them in 2004 through 2006. |
Page 32
Page 28
Present Value of | Payments | |||||||||||||||||||||
Number of Years | Accumulated | During Last | ||||||||||||||||||||
Early Retirement | Credited Service | Benefit | Fiscal Year | |||||||||||||||||||
Name | Early | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | Eligible | Plan Name | (#)(1) | ($)(2) | ($) | ||||||||||||
Gregory E. Murphy | Yes | Retirement Income Plan | 25.58 | 441,506 | 0 | Yes | Retirement Income Plan | 26.58 | 438,631 | 0 | ||||||||||||
|
| SERP | 25.58 | 1,160,487 | 0 | SERP | 26.58 | 1,248,811 | 0 | |||||||||||||
Dale A. Thatcher | No | Retirement Income Plan | 5.67 | 47,617 | 0 | No | Retirement Income Plan | 6.67 | 52,342 | 0 | ||||||||||||
|
| SERP | 5.67 | 15,791 | 0 | SERP | 6.67 | 24,762 | 0 | |||||||||||||
Jamie Ochiltree, III | No | Retirement Income Plan | 11.67 | 214,313 | 0 | Yes | Retirement Income Plan | 12.67 | 223,892 | 0 | ||||||||||||
|
| SERP | 11.67 | 176,237 | 0 | SERP | 12.67 | 206,069 | 0 | |||||||||||||
Richard F. Connell | No | Retirement Income Plan | 5.33 | 111,608 | 0 | No | Retirement Income Plan | 6.33 | 135,484 | 0 | ||||||||||||
|
| SERP | 5.33 | 64,902 | 0 | SERP | 6.33 | 90,064 | 0 | |||||||||||||
Ronald J. Zaleski | No | Retirement Income Plan | 6.25 | 76,612 | 0 | |||||||||||||||||
Kerry A. Guthrie | Yes | Retirement Income Plan | 19.00 | 265,213 | 0 | |||||||||||||||||
|
| SERP | 6.25 | 38,839 | 0 | SERP | 19.00 | 119,372 | 0 |
(1) The Retirement Income Plan imposes a one year waiting period for plan participation.
(2) Present value is calculated on the basis of normal retirement age of 65. A 5.9% discount rate is applied and the RP-2000 Mortality Table is used to calculate the values indicated.
(1) | The Retirement Income Plan imposes a one year waiting period for plan participation. | |
(2) | Present value is calculated on the basis of normal retirement age of 65. A 6.5% discount rate is applied and the RP-2000 Mortality Table is used to calculate the values indicated. |
Executive | Selective | Aggregate | Aggregate Balance | ||||||||||||||||||||||
Contributions | Contributions in | Aggregate | Withdrawals/ | at December 31, | |||||||||||||||||||||
in 2007 | 2007 | Earnings in 2007 | Distributions | 2007 | |||||||||||||||||||||
Name | Executive Contributions in 2006 ($)(1) | Selective Contributions in 2006 ($)(2) | Aggregate Earnings in 2006 ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at December 31, 2006 ($)(4) | ($)(1) | ($)(2) | ($)(3) | ($) | ($)(4) | |||||||||||||||
Gregory E. Murphy | 296,423 | 33,075 | 22,164 | 0 | 419,778 | 252,387 | 30,875 | (59,022 | ) | 0 | 728,998 | ||||||||||||||
Dale A. Thatcher | 29,615 | 13,312 | 14,929 | 0 | 157,395 | 40,500 | 15,569 | (1,242 | ) | 0 | 216,341 | ||||||||||||||
Jamie Ochiltree, III | 42,385 | 9,536 | 16,324 | 0 | 268,342 | 686,410 | 10,645 | 60,994 | 0 | 1,041,822 | |||||||||||||||
Richard F. Connell | 463,577 | 7,330 | 99,415 | 0 | 922,449 | 334,249 | 8,650 | 95,019 | 0 | 1,410,176 | |||||||||||||||
Ronald J. Zaleski | 366,367 | 10,237 | 102,157 | 0 | 1,162,975 | ||||||||||||||||||||
Kerry A. Guthrie | 171,200 | 14,790 | 97,973 | 0 | 645,441 |
(1) Amounts in this column attributable to 2006 salary deferred by the named executive officers is included in the Salary column of the Summary Compensation table. Such amounts are as follows: Mr. Murphy: $296,423; Mr. Thatcher: $29,616; Mr. Ochiltree: $42,385; Mr. Connell: $75,077; and Mr. Zaleski: $70,663. The balance of the amounts in this column ($388,500 for Mr. Connell and $295,704 for Mr. Zaleski) are attributable to the deferral of all of Mr. Connell’s and a portion of Mr. Zaleski’s 2005 ACIP paid in March 2006.
(2) 100% of the information in this column is included in the All Other Compensation Column of the Summary Compensation table.
(3) The information in this column is not included in the Summary Compensation Table because such earnings are not above market earnings.
(4) The portions of the amounts in this column attributed to the contributions of the named executive officers and SICA to the Deferred Compensation Plan are included in the Summary Compensation table.
Page 2933
(1) | Amounts in this column attributable to 2007 salary deferred by the named executive officers is included in the Salary column of the Summary Compensation Table. Such amounts are as follows: Mr. Murphy: $252,387; Mr. Thatcher: $40,500; Mr. Ochiltree: $129,610; Mr. Connell: $91,749; and Mr. Guthrie: $91,200. The balance of the amounts in this column, $556,800 for Mr. Ochiltree, $242,500 for Mr. Connell and $80,000 for Mr. Guthrie, are attributable to the deferral of a portion of their ACIP paid in March 2007. | |
(2) | 100% of the information in this column is included in the All Other Compensation Column of the Summary Compensation Table. | |
(3) | The information in this column is not included in the Summary Compensation Table because such earnings are not above market earnings. | |
(4) | The portions of the amounts in this column attributed to the contributions of the named executive officers and SICA to the Deferred Compensation Plan are included in the Summary Compensation Table. |
Page 34
Upon Termination or Change of Control
| |||
Term | Three (3) years, automatically renewed for additional one (1) year periods unless terminated by either party with written notice. | ||
| |||
Compensation | Base salary.(1) | ||
| |||
Benefits | Eligible to participate in incentive compensation plan, stock plan, 401(k) plan, defined benefit pension plan and any other stock option, stock appreciation right, stock bonus, pension, group insurance, retirement, profit sharing, medical, disability, accident, life insurance, relocation plan or policy, or any other plan, program, policy or arrangement of Selective and SICA intended to benefit Selective employees generally. | ||
Vacation and Reimbursements | Vacation time and reimbursements for ordinary travel and entertainment expenses in accordance with Selective policies. | ||
| |||
Perquisites | Suitable offices, secretarial and other services, and other perquisites to which other Selective executives are generally entitled. | ||
Severance and Benefits on Termination without Change in Control | • For Cause or Resignation by Executive other than for Good Reason: Salary and benefits accrued through termination date. | ||
• Death or Disability: Multiple(2) of: (i) Executive’s salary, plus (ii) average of three (3) most recent annual cash incentive payments; provided that any such severance payments be reduced by life or disability insurance payments under policies with respect to which Company paid premiums. | |||
• Without Cause by Company, Relocation of Office over Fifty (50) Miles (without Executive’s consent), Resignation for Good Reason by Executive: | |||
¡
| |||
• Stock Awards: Except for termination for Cause or resignation by the Executive other than for Good Reason, immediate vesting and possible extended exercise period, as applicable, for any previously granted stock options, stock appreciation rights, cash incentive units, restricted stock and stock bonuses. | |||
Page 3035
Severance and Benefits on Termination after Change in Control | For termination Without Cause or by Executive with Good Reason within two (2) years following a Change in Control (as defined in the Employment Agreement), Executive is entitled to: | ||
• Severance payment equal to multiple(4) of the greater of (i) Executive’s salary plus target annual cash incentive payment; or (ii) Executive’s salary plus the average of Executive’s three (3) immediately prior annual cash incentive payments. | |||
• Medical, dental, vision, disability and life insurance coverages in effect for Executive and dependents until the earlier of period of months(5) following termination or commencement of equivalent benefits from a new employer. | |||
• Stock Awards, same as above, except that the initial number of cash incentive units is increased by 150%. | |||
• TaxGross-Up
| |||
Release; Confidentiality and | • Receipt of severance payments and benefits conditioned upon: | ||
Non-Solicitation | ¡
| ||
¡ No disclosure of confidential or proprietary information or solicitation of employees to leave Selective for a period of two (2) years following the termination of the Employment Agreement. | |||
(1) On January 30, 2007 the SEBC established new annual base salaries for the named executive officers other than the CEO as follows: Mr. Thatcher, $415,000; Mr. Ochiltree, $460,000; Mr. Connell, $410,000; and Mr. Zaleski, $370,000. Mr. Murphy did not receive an increase for 2007 and his salary remains at $900,000.
(2) For Mr. Murphy the multiple is 2; for Messrs. Ochiltree and Connell the multiple is 1.75; and for Messrs. Thatcher and Zaleski the multiple is 1.5.
(3) For Mr. Murphy the period is 24 months; for Messrs. Ochiltree and Connell, 21 months; and for Messrs. Thatcher and Zaleski, 18 months.
(4) For Mr. Murphy the multiple is 2.99; for Messrs. Ochiltree and Connell the multiple is 2.5; and for Messrs. Thatcher and Zaleski the multiple is 2.
(5) For Mr. Murphy the period is 36 months; for Mr. Ochiltree, 30 months; and for Messrs. Connell, Thatcher, and Zaleski, 24 months.
(1) | Effective January 31, 2008, the annual base salaries for the named executive officers were as follows: Mr. Murphy, $900,000; Mr. Thatcher, $475,000; Mr. Ochiltree, $460,000; Mr. Connell, $450,000; and Mr. Guthrie, $425,000. | |
(2) | For Mr. Murphy the multiple is 2; for Messrs. Ochiltree and Connell the multiple is 1.75; and for Messrs. Thatcher and Guthrie the multiple is 1.5. | |
(3) | For Mr. Murphy the period is 24 months; for Messrs. Ochiltree and Connell, 21 months; and for Messrs. Thatcher and Guthrie, 18 months. | |
(4) | For Mr. Murphy the multiple is 2.99; for Messrs. Ochiltree and Connell the multiple is 2.5; and for Messrs. Thatcher and Guthrie the multiple is 2. | |
(5) | For Mr. Murphy the period is 36 months; for Mr. Ochiltree, 30 months; and for Messrs. Connell, Thatcher, and Guthrie, 24 months. |
Name | Resignation or ($) | Retirement ($)(1) | Death or Disability ($)(2) | Termination Without Cause ($)(3) | Change in Control ($)(4) |
Gregory E. Murphy | 0 | 4,909,587 | 8,623,153 | 8,653,243 | 12,257,541 |
Dale A. Thatcher | 0 | 1,770,836 | 2,628,136 | 2,649,183 | 3,458,950 |
Jamie Ochiltree, III | 0 | 1,794,726 | 3,103,317 | 3,131,366 | 4,280,432 |
Richard F. Connell | 0 | 1,780,804 | 2,910,429 | 2,921,122 | 3,948,442 |
Ronald J. Zaleski | 0 | 1,750,899 | 2,648,914 | 2,670,996 | 3,445,318 |
(1) This column only reflects the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would normally vest upon retirement for any participant in such plans. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which, as for any other participant, would fully vest upon retirement and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award.
(2) This column includes the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, which value is reflected in the Retirement column, all of which shares would normally vest upon death or disability for any participant in such plans. This column also includes the severance payment provided for in each named executive officer’s Employment Agreement. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which, as for any other participant, would fully vest upon death or disability and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award.
Resignation | |||||||||||||||||||||||||
or | |||||||||||||||||||||||||
Termination | Death or | Termination | Change in | ||||||||||||||||||||||
for Cause | Retirement | Disability | Without Cause | Control | |||||||||||||||||||||
Name | ($) | ($)(1) | ($)(2) | ($)(3) | ($)(4)(5) | ||||||||||||||||||||
Gregory E. Murphy | 0 | 1,115,383 | 5,414,550 | 5,440,564 | 9,560,756 | ||||||||||||||||||||
Dale A. Thatcher | 0 | 1,419,173 | 2,518,173 | 2,539,197 | 3,517,212 | ||||||||||||||||||||
Jamie Ochiltree, III | 0 | 377,036 | 1,965,394 | 1,988,860 | 3,335,894 | ||||||||||||||||||||
Richard F. Connell | 0 | 1,417,748 | 2,854,790 | 2,856,772 | 4,093,148 | ||||||||||||||||||||
Kerry A. Guthrie | 0 | 361,357 | 1,448,857 | 1,453,347 | 2,376,925 | ||||||||||||||||||||
(1) | This column includes the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would normally vest upon retirement for any participant in such plans. These amounts do not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which, as for any other participant, would fully vest upon retirement and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. | |
(2) | This column includes the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would normally vest upon death or disability for any participant in such plans. This column also includes the severance payment provided for in each named executive officer’s Employment Agreement. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which, as for any other participant, would fully vest upon death or disability and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award. |
Page 3136
(3) This column includes: (i) the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, which value is reflected in the Retirement column, all of which shares would vest upon a termination Without Cause; (ii) the severance payment; and (iii) the value of medical, dental, vision, disability, and life insurance coverages, all as provided for in each named executive officer’s Employment Agreement. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which would fully vest and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award, as provided for in each named executive officer’s Employment Agreement.
(4) This column includes: (i) the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, which value is reflected in the Retirement column, 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, 2006 of $109.69, both of which would vest upon a change in control for any participant holding such awards under such plans. This column also includes the severance payment and the value of medical, dental, vision, disability, and life insurance coverages, as provided for in each named executive officer’s Employment Agreement.
(3) | This column includes: (i) the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, all of which shares would vest upon a termination Without Cause; (ii) the severance payment; and (iii) the value of medical, dental, vision, disability, and life insurance coverages, all as provided for in each named executive officer’s Employment Agreement. This column does not include the value of performance-based cash incentive units awarded under the Cash Incentive Plan to the named executive officers, which would fully vest and be payable following the end of the three-year performance period, subject to the achievement of the specified performance goals applicable to each such award, as provided for in each named executive officer’s Employment Agreement. | |
(4) | This column includes: (i) the value of unvested restricted stock granted under the Omnibus Stock Plan or Selective’s previous equity plans and any related accrued DRP shares, and (ii) the value of 150% of the number of outstanding performance-based cash incentive units awarded to the named executive officers under the Cash Incentive Plan, calculated using a per unit value at December 31, 2007 of $89.83 for the 2006 grant and $81.89 for the 2007 grant, both of which would vest upon a change in control for any participant holding such awards under such plans. This column also includes the severance payment and the value of medical, dental, vision, disability, and life insurance coverages, as provided for in each named executive officer’s Employment Agreement. | |
(5) | This column does not include the value of any tax gross-up payment, if necessary, to offset any excise tax imposed for the payment and benefits disclosed in this column. |
Fees Earned or Paid | ||||||||||||||||
in Cash | Stock Awards | Option Awards | Total | |||||||||||||
Name | ($) | ($)(1) | ($)(2) | ($) | ||||||||||||
Paul D. Bauer | 37,000 | 82,576 | 31,210 | 150,786 | ||||||||||||
W. Marston Becker | 6,000 | 82,576 | 31,210 | 119,786 | ||||||||||||
A. David Brown | 15,000 | 82,576 | 31,210 | 128,786 | ||||||||||||
John C. Burville | 28,000 | 62,610 | 31,210 | 121,820 | ||||||||||||
William M. Kearns, Jr. | 25,000 | 82,576 | 31,210 | 138,786 | ||||||||||||
Joan M. Lamm-Tennant | 17,500 | 82,576 | 31,210 | 131,286 | ||||||||||||
S. Griffin McClellan III | 31,000 | 57,598 | 31,210 | 119,808 | ||||||||||||
Ronald L. O’Kelley | 16,500 | 82,576 | 31,210 | 130,286 | ||||||||||||
John F. Rockart | 45,500 | 57,598 | 31,210 | 134,308 | ||||||||||||
William M. Rue | 16,500 | 82,576 | 31,210 | 130,286 | ||||||||||||
J. Brian Thebault | 37,000 | 82,576 | 31,210 | 150,786 |
(1) | This column reflects amounts recognized as expense for the 2007 grants of restricted stock to directors, based on a grant date fair market value of $24.54, and the portion of each director’s annual retainer paid in stock, 50% of which annual retainer, as set forth below, must be paid to a director in Selective common stock. | |
(2) | This column reflects amounts recognized as expense for the 2007 option grants to directors. The grant date fair value of these grants of $6.20 is calculated using the Black-Scholes option valuation method, in accordance with FAS 123R. The aggregate number of options outstanding at December 31, 2007 for each director is as follows: Messrs. Bauer, Kearns and Rue and Ms. Lamm-Tennant 51,269; Messrs. Becker and Burville: 9,269; Mr. Brown: 39,269; Mr. McClellan: 21,269; Mr. O’Kelley: 15,269; Mr. Rockart: 27,269; and Mr. Thebault: 57,269. |
Page 37
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Total |
Paul D. Bauer | $33,000 | $64,933 | $7,642 | $105,575 |
W. Marston Becker | $4,000 | $59,726 | $7,642 | $71,368 |
A. David Brown | $20,093 | $64,933 | $7,642 | $92,668 |
John C. Burville | $29,300 | $45,529 | $7,642 | $82,471 |
William M. Kearns, Jr. | $31,390 | $64,933 | $7,642 | $103,965 |
Joan M. Lamm-Tennant | $15,500 | $64,933 | $7,642 | $88,075 |
S. Griffin McClellan III | $37,125 | $40,800 | $7,642 | $85,567 |
Ronald L. O’Kelley | $14,000 | $64,933 | $7,642 | $86,575 |
John F. Rockart | $41,125 | $40,800 | $7,642 | $89,567 |
William M. Rue | $16,500 | $64,933 | $7,642 | $89,075 |
J. Brian Thebault | $29,016 | $64,933 | $7,642 | $101,591 |
(1) This column reflects amounts recognized as expense for the 2006 grants of restricted stock to directors. The aggregate number of restricted stock awards outstanding at December 31, 2006 for each director was 1,196.
(2) This column reflects amounts recognized as expense for the 2006 option grants to directors. The grant date fair value of these grants is calculated using the Black-Scholes option valuation method, in accordance with FAS 123R. The aggregate number of options outstanding at December 31, 2006 for each director is as follows: Mr. Bauer: 46,238; Messrs. Becker and Burville: 4,238; Mr. Brown: 40,238; Messrs. Kearns and Thebault and Ms. Lamm-Tennant: 52,238; Mr. McClellan: 16,238; Mr. O’Kelley: 10,238; Mr. Rockart: 22,238; and Mr. Rue: 58,238.
|
| ||
|
| ||
|
| ||
|
| ||
|
| ||
|
| ||
| |||
|
| ||
|
| ||
|
|
Type of Compensation | Amount | |||
Annual Retainer Fee | $ | 50,000 | ||
Grant Date Fair Value of Annual Equity Award | $ | 32,500 | ||
Black-Scholes Value of Annual Option Grant | $ | 32,500 | ||
Board Meeting Attendance | $ | 0 | ||
Committee Attendance Fee | ||||
In person | $ | 1,500 | ||
By telephone | $ | 1,000 | ||
Annual Chairperson Fee | ||||
Audit Committee | $ | 12,500 | ||
Corporate Governance and Nominating Committee | $ | 7,500 | ||
Finance Committee | $ | 7,500 | ||
Salary & Employee Benefits Committee | $ | 12,500 | ||
Lead Director Fee | $ | 15,000 | ||
Expenses | Reasonable |
Page 32
Page 38ChairmanChairperson Fees, as listed in the table above, are paid in cash.ChairmanChairperson Fees, and the Annual Lead Director Fee and any dividends and accrued interest thereon, to a specified future year, the attainment of age 70, or termination of services as a director.2006,2007, the Corporate GovernanceSalary and NominatingEmployee Benefits Committee wasbecame responsible for non-employee director compensation and it engaged Mercer Human Resource Consulting LLC to review Selective’s director compensation program compared to peer groups. As a result of the review, no significant changes are being made to the director compensation program for 2008. The annual chairperson fee for the Audit Committee was changed to the program that is currently$15,000 beginning in effect. As a result of the new SEC executive compensation disclosure rules, responsibility for non-employee director compensation has been transferred to the Salary and Employee Benefits Committee.2008.
Page 33
J. Brian Thebault, Chairperson
Paul D. Bauer
John C. Burville
Joan M. Lamm-Tennant
J. Brian Thebault, Chairperson Paul D. Bauer John C. Burville Ronald L. O’Kelley |
Page 3439
Ratification of Appointment of
Independent Public Accountants
2007.
Category | 2006 |
| 2005 | 2007 | 2006 | ||||||
Audit Fees | $1,319,500 |
| $1,039,800 | $ | 1,353,500 | $ | 1,319,500 | ||||
Audit-Related Fees(1) | $132,000 |
| $173,000 | $ | 164,500 | $ | 132,000 | ||||
Tax Fees | $0 |
| $0 | $ | 0 | $ | 0 | ||||
All Other Fees | $0 |
| $0 | $ | 0 | $ | 0 | ||||
TOTAL | $1,451,500 |
| $1,212,800 | $ | 1,518,000 | $ | 1,451,500 |
(1) Audit-Related Fees for 2006 and 2005 consisted primarily of the independent actuarial review and reserve opinion related to the Audit. The Audit-Related Fees for 2006 also include audits of the employee benefit plans for 2005 and 2006.
(1) | Audit-Related Fees for 2007 and 2006 consisted primarily of the independent actuarial review and reserve opinion related to the Audit. The Audit-Related Fees for 2007 also include audits of the employee benefit plans for 2006 and 2007. |
Page 3540
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, 2006, included in the Annual Report with management, which represented to the Audit Committee that (i) the financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and (ii) management had reviewed Selective’s disclosure controls and procedures and believes those controls are effective.
• | Periodically met with and held discussions with management regarding the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in Selective’s financial statements. | ||
• | Reviewed and discussed the audited financial statements for the year ended December 31, 2007, included in the Annual Report with management, which represented to the Audit Committee that (i) the financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and (ii) management had reviewed Selective’s disclosure controls and procedures and believes those controls are effective. | ||
• | Reviewed and discussed with KPMG LLP, Selective’s independent public accountants who are responsible for expressing an opinion on the conformity of those audited financial statements with the Statements of the Public Company Accounting Oversight Board (United States), their judgments as to the quality, not just the acceptability, of Selective’s accounting principles and such other matters as are required to be discussed with the Audit Committee under Statements of the Public Company Accounting Oversight Board, including the Statement on Auditing Standards No. 61, as amended. | ||
• | Discussed with KPMG LLP, the independent accountant’s independence from Selective and its management, including the matters in the written disclosures from the independent accounts delivered to the Audit Committee as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). |
Reviewed and discussed with KPMG LLP, Selective’s independent public accountants who are responsible for expressing an opinion on the conformity of those audited financial statements with 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 amended.
Discussed with KPMG LLP, the independent accountant’s independence from Selective and its management, including the matters in the written disclosures from the independent accounts delivered to the Audit Committee as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees).
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 Selective’s Annual Report on Form 10-K for the year ended December 31, 2006, 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.
Paul D. Bauer, Chairperson
Joan M. Lamm-Tennant
John F. Rockart
J. Brian Thebault
Paul D. Bauer, Chairperson Joan M. Lamm-Tennant John F. Rockart J. Brian Thebault | ||||
Page 3641
26, 2008.
24, 2009.
the business proposed to be brought before the annual meeting;
the reasons for conducting the business at the annual meeting;
• | the business proposed to be brought before the annual meeting; | ||
• | the reasons for conducting the business at the annual meeting; | ||
• | any material interest of the stockholder in the business; | ||
• | the beneficial owner, if any, on whose behalf the proposal is made; | ||
• | the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and | ||
• | the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner. |
any material interest of the stockholder in the business;
the beneficial owner, if any, on whose behalf the proposal is made;
the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and
the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner.
Selective’s By-laws require that the stockholder provide the following information in writing regarding any nomination for director:
all information relating to each person whom the stockholder proposes to nominate for election as a director as would be required to be disclosed in a solicitation of proxies for the election of such person as a director pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if so elected);
the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and
• | all information relating to each person whom the stockholder proposes to nominate for election as a director as would be required to be disclosed in a solicitation of proxies for the election of such person as a director pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if so elected); | ||
• | the name and address of the stockholder giving the notice, as they appear on our books, and of the beneficial owner of those shares; and | ||
• | the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner. |
the class and number of shares which are owned beneficially and of record by the stockholder and the beneficial owner.
* * * * * * * *
Page 3742
Senior
Executive Vice President, General Counsel
and Corporate Secretary
26, 2008
Branchville, New Jersey
Page 3843
DIRECTIONS
Directions to Principal Offices
40 Wantage Avenue
Branchville, NJ 07890-1000
2008
9:00 a.m.
Branchville, New Jersey 07890
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Selective Insurance Group, Inc.
| proxy | |||
This proxy is solicited by the Board of Directors of Selective Insurance Group, Inc. for use at the Annual Meeting of Stockholders to be held on April 24, 2008. | ||||
The undersigned, a stockholder of Selective Insurance Group, Inc. (the “Company”), hereby constitutes and appoints W. Marston Becker and William M. Rue and/or any one of them (with full power of substitution and the full power to act without the other), proxies to vote all the shares of the Common Stock of the Company, registered in the name of the undersigned at the Annual Meeting of Stockholders of the Company to be held on Thursday, April 24, 2008 at 9:00 a.m. in the auditorium at the headquarters of the Company at 40 Wantage Avenue, Branchville, New Jersey, and at any adjournment thereof. | ||||
Specify your choices by marking the appropriate box (see reverse side), but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendations. The proxies cannot vote your shares unless you sign and return this proxy, submit a proxy by telephone or through the Internet, or attend the meeting and vote by ballot. |
This proxy is solicited by the Board of Directors of Selective Insurance Group, Inc. for use at the Annual Meeting of Stockholders to be held on April 24, 2007.
The undersigned, a stockholder of Selective Insurance Group, Inc. (the “Company”), hereby constitutes and appoints A. David Brown and J. Brian Thebault 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 Tuesday, April 24, 2007 at 9:00 a.m. in the auditorium at the headquarters of the Company at 40 Wantage Avenue, Branchville, New Jersey, and at any adjournment thereof.
Specify your choices by marking the appropriate box (see reverse side), but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendations. The proxies cannot vote your shares unless you sign and return this proxy, submit a proxy by telephone or through the Internet, or attend the meeting and vote by ballot.
Your vote is important. Please vote immediately.
COMPANY # |
Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week, until 12:00 noon (CT) on April 23, 2007.
Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available and follow the instructions.
Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 12:00 noon (CT) on April 23, 2007.
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.
• | 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. |
-- Please detach here --ò
The Board of Directors Recommends a Vote FOR Items 1 and 2.
The Board of Directors Recommends a Vote FOR Items 1 and 2. |
1. | Election of for a term expiring in | 01 02 | o | Vote FOR all nominees | o | Vote WITHHELD from all nominees |
03 Joan M. Lamm-Tennant | (except as marked) | |||||||||
04 Michael J. Morrissey 05 Ronald L. O’Kelley | ||||||||||
(Instructions:To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.) |
| ||||||||||||||
2. | Ratify the appointment of KPMG LLP as independent public accountants for the fiscal year ending December 31, |
| o | For | o | Against | o | Abstain |
Address Change? Mark Box | o Indicate changes below: |
|
Date | ||||
Signature(s) in Box | ||||
Please sign exactly as your name(s) appears on the proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy. |