PAGE
EXHIBIT 10.6
CONSENT OF BOARD OF DIRECTORS TO ACTION
BY UNANIMOUS WRITTEN CONSENT
The undersigned, being all the Directors of Selective Insurance Group, Inc.,
a New Jersey Corporation, (the "Company"), acting by unanimous written
consent without a meeting, do hereby adopt the following resolutions
effective December 31, 1997:
WHEREAS, Selective Insurance Group, Inc. (the "Company") has in
effect the Selective Insurance Group, Inc. Directors' Plan
(the "Plan"), which Plan provides certain retirement benefits to
present and former nonemployee directors (the "Participants"); and
WHEREAS, the Board of Directors of the Company (the "Board")
desires (i) to terminate the Plan effective as of December 31, 1997
(the "Effective Date"), (ii) to fully vest all accrued benefits under
the Plan to Participants whose benefits thereunder are not vested
as of the Effective Date, and (iii) to provide for the payment of
accrued benefits to Participants, all in the manner hereinafter set
forth in these resolutions; it is therefore
RESOLVED, that effective as of the Effective Date the accrued
benefits of all Participants under the Plan be, and the same
hereby are, fully vested as of the Effective Date; and it is
further
RESOLVED, that all Participants or their executors,
administrators, personal representatives or beneficiaries
who have commenced receiving benefits under the Plan prior
to the Effective Date shall continue to receive benefits equal
to benefits payable in accordance with the provisions of the
Plan as in effect prior to the Effective Date; and it is further
RESOLVED, that each Participant who is a director of the Company
as of the Effective Date shall be entitled to receive his or
her benefits under the Plan which are accrued up to and
including the Effective Date, in accordance with these
resolutions hereinbelow, based upon his or her period of service
as a director of the Company from the date of commencement of
such service up to and including the Effective Date; and it is
further
RESOLVED, that as of the Effective Date the amount of benefits
accrued for each Participant who is a director of the Company
on the Effective Date shall be converted into units
(a "Unit" or "Units") issued to each such Participant, with the
number of Units issued to each such Participant to be determined
by dividing the amount of his or her accrued benefits as of
the Effective Date by the average of the high and low sale
prices of a share of the Company's common stock
("Common Stock") as reported on the Nasdaq National Market on
the Effective Date (the "Fair Market Value on the Effective Date");
and it is further
PAGE
RESOLVED, that (i) each Unit shall accrue an amount equal to the
amount of dividends as and when declared and paid from time to
time on a share of Common Stock, (ii) said amounts accrued with
respect to each Unit shall be deemed reinvested in Units on the
same basis as dividends are reinvested in shares of Common Stock
under the Company's dividend reinvestment plan for stockholders
in effect from time to time (the "Dividend Reinvestment Plan"),
and (iii) each such reinvested Unit shall have a value equal to
the fair market value of a share of Common Stock on the date
of such dividend reinvestment under the Dividend Reinvestment Plan;
and it is further
RESOLVED, that on the effective date of such Participant's
termination of service as a director of the Company as determined
by the Board ("Retirement Date"), such Participant shall be
entitled to receive the value of his or her Units in cash, either
in a lump sum or in equal annual installments over a period
of up to fifteen years, at the election of such Participant,
the lump sum or installment payment, as the case may be, to
be determined by dividing the accrued Units to be distributed
by the average high and low of the Company's Common Stock as
reported on the Nasdaq National Market on the Retirement
Date or appropriate anniversary thereof in the case of
installment payments; provided, however, that in the event that
any such Participant shall cease to serve as a director of
the Company following a "change in control" of the Company,
as hereafter defined, such Participant shall be immediately
entitled to receive in cash, either in a lump sum or in equal
annual installments over a period of five years, at the election
of such Participant, the value of his or her Units as
aforementioned; and it is further
RESOLVED, that in the event of the death of any such Participant
prior to the receipt by such Participant of the value of his or
her Units, as hereinabove provided, the surviving spouse of such
Participant shall be entitled to receive in cash, either in a lump
sum or in equal annual installments over a period of up to fifteen
years, at the election of such surviving spouse, or if such
Participant shall have no surviving spouse the executor(s)
or administrator(s) of the estate of such Participant on behalf
of such estate, shall be entitled to receive in cash, in a
lump sum, the value of the Units held by such deceased Participant
on the date of his or her death and not theretofore paid by
the Company, said Units to be valued as hereinabove provided;
and it is further
RESOLVED, that for the purposes hereof a "change in control"
shall be deemed to occur upon the first to occur of any of the
following events:
(i) The acquisition by any person or group,
including, without limitation, any current
stockholder or stockholders of the Company,
of securities of the Company resulting in
such person's
2
PAGE
or group's owning of record
or beneficially twenty-five percent (25%)
or more, of any class of voting securities
of the Company;
(ii) The acquisition by any person or group,
including, without limitation, any current
stockholder or stockholders of the Company,
of securities of the Company resulting in
such person's or group's owning of record
or beneficially twenty percent (20%)
or more, but less than twenty-five percent
(25%), of any class of voting securities
of the Company, if the Board adopts
a resolution that such acquisition
constitutes a change in control;
(iii)The sale or disposition of all or substantially
all of the assets of the Company;
(iv) The reorganization, recapitalization, merger,
consolidation or other business combination
involving the Company the result of which
is the ownership by the shareholders of
the Company of less than eighty percent (80%)
of those voting securities of the resulting
or acquiring entity having the power to
elect a majority of the board of directors
of such entity; or
(v) A change in the membership in the Board
which, taken in conjunction with any other
prior or concurrent changes, results in twenty
percent (20%) or more of the Board's
membership being persons not nominated by
the Company's management or the Board as set
forth in the Company's then most recent
proxy statement, excluding changes resulting
from substitutions by the Board because
of retirement or death of a director or
directors, removal of a director or
directors by the Board or resignation
of a director or directors due to demonstrated
disability or incapacity; and it is further
RESOLVED, that the rights to receive payments in respect of
Units pursuant to these resolutions shall be nonforfeitable and
shall inure to the benefit of such Participants and their
respective surviving spouses, executor(s), administrator(s) and
heirs, as the case may be; and it is further
3
PAGE
RESOLVED, that in the event that the number of outstanding
shares of Common Stock is changed as a result of a stock
dividend, stock division or other adjustment or change
in the capital structure of the Company, or in the event
that outstanding shares of Common Stock are exchanged for securities
of the Company or another company by reason of any merger,
consolidation, reorganization or similar change, the
Committee on Directors of the Board (the "Committee") shall
make an appropriate adjustment in the number of Units
issued to each Participant pursuant hereto; and it is further
RESOLVED, that the Committee shall administer the benefits
provided hereunder, and the interpretation of said Committee
with respect hereto shall be final, conclusive and binding on all
Participants and the Company; and it is further
RESOLVED, that the Plan be, and it hereby is, terminated
as of the Effective Date; and it is further
RESOLVED, that the proper officers of the Company be,
and each of them hereby is, authorized and empowered,
to execute and deliver, for and on behalf of the Company, all
such further agreements, instruments and documents, as they,
or any of them, shall deem necessary or appropriate in order to
carry into effect the intents and purposes of the foregoing
negotiations.
/S/ David Brown /s/ Joan Lamm-Tennant
----------------------- ------------------------
A. David Brown Joan Lamm-Tennant
/s/ William A. Dolan, II /s/ S. Griffin McClellan III
----------------------- ------------------------
William A. Dolan, II S. Griffin McClellan III
/s/ James W. Entringer /s/ Russell R. Moffett
----------------------- ------------------------
James W. Entringer Russell R. Moffett
/s/ William C. Gray /s/ Gregory E. Murphy
----------------------- ------------------------
William C. Gray Gregory E. Murphy
4
PAGE
/s/ C. Edward Herder /s/ William M. Rue
----------------------- ------------------------
C. Edward Herder William M. Rue
/s/ Frederick H. Jarvis /s/ Thomas D. Sayles, Jr.
----------------------- ------------------------
Frederick H. Jarvis Thomas D. Sayles, Jr.
/s/ William M. Kearns, Jr. J. Brian Thebault
----------------------- ------------------------
William M. Kearns, Jr. J. Brian Thebault
5