|
Item 5.02.
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
|
(c) Appointment
of Certain Officers
On October 30, 2019, Selective Insurance Group, Inc. (the
“Company”) announced that, effective February 1, 2020 (the “Effective Date”), the Company’s Board
of Directors (the “Board”) has appointed John J. Marchioni as President and Chief Executive Officer of the Company.
Mr. Marchioni will continue to serve as a member of the Company’s Board. The Company also announced that, as of the Effective
Date, Gregory E. Murphy will cease serving as Chief Executive Officer of the Company and become Executive Chairman of the Board.
John Marchioni, 50, has served as President and Chief Operating
Officer of the Company since 2013. In May 2019, he was elected to the Company’s Board of Directors. Mr. Marchioni joined
the Company in 1998 as a Government Affairs Specialist, was promoted to Assistant Vice President of Government Affairs in 2000,
and named Vice President of Government Affairs in 2003. He was appointed Vice President and Strategic Business Unit Leader in 2004
and Senior Vice President, Director of Personal Lines and Flood in 2005. In 2007, he was promoted to Executive Vice President,
Chief Field Operations Leader and, in 2008, Executive Vice President, Insurance Operations. He is a graduate of Princeton University
and the Harvard Business School Advanced Management Program.
Gregory Murphy, 64, has served as Chairman and Chief Executive Officer
of the Company since 2013. He served as Chairman, President and Chief Executive Officer of the Company from 2000 to 2013, President
and Chief Executive Officer from 1999 to 2000, President and Chief Operating Officer from 1997 to 1999, and other senior executive,
management, and operational positions of the Company from 1980 to 1997. Mr. Murphy is a graduate of Boston College and the Harvard
Business School Advanced Management Program.
(e) Compensatory
Arrangements of Certain Officers
There is no change in compensation at this time for Mr. Marchioni
in connection with his appointment as President and Chief Executive Officer.
In connection with the appointment of Mr. Murphy as Executive
Chairman of the Board, Selective Insurance Company of America (“SICA”), a wholly-owned subsidiary of the Company, entered
into a new Employment Agreement (the “Employment Agreement”) with Mr. Murphy (the “Executive”), commencing
as of the Effective Date. As of the Effective Date, Mr. Murphy’s previous employment agreement with SICA will terminate.
The following table summarizes the principal provisions of the
Employment Agreement. Defined terms used in this table, but not defined in this Current Report on Form 8-K, have the meanings given
to them in the Employment Agreement.
Term
|
One-year term commences on the Effective Date and ends on February 1, 2021 (the “Term”).
|
Compensation
|
Base salary of $750,000 as of the Effective Date. In lieu of eligibility for long-term incentive plan (“LTIP”) grants of restricted stock units and cash incentive units after the first quarter of 2020, and provided Executive remains employed through the end of the Term (except for a termination without Cause, or due to death or Total Disability), $1,000,000 in cash (the “Cash Award”) to be paid within ten business days following the end of the Term.
|
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, life insurance, relocation plan or policy, or any other plan, program, policy or arrangement of the Company or SICA intended to benefit SICA’s employees generally, except for LTIP grants after the first quarter of 2020.
|
Reimbursements
|
Reimbursements for ordinary travel and entertainment expenses in accordance with SICA’s policies.
|
Perquisites
|
Suitable offices, secretarial and other services, and other perquisites to which other executives of SICA are generally entitled.
|
Severance and
|
·
|
For
Cause or Resignation by Executive: Salary and benefits accrued through termination date.
|
Benefits on Termination
|
·
|
Death,
Disability, or without Cause:
|
|
|
o
|
Remainder of unpaid salary through the end of the Term.
|
|
|
o
|
Annual cash incentive payment.
|
|
|
o
|
The Cash Award.
|
|
|
o
|
Partial reimbursement for the cost of medical, dental, and vision insurance coverages in effect for Executive and dependents for up to 24 months following termination.
|
Release; Confidentiality
|
·
|
Receipt of severance payments and benefits conditioned upon:
|
and
Non-Solicitation
|
|
o
|
Entry into release of claims; and
|
|
|
o
|
No disclosure of confidential or proprietary information or solicitation of employees to leave the Company or its subsidiaries for a period of two years following the termination of the Employment Agreement and assignment of intellectual property rights.
|
This summary table description of the Employment Agreement is
qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is filed herewith as Exhibit
10.1. Mr. Murphy also will be granted, as of November 1, 2019, a retention award of restricted stock units having a monetized value
of $1 million dollars that vests 100% on February 1, 2021, subject to the terms of a service-based restricted stock unit agreement,
a form of which is filed herewith as Exhibit 10.2.