SELECTIVE INSURANCE GROUP, INC. RESTRICTED STOCK UNIT AGREEMENT
Exhibit
10.2
SELECTIVE
INSURANCE GROUP,
INC.
2005
OMNIBUS STOCK PLAN
This
RESTRICTED STOCK UNIT AGREEMENT (the “Restricted Stock
Unit
Agreement”) is made and entered into as of [DATE] (the “Date of
Grant”), by
and between Selective Insurance Group, Inc., a New Jersey corporation (the
“Company”) and
[EMPLOYEE] (the “Recipient”).
WHEREAS,
the Salary and Employee Benefits Committee (the “Committee”) of the
Board of Directors of the Company (the “Board”) has approved
the grant of Restricted Stock Units pursuant to the Selective Insurance Group,
Inc. 2005 Omnibus Stock Plan, as amended (the “Plan”), as
hereinafter defined, to the Recipient as set forth below;
NOW,
THEREFORE, in consideration of the covenants and agreements herein contained,
and intending to be legally bound hereby, the parties agree as follows:
1.
Definitions. Capitalized
terms which are not defined herein shall have the meanings set forth in the
Plan.
2.
Grant of Restricted
Stock Units. The Company hereby grants to the Recipient an
award of [NUMBER] Restricted Stock Units, subject to all of the terms and
conditions of this Restricted Stock Unit Agreement and the Plan.
3.
Lapse of
Restrictions. All Restricted Stock Units shall vest as set
forth in this Section 3, and, except as herein provided, shall be forfeited
upon
the Recipient’s termination of employment with the Company and all its
Subsidiaries. The Restricted Stock Units shall become vested if the
Recipient is employed by the Company or any Subsidiary as of the applicable
anniversary date set forth below (the “Vesting
Date”). Notwithstanding the foregoing, the Restricted Stock
Units shall not be forfeited and the Recipient shall be vested in the Restricted
Stock Units if the Recipient terminates employment with the Company and all
its
Subsidiaries prior to the Vesting Date solely as a result of the Recipient’s
death, termination of employment on or after “Early Retirement Age” or “Normal
Retirement Age,” as each is defined in the Retirement Income Plan for Selective
Insurance Company of America (the “Retirement Income
Plan”), or “Total Disability” as defined in the Retirement Income
Plan.
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Date
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Percentage
Vested
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[Third
anniversary of the Date of Grant]
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[100%]1
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1
[Actual dates and vesting percentages to be determined by the Committee
at the
time of grant.]
4.
Dividend
Equivalents. Following the vesting of a Restricted Stock Unit,
the Recipient shall also be entitled to receive the Fair Market Value of
that
number of shares of Company Stock that would have been payable had the aggregate
dividends paid with respect to a share of Company Stock during the period
commencing on the date of grant of the Restricted Stock Unit and terminating
on
the date on which the Recipient is entitled to settlement of such Restricted
Stock Unit pursuant to Section 6 of this Restricted Stock Unit Agreement
(that
is, on the Vesting Date, the Recipient’s Separation from Service or the first
business day following the expiration of six months following the Recipient’s
Separation from Service, as applicable) been immediately reinvested in Company
Stock on the dividend payment date. All such dividend equivalents
shall be subject to the same vesting and forfeiture requirements as apply
to the
Restricted Stock Units, and shall be paid to the Recipient in shares of Company
Stock (with any fractional shares paid in cash) in accordance with, and at
the
same time as, settlement of the vested Restricted Stock Units to which they
are
related.
5.
Restrictions on
Transfer. The Restricted Stock Units may not be sold,
assigned, hypothecated, pledged or otherwise transferred or encumbered in
any
manner except (i) by will or the laws of descent and distribution or (ii)
as may
be permitted by the Committee pursuant to Section 22(c) of the Plan.
6.
Settlement of
Restricted Stock Units.
(a) Subject to
the provisions of Section 15 of the Plan and this Section 6, the Company
shall
deliver to the Recipient (or, if applicable, the Recipient’s Designated
Beneficiary or legal representative) that number of shares of Company Stock
as
is equal to the number of Restricted Stock Units covered by this Restricted
Stock Unit Agreement that have become vested and nonforfeitable as soon as
administratively practicable after the Vesting Date but in no event later
than
the end of the calendar year in which the Vesting Date occurs.
(b)
Notwithstanding paragraph (a) of this Section 6, if the Recipient terminates
employment with the Company and all its Subsidiaries prior to the Vesting
Date
solely as a result of the Recipient’s death, termination of employment on or
after “Early Retirement Age” or “Normal Retirement Age,” or “Total Disability,”
as defined in the Retirement Income Plan, then the Company shall deliver
to the
Recipient (or, if applicable, the Recipient’s Designated Beneficiary or legal
representative) that number of shares of Company Stock as is equal to the
number
of Restricted Stock Units covered by this Restricted Stock Unit Agreement
as
soon as administratively practicable after the Recipient’s Separation from
Service, but in no event later than the end of the calendar year in which
such
Separation from Service occurs. The Recipient’s “Separation from
Service” shall mean his “separation from service,” within the meaning of Section
409A of the Code and Treas. Reg. Section 1.409A-1(h)(1), from the
Company.
(c)
Notwithstanding anything in this Section 6 to the contrary, to the extent
(i) the Recipient is entitled to settlement of Restricted Stock Units upon
his Separation from Service pursuant to paragraph (b) of this Section 6;
and
(ii) at the time of his Separation from Service, the Recipient is a “specified
employee” of the Company under Section 409A of the Code (a “Specified
Employee”), then delivery of Company Stock and payment of any related dividend
equivalents upon settlement of the Recipient’s Restricted Stock Units shall be
made,
2
without
interest, upon the earlier of (i) the first business day following the
expiration of six months following the Recipient’s Separation from Service; and
(ii) the date of the Recipient’s death; provided, however, that such deferral
shall be effected only if and to the extent required to avoid adverse tax
treatment to the Recipient under Section 409A of the Code.
(d) If the
Recipient is (or is reasonably expected to be) a “covered employee” within the
meaning of Section 162(m) of the Code for the calendar year in which delivery
of
Company Stock or payment of dividend equivalents would ordinarily be made
to the
Recipient, the Company may delay delivery to the Recipient of that portion
of
the shares of Company Stock and/or dividend equivalents for which the Company
reasonably believes that Section 162(m) of the Code will preclude the Company
from taking a compensation expense deduction, until the Recipient’s Separation
from Service. Notwithstanding the foregoing, if the Recipient is a
Specified Employee of the Company at the time of his Separation from Service,
then such delayed delivery of Company Stock or payment of dividend equivalents
shall be made on the first business day following the expiration of six months
following the Recipient’s Separation from Service.
7.
No Rights as a
Shareholder. Until shares of Company Stock are issued, if at
all, in satisfaction of the Company’s obligations under this Restricted Stock
Unit Agreement, the Recipient shall have no rights as a shareholder.
8.
Notices. Any
notice required or permitted under this Restricted Stock Agreement shall
be
deemed given when delivered personally, or when deposited in a United States
Post Office, postage prepaid, addressed, as appropriate, to the Recipient
either
at the Recipient’s address as last known by the Company or such other address as
the Recipient may designate in writing to the Company.
9.
Securities Laws
Requirements. The Company shall not be obligated to transfer
any shares of Company Common Stock issued in settlement of this Restricted
Stock
Unit grant from the Recipient to another party, if such transfer, in the
opinion
of counsel for the Company, would violate the Securities Act of 1933, as
amended
from time to time (or any other federal or state statutes having similar
requirements as may be in effect at that time). Further, the Company
may require as a condition of transfer of any shares to the Recipient that
the
Recipient furnish a written representation that he or she is holding the
shares
for investment and not with a view to resale or distribution to the
public.
10.
Protections Against
Violations of Constituent Documents. No purported sale,
assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation
of a
security interest in or lien on, any of the shares of Company Stock deliverable
following the vesting of the Restricted Stock Units by any holder thereof
in
violation of the provisions of the Certificate of Incorporation or the By-Laws
of the Company, shall be valid, and the Company will not transfer any of
said
shares of Company Stock on its books nor will the holder of any of said Company
Stock be entitled to vote, nor will any dividends be paid thereon, unless
and
until there has been full compliance with said provisions to the satisfaction
of
the Company. The foregoing restrictions are in addition to and not in
lieu of any other remedies, legal or equitable, available to enforce said
provisions.
3
11.
Taxes. The
obligations of the Company under this Restricted Stock Unit Agreement shall
be
conditional on satisfaction of the Company’s legal tax withholding obligations
and, unless the Recipient has made alternative arrangements satisfactory
to the
Company with respect to such tax withholding obligations, the Company will
(1)
withhold from the shares of Company Stock otherwise deliverable hereunder
such
number of shares as it determines is necessary to satisfy all applicable
withholding tax obligations in respect of such shares, or (2) to the extent
permitted by law, deduct any such taxes from any payment of any kind otherwise
due to the Recipient by the Company.
12.
Failure to Enforce
Not
a Waiver. The failure of the Company to enforce at any time any
provision of this Restricted Stock Agreement shall in no way be construed
to be
a waiver of such provision or of any other provision hereof.
13.
Governing
Law. This Restricted Stock Unit Agreement shall be governed by and
construed according to the laws of the State of New Jersey without regard
to its
principles of conflict of laws.
14.
Amendments.
Except as otherwise provided in Section 16, this Restricted Stock Unit Agreement
may be amended or modified at any time only by an instrument in writing signed
by each of the parties hereto.
15.
Survival of
Terms. This Restricted Stock Unit Agreement shall apply to and bind
the Recipient and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal
successors.
16.
Agreement Not
a
Contract for Services. Neither the grant of Restricted Stock Unit,
the execution of this Restricted Stock Unit Agreement nor any other action
taken
pursuant to this Restricted Stock Unit Agreement shall constitute or be evidence
of any agreement or understanding, express or implied, that the Recipient
has a
right to continue to provide services as an officer, director, employee or
consultant of the Company for any period of time or at any specific rate
of
compensation.
17.
Severability.
If a provision of this Restricted Stock Unit Agreement is held invalid by
a
court of competent jurisdiction, the remaining provisions will nonetheless
be
enforceable according to their terms. Further, if any provision is
held to be over broad as written, that provision shall be amended to narrow
its
application to the extent necessary to make the provision enforceable according
to applicable law and enforced as amended.
18.
Incorporation
of Plan;
Acknowledgment. The Restricted Stock Unit Award is granted pursuant
to the Plan, and the Restricted Stock Units and this Restricted Stock Unit
Agreement are in all respects governed by the Plan and subject to all of
the
terms and provisions thereof, whether such terms and provisions are incorporated
in this Restricted Stock Unit Agreement by reference or are expressly cited.
By
signing this Restricted Stock Agreement, the Recipient acknowledges having
received and read a copy of the Plan.
4
IN WITNESS
WHEREOF, the
parties hereto have executed and delivered this Restricted Stock Unit Agreement
on the day and year first above written.
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SELECTIVE
INSURANCE GROUP, INC.
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By:
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Title:
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[EMPLOYEE]
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[CURRENT
DATE]
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