HANOVER INSURANCE GROUP, INC. FILES (8-K) Disclosing Change in Directors or Principal Officers

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Compensatory Arrangements of Certain Officers

  On January 20, 2012, the following actions were taken with respect to the compensation of the Company's Chief Executive Officer ("CEO") and other "named executive officers" (as that term is defined in Item 402 of Regulation S-K) of the Company.  

Approval of 2011 Executive Short-Term Incentive Compensation Program Awards

  The 2011 Executive Short-Term Incentive Compensation Program (the "2011 IC Program") awards for the CEO and other named executive officers ("NEOs") were approved. The following table lists 2011 IC Program awards for our CEO and the NEOs identified below:                                                                                  Restricted             Total                                                                               Stock Award      2011 IC  Program Executive Officer                     Title                  Cash Award        (Shares)           Award Value Frederick H. Eppinger   President and CEO                   $    200,000            13,750     $         706,138  Marita Zuraitis         EVP-President, P&C Insurance        $    100,000             5,750     $         311,658  David Greenfield        EVP and Chief Financial Officer     $     65,000             5,500     $         267,455  J. Kendall Huber        EVP and General Counsel             $     55,000             3,750     $         193,038  Gregory Tranter         EVP, Chief Information Officer                         and Chief Operations Officer        $     50,000             3,250     $         169,633   The 2011 IC Program is historically a cash program. However, for executive officers, including the NEOs listed above, the Compensation Committee decided to pay approximately 70% of the total award value in restricted stock in lieu of cash. The restricted stock vests on the second anniversary of the date of grant. Prior to vesting, such shares are subject to forfeiture and restrictions on sale. Participants must be employees of the Company as of the vesting date for the restricted stock to vest, except as otherwise provided with regard to death, disability or change-in-control.  

Approval of the 2012 Executive Short-Term Incentive Compensation Program

  The 2012 Executive Short-Term Incentive Compensation Program (the "2012 IC Program") for the CEO and certain other executive officers, including the Company's other NEOs, was approved. The 2012 IC Program was established pursuant to the Company's shareholder approved 2009 Short-Term Incentive Compensation Plan (filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K). Individual awards for the NEOs provide for target awards ranging from 65% to 120% of base salary. The actual amount of the award, however, may range from zero to a maximum of 200% of target, based on the Company achieving certain levels of adjusted segment income. The actual amount of each executive officer's award, however, is dependent on the level of achievement of the Company's performance targets, such executive officer's individual performance and such other factors as the Compensation Committee may determine, but in no event may any such award exceed the amount determined in accordance with the pre-established adjusted segment income performance metric. For 2012, awards, if any, are payable in the first fiscal quarter of 2013.  

Approval of the 2012 Long-Term Incentive Program

  The 2012 Long-Term Incentive Program (the "2012 LTIP") for the CEO and other executive officers, including the Company's other NEOs, was approved. The 2012 LTIP was established pursuant to the Company's 2006 Long-Term Incentive Plan (filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K) (the "2006 Plan"). As applied to the CEO, the 2012 LTIP provides for awards of performance-based restricted stock units ("PBRSUs") and Stock Options ("Options"). As applied to the other NEOs, and certain other executive officers of the Company, the 2012 LTIP provides for awards of PBRSUs, Options and time-based restricted stock units ("RSUs").  The PBRSUs vest 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant, but only to the extent the Company's three year (2012-2014) average relative total shareholder return (TSR) as compared to a pre-established peer group places the Company's performance above a certain percentile. Participants                                           2  -------------------------------------------------------------------------------- must be employees of the Company as of the vesting dates for the PBRSUs to vest, except as otherwise provided with regard to death, disability or change-in-control. The actual PBRSU award may be as low as zero, and as high as 150% of the target award, based on the three-year average relative TSR actually achieved.  The RSUs vest 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant. Participants must be employees of the Company as of the vesting dates for the RSUs to vest, except as otherwise provided with regard to death, disability or change-in-control.  The Options vest 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant. Participants must be employees of the Company as of the vesting dates for the Options to vest, except as otherwise provided with regard to disability or change-in-control. Each Option has a ten year term and an exercise price of $36.81 per share, which was the closing price per share of THG's common stock as reported on the New York Stock Exchange on the date of grant (January 20, 2012).  

The following table sets forth the number of PBRSUs (at target), RSUs and Options granted to the following executive officers.

    Executive Officer                         Title                      PBRSUs        RSUs        Options Frederick H. Eppinger   President and CEO                             45,000            0       120,000  Marita Zuraitis         EVP-President, P&C Insurance                  10,000       10,000        50,000  David Greenfield        EVP, Chief Financial Officer                   7,500        7,500        45,000  J. Kendall Huber        EVP and General Counsel                        4,500        4,500        22,500  Gregory Tranter         EVP, Chief Information Officer and Chief                         Operations Officer                             4,500        4,500        22,500                                            3 

--------------------------------------------------------------------------------