THG 2019 Proxy Statement

THE HANOVER INSURANCE GROUP 2019 PROXY STATEMENT 46 Option Exercises and Stock Vested in 2018 The following table sets forth information for our NEOs regarding the value realized during 2018 pursuant to (i) option exercises, and/or (ii) shares acquired upon vesting of previously granted stock awards. Option Awards Stock Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) (1) Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) (1) John C. Roche — — 6,367 714,093 Jeffrey M. Farber — — — — J. Kendall Huber 24,000 1,249,850 5,257 581,266 Richard W. Lavey — — 3,885 429,564 Bryan J. Salvatore — — 3,430 413,521 Former Officer John Fowle — — 1,672 194,889 (1) For stock options, represents the difference between the fair market value of our Common Stock on the date of exercise and the exercise price of the option multiplied by the number of shares acquired upon exercise. For stock awards, represents the number of shares acquired upon vesting multiplied by the closing price of our Common Stock on the vesting date. Pension and Retirement Benefits Cash Balance and Excess Benefit Plan Mr. Huber is the only NEO who participates in the Company’s funded, tax-qualified, noncontributory defined benefit pension plan (the “ Cash Balance Plan ”) and associated non-qualified excess benefit plan (the “ Excess Benefit Plan ”). Effective December 31, 2004, benefits under both these plans were frozen and annual allocations to participant bookkeeping accounts were discontinued. Although future annual allocations were discontinued, interest based on the GATT rate continues to be credited to participant bookkeeping accounts. Each year while the Cash Balance Plan was in effect, the Company allocated an amount equal to a percentage of each participant’s eligible compensation (generally, salary and short-term incentive compensation, up to the federal limits) to a separate bookkeeping account established for each participant. Similarly, each year the Excess Benefit Plan was in effect, the Company provided eligible individuals with the difference between the benefits calculated under the Cash Balance Plan, without regard to federal limitations, and the maximum amount that may be allocated to the participant’s Cash Balance Plan bookkeeping account under federal tax laws. Mr. Huber is fully vested in his benefits under the Cash Balance Plan and Excess Benefit Plan and may elect to receive benefits under the plans at any time following a termination of his employment, either as a one-time lump sum payment or an annuity. Because they joined the Company after the plans were frozen, Messrs. Roche, Farber, Lavey, and Salvatore receive no benefits under the Cash Balance Plan or Excess Benefit Plan. As an employee of Chaucer, Mr. Fowle was never eligible to participate in the Cash Balance Plan or Excess Benefit Plan. Pension Benefits Table Name Plan Name Number of Years of Credited Service (#) Present Value of Accumulated Benefit ($) (1) Payments During Last Fiscal Year ($) J. Kendall Huber Cash Balance Plan N/A 65,088 — Excess Benefit Plan N/A 42,834 — (1) The amounts shown are estimates only and actual benefits will be based upon data, form of benefit elected and age at the time of retirement. The primary assumptions used in the calculations are based on GAAP assumptions as disclosed in Note 8 to the Company’s audited financial statements for the fiscal year ended December 31, 2018 included in the Annual Report. Other assumptions used in the calculations are based on applicable SEC regulations. In particular, the participant is assumed to elect a lump sum payment when he commences benefits, which is assumed to be at age 65, the normal retirement age defined in both the Cash Balance Plan and the Excess Benefit Plan. Also, the participant is assumed to continue his employment to age 65.