| | | Proposals | | | Recommended Vote | |
1 | | ||||||
Election of | | | FOR | | |||
| | Ratification of the Audit Committee’s appointment of | | | FOR | | |
| | Approval, on an advisory basis, of the compensation of the Company’s named executive | | | FOR | | |
4 | | | Approval, on an advisory basis, of the frequency of future shareholder votes on executive compensation | | | EVERY ONE YEAR | |
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Paul Besong | Carlton | Clancy | Christopher Drahozal | | | Matthew Foran | | | Mark Green | | | Kevin Leidwinger | | | Lura McBride | | | George Milligan | | | James Noyce | | | Susan Voss | | ||||||||||
| | | | | | | | | | | X | | | | | | | | | | | | | | | | | | | | | | | ||
Accounting | | | | | | X | | ||||||||||||||||||||||||||||
| X | | | | | | | | | | | | | | | | | | | | | X | | | | | |||||||||
Actuarial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | | | | |
| | X | | X | | X | | | | | X | | X | | |||||||||||||||||||||
X | | X | | X | | X | | X | | ||||||||||||||||||||||||||
Business Operations | | | X | | | X | | | X | | | | | | X | | | X | | | X | | | X | | | X | | | X | | | | | |
Corporate | | | X | | X | | X | | X | | X | ||||||||||||||||||||||||
| X | | | X | | | X | | | X | | ||||||||||||||||||||||||
X | | X | |||||||||||||||||||||||||||||||||
Finance & Capital | | | | | | X | | X | | | | | X | ||||||||||||||||||||||
| X | | | | | X | | ||||||||||||||||||||||||||||
| | | X | | | X | |||||||||||||||||||||||||||||
Industry Service | | | | | | | | | X | | |||||||||||||||||||||||||
| | | X | | X | | | X | | | | | | X | | | X | | | X | | ||||||||||||||
| | | | | | | | | | | | | | X | | | X | | | X | | | | | | X | | | X | | | | | ||
Marketing | | | | | | | | | | | | | | | X | | | X | | | X | | | X | | | | | | | | | | | |
Regulatory & Government | | | | | | | | | | | | X | | | | | | | | | | | | | | | | | | | | | X | | |
Risk Management | | | | | | X | | | X | | | | | X | | | X | | | X | | | X | | | X | | | X | | | | | ||
Technology | | | X | | | | | | X | | | | | | X | | | | | | X | | | X | | | | | | | | | | |
45–50 | 51–60 | 61–70 | 71+ | ||
Age at December 31, 2015 | 1 | 6 | 5 | — | |
0–5 | 6–10 | 11–15 | 15–20 | 20+ | |
Years of service as a Director through December 31, 2015 | 3 | 3 | — | 4 | 2 |
Male Directors: | 9 | ||||
Female Directors: | 3 |
| Board Diversity Matrix | | ||||||||||||||||||||||||
| Total Number of Directors: 12 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose Gender | | ||||||||||||
| Gender Identity | | | | | | | | | | | | | | | | | | | | | | | | | |
| Directors | | | | | 3 | | | | | | 9 | | | | | | — | | | | | | — | | |
| Demographic Background | | | | | | | | | | | | | | | | | | | | | | | | | |
| African American or Black | | | | | — | | | | | | 1 | | | | | | — | | | | | | — | | |
| White | | | | | 3 | | | | | | 8 | | | | | | — | | | | | | — | | |
Director Name | | | Audit Committee | | | Compensation Committee | | | Executive Committee | | | Investment Committee | | | Nominating and Governance Committee | | | Risk Management Committee | | |
| | | | | | | | | | | | | | | | | | | ||
Kevin J. Leidwinger | | | | | | | | | M | | M | | | | | | M | | ||
Independent Directors | | | | | | | | | | | | | | | | | | | | |
John-Paul E. Besong | | | M | | | | | | | | | | | | | | | M | | |
Scott L. Carlton | | | M, F | | M | | | | | | C | | | | | | | | ||
Brenda K. Clancy | | | C, F | | | M | | | M | | | | | | | | | | | |
Christopher R. Drahozal | | | M | | | | | | M | | | | | | | | C | | ||
| | | | | | | | | | | M | | | | | | M | | ||
Mark A. Green | | | | | | M | | | | | | | | | | | | M | | |
Lura E. McBride | | | | | | M | | | | | | | | | M | | | M | | |
George D. Milligan | | | M | | | | | M | | | M | | | C | | | | | ||
James W. Noyce, | | | M, | | | M | | C | | | | | | M | ||||||
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Kyle D. Skogman, | | | M | | | | | | M | | | M | | M | | | | | ||
Susan E. Voss | | | | | | C | | | | | | M | | | | | | M |
| | Scott L. Carlton Age 54 Director since 2012 | | | | Mr. Carlton has a strong international business background and extensive experience within the finance and accounting functions in a global public company. He is currently the President of Tokai Carbon GE LLC, the US subsidiary of Tokai Carbon, a global leader in carbon-based materials, a position he has held since 2017. Prior to this position, Mr. Carlton was the President of SGL Carbon LLC ( “SGL Carbon”) for 10 years, leading the U.S. companies of SGL Carbon, a leading worldwide manufacturer of carbon-based products. From 2002 until 2007, Mr. Carlton served as Vice President of Finance and Controlling for the largest business unit of SGL Carbon, and in that capacity was responsible for the controlling, finance and accounting functions. Since beginning his career with SGL Carbon in 1994, Mr. Carlton has worked in a variety of accounting and financial positions at various locations within and outside of the U.S. Mr. Carlton holds a bachelor’s degree in financial management, a masters of business administration degree from the University of North Carolina Charlotte, and completed the Senior Executive Education Program at the London Business School. Mr. Carlton also has insurance experience on both a domestic and international scale. He has also served as director in the Carolinas chapter of the National Association of Corporate Directors (“NACD”). He is a registered NACD Certified Director, as well as a Governance Fellow and an audit committee financial expert. He also serves on the board of E4 Carolinas of Charlotte, North Carolina as Treasurer. Mr. Carlton is a first cousin by marriage to Mr. Drahozal, another director of the Company. | | |
| | Brenda K. Clancy Age 68 Director since 2016 | | | | Ms. Clancy has a wealth of valuable experience in the insurance industry, having most recently served as the Global Chief Technology Officer for AEGON N.V. (“AEGON”) (2013-2016), which is a multinational life insurance, pensions and asset management company headquartered in The Hague, Netherlands. AEGON is a parent company of Transamerica Corporation, an American holding company for various life insurance companies and investment firms doing business primarily in the United States, offering life and supplemental health insurance, investments, and retirement services. Throughout her 40-year career with AEGON, Ms. Clancy held numerous financial leadership positions including President of Transamerica Life Insurance Company (2008-2016), Executive Vice President and Chief Operating Officer of Transamerica Life Insurance Company (2004-2008), Senior Vice President, Information & Finance and Treasurer of Life Investors Insurance Co. of America (1997-2004), and Vice President and Controller of Life Investors Insurance Co. of America (1992-1997). She was actively involved in all major acquisitions, strategy development, change initiatives and business integration. Ms. Clancy served as a Director for UnityPoint Health, a nonprofit healthcare organization operating in Iowa, Illinois and Wisconsin until December 31, 2022. She is also an audit committee financial expert. | | |
| | Kevin J. Leidwinger Age 59 Director since 2022 | | | | Mr. Leidwinger became our President and Chief Executive Officer in August 2022 after more than 30 years in the insurance industry. He previously served as President and Chief Operating Officer of CNA Commercial, a property and casualty business insurance company from June 2015 to April 2022. He also spent many years with Chubb Commercial Insurance, where he served in casualty, liability and underwriting management roles. Mr. Leidwinger served as Director of National Council on Compensation Insurance, Inc. (NCCI) and NCCI Holdings, Inc. from May 2018 to April 2022, and has served as Director of 2001 Development Corporation since September 2022. Mr. Leidwinger received an undergraduate degree from Dickinson College. | | |
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Voss Age 67 Director since 2014 | | | | Ms. Voss joined American Enterprise Group, Inc. as its Vice President and General Counsel in November 2013. Headquartered in Des Moines, Iowa, American Enterprise Group provides personal and customized health and life insurance solutions for individuals, families and small business owners. In 2019, Voss became VP of Government Relations and retired December 31, 2019. Prior to joining American Enterprise Group, Inc., Ms. Voss founded her own consulting firm in 2013, Voss Consulting, LLC, which provides consulting and expert witness services in the areas of insurance and financial product regulation and compliance issues. Before Voss Consulting, Ms. Voss worked in Iowa state government for 31 years, the last 20 of which were spent with the Iowa Insurance Division. In 2005 she was appointed by then-Governor Tom Vilsack to serve as Iowa Insurance Commissioner, a position she held until 2013. Ms. Voss was elected by her peers as an officer of the National Association of Insurance Commissioners (“NAIC”) in 2007 and served as its President in 2011. During her time as Iowa Insurance Commissioner and her tenure with the NAIC, Ms. Voss served on a number of NAIC committees including: Market Conduct and Regulation Committee (which she chaired from 2005 to 2006), the Principles-Based Reserving Working Group (which she chaired in 2012), International Insurance Committee (which she chaired in 2012), Life and Annuities Committee, Financial Condition Committee and Financial Regulation Standards and Accreditation Committee. Ms. Voss is also a member of the Board of Directors for NCCI-the National Council of Compensation Insurers and Everlake Life Insurance Company. Ms. Voss brings regulatory and compliance expertise to the Board of Directors. | | |
| | John-Paul E. Besong Age 69 Director since 2013 | | | | Mr. Besong has a strong technical, business and management background with a distinguished management career as an officer and information technology expert of a Fortune 500 company. Mr. Besong previously held the position of Senior Vice President of e-Business and Chief Information Officer for Rockwell Collins, a Fortune 500 company based in Cedar Rapids, Iowa, that provides aviation electronics for both commercial and military aircraft. He was appointed Senior Vice President and Chief Information Officer in 2003, serving until 2015. Since 2015, Mr. Besong has served as a director of QCR Holdings, Inc. of Moline, Illinois, a multi-bank holding company. Mr. Besong is a strong community supporter and member of various industry and community boards. He serves on the board of directors of Lean Aerospace Initiative (LAI), Junior Achievement of Eastern Iowa (Cedar Rapids Area), Mercy Medical Center, Iowa Public Television Foundation and Technology Association of Iowa (“TAI”) CIO Advisory Board, where he serves as a member and former chair of the executive board of TAI. Mr. Besong’s business background provides him with a very strong understanding of technological advances critical to the insurance industry. The Board of Directors believes that Mr. Besong’s qualifications to serve as director include his business acumen and distinguished management career as an officer and information technology expert of a Fortune 500 company. | | |
| | Matthew Foran Age 42 Director since 2022 | | | | Matthew R. Foran is co-founder and president of Stoic Lane, Inc., a private holding company in Chicago, IL. His strengths include his extensive experience in the insurance technology sector. From 2018 to April 2021, he led the alternative distribution division of The Hartford Insurance Group. Mr. Foran’s background includes serving as leader of IVANS Marketplace at Applied Systems from 2015 to 2018; CEO at EvoSure, LLC, an insurance technology company, from 2012 to 2015; director of strategy and operational planning and execution at Zurich North America from 2009 to 2012; and in a business development role at Marsh USA, Inc. from 2004 to 2009. Mr. Foran graduated from the University of Illinois with a degree in Economics. Mr. Foran brings extensive experience in the insurance technology sector and investment experience to the Board of Directors. | | |
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James W. Noyce Age 67 Director since | | | | Mr. Noyce has a strong business, accounting and insurance industry background, with extensive public company experience. Before retiring, Mr. Noyce had nearly three decades of experience in the financial services industry, most recently as Chief Executive Officer and Director of FBL Financial Group, Inc. (“FBL”), an insurance holding company headquartered in West Des Moines, Iowa. While at FBL, Mr. Noyce served as Chief Executive Officer and Director (2007-2009), Chief Financial Officer (1996-2007), and Chief Administrative Officer (2002-2007). From January 2000 to July 2002 he was Executive Vice President and General Manager of the property casualty companies managed by FBL. Mr. Noyce began his employment with FBL and its affiliates in 1985. From January to May 2016, Mr. Noyce served as Interim CEO of the Greater Des Moines YMCA while the organization performed a search for a permanent CEO. Since 2009, Mr. Noyce has served as a director of West Bancorporation, Inc. of West Des Moines, Iowa, a bank holding company, and was named Board Chairman in April 2018. Mr. Noyce has held or still holds numerous professional certifications and designations including certified public accountant; Fellow, Casualty Actuarial Society; Associate, Society of Actuaries; Fellow, Life Management Institute; and Member, American Academy of Actuaries. He was named Outstanding CPA in Business and Industry by the Iowa Society of CPAs and was inducted into the American Institute of Certified Public Accountants’ Business and Industry Hall of Fame in 2007. He is also an audit committee financial expert. | | |
| | Mark Green Age 55 Director since 2022 | | | | Mr. Green is an operating partner at Vistria Group, a private equity firm in Chicago, IL. Mr. Green has an extensive background in the insurance sector. Prior to joining Vistria Group in 2021, he served as executive vice president of business development and reinsurance, and executive vice president and president of life and health at Kemper Corporation. From 2009 to 2016, Mr. Green gained valuable experience in various roles at Allstate Corporation, including as vice president and senior vice president at Allstate Financial, president of Ivantage from 2013 to 2015, president of Allstate Dealer Services from 2014 to 2015, and president of Encompass Insurance Company from 2015 to 2016. Prior to joining Allstate, Mr. Green worked for various other companies in the insurance industry from 1995 to 2009. He holds a bachelor’s degree from Macalester College, and a master of business administration degree from Columbia University. Mr. Green has an extensive background in the insurance sector with business development roles, as well as investment experience. | | |
| | Christopher R. Drahozal Age 61 Director since 1997 | | | | Mr. Drahozal is the John M. Rounds Professor of Law at the University of Kansas School of Law in Lawrence, Kansas, where he has taught since 1994. During Fall 2015 and Fall 2018 he was the Mason Ladd Distinguished Visiting Professor of Law at the University of Iowa College of Law. He is on the Board of Directors of The McIntyre Foundation. From 2012 to 2016, Mr. Drahozal served as special advisor to the Consumer Financial Protection Bureau, a government agency headquartered in Washington, D.C., on matters related to the use of arbitration clauses in consumer financial services contracts. Prior to teaching, Mr. Drahozal was in private law practice in Washington, D.C., and served as a law clerk for the Iran-U.S. Claims Tribunal, the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court. Mr. Drahozal is a first cousin by marriage to Mr. Carlton, another director of the Company. Mr. Drahozal is an internationally known scholar whose writing focuses on the law and economics of dispute resolution, particularly arbitration. | | |
| | Lura E. McBride Age 51 Director since 2021 | | | | Ms. McBride is the President & CEO at Van Meter Inc. (“Van Meter”), a one-hundred percent employee-owned electrical and automation distributor, a position she has held since 2016. She previously served as Chief Operating Officer since 2010 and the Vice President of Organizational Effectiveness since 2008. She has responsibility for the overall vision, direction and growth strategy of Van Meter, employing 800 employee-owners in 25 locations across Iowa, Nebraska, Kansas, Minnesota, Wisconsin, Alabama and Virginia. Her focus is on building strong teams through exceptional leadership and a high performing culture to create lasting value for customers, supplier partners, communities, and employee-owners. She serves on the Van Meter Board of Directors and the National Association of Electrical Distributors Foundation Board (NAED). Prior to joining Van Meter in 2008, she worked for 15 years at Accenture, a global management consulting company based out of Chicago, Illinois. Her work experiences were in the areas of Systems Integration, Change Management, Human Performance, Knowledge Management, Business Process Design and Program Management. Ms. McBride graduated from the University of Iowa with a business degree in the fields of Finance and Marketing. In the community, Ms. McBride serves on various boards and committees including The Tippie School of Business Advisory Board, Tanager Place, The Hall-Perrine Foundation and Unity Point St. Luke’s Hospital. | | |
George D. | ||||||||
Milligan Age 66 Director since | | | | Mr. Milligan has a strong business background, with service since 1985 as President of The Graham Group, Inc., of Des Moines, Iowa. The Graham Group, Inc. consists of a real estate firm specializing in developing office buildings and a construction firm specializing in constructing hospital facilities. Since 2005, Mr. Milligan has also served as a director of West Bancorporation, Inc. of West Des Moines, Iowa, a bank holding company. Mr. Milligan serves as a director on the loan committee and nominating and governance committee of the West Bancorporation, Inc. Board of Directors. Mr. Milligan previously served as director of Allied Life Insurance Company. Mr. Milligan is a long-time community leader and supporter, being active with the Boy Scouts of America, the Dowling Foundation, and the Variety Club of Iowa. | | |
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Kyle D. Skogman Age 72 Director since | | | | Mr. Skogman possesses a strong business background. He served as President of Skogman Construction Co. of Iowa from 1990 to 2020, a company that specializes in residential construction and real estate sales, primarily in Cedar Rapids, Iowa. Skogman Homes has built over 6,200 homes while Mr. Skogman served as President. Mr. Skogman also owns an interest in a property-casualty insurance agency. He was inducted into the Cedar Rapids Area Homebuilders Association Hall of Fame in 2008. He serves on the Board of Directors of Mercy Medical Center in Cedar Rapids, Iowa. | | |
Services | | | 2022 Fees ($) | | | 2021 Fees ($) | | ||||||
Audit(1) | | | | | 1,350,000 | | | | | | 1,230,000 | | |
Audit-Related(2) | | | | | 67,850 | | | | | | — | | |
Tax(3) | | | | | 202,187 | | | | | | 231,215 | | |
All Other | | | | | — | | | | | | — | | |
Total Fees | | | | | 1,620,037 | | | | | | 1,461,215 | | |
Services | 2015 Fees | 2014 Fees | ||||||||
Audit (1) | $ | 1,150,000 | $ | 1,394,300 | ||||||
Audit-Related (2) | 274,000 | — | ||||||||
Tax (3) | 99,655 | 80,000 | ||||||||
All Other (4) | — | — | ||||||||
Total Fees: | $ | 1,523,655 | $ | 1,474,300 |
Name and Address of Beneficial Owner | | | Amount and Nature of Beneficial Ownership (#) | | | Percent of Common Stock Outstanding (%) | | ||||||
BlackRock, Inc.(1) 55 East 52nd St. New York, NY 10055 | | | | | 3,727,923 | | | | | | 14.8% | | |
Dee Ann McIntyre(2) 1218 Bishops Lodge Rd. Santa Fe, NM 87501-1009 | | | | | 2,997,102 | | | | | | 11.9% | | |
The Vanguard Group(3) 100 Vanguard Blvd Malvern, PA 19355 | | | | | 2,569,033 | | | | | | 10.2% | | |
Dimensional Fund Advisors LP(4) 6300 Bee Cave Rd, Building One Austin, TX 78746 | | | | | 1,684,237 | | | | | | 6.7% | | |
EARNEST Partners, LLC(5) 1180 Peachtree St NE, Ste 2300 Atlanta, GA 30309 | | | | | 1,663,638 | | | | | | 6.6% | | |
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||
Common | Dee Ann McIntyre 1218 Bishops Lodge Rd Santa Fe NM 87501-1099 | 2,996,862 | (1) | 11.9 | % | ||
Common | Dimensional Fund Advisors LP 6300 Bee Cave Rd, Bldg One Austin TX 78746 | 2,130,531 | (2) | 8.5 | |||
Common | EARNEST Partners LLC 1180 Peachtree St NE Ste 2300 Atlanta GA 30309 | 1,642,978 | (3) | 6.5 | |||
Common | BlackRock, Inc. 40 East 52nd Street New York, New York 10022 | 1,965,518 | (4) | 7.8 | |||
Common | The Vanguard Group 100 Vanguard Blvd Malvern PA 19355 | 1,459,247 | (5) | 5.8 |
Name of Beneficial Owner | | | Amount and Nature of Beneficial Ownership (#)(1) | | | Percent of Common Stock Outstanding (%) | | ||||||
Jeremy J. Bahl | | | | | 18,619(2) | | | | | | * | | |
John-Paul E. Besong | | | | | 16,944 | | | | | | * | | |
Scott L. Carlton | | | | | 263,542(3) | | | | | | 1.04% | | |
Robert F. Cataldo | | | | | 30,766(4) | | | | | | * | | |
Brenda K. Clancy | | | | | 10,262 | | | | | | * | | |
Christopher R. Drahozal | | | | | 818,763(5) | | | | | | 3.24% | | |
Matthew Foran | | | | | 2,405 | | | | | | * | | |
Mark A. Green | | | | | 4,205 | | | | | | * | | |
Kevin J. Leidwinger | | | | | 32,187 | | | | | | * | | |
Eric J. Martin | | | | | 25,499(6) | | | | | | * | | |
Lura E. McBride | | | | | 6,604(7) | | | | | | * | | |
George D. Milligan | | | | | 60,135 | | | | | | * | | |
James W. Noyce | | | | | 20,459(8) | | | | | | * | | |
Randy L. Patten | | | | | 2,980(9) | | | | | | * | | |
Randy A. Ramlo | | | | | 326,074(10) | | | | | | 1.29% | | |
Kyle D. Skogman | | | | | 43,572(11) | | | | | | * | | |
Susan E. Voss | | | | | 14,280(12) | | | | | | * | | |
Michael T. Wilkins | | | | | 169,474(13) | | | | | | * | | |
Micah Woolstenhulme | | | | | 37,458(14) | | | | | | * | | |
All directors and executive officers as a group (19 persons) | | | | | 1,903,314 | | | | | | 7.54% | | |
Title of Class | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percent of Class | |||
Common | John-Paul E. Besong | 5,432 | (2) | * | ||
Common | Scott L. Carlton | 125,151 | (3) | * | ||
Common | Christopher R. Drahozal | 901,517 | (4) | 3.6 | ||
Common | Barrie W. Ernst | 38,477 | (5) | 0.2 | ||
Common | Jack B. Evans | 54,730 | (6) | * | ||
Common | Sarah Fisher Gardial | — | * | |||
Common | Kevin W. Helbing | 95 | (7) | * | ||
Common | Douglas M. Hultquist # | 20,949 | (8) | * | ||
Common | Dawn M. Jaffray | 656 | (9) | — | ||
Common | Casey D. Mahon | 29,518 | (10) | * | ||
Common | George D. Milligan | 31,677 | (11) | * | ||
Common | James W. Noyce | 15,949 | (12) | * | ||
Common | Mary K. Quass | 25,482 | (13) | * | ||
Common | Randy A. Ramlo | 87,513 | (14) | 0.3 | ||
Common | Neal R. Scharmer | 22,020 | (15) | 0.1 | ||
Common | Kyle D. Skogman | 40,890 | (16) | * | ||
Common | Susan E. Voss | 2,919 | (17) | * | ||
Common | Michael T. Wilkins | 41,578 | (18) | 0.2 | ||
Common | All other executive officers (includes two additional persons) | 45,623 | (19) | 0.2 | ||
Common | All directors and executive officers as a group | 1,490,174 | 5.9 | % |
Plan Category | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) (a) | | | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights ($) (b)(1) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) (c) | | |||||||||
Equity Compensation Plans Approved by Security Holders | | | | | 933,725(2) | | | | | | 36.47 | | | | | | 1,465,516(3) | | |
Equity Compensation Plans Not Approved by Security Holders | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | 933,725 | | | | | | | | | | | | 1,465,516 | | |
Equity Compensation Plans Approved by Security Holders | (A) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (B) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | (C) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) | |||||||
Nonqualified Employee Stock Plan: | ||||||||||
Nonqualified Incentive Stock Options | 1,214,041 | $ | 28.77 | 1,394,578 | (1) | |||||
Nonqualified Nonemployee Director Stock Option and Restricted Stock Plan: | ||||||||||
Nonqualified Incentive Stock Options | 169,839 | $ | 27.87 | 69,938 | (2) | |||||
Total: | 1,383,880 | $ | 28.66 | 1,464,516 |
(2) Includes 776,338 stock options, 110,028 RSUs, and 47,359 PSUs (assuming probable achievement estimated as of |
| • Amerisafe, Inc. | | | • ProSight Global | |
| • Argo Group International Holdings Ltd | | | • RLI Corporation | |
| • Donegal Group Inc. | | | • Safety Insurance Group Inc. | |
| • Employers Holdings Inc | | | • Selective Insurance Group Inc. | |
| • Global Indemnity Limited | | | • State Auto Financial Corporation | |
| • Heritage Insurance Holdings, Inc. | | | • Stewart Information Services Corporation | |
| • Horace Mann Educators Corporation | | | • United Insurance | |
| • | | | • Universal Insurance Holdings, Inc. | |
Element | | | Type | | | Form | | | Period | | | Purpose | | |||||||||||||||||||||
Annual Base Salary | | | Fixed | | | Cash | | | Ongoing | | | Attract and retain; recognize individual performance | | |||||||||||||||||||||
Annual Incentive Plan | | | Variable | | | Cash | | | 1 year | | | Short-term company performance | | |||||||||||||||||||||
Long Term Incentive Plan (“LTIP”) | | | Variable | | | Stock Option time-based | | | 3-year pro rata | | | Shareholder alignment, long-term value creation and retention; represents 25% of
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Name and Principal Position | | | 2021 Base Salary ($) | | | 2022 Base Salary ($) | | | Change in Base Salary (%) | | |||||||||
Kevin J. Leidwinger | | | | | N/A | | | | | | 750,000 | | | | | | — | | |
Eric J. Martin | | | | | N/A | | | | | | 475,000 | | | | | | — | | |
Robert F. Cataldo | | | | | 375,000 | | | | | | 400,000 | | | | | | 6.7% | | |
Jeremy J. Bahl | | | | | 275,000 | | | | | | 325,000 | | | | | | 18.2% | | |
Micah Woolstenhulme | | | | | 230,000 | | | | | | 300,000 | | | | | | 30.4% | | |
Randy A. Ramlo | | | | | 800,000 | | | | | | 840,000 | | | | | | 5.0% | | |
Randy L. Patten | | | | | 189,621 | | | | | | 205,000 | | | | | | 8.3% | | |
Michael T. Wilkins | | | | | 500,000 | | | | | | 550,000 | | | | | | 10.0% | | |
Named Executive Officer | | | Target Bonus Opportunity as % of Base Salary | | | Adjusted ROE | | | Statutory Combined Ratio | | |||||||||
Kevin J. Leidwinger | | | | | 125 | | | | | | 50 | | | | | | 50 | | |
Eric J. Martin | | | | | 60 | | | | | | 50 | | | | | | 50 | | |
Robert F. Cataldo | | | | | 50 | | | | | | 50 | | | | | | 50 | | |
Jeremy J. Bahl | | | | | 40 | | | | | | 50 | | | | | | 50 | | |
Micah Woolstenhulme | | | | | 50 | | | | | | 50 | | | | | | 50 | | |
Randy A. Ramlo | | | | | 80 | | | | | | 50 | | | | | | 50 | | |
Randy L. Patten | | | | | 20 | | | | | | 50 | | | | | | 50 | | |
Michael T. Wilkins | | | | | 60 | | | | | | 50 | | | | | | 50 | | |
| | | 2022 AIP Goals (%) | | | 2022 AIP Achievement (%) | | |||||||||||||||||||||
Performance Measures | | | Threshold | | | Target | | | Maximum | | | Result | | | % of Target | | ||||||||||||
Adjusted ROE | | | | | 3.0 | | | | | | 5.0 | | | | | | 7.0 | | | | | | 3.0(1) | | | | 50 | |
Statutory Combined Ratio. | | | | | 102.0 | | | | | | 99.0 | | | | | | 96.0 | | | | | | 102.7(1) | | | | 50 | |
| | | “cliff” vest of the | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs | | | 25 | | | “cliff” vest of the | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | | | 25 | | | one-third of
Grant Type Allocation PSUs — The PSUs are: • earned over a three-year performance period, subject to continued employment; • earned only to the extent that goals are achieved among two separate, equally weighted, performance measures tied to our 2022 Vision performance milestones relating to profit and our GAAP combined ratio; and • settled shares of Company Common Stock with vesting between 0% and 150% of the target award based upon the results achieved. RSUs — The RSUs “cliff” vest of the third anniversary of the grant date and are settled into an equivalent number of shares of Company Common Stock, in each case, generally subject to the executive remaining employed by us through the vesting date. The purpose of the awards is to encourage shareholder alignment, long-term value creation and executive retention. Additionally, because RSUs do not vest for three years, they encourage executive retention. Stock Options — Each option has a ten-year term and, provided the executive remains employed by us through such dates, vests as to one-third of the options on each of the first three anniversaries of the grant date. Stock options directly align with our stock performance since they become valuable only if and to the extent the share price increases after the date of grant. Additionally, because stock options do not fully vest for three years, they encourage executive retention. Performance Measure Selection PSU performance measures are tied to our 2022 Vision performance milestones relating to profit and our GAAP combined ratio. These goals were selected because they are viewed as key indicators of our successful operation of our long-term operating plan. PSU performance goals are measured over a three-year performance period. • Adjusted ROE (Three-Year Average). The Compensation Committee chose Adjusted ROE as an LTIP performance measure because ROE is viewed as a key performance indicator in our industry and is watched closely by investors. Since Adjusted ROE is a function of both income and shareholders’ equity, it encourages management to focus on objectives that are important for creating shareholder value, including the quality and profitability of our underwriting activities and capital management, and discourages excessive risk-taking. • GAAP Combined Ratio (Three-Year Average). The Compensation Committee chose GAAP Combined Ratio as an LTIP performance measure because we believe it culminates book performance and assists with ROE for shareholder return, and also integrates expense monitoring. 44 Goal-Setting Process The Compensation Committee annually reviews the threshold, target and maximum goals for each performance measure of the PSUs in order to evaluate whether they remain rigorous and aligned with shareholder interests. Management presents recommendations to the Compensation Committee regarding the goals, but the Compensation Committee retains the ultimate decision-making authority to set the goals. The performance goals established for the 2022 PSU grant were designed to be challenging, but achievable, given the economic and market conditions at the time the goals were set, with vesting at the maximum goal designed to be difficult. 2022 Grant The 2022 target award opportunities and allocation to each grant type for our participating named executive officers are summarized below. The target award opportunities for Messrs. Leidwinger and Martin were determined at the time of their hiring and were based on peer company compensation for Chief Executive Officers and Chief Financial Officers, respectively, as well as internal pay equity and the level of compensation needed to recruit them to join the Company. LTIP Grant — 2022
(1) The amount for PSUs is shown at target. Pursuant to the terms of his Executive Employment Offer Letter, Mr. Leidwinger’s 2022 PSU awards will have a guaranteed minimum vesting level equal to the target amount. (2) Mr. Patten forfeited his 2022 RSU award upon his resignation in July 2022. 2020 PSU Grant The 2020 PSU grant vested based on performance from January 1, 2020 through December 31, 2022 and service through February 21, 2023. Based on performance against the pre-established performance goals, the 2020 grant vested at 51.1% of target. LTIP PSU Goals and Achievement — 2020 Grant
Patten RSU Grants In February 2022, upon the recommendation of Mr. Ramlo, the Compensation Committee granted special RSU awards with a target grant date fair value of $3,000 each, to certain employees based on their 45 2021 performance, including Mr. Patten. These RSUs were scheduled to vest in February 2025, subject to Mr. Patten’s continued employment through the vesting date. Mr. Patten forfeited his RSU grant upon his resignation. Additional Compensation Leidwinger Appointment Pursuant to Mr. Leidwinger’s Executive Employment Offer Letter (the “Leidwinger Offer Letter”) that was provided to him in connection with his commencement as our President and Chief Executive Officer, Mr. Leidwinger was granted an initial RSU award with respect to 17,500 shares, vesting as follows: (i) with respect to 5,834 shares upon the commencement of his employment with the Company; (ii) with respect to 5,833 shares on December 31, 2023; and (iii) with respect to 5,833 shares on December 31, 2024, subject to his continued employment through each such vesting date. Martin Appointment Pursuant to Mr. Martin’s Executive Employment Offer Letter (the “Martin Offer Letter”) that was provided to him in connection with his commencement as our Chief Financial Officer, Mr. Martin is eligible for a retention bonus payable in June 2023, 2024 and 2025 in the amounts of $10,000, $20,000 and $30,000, respectively, subject to his continued employment through April 1, 2023, 2024 and 2025, respectively. Pursuant to the Martin Offer Letter, the Board of Directors also granted RSUs to Mr. Martin with respect to 10,000 shares, which are scheduled to vest 60% on the one-year anniversary of Mr. Martin’s start date and 40% on the two-year anniversary of his start date, subject to his continued employment through each vesting date. Ramlo Retirement In anticipation of Mr. Ramlo’s retirement in October 2022, he and the Company entered into a Retirement Agreement in July 2022 (the “Ramlo Retirement Agreement”), pursuant to which (1) the Company agreed to continue paying Mr. Ramlo his base salary and provide regular employee benefits through his retirement on October 31, 2022 (the “Ramlo Retirement Date”), and on the Ramlo Retirement Date would pay Mr. Ramlo for his accrued paid time off, if any, consistent with the Company’s standard practices with respect to terminating employees; (2) Mr. Ramlo remained eligible for his 2022 bonus under the AIP, based on actual performance and prorated for his partial year of employment during 2022; and (3) all unvested RSUs and stock options held by Mr. Ramlo vested on the Ramlo Retirement Date and the exercise period on all stock options held by Mr. Ramlo was extended to October 31, 2024. As described above, Mr. Ramlo did not receive any equity awards in 2022 and all unvested PSUs held by Mr. Ramlo lapsed and were terminated as of the Ramlo Retirement Date. Wilkins Retirement In August 2022, Mr. Wilkins notified the Company of his intention to retire, effective September 30, 2022 (the “Wilkins Retirement Date”). In connection with Mr. Wilkins’ planned retirement, the Company and Mr. Wilkins agreed that Mr. Wilkins would continue to be paid his base salary and that all of his employee benefits would continue through the Wilkins Retirement Date. Subject to his not voluntarily terminating his employment or being terminated for cause (as defined in Mr. Wilkins’ Change in Control Severance Agreement) prior to the Wilkins Retirement Date, Mr. Wilkins (i) received a retention bonus of $50,000, which was payable within 30 days following the Wilkins Retirement Date; and (ii) was entitled to be paid his bonus for 2022 under the AIP, based on actual performance and prorated for his partial year of employment. In addition, all unvested RSUs and stock options held by Mr. Wilkins fully vested on the Wilkins Retirement Date and the exercise period on his stock options was extended to September 30, 2024. All unvested PSUs held by Mr. Wilkins lapsed and were terminated upon his retirement. Woolstenhulme Retention Awards Pursuant to the terms of his 2019 offer letter, Mr. Woolstenhulme was entitled to a $50,000 retention bonus and related tax reimbursement in 2022, subject to his continued employment through March 30, 46 2022. Mr. Woolstenhulme is also entitled to receive a $50,000 retention bonus in 2023 subject to his continued employment through March 30, 2023. In addition, in May 2022, the Company granted to Mr. Woolstenhulme a retention RSU award with a target grant date fair value of $150,000, which will vest in full on May 18, 2025, subject to his continued employment through such date. Patten Special Compensation As described above, prior to his resignation in July 2022, Mr. Patten did not participate in the Company’s standard executive compensation program. In February 2022, Mr. Patten received a retention bonus of $15,000. Also in February, 2022, Mr. Ramlo recommended, and the Compensation Committee approved, a supplemental cash award to Mr. Patten, pursuant to which he would be paid $20,000 on April 15, 2022 and December 31, 2022, subject to his continued service through each such date. Mr. Patten forfeited his right to the second payment upon his resignation. In addition, in May 2022, Mr. Ramlo recommended, and the Compensation Committee approved, additional supplemental compensation for Mr. Patten in the amount of $90,000, which was paid to him in a lump sum in May 2022. Company-Sponsored Benefit Plans We believe the insurance and retirement benefit plans we sponsor are an important part of fair and reasonable compensation for all of our employees, including our named executive officers. We design these benefit plans to attract and retain a strong employee base, to provide a measure of financial security for our employees and to assist our employees in providing for their own financial security in a manner that recognizes individual needs and preferences. We also provide these programs because we believe that employees who have a plan for health and financial security are better employees. We apply these programs equally to all employees. Our benefit plans consist of an insurance plan that provides health, vision, dental, disability and basic term life insurance coverage and various retirement plans, including a defined-benefit pension plan and a 401(k) plan with a Company match. The pension plan is discussed further under Pension Benefits below. Nonqualified Deferred Compensation The United Fire & Casualty Company Supplemental Executive Retirement and Deferral Plan (“SERP”) permits certain of our executive officers, including 2022 named executive officers Messrs. Cataldo, Ramlo and Wilkins, the opportunity to save a portion of their direct compensation for retirement. The SERP also allows the Company to make contributions to participants’ accounts. In 2022, the Compensation Committee exercised its discretion to make employer contributions for Messrs. Cataldo, Ramlo and Wilkins. The contributions were intended to recognize the gap between what the selected executives may receive under our tax-qualified retirement plans, which are limited due to IRS regulations, and the amount that would have been deposited in the qualified retirement plans absent such limitations. For amounts deferred after December 31, 2014, (a) any employer contribution made to a participant’s account follows a predetermined vesting schedule, and become 100% vested upon reaching age 65, death, disability, or change in control, and (b) the deferring executive officers may elect to receive their benefits as a lump sum or as annual installments over a 10-year period. As most executives who participated in the SERP have separated from the Company, including Messrs. Ramlo and Wilkins, the Board of Directors has ceased adding new executive officers as SERP participants. Rather, the Compensation Committee believes the United Fire & Casualty Company Supplemental Retirement & Deferral Plan (the “NQDC”) and other executive benefits align with market trends for executive retirement planning. The SERP and the NQDC are discussed further under Nonqualified Deferred Compensation below. Perquisites We do not rely upon perquisites as a method of providing significant compensation to any of our employees, preferring instead to use direct compensation and incentive plans. We provide only those perquisites that are related to our business or that we believe are necessary to attract and retain key executive 47 personnel. For 2022, we paid for country club dues for certain of our named executive officers so they have a club available for business entertainment on our behalf. Perquisites and other personal benefits paid to a named executive officer are reported in the All Other Compensation column of the Summary Compensation Table — 2022. We expect our other named executive officers to use our corporate aircraft for business travel whenever it is reasonable to do so. Occasionally, a spouse or other guest may accompany executive officers on corporate aircraft when the aircraft is already scheduled for business purposes and can accommodate additional passengers. In those cases, there is no aggregate incremental cost to the Company. We permit Mr. Leidwinger, and permitted Mr. Ramlo while he was serving as President and Chief Executive Officer, to use our corporate aircraft for personal travel, and under limited circumstances, directors and executive officers may be permitted to use the aircraft for personal use as well. Named Executive Officers as Shareholders We believe that ownership of Company Common Stock by our executive officers, including our named executive officers, promotes the alignment of their interests with those of our Company and our shareholders. A Board of Directors’ policy sets forth guidelines for stock ownership by certain of our executive officers, including certain of our named executive officers. These guidelines include target levels of stock ownership for each covered executive officer, which must be achieved with a five-year transition period. The goal of these guidelines is to have our executive officers hold a meaningful stake in our Company. The table below shows the target number of shares to be owned by each named executive officer subject to these guidelines as of the record date. As of the record date, each named executive officer subject to these guidelines either held the requisite number of shares of Company Common Stock, or was appropriately trending to goal during the five-year transition period.
(1) Equity ownership targets for Mr. Leidwinger as a Tier 3 executive were calculated as the number of shares equal to four times his base salary on August 22, 2022 divided by the closing price of Company Common Stock on August 22, 2022. Equity ownership targets for Mr. Martin as a Tier 2 executive were calculated as the number of shares equal to one and one-half times his base salary on April 18, 2022 divided by the closing price of Company Common Stock on April 18, 2022. Equity ownership targets for Mr. Cataldo as a Tier 1 executive were calculated as the number of shares equal to his base salary on January 1, 2019 divided by the closing price of our Company Common Stock on December 31, 2018. These guidelines were revised by the Board of Directors on August 19, 2022 resulting in the inclusion of Messrs. Bahl and Woolstenhulme. Equity ownership targets for Mr. Woolstenhulme as a Tier 1 executive were calculated as the number of shares equal to his base salary on August 19, 2022 divided by the closing price of our Company Common Stock on August 19, 2022. Equity ownership targets for Mr. Bahl as a Tier 1 executive were calculated as the number of shares equal to his base salary on August 19, 2022 divided by the closing price of our Company Common Stock on August 19, 2022. (2) Shares held either directly or indirectly and any RSUs (whether vested or unvested) held by the named executive officer are counted toward the target number of shares. Any unexercised stock options or PSUs (whether vested or unvested) held by the named executive officer are not counted toward the target number of shares. The target number of shares are the number of shares to be held by the named executive officer within five years of having a new target guideline set. 48 Report of the Compensation Committee The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s annual proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Susan E. Voss, Chair Scott L. Carlton Brenda K. Clancy Mark A. Green Lura E. McBride James W. Noyce 49 2022 Summary Compensation Table Summary Compensation Table — 2022
(1) The amount reported in this column for Messrs. Leidwinger and Martin for 2022 represents the guaranteed portion of their 2022 bonuses. The amounts reported in this column for Messrs. Woolstenhulme and Wilkins for 2022 represents retention bonuses of $50,000 each that were granted to them in 2019 and 2022, respectively, subject to their continued employment through March 30, 2022 and September 30, 2022, respectively. As described in the CD&A, the amount reported in this column for Mr. Patten for 2022 represents supplemental bonuses of $15,000, $20,000 and $90,000 paid to him in February 2022, April 2022 and May 2022, respectively. (2) Amounts in this column represent the aggregate grant date fair value for PSUs and RSUs, as applicable, granted during 2022, 2021 and 2020. For Messrs. Ramlo and Wilkins, the amounts reported in this column for 2022 also include $297,179 and $245,182, respectively, representing the incremental fair value associated with the modification of their RSU awards in connection with their retirement. Amounts in this column are calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The grant date fair value for stock awards is measured based on the closing price of our Company Common Stock on the grant date, and the probable satisfaction of the performance conditions for the PSU awards as of the date of grant. Assuming the highest level of performance is 50 achieved for the 2022 PSUs, the maximum value of amounts in this column at the grant date would be as follows: Mr. Leidwinger, $302,820; Mr. Martin, $200,396; Mr. Cataldo, $150,014; Mr. Bahl, $93,753; Mr. Woolstenhulme, $131,246; and Mr. Wilkins, $239,075. The values shown have not been adjusted to reflect that these units are subject to forfeiture. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K/A for the year ended December 31, 2022. (3) Amounts in this column represent the aggregate grant date fair value for options granted during 2022, 2021 and 2020. Amounts in this column are calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. To calculate the option amounts we use the Black-Scholes option pricing model. This model estimates the fair value of traded options, which have different characteristics than employee stock options. Changes to the subjective assumptions used in the model can result in materially different fair value estimates. The values shown have not been adjusted to reflect that these units are subject to forfeiture. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K/A for the year ended December 31, 2022. (4) All employees are eligible to participate in our annual performance-based cash award plan if they are in our employ at the time the cash awards for that year are paid. The amounts shown in this column are those amounts earned by the executive for the year shown. These amounts were determined and paid in the subsequent year. For example, any non-equity incentive plan awards shown for 2022 were earned in 2022, but determined and paid in 2023. (5) The 2022 amount in this column reflects the change in pension value under the United Pension Plan that is described further in the Pension Benefits section and above market earnings under the Company’s nonqualified deferred compensation plan. There were no above market deferred compensation earnings for any named executive officers in 2022. Messrs. Cataldo, Bahl, Woolstenhulme, Ramlo, Patten and Wilkins had negative change in pension value amounts as of December 31, 2022 of $123,827, $213,682, $17,397, $476,546, $72,033 and $525,804, respectively. (6) All Other Compensation for 2022 includes:
For Mr. Leidwinger, the amount shown for perquisites and other personal benefits consists of country club dues paid on his behalf, relocation expenses, temporary housing expenses, and the incremental costs associated with his personal use of corporate aircraft. For Mr. Martin, the amounts shown for perquisites and other personal benefits consist of country club dues paid on his behalf. For Mr. Cataldo, the amount shown for perquisites and other personal benefits consists of country club dues paid on his behalf. For Mr. Bahl the amount shown is the incremental cost of an agent incentive trip for his spouse. For Mr. Ramlo, the amount shown for perquisites and other personal benefits consists of $190,123 paid to him in connection with his separation in respect of his accrued and unused paid time off, country club dues paid on his behalf, the incremental cost of agent incentive trips for his spouse, and a charitable contribution made by the Company on his behalf in connection with his retirement. For Mr. Patten, the amount for perquisites and other personal benefit consists of $31,500 paid to him in connection with his separation in respect of his accrued and unused paid time off. For Mr. Wilkins, the amount shown for perquisites and other personal benefits consists of $108,441 paid to him in connection with his separation in respect of his accrued and 51 unused paid time off, country club dues paid on his behalf, the incremental cost of agent incentive trips for his spouse, and a charitable contribution made by the Company on his behalf in connection with his retirement. For Messrs. Woolstenhulme and Wilkins, the tax reimbursements relate to their retention bonuses. (7) The amounts reported in the Bonus and All Other Compensation columns for Mr. Woolstenhulme have been updated from 2021 to reallocate $24,710 related to a tax reimbursement for his retention bonus that was previously reported in the Bonus column. 2022 Grants of Plan-Based Awards The following table details the grants of plan-based awards to our named executive officers in 2022 under the AIP and the United Fire Group, Inc. 2021 Stock and Incentive Plan, as applicable.
52 (1) We estimate the amounts shown in this column by assuming the achievement of the threshold level for the least-weighted performance measure used in our AIP and by multiplying 2022 base salary by 12.5% for Mr. Cataldo; 10% for Mr. Bahl; 12.5% for Mr. Woolstenhulme; 20% for Mr. Ramlo; 5% for Mr. Patten; and 15% for Mr. Wilkins. Pursuant to the terms of their Executive Employment Offer Letters, Messrs. Leidwinger and Martin’s payout under the AIP for 2022 was guaranteed to be no less than the target amount $336,563 and $250,000, respectively. (2) We estimate the amounts shown in this column by assuming the achievement of target levels for all applicable performance measures used in our AIP and by multiplying 2022 base salary by 125% for Mr. Leidwinger; 52.6% for Mr. Martin; 50% for Mr. Cataldo; 40% for Mr. Bahl; 50% for Mr. Woolstenhulme; 80% for Mr. Ramlo; 20% for Mr. Patten; and 60% for Mr. Wilkins. (3) We estimate the amounts shown in this column by assuming the achievement of maximum levels for all applicable performance measures used in our AIP and by multiplying 2022 base salary by 196% for Mr. Leidwinger; 115% for Mr. Martin; 75% for Mr. Cataldo; 60% for Ms. Bahl; 75% for Mr. Woolstenhulme; 120% for Mr. Ramlo; 30% for Mr. Patten; and 90% for Mr. Wilkins. (4) We estimate the amounts shown in this column by assuming the achievement of the threshold level for only one of the two equal-weighted performance measures under our 2022 PSUs. Pursuant to the terms of his Executive Employment Offer Letter, the minimum achievement level for Mr. Leidwinger’s 2022 PSU award is equal to the target amount. (5) Amounts in this column represent the aggregate grant date fair value for stock options, RSUs and PSUs granted during 2022, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation. To calculate the option amounts, we use the Black-Scholes option pricing model. This model estimates the fair value of traded options, which have different characteristics than employee stock options. Changes to the subjective assumptions used in the model can result in materially different fair value estimates. The grant date fair value for RSU and PSU awards is measured based on the closing price of our Company Common Stock on the grant date and the probable satisfaction of the performance conditions for the PSU awards as of the date of grant. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K/A for the year ended December 31, 2022. (6) Represents option awards that vest one-third each year for three years beginning with the first anniversary of the grant date, provided the named executive officer remains employed through the applicable vesting date. (7) Represents RSUs granted to Mr. Leidwinger in connection with his commencement as our President and Chief Executive Officer, which vested with respect to 5,834 shares upon the commencement of his employment with the Company and vests (i) with respect to 5,833 shares on December 31, 2023, and (ii) with respect to 5,833 shares on December 31, 2024, subject to his continued employment through each such vesting date. (8) Represents a grant of RSUs that vest in full on the third anniversary of the grant date, provided the named executive officer remains employed through the vesting date. (9) Represents PSUs that vest on the third anniversary of the grant date only if and to the extent the Company achieves performance goals relating to Adjusted ROE and GAAP Combined Ratio over the 2022-2024 performance period. (10) There is no specific grant date for awards under our AIP. We paid awards based on our 2022 performance during the first quarter of 2023. Please see Compensation Discussion and Analysis in this proxy statement for further information regarding the AIP. Actual amounts paid to each named executive officer under our AIP for 2022 are shown in the Summary Compensation Table — 2022 in this proxy statement and were calculated based on each individual’s base salary for 2021. In connection with their retirements, Messrs. Ramlo and Wilkins remained eligible for prorated payouts under the AIP, based on actual performance. Mr. Patten forfeited his 2022 award under our AIP upon his resignation in July 2022. (11) Represents RSUs granted to Mr. Martin in connection with his commencement as our Chief Financial 53 Officer, which vests 60% on the one-year anniversary of Mr. Martin’s start date and 40% on the two-year anniversary of his start date, subject to his continued employment through each vesting date. (12) Represents RSUs granted to Mr. Woolstenhulme, which vest on May 18, 2025, subject to his continued employment through the vesting date. (13) This number represents the incremental fair value related to the modification of the RSU awards held by Messrs. Ramlo and Wilkins, the vesting of which was accelerated in connection with their retirements. (14) Mr. Patten forfeited his 2022 equity awards upon his resignation in July 2022. Messrs. Ramlo and Wilkins forfeited their 2022 PSU awards upon their retirement in October 2022 and September 2022, respectively. (15) The Board of Directors granted LTIP awards after approval dates for Messrs. Leidwinger, Martin, and Wilkins. Outstanding Equity Awards at 2022 Fiscal Year-End The following table details the outstanding equity awards held by each of our named executive officers as of December 31, 2022. As of December 31, 2022, Mr. Patten did not hold any outstanding equity awards.
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55 (1) The market value of shares or units of stock that have not vested reflects a stock price of $27.36, our closing stock price on December 30, 2022, the last trading day of 2022. (2) These options vest in three equal installments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment through each such vesting date. (3) These PSUs granted on 8/22/2022 will vest on 8/22/2025 and have a guaranteed minimum vesting level equal to target per the Leidwinger Offer Letter. (4) These RSUs vest (i) with respect to 5,833 shares on December 31, 2023 and (ii) with respect to 5,833 shares on December 31, 2024, subject to Mr. Leidwinger’s continued employment through each such vesting date. (5) These RSUs cliff vest on the third anniversary of the grant date, subject to the named executive officer’s continued employment through such vesting date. (6) These PSUs granted on 4/18/2022 will vest on 4/18/2025 and are reported assuming threshold achievement. (7) These RSUs vest 60% on the one-year anniversary of Mr. Martin’s start date and 40% on the two-year anniversary of his start date, subject to his continued employment through each vesting date. (8) These PSUs granted 2/21/2020 vested on 2/21/2023 and are reported based on actual performance through December 31, 2022. (9) These PSUs granted 2/19/2021 will vest on 2/19/2024 and are reported assuming target achievement. (10) These PSUs granted 2/18/2022 will vest on 2/18/2025 and are reported assuming target achievement. (11) These PSUs granted 5/20/2020 will vest on 5/20/2023 and are reported based on actual performance through December 31, 2022. (12) These RSUs granted 5/18/2022 will vest on May 18, 2025, subject to Mr. Woolstenhulme’s continued employment through the vesting date. 2022 Option Exercises and Stock Award Vesting The following table represents the number and value of shares acquired by our named executive officers through the exercise of options and vesting of stock awards during fiscal year 2022.
Pension Benefits All of our employees who are 21 years of age and older automatically participate in our defined- benefit pension plan after completing one year of employment and 1,000 hours of service. When eligibility criteria are met, the employee participates in the plan on the next January 1 or July 1. Employees become 100% vested in the plan after completing five years of service. Effective July 1, 2021, the Company amended the defined-benefit pension plan to convert it from a traditional pension plan with a benefits formula based on 56 annual compensation and years of service to a “cash balance” defined-benefit plan. Participants retained all benefits previously accrued under the traditional pension benefit formula. Prior to July 1, 2021, plan benefits equaled 1.25% of an employee’s five-year average annual compensation, plus 0.5% of average annual compensation in excess of covered compensation, multiplied by the lesser of years of service or 35 years. Effective July 1, 2021, plan benefits equal 4.0%-7.0% of the participant’s annual compensation for the plan year plus 2.0%-3.5% of the participant’s compensation in excess of covered compensation, in each case, depending on the participant’s years of service. Participants are credited with interest on their balances under the plan at the greater of 2% or the discount rate on the yield of 30-year Treasury securities. Covered compensation is determined by reference to the Social Security taxable wage base. Average annual compensation means annual compensation, averaged over the period of five consecutive years of service that produces the highest average. The pension plan uses only salary to determine the average annual compensation. Under federal law, for 2022 the maximum compensation that could be considered for determining benefits was $305,000. The normal form of payment under the pension plan is a joint and 50% survivor annuity for a participant who is married on the annuity starting date and a life annuity for a participant who is unmarried on the annuity starting date. Participants may elect to receive a monthly pension over the participant’s life or a term of up to 20 years or, if the actuarial equivalent of the annuity is $10,000 or less, in the form of a lump sum cash payment. The amount of monthly pension benefits varies depending upon the form of payment elected by the participant, but the payments are in each case the actuarial equivalent of the normal form of payment. Distributions will be in the form of a lump-sum cash payment for vested participant balances of $50,000 or less. Assets of the pension plan belong to the Company and are not taxable to the employee until paid as a benefit. Such assets are subject to a substantial risk of forfeiture until vested by the employee. Normal retirement age under the pension plan is 65, which is the earliest time a participant may retire under the pension plan without any benefit reduction due to age. The earliest age a participant may retire under the plan and still receive benefits is age 55. Participants electing early retirement with at least 20 years of service receive a reduction in benefits of 6% for each year the participant retires after age 55 and before age 60, and a reduction of benefits of 4% for each year the participant retires after age 60 and before age 65. If a participant elects early retirement with less than 20 years of service to us, then the participant’s reduction in benefits is based on an actuarial calculation. None of our continuing named executive officers are currently eligible for early retirement under our pension plan. The following table reports the present value of the annual defined benefit payable for each named executive officer under our pension plan. The present value is based on the retirement benefit formula for the compensation levels and years of service of those officers. As of December 31, 2022, Messrs. Leidwinger and Martin had not yet satisfied the service requirements to participate in the pension plan. Pension Benefits — 2022
Nonqualified Deferred Compensation The Restoration Benefit Credit Plan, which is our supplemental executive retirement plan (“SERP”), permits certain of our executive officers, including our named executive officers, the opportunity to save a 57 portion of their direct compensation for retirement. Executives must make a deferral election in the year prior to the beginning of the earnings period. For performance-based cash bonuses, participants may make elections up to six months prior to the end of the performance period. Newly eligible executives have 30 days to enroll in the plan once they become eligible to participate. For amounts deferred on or prior to December 31, 2014, (a) we pay the deferred amounts to the deferring executive officer upon termination of employment for any reason after the executive reaches age 591∕2, and (b) the deferring executive officer receives the benefits in monthly installments adjusted for gains or losses over a 10-year period. For amounts deferred after December 31, 2014, (a) any employer contribution made to a participant’s account follows a predetermined vesting schedule, and become 100% vested upon reaching age 65, death, disability, or change in control, and (b) the deferring executive officers may elect to receive their benefits as a lump sum or as annual installments over a 10-year period. The SERP also allows the Company to make contributions to participants’ accounts. In 2022, employer contributions were made on behalf of Messrs. Cataldo, Ramlo and Wilkins. The contributions for Messrs. Ramlo and Wilkins were prorated for their partial year of service in 2022. As most participants in the SERP have separated from the Company, the Board of Directors has ceased adding new participants. Instead, the Board of Directors believes the NQDC, described below, paired with other executive benefits such as LTIP, competitively align with market trends for executive retirement planning. The NQDC is a non-qualified deferred compensation plan made available to management, including our named executive officers. Employees participating in the NQDC may elect to defer a portion of their salary, of which the contribution and earnings are immediately vested at 100%. Notational interest is credited to each participant’s deferred account which will be distributed in predetermined installments commencing upon his or her separation from service, or paid in a lump sum upon his or her death or a termination of employment upon a change in control of the Company. Participant deferrals are 100% vested immediately. If the executive officer dies or becomes disabled while employed by us, we will pay the plan benefits as directed by that executive officer. The SERP and NQDC allow participants to utilize in-service distributions to satisfy short-term savings goals. Participants can create these in-service payable accounts at the time of initial enrollment or at re-enrollment. The amounts deferred are subject to our creditors. The following table provides information about the participation by each of our named executive officers in the SERP. Messrs. Leidwinger, Martin, Bahl and Woolstenhulme do not participate in the SERP and Mr. Patten did not participate while he was with the Company. Messrs. Leidwinger and Martin were eligible to participate in the NQDC in 2022, but did not contribute. Nonqualified Deferred Compensation — 2022
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(1) All amounts reported in this column were reported as part of either “Base Salary,” or “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table — 2022 in this proxy statement. (2) All amounts reported in this column were reported as part of “All Other Compensation” in the Summary Compensation Table — 2022 in this proxy statement. (3) The amounts reported in this column do not include any above-market earnings. (4) Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for 2021 and 2020, respectively: Mr. Leidwinger — $0, $0; Mr. Martin — $0, $0; Mr. Cataldo — $65,625, $5,611; Mr. Bahl — $0, $0; Mr. Woolstenhulme — $0, $0; Mr. Ramlo — $355,093, $347,005; Mr. Patten — $0, $0; and Mr. Wilkins — $191,666, $193,828. Executive Employment Offer Letters Leidwinger Executive Employment Offer Letter The Leidwinger Offer Letter provides for an initial base salary of $750,000 per year. The Leidwinger Offer Letter provides that, for 2022, Mr. Leidwinger will be eligible for a potential cash bonus at target of 125% of base salary, pro-rated for his partial year of employment. The Leidwinger Offer Letter provides that Mr. Leidwinger’s cash bonus payout for 2022 will be no less than his pro-rated target ($336,563, based upon a start date of August 22, 2022), regardless of attainment of applicable performance measures. For 2023, Mr. Leidwinger will be eligible for a cash bonus at target of 125% of base salary, with an opportunity to achieve up to 200% of the target cash bonus opportunity. Martin Executive Employment Offer Letter The Martin Offer Letter provides for an initial base salary of $475,000 per year. The Martin Offer Letter also provides that, for 2022, the Chief Executive Officer will recommend a $250,000 cash bonus for Mr. Martin. In addition, the Martin Offer Letter provides that the Chief Executive Officer will recommend that Mr. Martin’s annual target bonus opportunity for subsequent years be set as $285,000 (i.e., 60% of base salary). The Martin Offer Letter also provides for a retention bonus payable in June 2023, 2024 and 2025 in the amounts of $10,000, $20,000 and $30,000, respectively. Potential Payments Upon Termination or Change in Control Ramlo Retirement As described above, in anticipation of Mr. Ramlo’s retirement in October 2022, Mr. Ramlo and the Company entered into the Ramlo Retirement Agreement, pursuant to which (1) the Company agreed to 59 continue paying Mr. Ramlo his base salary and provide regular employee benefits through the Ramlo Retirement Date, and on the Ramlo Retirement Date would pay Mr. Ramlo for his accrued paid time off, if any, consistent with the Company’s standard practices with respect to terminating employees; (2) Mr. Ramlo remained eligible for his 2022 bonus under the AIP, based on actual performance and prorated for his partial year of employment ($286,363); and (3) all unvested RSUs and stock options held by Mr. Ramlo vested on the Ramlo Retirement Date and the exercise period of all stock options held by Mr. Ramlo was extended to October 31, 2024. All unvested PSUs held by Mr. Ramlo lapsed and terminated as of the Ramlo Retirement Date. Mr. Ramlo was also paid $190,123 in respect of accrued and unused paid time off. Under the Ramlo Retirement Agreement, Mr. Ramlo is subject to a perpetual confidentiality covenant and non-compete and non-solicit covenants through April 30, 2024. The Ramlo Retirement Agreement contains a mutual non-disparagement covenant. Wilkins Retirement As described above, in connection with Mr. Wilkins’ planned retirement, the Company and Mr. Wilkins agreed that Mr. Wilkins would continue to be paid his base salary and that all of his employee benefits would continue through the Wilkins Retirement Date. Subject to his not voluntarily terminating his employment or being terminated for cause (as defined in Mr. Wilkins’ Change in Control Severance Agreement) prior to the Wilkins Retirement Date, Mr. Wilkins (i) received a retention bonus of $50,000, which was payable within 30 days following the Wilkins Retirement Date, and (ii) was entitled to be paid his bonus for 2022 under the AIP, based on actual performance and prorated for his partial year of employment ($127,188). In addition, all unvested RSUs and stock options held by Mr. Wilkins fully vested on the Wilkins Retirement Date and the exercise period on his stock options was extended to September 30, 2024. All unvested PSUs held by Mr. Wilkins lapsed and terminated upon his retirement. Mr. Wilkins was also paid $108,441 in respect of accrued and unused paid time off. Patten Resignation Mr. Patten did not receive any severance payments or benefits in connection with his resignation in July 2022, other than the pay out of his accrued and unused paid time off in the amount of $31,500, consistent with the Company’s standard practices with respect to terminating employees. Change in Control Severance Agreements The Company has entered into Change in Control Severance Agreements with each of the continuing named executive officers other than Mr. Bahl and Mr. Woolstenhulme, who are not party to any agreements or arrangements with the Company entitling him to severance payments or benefits. These agreements, among other things, provide for: (1) an 18-month non-competition agreement and (2) in the event of both a change in control and termination of employment by the Company without cause: (a) a severance benefit payable to the named executive officer in an amount equal to 1.5 times the sum of his or her highest annual base salary in effect during the 12-month period prior to his or her termination date plus his or her target annual incentive compensation (or, if higher, the average of the annual bonuses earned by the named executive officer in respect of the three fiscal years of the Company immediately preceding the fiscal year in which the change in control occurs); (b) the continuation of certain insurance benefits for a period of 18 months; (c) the full vesting of each long-term incentive award held by the named executive officer, with any performance measures deemed satisfied at the target level; and (d) certain outplacement benefits. The Compensation Committee believes that these agreements help accomplish the Company’s compensation objectives of attracting and retaining superior talent through competitive compensation. The Compensation Committee also believes that it is appropriate to provide our named executive officers with the protections afforded by these agreements and that these agreements promote management independence and help retain and focus the named executive officers in the event of a change in control. Upon a termination of employment for any reason, our named executive officers will also receive compensation and benefits pursuant to our pension plan and deferred compensation plans. Such plans and arrangements do not discriminate in scope, terms or operation in favor of our named executive officers. 60 Our named executive officers are vested in the benefits available under these plans (specifically excluding the SERP), and therefore do not receive any enhanced benefit as a result of any termination or change in control. The information in the following tables describes the compensation that would be payable under specific circumstances if our continuing named executive officers’ employment had terminated on December 31, 2022: Potential Payments Upon Termination Or Change In Control — 2022
(1) As of December 31, 2022, none of the continuing named executive officers have achieved normal retirement age under our benefit plans. The figures in this column assume the accelerated vesting by the Board of Directors of all unvested stock options, RSUs and PSUs, as applicable. For purposes of this table, we have assumed accelerated vesting of the PSUs at target. (2) Under their existing Change in Control Severance Agreements, the continuing named executive officers are entitled to payment only if their employment is terminated by reason other than a Nonqualifying Termination. Nonqualifying Termination is defined to include (a) by the Company for cause, (b) by the named executive officer for reason other than a good reason, (c) the named executive officer’s death, and (d) by the Company due to the executive’s absence from the executive’s duties with the Company on a full-time basis for a period of 180 consecutive days as a result of the executive’s incapacity due to physical or mental illness. In addition to the value associated with stock options, the figures in this column assume the accelerated vesting by the Board of Directors of all RSUs and PSUs, as applicable. For purposes of this table, we have assumed accelerated vesting of the PSUs at target. (3) Per their existing Change in Control Severance Agreements, the amounts reported in this column as separation compensation for the named executive officers equal 1.5 times the sum of the executive’s highest annual base salary and target annual incentive compensation (or, if higher, the average of the annual bonuses earned by the named executive officer in respect of the three fiscal years of the Company immediately preceding the fiscal year in which the change in control occurs). (4) Under the terms of the existing Change in Control Severance Agreements for the named executive officers, if the payments and benefits they are entitled to receive under these agreements would result in the payment of the excise tax imposed by Section 4999 of the Internal Revenue Code, then their payments and benefits may be subject to reduction. Under their agreements, change in control payments and benefits are reduced by the minimum amount necessary to avoid federal excise tax, if the reduction would result in the named executive officers receiving a higher net after tax amount. The amounts in this column do not reflect the application of any reduction in payment or benefit according to the terms of the Change in Control Severance Agreements. (5) While Messrs. Bahl and Woolstenhulme do not have Change in Control Severance Agreements, values are included for death, disability and change in control as if such agreement were in place. In general, we do not make a payment to a participant in our AIP for a particular year unless the participant is employed by us on the date incentive payments are made, typically in March of the following year. In the case of death or retirement, and at the discretion of our Chairman of the Board and our Chief Executive Officer, we will pay an AIP payment to a participant prorated to the date of death or retirement. Amounts shown for death and retirement assume our Chairman of the Board and our Chief Executive Officer exercised their discretion to make the payment. The Change in Control Severance Agreements in place for 61 continuing named executive officers state that they will be paid an amount equal to their target payment under our AIP for the year in which the change in control occurs, prorated to the date of termination. In this case, termination is presumed to occur on December 31, 2022. Upon termination of employment due to death or retirement, the Board of Directors, may at its discretion, accelerate the vesting of any unvested option awards. In addition, under the terms of the option award agreements, the vesting of unvested stock options will accelerate upon a change in control. Amounts shown are calculated using the fair market value of the stock underlying in-the-money options that would have become exercisable on December 31, 2022, assuming that the Board of Directors accelerated the vesting of all unvested options. Upon termination of employment due to death, retirement, disability or a change in control not involving termination, the Board of Directors, may at its discretion, accelerate the vesting of any unvested RSU or PSU awards. Amounts shown assumes a voluntary acceleration of vesting by the Board of Directors, with PSUs assumed to be accelerated at target. The Change in Control Severance Agreements for the named executive officers provide for the continuation of medical, accident, disability and life insurance benefits with respect to the named executive officer and his/her dependents for a period of 18 months following a change in control at substantially the same level that existed immediately prior to the change in control. The amounts shown for the named executive officers reflect the cost of these benefits as they existed at December 31, 2022. The Change in Control Severance Agreements for the named executive officers provide for outplacement services for a period of 12 months following a change in control. The cost to the Company of these outplacement services is capped for each executive at $15,000. Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Kevin J. Leidwinger, our President and Chief Executive Officer as of December 31, 2022. The median of the annual total compensation of all of our employees, excluding Kevin J. Leidwinger, was $94,537 in 2022, calculated in accordance with the Summary Compensation Table rules. To identify the median employee, we compiled total cash compensation identified in our payroll records, and excluded equity awards, for all full-time, part-time, temporary and seasonal employees employed as of December 31, 2022. We selected total cash compensation as it reflects the principal form of compensation delivered to all of our employees. Further, we annualized cash compensation (other than bonus awards) for permanent full- and part-time employees who were not employed for all of 2022. The annual total compensation of Kevin J. Leidwinger for purposes of this disclosure is $3,376,364, which differs from the amount reported in the Total column of the Summary Compensation Table — 2022 due to the annualization of Mr. Leidwinger’s compensation to reflect his mid-year commencement of employment, as discussed further below. Because Mr. Leidwinger was appointed President and Chief Executive Officer effective August 22, 2022, we annualized his base salary, AIP award and, because the amount of such awards was pro-rated for his partial year of service, his annual equity awards, and added the disclosed values of the relocation and temporary housing expenses incurred in connection with his relocation, the country club dues paid on his behalf, and the incremental costs associated with his personal use of corporate aircraft. We annualized the amount of Mr. Leidwinger’s 401(k) matching contribution, certain country club expenses and the incremental costs associated with his personal use of corporate aircraft, as such amounts were impact by Mr. Leidwinger’s partial year of service. We did not annualize Mr. Leidwinger’s new hire RSU award with respect to 17,500 shares that was granted in connection with his hiring as the value of such award was not impacted by the period of service during 2022, nor did we annualize the relocation and temporary housing expenses incurred in connection with his relocation as such amounts were not prorated or reduced to reflect Mr. Leidwinger’s mid-year employment commencement date. Based on this information, for 2022 the ratio of the annual total compensation of Mr. Leidwinger, our President and Chief Executive Officer, to the median of the annual total compensation of all employees is estimated to be 36 to 1. 62 PAY VERSUS PERFORMANCE
(1) The Principal Executive Officer (“PEO”) and named executive officers for the applicable years were as follows: — 2022: Kevin J. Leidwinger assumed the role of the Company’s PEO, effective August 22, 2022, and Randy A. Ramlo served as the Company’s PEO during 2022 up to August 21, 2022. The Company’s other named executive officers for 2022 were: Eric J. Martin; Robert F. Cataldo; Jeremy J. Bahl; Micah Woolstenhulme; Randy L. Patten; and Michael T. Wilkins. — 2021: Randy A. Ramlo served as the Company’s PEO for the entirety of 2021 and the Company’s other named executive officers were: Michael T. Wilkins; Randy L. Patten; Robert F. Cataldo; Micah Woolstenhulme; and Dawn M. Jaffray. — 2020: Randy A. Ramlo served as the Company’s PEO for the entirety of 2020 and the Company’s other named executive officers were: Michael T. Wilkins; Dawn M. Jaffray; Robert F. Cataldo; and Neal R. Scharmer. (2) Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Messrs. Leidwinger and Ramlo and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s named executive officers reported for the applicable year other than the PEOs for such years. (3) To calculate compensation actually paid, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Messrs. Leidwinger and Ramlo and for the average of the other named executive officers is set forth following the footnotes to this table. (4) Pursuant to rules of the SEC, the comparison assumes $100 was invested on December 31, 2019. Historic stock price performance is not necessarily indicative of future stock price performance. (5) The TSR Peer Group consists of Standard & Poor’s 600 Property and Casualty Index. This is the same industry index used for purposes of the Company’s stock price performance graph in its Annual Report to stockholders. (6) As noted in the CD&A, for 2022, the Compensation Committee determined that Adjusted ROE continues to be viewed as a core driver of the Company’s performance and stockholder value creation and, accordingly, was utilized as a component in both the 2022 AIP and 2022 PSUs. Adjusted ROE is our return-on-equity, calculated in accordance with GAAP, excluding the impact of market value changes on investments. 63 Reconciliation of Compensation Actually Paid Adjustments
(a) Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the other named executive officers, amounts shown represent averages. (b) Represents the aggregate change in the actuarial present value of the accumulated benefits under all defined benefit and actuarial pension plans reported in the Summary Compensation Table for the indicated fiscal year. (c) Represents the sum of the actuarial present value of the benefits under all defined benefit and actuarial pension plans attributable to services rendered during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles. (d) Represents the grant date fair value of the stock option and stock awards granted during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. (e) Represents the fair value as of the indicated fiscal year-end of the outstanding and unvested option awards and stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. (f) Represents the change in fair value during the indicated fiscal year of each option award and stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year. (g) Represents the fair value at vesting of the option awards and stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. 64 (h) Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each option award and stock award that was granted in a prior fiscal year and which vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. (i) Represents the fair value as of the last day of the prior fiscal year of the option award and stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. (j) See footnote 1 above for the named executive officers included in the average for each year. Relationship Between Pay and Performance We believe the compensation actually paid (“CAP”) in each of the years reported above and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance” as the CAP fluctuated year-over-year, primarily due to the result of our stock performance and our varying levels of achievement against pre-established performance goals under our 2022 AIP and our 2022 PSU awards, including our Adjusted ROE performance. The following graphics reflect the relationship between the CAP to our NEOs and our TSR, the TSR of the TSR Peer Group, our net income and our Adjusted ROE during the three most recently completed fiscal years. 65 Performance Measures Used to Link Company Performance and Compensation Actually Paid to the Named Executive Officers The following is a list of financial performance measures, which in the Company’s assessment represent the most important financial performance measures used by the Company to link CAP to the named executive officers for 2022. Please see the CD&A for a further description of these metrics and how they are used in the Company’s executive compensation program, including the AIP and 2022 PSUs. • Adjusted ROE • Statutory Combined Ratio • GAAP Combined Ratio 66 DIRECTOR COMPENSATION We have designed the compensation of our directors to attract and retain qualified directors and to align director compensation with the interests of our shareholders. The Compensation Committee is responsible for making recommendations to the Board of Directors regarding compensation plans and the elements of director compensation. Annual Retainer, Committee Meetings and Expenses
For the 12-month period beginning with the 2022 Annual Meeting, In 2022, following a review of director compensation levels at peer companies and discussions with FW Cook, the Compensation Committee eliminated the attendance fees for regular and unscheduled meetings of the Board of Directors and approved an increase in the base annual retainer for all non-employee directors from $55,000 to $67,000, and also added an additional retainer of $5,000 for members of the Compensation Committee and Audit Committee and an additional retainer of $4,000 for members of the Executive Committee, Nominating and Governance Committee, Investment Committee and Risk Management Committee. In February 2022, the Board of Directors dissolved the ad hoc Succession Planning Committee and approved a one-time stipend in the amount of $10,000 for each member of such committee and an additional $10,000 stipend for the chair of such committee. In addition, in August 2022, the Board of Directors approved additional stipends for the chair and members of the Compensation Committee in the amounts of $10,000 and $7,500, respectively, in recognition of the substantial time and effort spent by members of the Compensation Committee in connection with the retirement of Mr. Ramlo and the appointment of Mr. Leidwinger. Non-Employee Director Fee Schedule — 2022
(1) In May 2022, the Compensation Committee recommended, and the Board of Directors approved, the issuance to each then-serving non-employee director of 1,905 RSUs under our Non-Employee Director Plan. These RSUs vest one year after their grant date, subject to the director’s continued service. 67 The following table shows individual non-employee director compensation during 2022: Non-Employee Director Compensation — 2022
(1) Stock awards represented in this column are scheduled to vest on May 18, 2023 and are subject to forfeiture until vested. Aggregate RSUs outstanding at December 31, 2022 for each of the following non-employee directors was: Besong — 1,905, Carlton — 1,905, Clancy — 1,905, Drahozal — 1,905, Foran — 1,905, Green — 1,905, McBride — 1,905, Milligan — 1,905, Noyce — 1,905, Skogman — 1,905, and Voss — 1,905. At December 31, 2022, Mr. Noyce’s plan balance under the Directors’ Deferred Compensation Plan, including any accrued dividends, represented 4,047 phantom stock units. (2) Amounts in this column represent the aggregate grant date fair value for restricted stock granted during 2022 calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K/A for the year ended December 31, 2022. (3) Aggregate options outstanding at December 31, 2022 for each of the following non-employee directors was: Besong — 1,755, Milligan — 1,755, Noyce — 1,755, Quass — 1,755, and Skogman — 1,755. Carlton, Clancy, Drahozal, Foran, Green, McBride, and Voss have no options outstanding. (4) Messrs. Foran and Green were appointed to the Board of Directors effective February 18, 2022. (5) Ms. Quass resigned from the Board of Directors effective immediately following the 2022 Annual Meeting. Deferred Compensation In November 2012, the Board of Directors approved the adoption of the 2012 Deferred Compensation Plan for United Fire Group, Inc. Non-Employee Directors (“Directors’ Deferred Compensation Plan”). The Directors’ Deferred Compensation Plan allows non-employee directors the opportunity to defer up to 100% of the annual retainer fee they receive for service on our Board of Directors. In order to participate in the Directors’ Deferred Compensation Plan, each non-employee director must submit an election form by December 31 prior to the plan year for which compensation will be deferred. Thereafter, the participating director can change or terminate the election for future years by making a timely new election in the prior year. Compensation amounts deferred by non-employee directors are used to acquire “credited stock units” based on the average market price of Company Common Stock during the month the amounts are deferred. Participating directors also acquire additional credited stock units 68 based on the quarterly dividend paid to our registered shareholders. These dividend amounts are based on each participant’s account balance at the time the dividend is paid and the closing market price of Company Common Stock on the dividend payment date. A participating director’s credited stock units are then valued on an annual basis based on the closing market price of Company Common Stock on the last trading day of each year. By tying a director’s deferred compensation to the performance of Company Common Stock, we believe this plan allows directors to acquire a more meaningful stake in our company. When a participating director leaves the Board of Directors, the director may elect to receive the cash value of the credited stock units in the director’s account either in one lump sum or in equal installments paid out over five years. The participating director selects the manner of distribution when the director elects to participate in the Directors’ Deferred Compensation Plan. The amount payable to a director is the value of the credited stock units in the director’s account, valued at the last trading day of the year the director ceases to serve as a director. 69 Your vote matters – here’s how to vote!vote online or by phone instead of mailing this card.OnlineBefore the Meeting: Go to www.envisionreports.com/UFCSor scan the QR code — login details are located in theshaded bar below.Save paper, time and money!Sign up for electronic delivery atwww.envisionreports.com/UFCSPhoneCall toll free 1-800-652-VOTE (8683) within the USA, USterritories and CanadaVotes submitted electronically before the meeting must bereceived by 12:00 a.m. Central Time on May 17, 2023 4. Approval, on an advisory basis, of the frequency offuture shareholder votes on executive compensation.1 Year 2 Years 3 Years Abstain01 - Scott L. Carlton(Class A Director)03 - Kevin J. Leidwinger(Class A Director)04 - Susan E. Voss(Class A Director)For Against Abstain For Against Abstain For Against Abstain1 U P X02 - Brenda K. Clancy(Class A Director)Using a black ink pen, mark your votes with an X as shown in this example.Please do not write outside the designated areas.03SEBE++A Proposals — The Board of Directors recommends a vote FOR all the nominees listed, FOR Proposals 2 and 3 and 1 YEAR on Proposal 4.3. Approval, on an advisory basis, of the compensation of UnitedFire Group, Inc.’s named executive officers.1. Election of Directors:Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please givefull title.Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below.qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q2023 Annual Meeting Proxy CardFor Against Abstain2. Ratification of the appointment of Ernst & Young LLP as UnitedFire Group, Inc.’s independent registered public accounting firmfor 2023.For Against AbstainYou may vote online or by phone instead of mailing this card.OnlineBefore the Meeting: Go to www.envisionreports.com/UFCSor scan the QR code — login details are located in theshaded bar below.Save paper, time and money!Sign up for electronic delivery atwww.envisionreports.com/UFCSPhoneCall toll free 1-800-652-VOTE (8683) within the USA, USterritories and CanadaVotes submitted electronically before the meeting must bereceived by 12:00 a.m. Central Time on May 17, 2023Your vote matters – here’s how to vote!During the Meeting: Go to www.meetnow.global/M5Y2PNQlogin details are located in the shaded bar below. 2023 Annual Meeting Admission Ticket2023 Annual Meeting of United Fire Group, Inc. ShareholdersMay 17, 2023 10:00 a.m. CT118 Second Avenue SECedar Rapids, IA 52401Upon arrival, please present this admission ticket and photo identification at the registration desk. The Annual Meeting will be simultaneously conducted live via the Internet in which shareholders will be able to attend the Annual Meeting atwww.meetnow.global/M5Y2PNQ.To access the webcast, you must have the information that is printed in the shaded bar located on the reverse side of this form.Small steps make an impact.Help the environment by consenting to receive electronicdelivery, sign up at www.envisionreports.com/UFCSNotice of 2023 Annual Meeting of ShareholdersProxy Solicited by Board of Directors for Annual Meeting — May 17, 2023, 10 a.m. Central Time, at 118 Second Avenue SE,Cedar Rapids, IA 52401, and simultaneously conducted live via the Internet at www.meetnow.global/M5Y2PNQ.Eric J. Martin and Sarah E. Madsen, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of theundersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of United Fire Group, Inc. tobe held on May 17, 2023 at 10 a.m. Central Time or at any postponement or adjournment thereof.Shares represented by this proxy will be voted by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the electionof each of the nominees identified in Proposal 1, FOR Proposals 2 and 3 and 1 YEAR on Proposal 4.In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.(Items to be voted appear on reverse side)United Fire Group, Inc.qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.qChange of Address — Please print new address below. Comments — Please print your comments below.C Non-Voting Items++Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders.The material is available at: www.envisionreports.com/ufcsThe Annual Meeting will be simultaneously conducted live via the Internet in which shareholders will be able to attend the Annual Meeting atwww.meetnow.global/M5Y2PNQ.To access the webcast, you must have the information that is printed in the shaded bar located on the reverse side of this form.2023 Annual Meeting Admission Ticket2023 Annual Meeting of United Fire Group, Inc. ShareholdersMay 17, 2023 10:00 a.m. CT118 Second Avenue SECedar Rapids, IA 52401Upon arrival, please present this admission ticket and photo identification at the registration des 0000101199 3 2022-01-01 2022-12-31 |