Except as indicated above, the foregoing persons hold sole voting and investment power.
The following table shows with respect to each individual identified above under Security Ownership of Management, the ownership of shares of FSBI, an affiliate of UTG.
The following table shows with respect to each individual identified above under security ownership of management the ownership held in FSF, an affiliate of UTG.
In accordance with the laws of Delaware and the Certificate of Incorporation and Bylaws of UTG, as amended, UTG is managed by its executive officers under the direction of the Board of Directors. The Board elects executive officers, evaluates their performance, works with managementManagement in establishing business objectives and considers other fundamental corporate matters, such as the issuance of stock or other securities, the purchase or sale of a business and other significant corporate business transactions. In the fiscal year ended December 31, 2009,2012, the Board met 4four times. All directors attended at least 75% of all meetings of the board except Mr.Messrs. John Albin.Albin and Ward Correll.
The Board has reviewed the qualifications of each member of the audit committee and determined no member of the committee meets the definition of a “financial expert”"financial expert". The Board concluded however, that each member of the committee has a proven track record as a successful businessman, each operating their own company and their experience as businessmen provide a knowledge base and experience adequate for participation as a member of the committee.
The Board of Directors does not have a formal nominating committee, or a committee that performs similar functions, and does not have a nominating committee charter. The Board has concluded that the nominating process should not be limited to certain members so that a comprehensive selection of candidates can be considered. Therefore, the nomination process is conducted by the full Board of Directors. The Board of Directors has not adopted a formal policy with regard to the consideration of director candidates recommended by shareholders. The Board of Directors will, however, consider nominees recommended by shareholders. Shareholders wishing to recommend candidates for Board membership must submit the recommendations in writing to the Secretary of the Company at least 90 days prio rprior to a date corresponding to the previous year’syear's Annual Meeting, with the submitting shareholder’sshareholder's name and address and pertinent information about the proposed nominee similar to that set forth for nominees named herein. Proposed nominees will be considered in light of their potential contributions to the Board, their backgrounds, their independence and such other factors as the Board considers appropriate.
Directors and officers of UTG file periodic reports regarding ownership of Company securities with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934 as amended, and the rules promulgated thereunder.there under. UTG is not aware of any individuals who filed late with the Securities and Exchange Commission during 2009.2012. SEC filings may be viewed from the Company’sCompany's Web site www.utgins.com.www.utgins.com.
The Board of Directors has provided a process for shareholders to send communications directly to the Board. These communications can be sent to James Rousey, President and Director of UTG at the corporate headquarters at 5250 South Sixth Street, Springfield, IL 62703.
James P. Rousey, 5154 | President since September 2006, Director of UTG and Universal Guaranty Life Insurance Company since September 2001; President and Director of ACAP Corporation and American Capitol Insurance Company since 2006; President and Director of Texas Imperial Life Insurance Company from 2006 to 2009; Regional CEO and Director of First Southern National Bank from 1988 to 2001. Board Member with the Illinois Fellowship of Christian Athletes from 2001-2005; Board Member with Contact Ministries since 2007;from 2007-2011; Board Member with Amigos En Cristo, IncInc. from 2007-2009. |
The Board of Directors recommends that shareholders vote “FOR”"FOR" the election of the director nominees listed above.
EXECUTIVE OFFICERS OF UTG
More detailed information on the following executive officers of UTG appears under "Directors":
Jesse T. Correll | Chairman of the Board and Chief Executive Officer |
James P. Rousey | President |
Other executive officers of UTG are set forth below:
Name, Age | Position with UTG and Business Experience |
Theodore C. Miller, 4750 | Corporate Secretary since December 2000, Senior Vice President and Chief Financial Officer since July 1997; Vice President since October 1992 and Treasurer from October 1992 to December 2003; Vice President and Controller of certain affiliated companies from 1984 to 1992. Vice President and Treasurer of certain affiliated companies from 1992 to 1997; Senior Vice President and Chief Financial Officer of subsidiary companies since 1997; Corporate Secretary of subsidiary companies since 2000. |
Douglas P. Ditto, 5457 | Chief Investment Officer and Vice President since June 2009; Chief Investment Officer from 2009 to 2012; Assistant Vice President from June 2003 to June 2009; Chief Executive Officer, and Executive Vice President of First Southern Bancorp since March 1985.
|
Code of Ethics
The Company has adopted a Code of Business Conduct and Ethics for our directors, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions) and employees. The Code of Business Conduct and Ethics is available to our stockholders by requesting a free copy of the Code of Business Conduct and Ethics by writing to us at UTG, Inc,Inc., 5250 South Sixth Street, Springfield, Illinois 62703.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation paid to or earned by UTG's Chief Executive Officer and President, and each of the executive officers of UTG whose salary plus bonus exceeded $100,000 during UTG's last fiscal year:
Summary Compensation Table | |
Name and Principal position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Comp | Nonqualified Deferred Comp Earnings | All Other Comp (1) | Total | Year | Salary | Bonus | Stock Awards (7) | All Other Comp (1) | Total |
Jesse T. Correll Chief Executive Officer | 2009 | 140,550 | 0 | 0 | 0 | 4,323 (1) | 144,873 | 2012 | 161,752 | 75,000 | 74,995 | 6,740 | (1) | 318,487 |
| 2008 | 150,000 | 0 | 0 | 0 | 9,000 (1) | 159,000 | 2011 | 150,000 | 50,000 | 0 | 6,000 | (1) | 206,000 |
| 2007 | 111,057 | 25,000 | 0 | 0 | 4,398 (1) | 140,455 | |
Randall L. Attkisson (6) Chief Operating Officer to 7/1/08 | 2009 | 0 | 0 | 0 | 0 | 0 | |
| 2008 | 80,769 | 0 | 0 | 0 | 4,846 (1) | 85,615 | |
| 2007 | 110,481 | 25,000 | 0 | 0 | 6,491 (1) | 141,972 | |
James P. Rousey President | 2009 | 140,000 | 0 | 0 | 0 | 983 (2) | 140,983 | 2012 | 155,000 | 50,000 | 49,992 | 9,585 | (2) | 264,577 |
| 2008 | 145,000 | 25,000 | 0 | 0 | 6,806 (2) | 176,806 | |
| 2007 | 145,000 | 25,000 | 0 | 0 | 6,922 (2) | 176,922 | 2011 | 145,000 | 35,000 | 0 | 7,615 | (2) | 187,615 |
Theodore C. Miller Secretary/Senior Vice President | 2009 | 110,000 | 0 | 0 | 0 | 1,490 (3) | 111,490 | 2012 | 117,500 | 30,000 | 29,998 | 1,658 | (3) | 179,156 |
| 2008 | 110,000 | 20,000 | 0 | 0 | 3,030 (3) | 133,030 | 2011 | 110,000 | 25,000 | 0 | 720 | (3) | 135,720 |
Douglas P. Ditto Vice President | | 2012 | 109,466 | 60,000 | 59,996 | 4,379 | (6) | 233,841 |
| 2007 | 110,000 | 20,050 | 0 | 0 | 3,071 (3) | 133,121 | 2011 | 100,050 | 50,000 | 0 | 3,951 | (6) | 154,001 |
Douglas P. Ditto Chief Investment Officer appointed 7/17/2009 | 2009 | 100,000 | 0 | 0 | 0 | 3,077 (1) | 103,077 | |
Douglas A. Dockter (5) Vice President | 2009 | 100,000 | 0 | 0 | 0 | 1,420 (4) | 101,420 | 2012 | 100,000 | 12,000 | 0 | 2,820 | (4) | 114,820 |
| 2008 | 100,000 | 0 | 0 | 0 | 2,820 (4) | 102,820 | 2011 | 100,000 | 6,500 | 0 | 2,820 | (4) | 109,320 |
| 2007 | 100,000 | 4,000 | 0 | 0 | 2,820 (4) | 106,820 | |
(1) | All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan. |
(2) | All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan of $263, $2,066$1,890 and $2,302,$1,269, group life insurance premiums of $720, $720 and $720, and country club membership fees of $0, $4,020$6,975 and $3,900$5,626 during 2009, 20082012 and 2007,2011, respectively. |
(3) | All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan of $770, $2,310$938 and $2,351 and$0, group life insurance premiums of $720 $720 and $720 during 2009, 20082012 and 2007,2011, respectively. |
(4) | All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan of $700, $2,653$2,100 and $2,100 and group life insurance premiums of $720 $720 and $720 during 2009, 20082012 and 20072011, respectively. |
(5) | Mr. Douglas A. Dockter is not considered an executive officer of UTG, but is included in this table pursuant to compensation disclosure requirements. |
(6) | Mr. Randall L. Attkisson retired fromAll Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan during 2012 and 2011, respectively. |
(7) | Stock Awards were issued on December 27, 2012 at a price per share of $13.25, the Company effective July 1, 2008. Mr. Attkisson remains a member of the Board of Directors.current market value reported. The awards were issued based on 2012 results. |
Outstanding Equity Awards at Fiscal Year End
Option/SAR Grants/Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
AtAs of December 31, 20092012, there were no sharesunexercised options, stock that has not vested or equity inventive plan awards outstanding for any of the common stock of UTG subject to unexercised options held by theabove named executive officers. There were no options or stock appreciation rights granted to the named executive officers for the past three fiscal years.
Compensation of Directors
UTG's standard arrangement for the compensation of directors provides that each director shall receive an annual retainer of $2,400, plus $300 for each meeting attended and reimbursement for reasonable travel expenses. UTG's director compensation policy also provides that directors who are employees of UTG or its affiliates do not receive any compensation for their services as directors except for reimbursement for reasonable travel expenses for attending each meeting.
Director Compensation | |
Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | Fees Earned or Paid in Cash | All Other Compensation | Total |
Jesse Thomas Correll Chief Executive Officer | 0 | 0 | 0 | 0 | 0 | | 0 |
Randall Lanier Attkisson Director | 3,600 | 0 | 0 | 0 | 3,600 | 3,300 | | 3,300 |
James Patrick Rousey President | 0 | 0 | 0 | 0 | 0 | | 0 |
John Sanford Albin Director | 3,000 | 0 | 0 | 0 | 3,000 | 2,700 | | 2,700 |
Joseph Anthony Brinck, II Director | 3,300 | 0 | 0 | 0 | 3,300 | 3,300 | | 3,300 |
Ward Forrest Correll Director | 3,300 | 0 | 0 | 0 | 3,300 | 2,700 | | 2,700 |
William Wesley Perry Director (1) | 3,300 | 0 | 0 | 0 | 3,300 | 3,600 | | 3,600 |
Thomas Francis Darden, II Director (1) | 3,300 | 0 | 0 | 0 | 3,300 | 3,600 | | 3,600 |
Peter Loyd Ochs Director | 3,600 | 0 | 0 | 0 | 3,600 | 3,600 | | 3,600 |
Howard Lape Dayton Director | 3,600 | 0 | 0 | 0 | 3,600 | 3,600 | (2) 5,000 | 8,600 |
Daryl Jack Heald Director | 3,300 | 0 | 0 | 0 | 3,300 | 3,000 | | 3,000 |
(1) Messrs. Darden and Perry have their fees donated to various charitable organizations.
(2) Other Compensation represents consulting performed relative to management enrichment.
REPORT ON EXECUTIVE COMPENSATION
Introduction
The Compensation Committee of the Board of Directors does not have a formal compensation committee. The compensation of UTG's executive officers is determined byresponsible for determining and recommending to the full Board of Directors.Directors the compensation of the Company's executive officers. The Board of DirectorsCompensation Committee strongly believes that UTG's executive officers directly impact the short-term and long-term performance of UTG. With this belief and the corresponding objective of making decisions that are in the best interest of UTG's shareholders, the Board of DirectorsCompensation Committee places significant emphasis on the design and administration of UTG's executive compensation plans.
Company Management may be requested by the Compensation Committee to provide support such as to attend portions of meetings, make recommendations to the Compensation Committee and perform various day-to-day administrative functions on behalf of the committee. The Company’sCommittee further has the authority to engage outside advisors, experts and other professionals to assist it. No such outside persons were engaged during 2012 or 2011.
The Company's philosophy regarding compensation of executive officers is generally one of executive officers qualify for the same benefits and opportunities as provided to all of the employees of the Company. Special or unique perquisites to executive officers not provided to all employees amount to less than $10,000 to any one individual. The Company maintains a membership to a local country club that can only be utilized by the President. During 2008,2012 and 2011 the Company paid $4,020$6,975 and $5,626, respectively, to maintain this membership. During 2009, this membership was suspended for a period of one year at the President’s request in an effort to further reduce expenses during the economic turmoil.
The Company’s philosophy isCompensation Committee periodically reviewed byreviews the Board of Directors.Company's compensation philosophy. From time to time, as necessary, the Board of Directorscommittee may modify the compensation philosophy, principles or goals. The compensation program is applied to our named executive officers in a fashion similar to its application to the Chief Executive Officer. Any differences are due to difference in job scope and market compensation for various positions.
The Company maintains employee benefits such as paid time off, 401(k) plan, health insurance, dental insurance, group life insurance and long term disability insurance. These benefits are generally competitive to other entities located in the Midwest where the Company must compete for employees. Executive officers are entitled to these benefits on the same basis and terms as other employees of the Company.
Executive Compensation Elements
Base Salary. The Boardtotal compensation package for the executive officers of Directors establishes base salaries at a level intendedUTG consists of multiple elements. The Compensation Committee considers market compensation comparisons as it determines the elements, appropriate levels and mix of compensation to be withinpaid to the executive officers in order to retain the executives necessary to the successful operation of the Company. The committee does not operate with rigid standards, rather, it works using a competitive market range of comparable companies. In addition to the competitive market range, manyrange. Many factors are considered in determining base salaries,compensation, including the responsibilities assumed by the executive, the scope of the executive's position, experience, length of service, individual performance and internal equity considerations. In addition to a base salary, increased compensation of current and future executive officers of the Company will be determined using a “performance based”"performance based" philosophy. UTG’sUTG's financial results are analyzed and future increases to compensation will be pr oportionatelyproportionately based on the profitability of the Company.
Messrs. Jesse Correll and James Rousey, the Company’s CEO and President, voluntarily reduced their annual base salaries by $10,000 and $5,000, respectively, effective January 1, 2009, to further reduce and control expenses.
Base Salary - The Board of Directors through recommendations from the Compensation Committee establishes base salaries at a level intended to be within the competitive market range of comparable companies.
Incentive Awards.Awards - The Board of Directors, from time to time, may approve incentive awards for the executive officers. These incentive awards are generally in the form of a onetimeone-time cash bonus payment. Incentive awards are determined based on the overall operations of the Company as well as individual performance considerations. The Company does not utilize a specific set formula in the determination of incentive awards.
Stock Options -. Stock options are granted at the discretion of the Board of Directors. There were no options granted to the named executive officers during the last threetwo fiscal years.
Employment Contracts.Contracts - There are no employment agreements or understandings in effect with any executive officers of the Company.
Deferred Compensation.Compensation - The Company has no deferred compensation arrangements with any of its executive officers.
Tax and Accounting Implications of Compensation.Compensation - As one of the factors considered in performing its duties, the Board of Directors evaluates the anticipated tax treatment to the Company and its subsidiaries, as well as to the executives, of various payments and benefits. The deductibility of some types of compensation depends upon the timing of an executive’sexecutive's vesting or exercise of previously-granted rights. Deductibility may also be affected by interpretations of and changes in tax laws.
Chief Executive Officer
On March 27, 2000, Jesse T. Correll assumed the position of Chairman of the Board and Chief Executive Officer of UTG and each of its affiliates. Under Mr. Correll’s leadership, he declined to receive a salary, bonus or other forms of compensation for his duties with UTG and its affiliates in the year 2000. In March 2001, the Board of Directors approved an annual salary for Mr. Correll of $75,000, payment of which began on April 1, 2001. As a reflection of Mr. Correll’s leadership, the compensation of current and future executive officers of the Company will be determined by the Board of Directors using a “performance based” philosophy. The Board of Directors will consider UTG’s financial results and future compensation decisions will be proportionately based on the profitability of th e Company. At the June 2007 meeting, members of the Board approved a salary increase for Mr. Correll to $150,000 annually. The increase became effective July 1, 2007. Additionally a $25,000 bonus was approved based on 2006 results. No bonus was paid during each of the last three years based on results of the previous year. Effective January 1, 2009, Mr. Correll voluntarily reduced his annual salary by $10,000.
Conclusion
The Board of DirectorsCompensation Committee believes this executive compensation plan provides a competitive and motivational compensation package to the executive officer team necessary to produce the results UTG strives to achieve. The Board of Directorscommittee also believes the executive compensation plan addresses both the interests of the shareholders and the executive team.
BOARD OF DIRECTORSCompensation Committee Report
The Compensation Committee of the Board of Directors of UTG has reviewed and discussed the Compensation Disclosure and Analysis required by Item 402(b) of SEC Regulation S-K with Company Management. Based on these reviews and discussions, the Compensation Committee recommended to the Board of Directors that this report on executive compensation be included with this filing.
Executive Compensation Committee
| John S. Albin | Howard L. Dayton |
| Randall L. Attkisson | Daryl J. Heald |
| Joseph A. Brinck, II | Peter L. Ochs |
| Jesse T. Correll | William W. Perry |
| Ward F. Correll | James P. Rousey |
| Thomas F. Darden | |
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on UTG’s Common Stock during the five fiscal years ended December 31, 2009 with the cumulative total return on the NASDAQ Composite Index Performance and the NASDAQ Insurance Index (1). The graph assumes that $100 was invested on December 31, 2004 in each of the Company’s common stock, the NASDAQ Composite Index, and the NASDAQ Insurance Stock Index, and that any dividends were reinvested.
(1) | The Company selected the NASDAQ Composite Index Performance as an appropriate comparison. UTG was listed on the NASDAQ Small Cap exchange until December 31, 2001. Furthermore, the Company selected the NASDAQ Insurance Stock Index as the second comparison because there is no similar single “peer Company” in the NASDAQ system with which to compare stock performance and the closest additional line-of-business index which could be found was the NASDAQ Insurance Stock Index. Trading activity in the Company’s common stock is limited, which may be due in part as a result of the Company’s low profile. The Return Chart is not intended to forecast or be indicative of possible future performance of the Company’s common stock. |
The foregoing graph shall not be deemed to be incorporated by reference into any filing of UTG under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that UTG specifically incorporates such information by reference.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION AND RELATED PARTY TRANSACTIONS
The UTG does not have a compensation committee and decisions regarding executive officer compensation are made byCompensation Committee may make recommendations to the full Board of Directors of UTG.on decisions regarding executive officer compensation. The following persons served as directors of UTG during 20092012 and were officers or employees of UTG or its affiliates during 2009:2012: Jesse T. Correll and James P. Rousey. Accordingly, these individuals have participated in decisions related to compensation of executive officers of UTG and its subsidiaries.
During 2009,2012, Jesse T. Correll and James P. Rousey, executive officers of UTG UG, ACAP, AC and TI,UG, were also members of the Board of Directors of UG, ACAP, AC, and TI.UG.
Jesse T. Correll is a director and executive officer of FSBI and participates in compensation decisions of FSBI. FSBI owns or controls directly and indirectly approximately 38.8%37% of the outstanding common stock of UTG.
OTHERCERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE
The Board of Directors determined that eight of the eleven current directors are "independent" as defined by Rule 5605 of the NASDAQ listing standards. The non-independent directors are Jesse T. Correll, Ward F. Correll and James P. Rousey.
On February 20, 2003, UG purchased $4,000,000 of a trust preferred security offering issued by FSBI. The security has a mandatory redemption after 30 years with a call provision after 5 years. The security pays a quarterly dividend at a fixed rate of 6.515%. The Company received $264,219$264,943 and $264,942$264,219 of dividends in 20092012 and 2008,2011, respectively. On March 30, 2009, UG purchased $1,000,000 of FSBI common stock. The sale and transfer of this security are restricted by the provisions of a stock restriction and buy-sell agreement.
As part of the acquisitionOn November 14, 2011, UTG, Inc. merged with ACAP. Shareholders of ACAP on December 8, 2006,received shares of UTG loaned $3,357,000in exchange for their ACAP shares. ACAP was a 73% owned subsidiary of UG. The merger reduced the corporate structure and provided certain efficiencies and economies to ACAP.the Companies. All ACAP usedshareholders, other than UTG or UG, have the proceedsright to receive 233 shares of UTG common stock for the repaymenteach share of existing debt with an unaffiliated financial institution and to retire all of its outstanding preferred stock. TheACAP common stock they owned at closing. Under the terms of the inter-company loan mirrorexchange ratio, UTG issued 50,328 shares to former ACAP shareholders. An additional 129,548 UTG shares were not issued due to dissenting ACAP shareholders. See Note 8 - Commitments and Contingencies in the interest rate and repayment requirements of the debt with First Tennessee Bank National Association. No payments were made on the loan in 2009 or 2008. At December 31, 2008, the interest due of $224,084 was addedNotes to the balance. As of December 31, 2009,Consolidated Financial Statements for additional information regarding the balance of the loan is $3,259,084.ACAP dissenting shareholders.
During June 2003, UGOn September 28, 2011 UTG entered into a leasejoint ownership agreement with Bandyco, LLC and First Southern National Bank, for an affiliated entity, for a one-sixth8.08% interest in an aircraft. Bandyco, LLC is affiliated with Ward, F.F Correll, who is a director of the Company. The Company iswas responsible for its sharean initial payment of annual non-operational$150,000 on September 30, 2011, along with a $125,000 payment on October 30, 2011. The Company will pay a monthly operational fee of $25,000 starting in November 2011 and lasting through July 2013. The aircraft is issued for business related travel by various officers and employees of the Company. For years 2012 and 2011 UTG paid $573,393 and $392,227 for costs in addition toassociated with the operational costs as are billable for specific use. During 2006, UG entered into an additional lease agreement for a 27.5% interest in a second plane with Bandyco, LLC. The lease term was for a period of five years at a total cost of $166,913. In December 2009, this aircraft was sold.
On March 26, 2002, the Board of Directors of UTG adopted, and on June 11, 2002, the shareholders of UTG approved, the UTG, Inc. Employee and Director Stock Purchase Plan. This plan was terminated effective June 17, 2009 (See Note 10.A. to the consolidated financial statements).aircraft.
Effective January 1, 2007, UTG entered into administrative services and cost sharing agreements with its subsidiaries, UG, AC and TI.subsidiary. Under these arrangements, each companythis arrangement, the subsidiary pays its proportionate share of expenses of the entire group, based on an allocation formula. During 2009,2012 and 2011, UG ACpaid $8,843,596 and TI paid $3,383,565, 2,827,504, and 690,028, respectively. During 2008, UG, AC and TI paid $3,717,696, $3,065,476 and $779,980, respectively.
Respective domiciliary insurance departments have$7,185,037, respectively, in expenses. The Ohio Department of Insurance has approved the agreements of the insurance companiescost sharing agreement and it is Management's opinion that where applicable, costs have been allocated fairly and such allocations are based upon accounting principles generally accepted in the United States of America.
UGThe Company from time to time acquires mortgage loans through participation agreements with FSNB. FSNB services UG'sthe Company's mortgage loans including those covered by the participation agreements. UGThe Company pays a .25% servicing fee on these loans and a onetime fee at loanoriginationloan origination of .50% of the original loan amount to cover costs incurred by FSNB relating to the processing and establishment of the loan. UGThe Company paid $74,153$102,447 and $93,572$136,457 in servicing fees and $384,931$81,851 and $19,283$89,651 in origination fees to FSNB during 20092012 and 2008,2011, respectively.
The Company reimbursed expenses incurred by employees of FSNB relating to travel and other costs incurred on behalf of or relating to the Company. The Company paid $22,521$90,939 and $41,819$15,392 in 20092012 and 2008,2011, respectively to FSNB in reimbursement of such costs. In addition, the Company began reimbursing FSNB a portion of salaries and pension costs for Mr. Correll, Mr. Ditto and a third employee. The reimbursement was approved by the UTG Board of Directors and totaled $332,766$462,819 and $261,777$348,610 in 20092012 and 2008,2011, respectively, which included salaries and other benefits.
UG paid no cashordinary dividends in 2009. On June 30, 2008, UG paid a cash dividend of $1,000,000 to UTG. An additional dividend of $2,000,000 was paid$3,316,722 and $3,530,000 to UTG on December 18, 2008. Thesein 2012 and 2011, respectively. No extraordinary dividends were comprised entirely of ordinary dividends. No regulatory approvals were required prior topaid during the payment of these dividends.
On July 20, 2009, the Company’s indirect 73% owned subsidiary AC, a Texas life insurance company, entered into a definitive stock purchase agreement for the sale of its 100% owned life insurance subsidiary, TI. The transaction was completed on December 30, 2009. TI was sold to United Funeral Directors Benefit Life Insurance Company, an unaffiliated third party. The sale price was $6,415,169 which was paid in cash. The transaction had no impact to the consolidated income statement of the Company. TI was an immaterial subsidiary acquired in 2006 as part of the acquisition of ACAP Corporation and subsidiaries. The Company has a history of acquisition and consolidation. TI is a Texas only stipulated premium insurance company. This fact made a consolidation o r merger of this company with any of the other insurance companies within the group impractical.two year period.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTSPRINCIPAL ACCOUNTING FEES AND SERVICES
The Audit Committee is required to be directly responsible for the appointment, compensation and retention of the Company's independent registered public accounting firm. The Audit Committee appointed Brown Smith Wallace, LLC (“BSW”("BSW") served as UTG’sthe Company's independent certifiedregistered public accounting firm for the fiscal years ended December 31, 20092012 and 2008. In serving their primary function2011.
Amounts paid to, or billed by, the Company's principal accountant, during the two most recent fiscal years by category were as outside auditor for UTG, BSW performed the following audit services: examination of annual consolidated financial statements; assistance and consultation on reports filed with the Securities and Exchange Commission; and assistance and consultation on separate financial reports filed with the State insurance regulatory authorities pursuant to certain statutory requirements.follows:
Audit Fees.Fees - Audit fees paid for these audit services in the fiscal yearyears ended December 31, 20092012 and 20082011 totaled $165,200$135,541 and $145,000,$178,250, respectively and audit fees billed for quarterly reviews of the Company’sCompany's financial statements totaled $19,500$20,100 and $23,452$19,500 for the year 2009years 2012 and 2008,2011, respectively.
Audit Related Fees. Fees -No audit related fees were incurred by the Company from BSW for the fiscal years ended December 31, 20092012 and 2008.2011.
Tax Fees.Fees - The Company paid $3,752$15,325 and $5,135$15,183 to BSW relating to certain tax advice and electronic filing of certain federal income tax returns of the Company for the years ended December 31, 20092012 and 2008.2011.
All Other Fees.Fees - During 2009, theThe Company paid $10,000$0 and $17,345 to BSW for services relating to a SAS 70 audit ofstate insurance exams and SEC filings for the Company.year ended December 31, 2012 and 2011, respectively. The audit committee approved the above work and fees of BSW. No other fees were paid to BSW by the Company during 2008.
The audit committee of the Company appoints the independent certified public accounting firm, with the appointment approved by the entire Board of Directors. Non-audit related services to be performed by the firm are to be approved by the audit committee prior to engagement.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 20112014 ANNUAL MEETING
In order for a proposal by a shareholder to be included in UTG’sUTG's proxy statement and form of proxy for the 20112014 Annual Meeting of Shareholders, the proposal must be received by UTG at its principal office on or before January 21, 2011.17, 2014.
Shareholder proposals submitted after April 8, 2011,4, 2014, will be considered untimely, and the proxy solicited by UTG for next year’syear's annual meeting may confer discretionary authority to vote on any such matters without a description of them in the proxy statement for that meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
Management does not intend to bring any other business before the meeting of UTG’sUTG's shareholders and has no reason to believe that any will be presented to the meeting. If, however, any other business should properly be presented to the meeting, the proxies named in the enclosed form of proxy will vote the proxies in accordance with their best judgment.
MULTIPLE STOCKHOLDERSDELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING THE SAMEAN ADDRESS
In late 2000, theThe Securities and Exchange Commission adopted new rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process allows for extra convenience for stockholders and potential costs savings for companies.
This year, oneOne or more brokers with accountholders who are UTG shareholders may send a single proxy statement addressed to two or more shareholders sharing the same address. In those cases, a single proxy statement and Annual Report will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholder. Once you have received notice from your broker that they will be sending communications to your address in this way, they will continue this practice until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to receive proxy materials and communications in this way and would prefer to receive a separate proxy statement, please notify your broker or direct your written request to UTG, Inc., Th eodoreTheodore C. Miller, Secretary, 5250 South Sixth Street, P.O. Box 5147, Springfield, Illinois, 62705-5147, or contact Mr. Miller at 217-241-6300. UTG will deliver promptly, upon written or oral request in the manner provided above, a separate copy of the proxy statement and Annual Report for the fiscal year ended December 31, 20092012 to a shareholder at a shared address to which a single copy was delivered. If your broker is not currently delivering a single proxy statement addressed to two or more shareholders sharing the same address (i.e., you received multiple copies of this proxy statement), and you would like to request delivery of a single copy, you should contact your broker.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
UTG has filed its Annual Report for the year ended December 31, 20092012 on Form 10-K with the Securities and Exchange Commission. A copy of the report, including any financial statements and financial statement schedules, may be obtained without charge by any shareholder. Requests for copies of the report should be sent to Theodore C. Miller, Secretary, UTG, Inc., P.O. Box 5147, Springfield, Illinois, 62705-5147.
| BY ORDER OF THE BOARD OF DIRECTORS |
| |
| UTG, INC. |
| /s/ Theodore C. Miller |
| Theodore C. Miller, Secretary |
Dated: August 8, 2013
Dated: May 11, 2010
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting To Be Held On June 16, 2010September 18, 2013
Shareholder name
Shareholder name
Address
City, state and zip
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.
The Proxy Statement and Annual Report are available at www.utgins.com/annualreport.phpannualreport.php.
If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed below on or before June 7, 2010September 10, 2013 to facilitate timely delivery.
The 20102013 Annual Meeting of Shareholders of UTG, Inc. will be held at the corporate headquarters, 5250 South Sixthoffices of First Southern Bancorp 99 Lancaster Street, Springfield, Illinois 62703,Stanford, Kentucky 40484, on Wednesday, June 16, 2010,September 18, 2013, at 9:00 a.m. centraleastern time.
At the meeting, shareholders will act to elect eleveneight directors, and to vote upon such other business as may properly be brought before the meeting.
Your vote is important. Whether or not you plan to attend the meeting, please review the Proxy Statement and Annual Report at www.utgins.com/www.utgins.com/annualreport.php. Complete this proxy form and return it promptly to Stock Transfer, UTG, Inc., 5250 South Sixth Street, Springfield, IL 62703.
Please call 1-800-248-8841 or e-mail stock.transfer@utgins.com to request a paper copy or you may download the Proxy Statement and Annual Report from www.utgins.com/www.utgins.com/annualreport.php.
Directions: Located off Interstate 55,From US Highway 150, take Toronto Road Exit 90, turn east. At intersection of Toronto RoadUS Highway 27 to Main Street to Lancaster Street. Parking and South Sixth Street/Frontage Road, turn north (left). On right in approximately 1 mile.
entrance behind building. GPS address: 5250 South Sixth102 West Main Street, Springfield, ILStanford, KY
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PROXY FORM | | UTG, INC. | | PROXY FORM |
| Annual Meeting of Shareholders – To be Held June 16, 2010September 18, 2013 | |
| THE BOARD OF DIRECTORS SOLICITS THIS PROXY | |
| The undersigned hereby appoints Jesse T. Correll and James P. Rousey, or either of them, the attorneys and proxies with full power of substitution and revocation to represent and to vote, as designated below, all the shares of common stock of the Company held of record by the undersigned on April July 26, 2010,2013, at the annual meeting of shareholders to be held at the corporate headquarters, 5250 South Sixthoffices of First Southern Bancorp, 99 Lancaster Street, Springfield, Illinois 62703,Stanford, Kentucky 40484, on Wednesday, June 16, 2010September 18, 2013 at 9:00 a.m., or any adjournment thereof. |
| This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS PRESENTED. |
| Please sign exactly as your name appears on the form and date and mail the proxy promptly. When signing as an attorney, executor, administrator, trustee or guardian, please give your full title as such. If shares are held jointly, both owners must sign. If a corporation, please sign in full corporate name by President and other authorized officer. If a partnership, please sign in partnership name by authorized person. |
Continued and to be voted and signed on reverse. |
| Our Stock Transfer Department is available to assist you with changes or questions concerning your account. |
| Lost Certificate | Notification of a lost stock certificate must be made in writing. |
| Address | Notification of shareholder address changes must be made in writing. If your address has changed or should change in the future, please give us your new address below. |
| Your name | |
| (Old Address) - Street | |
| City | | State | | Zip | |
| (New Address) - Street | |
| City | | State | | Zip | |
| Date new address in effect | | Signature | | |
| Registration | A change in certification registration is needed because of: |
| ¨ | Marriage | ¨ | Divorce |
| ¨ | Death of a tenant | ¨ | Establishment of a trust |
| ¨ | Remove custodian | ¨ | Other – Explain | |
| | | | |
| For instructions about your specific situation, contact our Stock Transfer Department by phone at (217) 241-6410, by writing to UTG, Inc., Attn: Stock Transfer Department, P.O. Box 5147, Springfield, IL 62705-5147 or through our website at www.utgins.com. |
| | | Signature | | | |
| | | Date | |
| Acct# | | |
Fold and Tear Here | | Fold and Tear Here |
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| | | | Withhold | For All |
| 1. | To elect all Director Nominees to serve on the Board of Directors. The nominees are: John S. Albin, Randall L. Attkisson, Joseph A. Brinck, II, Jesse T. Correll, Ward F. Correll, Thomas F. Darden II, Howard L. Dayton Jr., Daryl J. Heald, Peter L Ochs, William W. Perry, James P. Rousey. | For | Authority | Except |
| | ¨ | ¨ | ¨ |
| | *Exceptions: To vote for all director nominees, mark the "For" box. To withhold voting for all nominees, mark the "Withhold Authority" box. To withhold voting for a particular nominee, mark the "For All Except" box and enter name(s) of the exception(s) in the space provided. Your shares will be voted for the remaining nominees. |
| | | | | |
| 2. | In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof. |
Acct# | |
Signature | | Date | |
Signature | | Date | |