UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Horace Mann Educators Corporation

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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18 Horace Mann Educators Corporation Annual Meeting of Shareholders& Proxy Statement AUTO HOME LIFE RETIREMENT
Springfield, Illinois

April 11, 2016

6, 2020



Dear Shareholder:

Shareholder,

You are cordially invited to virtually attend the Annual Meeting of your corporationHorace Mann Educators Corporation to be held at 9:00 a.m. Central Daylight Saving Time on Wednesday, May 25, 2016, at20, 2020. We are pleased to announce that this year’s Annual Meeting will be via live webcast on the Horace Mann Lincoln Auditorium, 1 Horace Mann Plaza, Springfield, Illinois 62715.

Internet. You will be able to attend the Annual Meeting and vote during the live webcast by visiting www.virtualshareholdermeeting.com/HMN2020 and entering the 16-digit control number included in our Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions that accompanied your proxy materials.

We will present a report on Horace Mann’s current affairs, andbe taking questions from Shareholders only in advance of the meeting to reduce the risk of technology problems. If you have questions, please email them to 2020ShareholderMeeting@horacemann.com by May 15, 2020. As time permits, we will have an opportunity foranswer as many questions and comments.

as possible.

We encourage you to read the Proxy Statement and vote your shares as soon as possible. You may vote via the Internet,online, by telephone or by completing and returning a proxy card. Specific voting instructions are set forth in the Proxy Statement, the Notice of Internet Availability of Proxy Materials and the proxy card. You may revoke your voted proxy at any time prior to the meeting or vote in person if you attendelectronically during the virtual meeting.

We look forward to seeing you.having you join us for the virtual meeting. If you vote by proxy and do not plan to attend, let us know your thoughts about Horace Mann either by letter or by comment on the proxy card.

Sincerely,

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Gabriel L. Shaheen

Marita Zuraitis

Chairman of the Board

President and Chief Executive Officer

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H. Wade Reece
Chairman of the Board
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Marita Zuraitis

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President & Chief Executive Officer

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ANNUAL MEETING OF SHAREHOLDERS


Annual Meeting of Shareholders |Meeting Notice

HORACE MANN EDUCATORS CORPORATION


Horace Mann Educators Corporation
1 Horace Mann Plaza

Springfield, Illinois 62715-0001

When

Wednesday, May 25, 2016

9:00 a.m. Central Daylight Saving Time

Where

Horace Mann Lincoln Auditorium

1 Horace Mann Plaza

Springfield, Illinois 62715

Why

Elect nine Directors named in the Proxy Statement.

Approve the advisory resolution to approve Named Executive Officers’ compensation.

Ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the Company’s auditors for the year ending December 31, 2016.

Conduct other business, if properly raised.

Record Date

March 29, 2016 - Shareholders registered in the records of the Company or its agents on that date are entitled to receive notice of and to vote at the meeting.

The approximate availability date of the Proxy Statement and the proxy card is April 11, 2016.6, 2020. Your vote is important.Whether or Even if you do not you plan to attendparticipate in the Annual Meeting, the Board of Directors urges you to vote via the Internet, by telephone or by returning a proxy card.If you vote via the Internet or by telephone, do not return your proxy card.You may revoke your proxy at any time before the vote is taken at the Annual Meeting, provided that you comply with the procedures set forth in the Proxy Statement whichthat accompanies this Notice of Annual Meeting of Shareholders. If you attendparticipate in the Annual Meeting, you may either vote by proxy or vote in person.

electronically during the virtual meeting.

A broker is not permitted to vote on the election of directors or the advisory resolution to approve Named Executive Officers’ compensation without instructions from the beneficial owner. Therefore, if your shares are held in the name of your broker, bank or other nominee, unless you provide your broker, bank or other nominee with voting instructions, your shares will not be voted regarding these proposals.

We encourage you to read the Proxy Statement and vote your shares as soon as possible.

By order of the Board of Directors,

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Ann

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Donald M. Caparrós

Carley

Corporate Secretary

Springfield, Illinois

April 11, 2016









 


Meeting Details
Wednesday, May 20, 2020 9:00 a.m. Central Daylight Saving Time
Meeting live via the Internet - Please visit www.virtualshareholdermeeting.com/HMN2020. To join the meeting, you will need the 16-digit control number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials.
Elect the nine Directors named in the Proxy Statement.
Approve the advisory resolution to approve Named Executive Officers’ compensation.
Ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the Company’s auditors for the year ending December 31, 2020.
Conduct other business, if properly raised.
Record Date: March 24, 2020 - Shareholders registered in the records of the Company or its agents as of the close of business on that date are entitled to receive notice of and to vote at the meeting.




HORACE MANN EDUCATORS CORPORATION


20162020 Proxy Statement | Summary

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider. You should read the entire Proxy Statement carefully before voting.

How to Vote Before the Meeting
By Internet:     Go to www.proxyvote.com
By phone:     800-690-6903
By mail:     Request a paper proxy card
How to Vote During the Meeting
The meeting will be available at www.virtualshareholdermeeting.com/HMN2020. To join the meeting, you will need the 16-digit control number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. Voting will be available during the meeting, but if you have previously voted your shares, you do not need to vote during the meeting.
Voting Matters and Board Vote Recommendation
ProposalBoard vote recommendation
GENERAL INFORMATIONITEMS TO BE VOTED ON

Meeting: Annual Meeting of Shareholders

Date: May 25, 2016

Time: 9:00 a.m. Central Daylight Saving Time

Location: Horace Mann Lincoln Auditorium,

1 Horace Mann Plaza, Springfield, Illinois 62715

Record Date: March 29, 2016

Common Stock Outstanding: 40,349,689 shares

Stock Symbol: HMN

Exchange: NYSE

State of Incorporation: Delaware

Year of Incorporation: 1968

Public Company Since: 1991

Corporate Website: www.horacemann.com

Election of Nine Directors

Director Nominees:

Daniel A. Domenech (Independent)

Stephen J. Hasenmiller (Independent)

Ronald J. Helow (Independent)

Beverley J. McClure (Independent)

H. Wade Reece (Independent)

Gabriel L. Shaheen (Independent)(Chairman)

Robert Stricker (Independent)

Steven O. Swyers (Independent)

Marita Zuraitis (Management)

(page 4)

FOR each director nominee
Advisory Resolution to Approve Named Executive Officers’ Compensation

(page 15)

FOR
Ratification of Independent Registered Public Accounting Firm

(page
41)
CORPORATE GOVERNANCEEXECUTIVE COMPENSATION GOVERNANCE

Director Term: One year

Director Election Standard: Majority vote

Board Meetings in 2015: 5

Board Committees (Meetings in 2015):

Audit (12), Compensation (5), Executive (0); Investment & Finance (4), Nominating & Governance (4), Customer Experience & Technology (4)

Corporate Governance Materials: www.horacemann.com - Investors - Corporate Overview - Governance Documents

Board Communication:By mail to: Board of Directors, c/o Corporate Secretary, 1 Horace Mann Plaza, Springfield, Illinois 62715. By email to: hmecbofd@horacemann.com

    Hedging transactions prohibited for all Directors and Executive Officers

    Pledging shares prohibited for all Directors and Executive Officers

    Clawback provisions applicable to all Executive Officers for both cash and equity awards

    Stock Ownership Requirements for all Directors and Executive Officers

    Stock Option holding requirement post exercise

    Executive Change in Control Plan excludes “tax gross-up” provisions

    Perquisites for Executive Officers limited to third party financial planning services

FOR

Fiscal Year 2019 Business Highlights
Horace Mann’s strong 2019 results were the culmination of years of work to improve the Company’s products, distribution and infrastructure, combined with the positive impact of several transformational actions completed over the course of the year. Net income of $184.4 million increased ten-fold over prior year, mostly due to after-tax realized investment gains on the second quarter annuity reinsurance transaction.
Core earnings* of $92.2 million — a three-fold increase over 2018 — reflected anticipated improvement in the underlying profitability of the Property and Casualty segment and catastrophe losses well below prior year, improved margins in the Retirement segment, and the contribution of the new Supplemental segment.
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To determine annual compensation incentive awards, the Compensation Committee makes adjustments to core earnings for items that are highly volatile and outside the control of management. On that basis, core earnings would have increased to $104.7 million, as discussed in the Compensation Discussion and Analysis beginning on page 17.


ANNUAL MEETING OF SHAREHOLDERS


Although broader global issues are creating new challenges, by continuing to build on a strong foundation, the Company expects to make progress over the course of 2020 toward its long-term goals of significantly increasing education market share and reaching a double-digit return on equity.
(Highlights of 2019 performance include:
Culmination of multi-year effort to substantially improve profitability in the Property and Casualty segment. The reported combined ratio of 96.5% was the best full-year result since 2015, and surpassed the goal for improvement in the auto underlying loss ratio established in 2017. In addition, full-year 2019 results benefited from a lower level of catastrophe losses than 2018, which included the Camp Fire in California.
Reinsurance of $2.9 billion legacy annuity block of business with 4.5% minimum crediting rates that greatly reduced the Retirement segment’s exposure to declining interest rates and freed up capital used to acquire the higher-margin Supplemental business in July.
New Supplemental segment, added through the acquisition of National Teachers Associates Life Insurance Company (“NTA”), allows Horace Mann to provide an expanded suite of in-demand solutions for educator customers, while at the same time diversifying sales and earnings results to reduce volatility. In the second half of 2019, the Supplemental segment added $0.43 to EPS.
Acquiring NTA accelerated progress on each component of Horace Mann’s initiatives to improve its products, distribution and infrastructure:
Addition of in-demand supplemental insurance products to the Company’s suite of educator solutions. These coverages, such as cancer, heart and accident, offer a defined-dollar benefit that allows educators to address unexpected events without dipping into their retirement or other savings.
Addition of 220 agents with school worksite marketing experience. The Company completed sales training and licensing on Supplemental products for Horace Mann agents in 2019, and initiated pilot programs to cross-sell Horace Mann products to NTA’s 150,000 educator households.
Strong infrastructure and a talented management team focused on operational excellence and delivering great customer experiences.
Other actions that supported product, distribution and infrastructure initiatives over the course of the year included the acquisition of Benefit Consultants Group, Inc. (“BCG”), which improves Horace Mann’s business-to-business value proposition, and the second phase launch of the Guidewire P&C implementation in Illinois. The new administration system provides substantial customer experience improvements, as well as improved data segmentation and analysis, digital capabilities and ease of use. Over the course of 2020, the Company plans to on-board its largest states, representing about 60% of customers.
2019 results also reflected steps taken to streamline the Company’s organizational structure, as well as implementations of expense synergies and efficiency projects. These are expected to reduce the operating expense rate by at least $15 million in 2020 and beyond.
Commitment to transparency and dialogue around ESG topics
In line with the Business Roundtable’s statement on the purpose of a corporation, Horace Mann believes companies have a fundamental commitment to each of their stakeholder groups: customers, employees, suppliers, communities and shareholders. The statement emphasizes a commitment to transparency and effective engagement with shareholders, which Horace Mann aims to achieve through the financial reporting process, as well as additional disclosures and dialogue around incorporating environmental, social and governance (“ESG”) factors into business decisions.
Actions are based on the following goals:
Environment: We prioritize understanding climate change and mitigating associated risk, as well as reducing our environmental footprint. In 2019, Horace Mann published a climate change statement detailing how the Company is identifying, monitoring, managing and mitigating climate change risk.



Social: We strive to have a significant positive social impact as an insurance company and employer. In 2019, Horace Mann formally incorporated ESG factors into the investment management framework of its $6.6 billion portfolio by aligning its ESG Investment Policy with the Principles for Responsible Investment (“PRI”) supported by the United Nations.
Governance: We embrace strong corporate governance principles, which help us make the right decisions to achieve Horace Mann’s business goals, manage our risks, maintain our financial strength, and take care of our employees, agents, customers and communities. In 2019, Horace Mann adopted a Human Rights Statement that outlines specific actions and policies that demonstrate respect for the human rights of employees, customers, community residents, vendors and partners. 
For more information, view the 2018-2019 Corporate Social Responsibility Report, which is not part of this Proxy Statement, at csr.horacemann.com.
Focused on long-term shareholder value
Creating long-term shareholder value remains a priority for Horace Mann. Reported book value per share rose 21% in 2019, while book value excluding unrealized gains rose 11%, primarily reflecting realized gains recognized on assets transferred in the annuity reinsurance transaction, as well as strong earnings.
In March 2020, the Board approved a 4% increase in the shareholder dividend, an annualized estimated payout of $1.20. This represents the 12th consecutive year of a dividend increase. Horace Mann returned $47 million to shareholders in 2019 through dividends. The Company has $23 million remaining on its buyback authorization and continues to evaluate the potential for opportunistic buyback of shares. Since 2011, repurchases have totaled $77 million.
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For Horace Mann, 2019 was particularly rewarding, with a number of projects coming to fruition. The Company’s transformative efforts and multi-year initiatives focused on improving its products, distribution and infrastructure have resulted in a larger, more diverse company with a strong long-term outlook. The Company is better positioned than ever to achieve its corporate vision: To be the company of choice to help all educators achieve lifelong financial success.
Corporate and Compensation Governance Highlights
Director Term

: One year

Director Election Standard: Majority vote
Board Meetings in 2019: 8
Board Committees (Meetings in 2019): Audit (12), Compensation (5), Executive (1), Investment & Finance (4), Nominating & Governance (4)
Corporate Governance Materials: investors.horacemann.com - Corporate Overview - Governance Documents
Board Communication: By mail to: Board of Directors, c/o Corporate Secretary, 1 Horace Mann Plaza, Springfield, Illinois 62715. By email to: hmecbofd@horacemann.com
Compensation Governance:
Hedging transactions and pledging shares are prohibited for all Directors and Executive Officers
Clawback provisions are applicable to all Executive Officers for both cash and equity awards
Stock ownership requirements for all Directors and Executive Officers
Stock option holding requirement post-exercise



2020 Proxy Statement | Table of Contents




2020 Proxy Statement | General Information
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on Wednesday, May 20, 2020. The Proxy Statement and Annual Report and Form 10-K (the “Proxy Materials”) are available at proxyvote.com.
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Horace Mann Educators Corporation (“HMEC”,HMEC,” the “Company” or “Horace Mann”) of proxies (that is, the authority to vote shares) from holders of the Company’s common stock, par value $.001 per share (“Common Stock”). The proxies will be voted at the Annual Meeting of Shareholders to be held on Wednesday, May 25, 201620, 2020 at 9:00 a.m. Central Daylight Saving Time via live webcast at the Horace Mann Lincoln Auditorium, 1 Horace Mann Plaza, Springfield, Illinois 62715www.virtualshareholdermeeting.com/HMN2020 and at any adjournment or postponement thereof (the “Annual Meeting”).

The mailing address of the Company is 1 Horace Mann Plaza, Springfield, Illinois 62715-0001 (telephone number 217-789-2500). This Proxy Statement and the proxy card are first being first made available to shareholdersShareholders of the Company (“Shareholders”) on or about April 11, 2016.

6, 2020.

The Board has fixed the close of business on March 29, 201624, 2020 as the record date (the “Record Date”) for determining the Shareholders entitled to receive notice of and to vote at the Annual Meeting. At the close of business on the Record Date, an aggregate of 40,349,68941,277,498 shares of Common Stock were issued and outstanding, each share entitling the holder thereof to one vote on each matter to be voted upon at the Annual Meeting. The presence, in person or by proxy, of

the holders of a majority of such issued and outstanding shares entitled to vote at the Annual Meeting is necessary to constitute a quorum for the transaction of business at the Annual Meeting. The Company, through bankers, brokers or other persons, also intends to make a solicitation of beneficial owners of Common Stock.

At the Annual Meeting, Shareholders will be asked toto: (1) elect nine Directors named in the Proxy Statement to hold office for one-year terms continuing until the next Annual Meeting of Shareholders and until their respective successors have been duly elected and qualified,qualified; (2) approve the advisory resolution to approve Named Executive Officers’ compensation,(as defined on page 16 below) compensation; and (3) ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the Company’s auditors for the year ending December 31, 2016.

2020.

Shareholders may also be asked to consider and take action with respect to such other matters as may properly come before the Annual Meeting.

Copies of the Company’s Annual Report onand Form 10-K for the year ended December 31, 20152019 (“Annual Report”), including the Company’s audited consolidated financial statements, were made available to known Shareholders on or about February 29, 2016.

March 2, 2020.
Safe Harbor Statement and Non-GAAP Measures

Statements included in this document that are not historical in nature are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and the company's past and future filings and reports filed with the Securities and Exchange Commission for information concerning the important factors that could cause actual results to differ materially from those in forward-looking statements.  

The historical financial information contained in this document includes measures (marked with * the first time they are presented within this document) that are not based on accounting principles generally accepted in the U.S. (“non-GAAP”) such as core earnings, core earnings per share, and book value per share excluding some components of accumulated other comprehensive income. An explanation of these measures is contained in the Glossary of Selected Terms included as Exhibit 99.1 in our most recent Form 10-K and Form 10-Q filed with the SEC and are reconciled to the most directly comparable measures prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) in the Appendix on page 45.



2016Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement • General Information1



2020 Proxy Statement |Your Proxy Vote

How to Vote

Before the Meeting
(1)

1.Via Internet: Go to www.proxyvote.comproxyvote.com to vote via the Internet. You will need to followFollow the instructions on your Notice of Internet Availability of Proxy Materials (“Notice”) or proxy card and the website. If you vote via the Internet, you may incur telephone and Internet access charges.

(2)

2.By Telephone: Call If you received paper copies of the proxy materials, call the toll-free telephone number on the proxy card or the website to vote by telephone. You will need to follow the instructions and the voice prompts.

(3)

3.By Mail: Request, complete and return a paper proxy card, following the instructions on your Notice.

(4)

In Person: Attend the Annual Meeting, or send a personal representative with an appropriate proxy, to vote by ballot.

If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated and returned your proxy card.If you vote via the Internet or by telephone, you do not need to return your proxy card.

Further, shares held in your name as the shareholder of record or as beneficial owner may be voted electronically during the virtual Annual Meeting (www.virtualshareholdermeeting.com/HMN2020). To join the meeting, you will need the 16-digit control number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. If you have previously voted your shares, you do not need to vote during the meeting.

If your shares are held in “street name” (that is, in the name of a bank, broker or other holder of record), you will receive a Notice containing instructions from the holder of record that you must follow in order for your shares to be voted. Internet and/or telephone voting also will be offered to Shareholders owning shares through most banks and brokers.

Participants in the Company’s stock fund within the Horace Mann Service Corporation Supplemental Retirement and Savings 401(k) Plan can direct the trustee to vote their shares via the Internet as directed in the Notice, by telephone as provided on the website or proxy card, or by signing and returning a proxy card.

Voting Rules

Solicitation and Revocation

Your proxy is being solicited by and on behalf of the Board. The persons named in the Form of Proxy have been designated as proxies by the Board. Such persons are Directors of the Company.

Shares of Common Stock represented at the Annual Meeting by a properly executed and returned proxy will be voted at the Annual Meeting in accordance with the instructions noted thereon, or if no instructions are noted, the proxy will be voted in favor of the proposals set forth in the Notice of Annual Meeting. A submitted proxy is revocable by a Shareholder at any time prior to it being voted, provided that such Shareholder gives written notice to the

Corporate Secretary at or prior to the Annual Meeting that such Shareholder intends to vote in personduring the meeting or by submitting a subsequently dated proxy. Attendance atParticipation in the Annual Meeting by a Shareholder who has given a proxy shall not in and of itself constitute a revocation of such proxy.

Further solicitation may be made by officers and other employees of the Company personally, by telephone or otherwise, but such persons will not be specifically compensated for such services. Banks, brokers, nominees and other custodians and fiduciaries will be reimbursed for their reasonable out-of-pocket expenses in forwarding soliciting material to their principals, the beneficial owners of Common Stock. The costs of soliciting proxies will be borne by the Company. It is estimated these costs will be nominal.


2     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Shareholder Approval

Shareholders are entitled to one vote per share of Common Stock on all matters submitted for consideration at the Annual Meeting. Under the Company’s Bylaws, the affirmative vote of a majority of the shares of Common Stock represented in person or by proxy at the Annual Meeting is required for the election of Directors, approval of the advisory resolution to approve Named Executive Officers’ compensation, and the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2016.

2020.

Abstentions have the same effect as a vote “against” approval of the matter.

Please note that under New York Stock Exchange (“NYSE”) rules, brokers who hold shares of Common Stock in street name for customers have the authority to vote on certain items when they have not received instructions from beneficial owners. With respect to the matters to come before the Annual Meeting, if brokers are not entitled to vote without instructions and therefore cast broker non-votes, the broker non-votes will have no direct effect on the outcome of the vote. However, because each matter requires a majority vote of the outstanding shares present and entitled to vote, a broker non-vote will indirectly work against the matter for which a broker non-vote is cast.

For this Annual Meeting, if you do not give specific instructions, your broker may cast your vote in its discretion on only Proposal No. 3 - Ratification of Independent Registered Public Accounting Firm.

Other Matters

Other than the matters set forth below, the Board has not received any Shareholder proposal by the deadline prescribed by the rules of the SEC,Securities and Exchange Commission (“SEC”), and otherwise knows of no other matters to be brought before the Annual Meeting. However, should any other matters properly come before the meeting, the persons named in the Form of Proxy will vote or refrain from voting thereon at their discretion.


2Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Your Proxy Vote3



2020 Proxy Statement |Proposals and Company Information

PROPOSAL NO.
Proposal No. 1 - ELECTION OF NINE DIRECTORS

Election of Nine Directors

The By-LawsBylaws of the Company provide for the Company to have not less than five or more than fifteen15 Directors. The following nineten persons currently are serving as Directors of the Company (“Directors”): Mark S. Casady, Daniel A. Domenech, Mary H. Futrell, Stephen J. Hasenmiller, Ronald J. Helow,Perry G. Hines, Mark E. Konen, Beverley J. McClure, Gabriel L. Shaheen,H. Wade Reece, Robert Stricker, Steven O. Swyers and Marita Zuraitis. The terms of these Directors expire at the Annual Meeting. Dr. Futrell will be retiring fromMr. Hasenmiller, who has served on the Board as of the Annual Meeting, and the Board has nominated H. Wade Reece to serve as a new Director of the Company.for 15 years, is not standing for election. We thank Dr. FutrellMr. Hasenmiller for herhis exemplary service.

Board Qualifications
The Board of Directors believes it is necessary for each of the Company’s Directors to possess a variety of qualities and skills. The Nominating & Governance Committee conducts all necessary and appropriate inquiries into the background and qualifications of Board candidates, including the determination of their independence. In addition, the Nominating & Governance Committee has identified areas of expertise that it believes support the Company’s business strategy in the short- and long-term, enable the Board to exercise its oversight function and contribute to a well-rounded Board.
The matrix below highlights certain key qualifications and experience of the Board Nominees.
Financial ServicesInsuranceTechnology & InnovationSenior Leadership ExperienceEducation or Niche Market BackgroundFinance & AccountingBrand & MarketingInvestmentsAgency ManagementCustomer Experience
Mark S. CasadyXXXXXXX
Daniel A. DomenechXXX
Perry G. HinesXXXXXX
Mark E. KonenXXXXXXX
Beverley J. McClureXXXXXXXX
H. Wade ReeceXXXXX
Robert StrickerXXXX
Steven O. SwyersXXXX
Marita ZuraitisXXXXXXXXX
Board Diversity, Age and Tenure
The Nominating & Governance Committee believes that it is important that the Board be comprised of individuals with expertise in fields relevant to the Company’s business, experience from different professions, a diversity of age, ethnicity and gender, and a range of tenures.
The Nominating & Governance Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. This assessment includes members’ qualifications as independent,consideration of experience, perspective, background, skill sets, age, ethnicity, and gender makeup of the current Board as well as considerationthe candidate’s individual qualities in leadership, character judgment and ethical standards. It also assesses the effectiveness of skills, experience, diversity and ageour interest in the context of the needs of the Board. diverse candidates.
The Nominating & Governance Committee does not havebelieves our Board Nominees (as identified below) represent a formaldiverse base of perspectives and reflect the diversity policy; however,of the Company’s employees, customers and Shareholders, as well as an appropriate level of age and tenure, as further illustrated below.
chart-6ee0aa018162d266447a01.jpgchart-a9d0239ac6109e87ae5a01.jpgchart-e1881f63364d40cfc0aa01.jpg
Board Refreshment
The Board and the Nominating & Governance Committee believe that it is essential thatregularly consider the long-term makeup of the Board and how the members represent diverse viewpoints.of the Board change over time. The Board and Nominating & Governance Committee assessesunderstand the effectivenessimportance of Board refreshment and strive to balance the criteria described above when evaluating new Board candidates and when assessing the composition ofknowledge that comes from longer-term service on the Board aswith the new experience, ideas and energy that can come from adding directors to the Board. Directors who are 75 years of age or older may not stand for election in the absence of a whole.

specific finding by the Board that there are special circumstances to justify an exception, which supports Board refreshment.

As Horace Mann continues to focus on profitable growth across all lines of business, the integration of recent acquisitions of BCG and NTA, and the ongoing transformation of its technology and operations, we continue to consider Board refreshment opportunities. 
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4     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Board Nominees
Upon the recommendation of the Nominating & Governance Committee, the Board nominated Mr. Casady, Dr. Domenech, Mr. Hasenmiller,Hines, Mr. Helow,Konen, Ms. McClure, Mr. Reece, Mr. Shaheen, Mr. Stricker, Mr. Swyers and Ms. Zuraitis (the “Board Nominees”) to hold office as Directors. The proxies solicited by and on behalf of the Board will be voted “FOR” the election of the Board Nominees unless you specify otherwise. The Company has no reason to believe that any of the foregoing Board Nominees is not available to serve or will not serve if elected, although in the unexpected event that any such Board Nominee should become unavailable to serve as a Director, full discretion is reserved to the persons named as proxies to vote for such other persons as may be nominated, or the Board may reduce the size of the Board. Each Director will serve until the next Annual Meeting of Shareholders and until his or her respective successor is duly elected and qualified.

Board Nominees

The following information, as of March 15, 2016,2020, is provided with respect to each Board Nominee:

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Mark S. Casady
Age: 59
Director Since: 2019

Horace Mann Committees:
Investment & Finance
Executive
Mr. Casady was Chairman and Chief Executive Officer of LPL Financial Holdings, Inc. (“LPL Financial”), an independent broker dealer, until his retirement in 2017. He joined LPL Financial as Chief Operating Officer in 2002, became President in 2003 and Chairman and Chief Executive Officer at the end of 2005. Before joining LPL Financial, Mr. Casady was managing director of the mutual fund group for Deutsche Asset Management, Americas - formerly Scudder Investments, which he joined in 1994. In 2016, he co-founded Vestigo Ventures, a venture capital firm, which focuses on financing FinTech start-ups. He is General Partner and Chairman of the Advisory Board of Vestigo Ventures. Mr. Casady previously served on the Boards of Directors of Eze Software Group and Citizens Financial Group, Inc. and the Financial Industry Regulatory Authority (“FINRA”) Board of Governors. Mr. Casady also served as the former Chairman of the Insured Retirement Institute.
Mr. Casady’s in-depth knowledge of data management and technology, including cybersecurity, brings a unique perspective and assists the Board with its oversight responsibilities related to these matters.

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Daniel A. Domenech

Age: 70

Age: 74
Director Since:Since: 2015

Horace Mann Committees:

Customer ExperienceCommittees:

Nominating & Technology

Investment & Finance

Governance

Dr. Domenech has served as the Executive Director of the American Association of School Administrators, (“AASA”), The School Superintendents Association, a professional organization for educational leaders, since July 2008. He is currently Chairman of the Board of the Communities in Schools of Virginia and the National Student Clearinghouse Research Center and is a member of the Board of Directors of Learning First Alliance, America’s Promise, the Center for Naval Analyses, ACT and Universal Service Administrative Company, (“USAC”).where he Chairs the Schools and Libraries Committee. Dr. Domenech is also a past President of the New York State Council of School Superintendents, the Suffolk County Superintendents Association and the Suffolk County Organization for Promotion of Education, and was the first President and cofounderco-founder of the New York State Association for Bilingual Education. In addition, he has previously served on the U.S. Department of Education’s National Assessment Governing Board, on the Advisory Board for the Department of Defense schools, on the Board of Directors for the Baldrige Award and on the National Board for Professional Teaching Standards. Dr. Domenech has more than 40 years of experience in public education.

Dr. Domenech’s experience in public education provides the Board with valuable insight into the Company’s niche market and the challenges and opportunities within that market.


2016Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement • Proposals and Company Information35



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LOGO

Stephen J. Hasenmiller

Age: 66

Perry G. Hines
Age: 57
Director Since: 2004

Since: 2018

Horace Mann Committees:

Compensation (Chair)

Executive

NominatingCommittees:

Audit
Investment & Governance

Finance

Mr. HasenmillerHines is a retired corporate marketing executive and is the principal and owner of The Hines Group, LLC, a firm he formed in March 2001 after 242006 specializing in marketing, communications and strategic planning. He has over 27 years of service at The Hartford Financial Services Group, Inc.,cross-sector experience in general management, brand, communications and marketing. Mr. Hines previously served as Senior Vice President, - Personal Lines. Chief Marketing and Communications Officer for Irwin Mortgage Corporation, a position he held from 2002 to 2007, Senior Vice President, Chief Marketing and Sales Officer of Lincoln Reinsurance Corporation from 1998 to 2002 and Vice President of Marketing & Communications of Safeco from 1995 to 1998. He has held numerous management roles and stewarded well-known household brands. In addition to his consulting practice, he currently serves as the Director of Advancement for Covenant Christian High School.
Mr. Hasenmiller’s prior affiliations include his tenureHines’ cross-sector expertise in general management, brand building and strategic marketing brings unique perspective and insight to the Board.
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Mark E. Konen
Age: 61
Director Since: 2019
Horace Mann Committees:
Audit
Compensation
Mr. Konen retired from Lincoln Financial Group, a financial services company, in February 2017 as ChairmanPresident of the Personal Lines CommitteeInsurance and Retirement Solutions division, a position he had held since 2008. He was responsible for all aspects of strategic leadership, product development, and client services, as well as profitability management of the American Insurance Association (1999-2001)individual life insurance, group protection and membership onretirement plan services businesses. He oversaw Lincoln Financial Group’s individual life and annuity business as President, Individual Markets, from 2006 to 2008. Prior to its merger with Lincoln Financial Group in 2006, he served in various senior management positions with Jefferson Pilot Financial. Mr. Konen is currently a member of the BoardsBoard of Directors of the Institute for BusinessLincoln Life & Home Safety (1996-2001)Annuity Company of New York.
Mr. Konen’s 35-year insurance career, extensive background and the Insurance Institute for Highway Safety (1995-2001).

Mr. Hasenmiller’s seasoned insurance backgroundproven leadership in the personal lineslife and retirement business including both direct sales and agency distribution, as well as his understanding and experience in dealing with complex insurance issues, provides the Board with a valuable perspective.

perspective on these topics.

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LOGO

Ronald J. Helow

Age: 71

Director Since: 2009

Horace Mann Committees:

Customer Experience & Technology (Chair)

Audit

Executive

Mr. Helow is managing director of New Course Advisors, a consulting firm he founded in 2008 to advise companies on how to use advanced technologies to create a competitive advantage. Mr. Helow served from 2001 to 2008 as Partner and Chief Technology Officer at NxtStar Ventures, LLC, a firm providing consulting services to life insurance and retail financial services businesses, and founded Registry Systems Corporation in 1990 to custom design and implement mission critical projects using advanced computer technologies for insurance companies.

Mr. Helow’s past experience in developing and securing solutions to insurance company operating challenges through technology brings to the Board unique knowledge and perspective.

LOGO

Beverley J.  McClure

Age: 61

Age: 65
Director Since:Since: 2013

Horace Mann Committees:

Audit

Compensation

Customer ExperienceCommittees:

Nominating & Technology

Governance
(Chair)
Compensation

Ms. McClure retired in 2007 after a 35 year35-year career with United Services Automobile Association, (“USAA”),a diversified financial services group, as Senior Vice President, Enterprise Operations. She is owner ofIn 2007, she founded Fresh Perspectives LLC, a firm she founded in 2007 which specializes inan executive coaching and small business consulting.consulting firm, which was dissolved in 2019. Ms. McClure previously served as Senior Advisor of Endeavor Management, a consulting firm specializing in service culture creation, leadership coaching, business transformation, operational execution, and customer experience management, a position she held from 2010 to 2013. She holds the Chartered Life Underwriter and Fellow and Life Management Institute designations and is a certified executive coach through the International Coach Federation.

designations.

Ms. McClure’s broad experience in the areas of service excellence, customer experience, culture creation, employee engagement and quality management provides the Board with a valuable perspective.

perspective on these topics.


420166     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Proposals and Company InformationHorace Mann Educators Corporation



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LOGO

H. Wade Reece

Age: 59

Board Nominee

Chairman
Age: 63
Director Since: 2016
Horace Mann Committees:
Executive (Chair)
Compensation
Nominating & Governance

Mr. H. Wade Reece retired in 2015 after a 37 year37-year career with BB&T Corporation, (“BB&T”)a bank holding company, where he served as the Chairman of the Board and Chief Executive Officer of BB&T Insurance Services, Inc. and BB&T Insurance Holdings, Inc., the sixth largest insurance broker globally. Until his retirement in 2015, Mr. Reece served as Vice Chairman of the Foundation of Agency Management Excellence (“FAME”) Board of Directors and a member of the Executive Committee of The Institutes (American Institute for Chartered Property Casualty Underwriters and Insurance Institute of America). He was also a past Chairman of the Council of Insurance Agents & Brokers and past Chairman of the Board of Trustees of The Institutes.

Mr. Reece currently is a member of the Board of Directors of the North Carolina State University Foundation and the Blue Ridge Conservancy.

Mr. Reece’s in-depth knowledge of the insurance industry, leadership skills and broad experience with agency management will provideprovides the Board with industry insight and perspective.

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LOGO

Gabriel L. Shaheen

Age: 62

Robert Stricker
Age: 73
Director Since: 2007

Chairman Since: 2010

Since: 2009

Horace Mann Committees:

Executive (Chair)

Nominating & Governance (Chair)

Compensation

Mr. Shaheen retired in 1999 after 22 years of service with Lincoln National Corporation, including service as President and Chief Executive Officer of Lincoln National Life Insurance Company, Managing Director of Lincoln UK, and President and Chief Executive Officer of Lincoln National Reinsurance Companies. Since 2000, he has been Chief Executive Officer of GLS Capital Ventures, LLC and Partner of NxtStar Ventures, LLC, firms providing consulting services to life insurance and retail financial services businesses. He is currently a member of the Board of Directors of M Financial Holdings Incorporated and Steel Dynamics, Inc., one of the largest steel producers and metals recyclers in the United States. Mr. Shaheen holds the Fellow of the Society of Actuaries designation.

Mr. Shaheen’s insurance experience, technical insurance expertise and leadership background are valuable Board resources and contribute to Board discussion of issues impacting the Company.

LOGO

Robert Stricker

Age: 69

Director Since: 2009

Horace Mann Committees:

Committees:

Investment & Finance (Chair)

Audit

Customer Experience & Technology


Mr. Stricker retired from Shenkman Capital Management, Inc., an investment management firm, in March 2009 as Senior Vice President and Principal. Prior to joining Shenkman, he served as Managing Director, Head of U.S. Fixed Income, Citigroup Asset Management at Citigroup, Inc. from 1994 to 2001. Mr. Stricker has over 40 years of experience in the financial services industry. He currently serves as a Director of the CQS Directional Opportunities Feeder Fund Ltd. and on the OPEB Trust Board of the town of Greenwich, Connecticut. Mr. Stricker holds the Chartered Financial Analyst designation.

Mr. Stricker’s investment knowledge and financial services industry experience provide the Board with financial insights and assist the Board in its oversight responsibilities.

2016 Proxy Statement • Proposals and Company Information
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5


LOGO

Steven O. Swyers

Age: 65

Age: 69
Director Since:Since: 2014

Horace Mann Committees:

Committees:

Audit (Chair)

Executive
Investment & Finance

Mr. Swyers retired in 2013 after a 40 year40-year career with PricewaterhouseCoopers LLP (“PwC”), a public accounting firm. During this time with PwC, he served as the lead engagement partner on many national and international companies, including those in the financial services industry. He has also held various leadership positions at PwC, including leader of the Central Region’s consumer and industrial products business segment and managing partner of theirits St. Louis practice. He is currently a member of the Board of Directors of Mercy Health East Communities and Webster University. Mr. Swyers holds the Certified Public Accountant designation.

Mr. Swyers has an extensive audit and accounting background and is recognized as a financial expert. His knowledge in these areas assists the Board in its oversight responsibilities.


LOGO

Marita Zuraitis

Age: 55

Director Since: 2013

Horace Mann Committees:

Customer ExperienceEducators Corporation

2020 Annual Meeting of Shareholders Notice & Technology

Proxy Statement 7



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Marita Zuraitis
Age: 59
Director Since: 2013
Horace Mann Committees:
Executive

Investment & Finance

Ms. Zuraitis was appointed to her present position as President and Chief Executive Officer of the Company in September 2013. She joined2013 after joining the Company in May 2013 as President and Chief Executive Officer-Elect. Ms. Zuraitis joinedcame to Horace Mann from The Hanover Insurance Group where she was an Executive Vice President and a member of The Hanover’s Executive Leadership Team. From 2004 to 2013, she served as President, Property and Casualty Companies, responsible for the personal and commercial lines operations at Citizens Insurance Company of America, The Hanover Insurance Company and their affiliates.Group. Prior to 2004, Ms. Zuraitis was with The St. Paul/Travelers Companies for six years, where she achieved the position of President and Chief Executive Officer, Commercial Lines. She also held a number of increasingly responsible underwriting and field management positions with United States Fidelity and Guaranty Company and Aetna Life and Casualty. She is a member of the Board of Directors of LL Global, Inc., a trade association with operating divisions LIMRA and LOMA, and a memberincoming Chair of the Board of Trustees of The Institutes, the leading provider of risk management and property-casualty insurance education, whose offerings include the premier CPCU® designation. designation, and a past member of the Board of Directors of LL Global, Inc., a trade association with operating divisions LIMRA and LOMA. She is also a member of the Board of Directors of Citizens Financial Group, Inc. Ms. Zuraitis has over 30 years of experience in the insurance industry.

Ms. Zuraitis’s knowledge of and extensive background in the insurance industry contribute to Board discussion and understanding of issues impacting the Company.

All of the Board Nominees were elected Directors at the last Annual Meeting of Shareholders of the Company held on May 20, 2015, with the exception of Mr. Reece, who was identified by a retained executive search firm working with the Directors of the Company and recommended for nomination as a Director by the Company’s Nominating and Governance Committee.

22, 2019. The Board recommends that Shareholders vote FOR the election of these nine nominees as Directors.

Board of Directors and Committees

There were nineten members on the Board as of March 15, 2016.2020. The Board met fiveeight times during 2015.2019. No Director of the Company attended fewer than 75% of the Board meetings and the committee meetings to which he or she was appointed and served during 2015.

2019.

The Chairman of the Board presides over all executive sessions of the Board, including executive sessions of non-employee Directors, and may be contacted as described in “Corporate Governance - Communications with Directors”.Directors.” The members of the Board are expected to be present at the Annual Meeting. The following nine Directors serving on the Board at the time of last year’s Annual

62016 Proxy Statement • Proposals and Company Information


Meeting attended the meeting: Dr. Futrell,Domenech, Mr. Hasenmiller, Mr. Helow,Hines, Ms. McClure, Mr. Shaheen,Reece, Mr. Steinbecker,Shaheen, Mr. Stricker, Mr. Swyers and Ms. Zuraitis.

Committees of the Board

The standing committees of the Board consist of the Executive Committee, Compensation Committee, Nominating & Governance Committee, Investment & Finance Committee and Audit Committee. Each standing committee is governed by a charter that defines its role and responsibilities which are available on the Company’s website at www.horacemann.cominvestors.horacemann.com under “Investors - Corporate“Corporate Overview - Committee Composition and Charters”.Charters.” A printed copy of these charters may be obtained by Shareholders upon written request addressed to Investor Relations, Horace Mann Educators Corporation, 1 Horace Mann Plaza, C-120,C-738, Springfield, Illinois 62715-0001. The Board may also form ad hoc committees from time to time.

TheExecutive Committee exercises certain powers of the Board during intervals between meetings of the Board and, as requested by the Chief Executive Officer, acts as a sounding board for discussing strategic and operating issues.

issues between Board meetings.


8     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


TheCompensation Committee approves and recommends to the Board the compensation, salaries, bonuses and awards applicable to the Executive Officers and Directors of the Company and oversees the process of Executive Officer leadership development and succession. Each of the current members of this Committee isare independent under the listing standards of the NYSE applicable to compensation committee members. The Compensation Committee receives recommendations from management regarding compensation matters and has unrestricted access to the Company’s personnel documents and to reports or evaluations of any independent compensation consultants, specialists or advisors who are retained by the Company or the Compensation Committee to analyze the compensation of the Executive Officers and members of the Board. The Compensation Committee also has access to any other resources which it needs to discharge its responsibilities, including selecting, retaining and/or replacing, as needed, compensation consultants and other outside consultants to provide independent advice to the Compensation Committee. Additional information regarding the processes and procedures for the consideration and determination of Executive Officer compensation is provided in the “Compensation Discussion and Analysis”.

Analysis.”

TheNominating & Governance Committee develops and recommends to the Board corporate governance principles applicable to the Company, oversees the Board succession planning process, and recommends Director candidates to the Board. The Nominating & Governance Committee will consider Director candidates recommended by Shareholders. Candidates may be submitted in writing to the Corporate Secretary, Horace Mann Educators Corporation, 1 Horace Mann Plaza, Springfield, Illinois 62715-0001. There are no differences between the evaluation of candidates recommended by Shareholders and the evaluation of candidates recommended by members of the Nominating & Governance Committee.

The Committee does not have any specific, minimum qualifications that nominees must meet, but evaluates possible nominees to the Board on the basis of the factors it deems relevant, including the following:

high standards of personal character, conduct and integrity;

an understanding of the interests of the Company’s Shareholders, clients, employees, agents, suppliers, communities and the general public;

the intention and ability to act in the interest of all Shareholders;

a position of leadership and substantial accomplishment in his or her field of endeavor, which may include business, government or academia;

the ability to understand and exercise sound judgment on issues related to the goals of the Company;

a willingness and ability to devote the time and effort required to serve effectively on the Board, including preparation for and attendance at Board and committee meetings;

the absence of interests or affiliations that could give rise to a biased approach to directorship responsibilities and/or a conflict of interest, and the absence of any significant business relationship with the Company except for the employment relationship of an employee Director; and

the needs of the Board, including skills, experience, diversity and age.

TheInvestment & Finance Committee approves investment strategies, monitors the performance of investments made on behalf of the Company and its subsidiaries, and oversees issues and decisionsall matters relating to the Company’s capital structure.

TheAudit Committee oversees the accounting and financial reporting process, audits of the financial statements, and internal operating controls of the Company. It meets with both the Company’s management and the Company’s independent registered public accounting firm. Each of the current members of this Committee is independent under the independence standards of the NYSE applicable to audit committee members. No Audit Committee member serves on the audit committee of more than three other publicly traded companies. The Board has determined that Mr. Swyers, the Chair of our Audit Committee, is a financial expert. Mr. Swyers retired in 2013 from PricewaterhouseCoopers LLP,PwC, a public accounting firm, after a 40 year40-year career where he served as the lead engagement partner on many national and international companies, including those in the financial services industry. He has also held various leadership positions including leader of the PwC Central Region’s consumer and industrial products business segment and managing partner of theirPwC’s St. Louis practice.

TheCustomer Experience & Technology Committeeis an ad hoc committee formed by the Board during 2013. The Committee oversees the Company’s goals and strategies related to improving and managing the customer experience, as well as the development and implementation of the Company’s technology strategies.


2016Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement • Proposals and Company Information79



Considering the importance of technology advancement, the Board has established a formal Technology Liaison role to ensure focus on cybersecurity and technology issues, which we believe are important to Horace Mann’s ongoing success. The Technology Liaison is a Board member that has experience and expertise with respect to cybersecurity and technology issues. Fundamentally, the Technology Liaison’s role is to ensure effective Board oversight on cybersecurity and technology issues in light of the increasing costs and risks associated with technology investment and cybersecurity. Mark Casady currently serves as the Board’s designated Technology Liaison.
The following table identifies membership and the Chairman of each of the current committees of the Board, as well as the number of times each committee met during 2015.

Director Executive
  Committee  
 

  Compensation  

Committee

 

  Nominating &  

Governance
Committee

 

  Investment &  

Finance
Committee

 Audit
  Committee  
 

 

Customer
  Experience &  

Technology
Committee (1)

Daniel A. Domenech

       X   X

Mary H. Futrell

   X X     X

Stephen J. Hasenmiller  

 X Chair X      

Ronald J. Helow

 X       X Chair

Beverley J. McClure

   X     X X

Gabriel L. Shaheen

 Chair X Chair      

Robert Stricker

       Chair X X

Steven O. Swyers

       X Chair  

Marita Zuraitis

 X     X   X

Meetings in 2015

 0 5 4 4 12 4

2019.

DirectorExecutive
Committee
Compensation
Committee
Nominating &
Governance
Committee
Investment &
Finance
Committee
Audit
Committee
Mark S. CasadyX  X 
Daniel A. Domenech  X  
Stephen J. HasenmillerXChair  X
Perry G. Hines   XX
Mark E. Konen X  X
Beverley J. McClure XChair  
H. Wade ReeceChairXX  
Robert Stricker   Chair 
Steven O. SwyersX  XChair
Marita ZuraitisX  X 
Meetings in 2019154412
Chair - Committee Chair

X - Committee member

Director Compensation
The Compensation Committee (the “Committee”) reviews compensation to be paid to the Company’s non-employee Directors. The Committee retained Compensation Advisory Partners LLC (“CAP”) as independent compensation consultants to provide information and advice to the Committee regarding non-employee Director compensation. CAP analyzes each element of director compensation for the same peer group of companies that is used to evaluate executive compensation. See “Compensation levels should be market competitive” in the Compensation Discussion & Analysis for a list of these peer companies. CAP also considers non-employee Director compensation in the insurance industry and the broader general industry, as appropriate. The Committee reviews CAP’s report of competitive Director compensation and determines whether to recommend to the Board a change in the Company’s non-employee Director compensation. If such a change is recommended by the Committee, the full Board would then determine whether to ratify the change. The Compensation Committee’s current practice is to review non-employee Director compensation every other year. In order to simplify the non-employee Director compensation structure, in 2019 the Compensation Committee recommended, and the Board approved, changes to non-employee Director compensation including the elimination of the Committee Member annual retainer, an increase to the Board Member and Board Chairman annual retainers, and the addition of an annual retainer for the Technology Liaison role, as reflected in the table below.

(1)

The Customer Experience

10     2020 Annual Meeting of Shareholders Meeting Notice & Technology Committee is an ad hoc committee.

Proxy Statement
Horace Mann Educators Corporation

Director Compensation



The compensation program for non-employee Directors is shown in the following table:

Compensation Element
Non-Employee Director Compensation(1)(2)

Board Chairman Annual Retainer

$100,000

125,000

Board Member Annual Retainer
(other than Board Chairman)

$55,000

70,000

Committee Chairman Annual Retainer

$25,000 Audit Committee

$15,000 Compensation Committee

$12,000 Nominating & Governance Committee

$15,000 Customer Experience & Technology Committee

$10,000 all other Committees

(3)

Committee MemberTechnology Liaison Annual Retainer
(other than Committee Chairman)

$10,000 Audit Committee

$ 7,500 all other Committees

Share-based Compensation

Fair value on the date of the respective awards is used to determine the number of Restricted Stock Units (“RSUs”) awarded.

An annual award of $90,000$110,000 in RSUs following the Annual Shareholder Meeting. $90,000$110,000 in RSUs if joining the Board within 6six months after the prior Annual Shareholder Meeting, $45,000$55,000 in RSUs if joining more than 6six months after the prior Annual Shareholder Meeting but before the next Annual Shareholder Meeting.

All awards have a 1 year1-year vesting period.

Basic Group Term Life Insurance

Premium for $10,000 face amount

Business Travel Accident Insurance

Premium for $100,000 coverage

(1)

Annual retainer fees are paid following the Annual Shareholder Meeting each year. The annual retainer fees are prorated to the extent that a non-employee Director joins the Board after the Annual Shareholder Meeting.

(2)

Non-employee Directors may elect to defer cash compensation into Common Stock equivalent units (“CSUs”).

Non-employee Directors are required to hold shares of HMEC Common Stock with a book value equal to five times their annual cash retainer.

(1) Annual retainer fees are paid following the Annual Shareholder Meeting each year. The annual retainer fees are prorated to the extent that a non-employee Director joins the Board after the Annual Shareholder Meeting.

(2) Non-employee Directors may elect to defer cash compensation into RSUs.
(3) All other Committees except for the Executive Committee, which is not paid an Annual Retainer.

Non-employee Directors are required to hold shares of HMEC Common Stock with a book value equal to five times their annual cash retainer.
Until non-employee Directors meet this ownership requirement, they must retain all Common Stock equivalent units and Restricted Stock UnitsRSUs granted as share-based compensation (net of taxes). AllAs of December 31, 2019, all non-employee Directors have met the guidelines with the exception of Mr. Swyers,Reece, due to his tenure and elevation to Chairman in 2018, Mr. Hines, who joined the Board in 2014,2018, and Dr. Domenech,Mr. Casady and Mr. Konen, who joined the Board in 2015, and they2019. They have 5five years to meet this requirement. Employee Directors do not receive compensation for serving on the Board and are subject to separate stock ownership guidelines. See “Compensation Discussion and Analysis - Stock Ownership and& Holding Requirements”.

Requirements.”

8Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Proposals and Company Information11



The following table sets forth information regarding compensation earned by, or paid to, the non-employee Directors during 2015:

     
Director    

Fees Earned
or Paid

in Cash ($)

     Stock Awards
($) (1)
     All Other
Compensation
($) (2)
     Total
($)
 

Daniel A. Domenech

     0       160,000       102       160,102  

Mary H. Futrell

     38,750       128,750       204       167,704  

Stephen J. Hasenmiller

     85,000       90,000       204       175,204  

Ronald J. Helow

     87,500       90,000       204       177,704  

Beverley J. McClure

     80,000       90,000       51       170,051  

Gabriel L. Shaheen

     129,500       90,000       51       219,551  

Robert Stricker

     82,500       90,000       204       172,704  

Steven O. Swyers

     87,500       90,000       204       177,704  

(1)

Represents fees deferred in 2015 pursuant to the HMEC 2010 Comprehensive Executive Compensation Plan, as well as $90,000 in RSUs (awarded May 20, 2015). As of December 31, 2015, each Director had 2,602 unvested RSUs.

(2)

Represents insurance premiums provided by the Company for group term life insurance and business travel accident insurance for each Director. The group term life insurance premiums are age-banded and this is reflected in the lower premiums for Ms. McClure and Mr. Shaheen. In addition, Dr. Domenech’s premiums were pro-rated based on the date that he joined the Board.

2019:  

Director
Fees Earned
or Paid in Cash
($)
Stock Awards
($) (1)
All Other
Compensation
($) (2)
Total
($)
Mark S. Casady80,000110,00051190,051
Daniel A. Domenech70,000110,000204180,204
Stephen J. Hasenmiller85,000110,000204195,204
Perry G. Hines70,000110,00051180,051
Mark E. Konen70,000110,00051180,051
Beverley J. McClure85,000110,00051195,051
H. Wade Reece0235,00051235,051
Robert Stricker85,000110,000204195,204
Steven O. Swyers95,000110,000204205,204
(1) Represents fees deferred in 2019 pursuant to the HMEC 2010 Comprehensive Executive Compensation Plan, as well as $110,000 in RSUs (awarded May 22, 2019). As of December 31, 2019, each Director had 2,747 unvested RSUs.
(2) Represents insurance premiums provided by the Company for group term life insurance and business travel accident insurance for each Director. The group term life insurance premiums are age-banded and this is reflected in the lower premiums for Mr. Casady, Mr. Hines, Mr. Konen, Ms. McClure and Mr. Reece.
Corporate Governance

Director Independence

The Company’s Corporate Governance Principles require that the Board consist of a majority of directors who meet the criteria for independence required by the listing standards of the NYSE. Based on the independence requirements of the NYSE and after reviewing any relationships between the Directors and the Company or its management (either directly or indirectly, including as a partner, shareholder or officer of an organization that has a relationship with the Company or its management) that could impair, or appear to impair, the Director’s ability to make independent judgments, the Board determined that none of its non-employee Directors have a material relationship with the Company, and therefore all of these Directors are independent. In addition, the Board determined that Mr. Reece does not have a material relationship with the Company, and therefore is independent. These independence determinations are analyzed at least annually in both fact and appearance to promote arms-length oversight. The current non-employee Directors are Mr. Casady, Dr. Domenech, Dr. Futrell, Mr. Hasenmiller, Mr. Helow,Hines, Mr. Konen, Ms. McClure, Mr. Shaheen,Reece, Mr. Stricker and Mr. Swyers.

Board Leadership Structure

The Board is committed to strong, independent Board leadership and believes that objective oversight of management is a critical aspect of effective corporate governance. Accordingly, the Board currently has two separate individuals holding the offices of Chairman and Chief Executive Officer, and the position of Chairman is held by an independent Director. The Board of Directors believes that having an independent Director serve as Chairman is in the best interest of the Company at this time as this structure provides a greater role for the independent Directors in the oversight of the Company. However, as described in the Company’s Corporate Governance Principles, this situation can change in the future to permit one individual to hold both positions, if the Board deems it to be in the best interests of the Company at a given time.


12     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Board’s Role in Risk Oversight

The Board of Directors is responsible for overseeing the processes that management has established for assessing and managing risk. In addition, the Board has delegated oversight of certain categories of risk to designated Board committees. In performing their oversight responsibilities, the Board and relevant committees regularly discuss with management the Company’s policies with respect to risk assessment and risk management. The committees report to the Board regularly on matters relating to the specific areas of risk the committees oversee.

In addition, the Company has established an internal Enterprise Risk Management (“ERM”) Committee, which is composed of certain members of senior management, including the President and Chief Executive Officer; the Executive Vice President and Chief Financial Officer; the Executive Vice President, Annuity and Life; the Executive Vice President, Property & Casualty; the Senior Vice President and Chief Human Resources Officer; the Senior Vice President, Field Operations and Distribution; the Senior Vice President and Chief Information Officer; the General Counsel and Chief Compliance Officer; and the Corporate Secretary.heads of Operations, Distribution, Business Strategy and the Life & Retirement and Property & Casualty divisions. The ERM Committee is chaired by the Executive Vice President and Chief Financial Officer of the Company.

Throughout the year, the Board and the relevant Board committees receive regular reports from the Enterprise Risk ManagementERM Committee and its chairman regarding major risks and exposures facing the Company and the steps management has taken to monitor and control such risks and exposures. In addition, throughout the year, the Board and the relevant Board committees dedicate a portion of their meetings to review and discuss specific risk topics in greater detail.

Also, in light of ongoing threats to corporate cybersecurity, the Board and relevant Board Committees receive regular reports from the Chief Information Security Officer of the Company regarding cybersecurity risks and the steps management has taken to monitor and control such risks. The Audit Committee dedicates a portion of their meetings to review and discuss the Company’s cybersecurity program.

2016 Proxy Statement • Proposals and Company Information9


Code of Ethics, Code of Conduct and Corporate Governance Principles

The Company has adopted a Code of Ethics and a Code of Conduct applicable to all employees, including the Chief Executive Officer, Chief Financial Officer, Controller and Directors (in their capacity as Directors of the Company). The Company has also adopted Corporate Governance Principles. The Codes and Principles are available on the Company’s website at www.horacemann.com,investors.horacemann.com, under “Investors - Corporate“Corporate Overview - Governance Documents”.Documents.” A printed copy of the Codes and Principles may be obtained by Shareholders upon written request, addressed to Investor Relations, Horace Mann Educators Corporation, 1 Horace Mann Plaza, C-120,C-738, Springfield, Illinois 62715-0001.

Corporate Social Responsibility and Shareholder Engagement
The Board of Directors oversees the corporate social responsibility function. On an annual basis, the ERM Committee discusses ESG risk and the corporate social responsibility team briefs the board on ESG initiatives and developments. The full board reviews and approves the corporate social responsibility report.
Horace Mann is committed to maintaining an open and productive dialogue with shareholders to understand investor perspectives and share updates on the Company’s business and governance practices.
In advance of the 2020 Annual Meeting, Horace Mann’s investor relations team reached out to the Company’s top 25 active and passive shareholders, representing approximately 80% of outstanding shares, with information regarding the Company’s most recent CSR report. The outreach provides these shareholders with the opportunity to learn more about the Company’s stance on corporate governance, say on pay and overall shareholder value creation. Feedback to similar outreach in the past has been positive and shareholders approved all proposals in the 2019 Proxy Statement by over 93%.
In addition, Horace Mann’s management and investor relations team regularly discuss ESG and CSR topics with active investors during ongoing interactions at conferences and other venues. During late 2018 and throughout 2019, the team met or spoke one or more times with active investors representing more than 30% of outstanding shares, in addition to conversations with potential investors. In those meetings, management covers Horace Mann’s business strategy and performance. Investors react positively to updates on how corporate social responsibility initiatives support the Company’s business strategy.

Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement 13


Director Education

Each Director is required to participate in at least one education program every two years and may choose to participate in up to two education programs in a two yeartwo-year period at the Company’s expense. All Directors are in compliance with this requirement.

In addition, a schedule is developed, with input from the Directors, which covers a broad range of topics to enhance and strengthen the skills, knowledge and competencies of Directors. Examples of such topics include cybersecurity, crisis management, regulatory developments, corporate governance and industry trends. The program encompasses presentations from internal and external speakers as well as site visits and regular meetings with management. Directors are also encouraged to avail themselves of educational programs offered through recognized independent providers.

Communications with Directors

The Company has established various processes to facilitate communications with the Board by Shareholders and other interested parties. Communications to non-employee Directors as a group or to the Chairman of the Board or to an individual Director may be submitted via regular mail addressed to the Board of Directors, c/o the Corporate Secretary, Horace Mann Educators Corporation, 1 Horace Mann Plaza, Springfield, Illinois 62715-0001. Additionally, communications may be emailed to the Board of Directors, c/o the Corporate Secretary at hmecbofd@horacemann.com.

Compensation Committee Interlocks and Insider Participation

There are no Compensation Committee interlocks between the Company and other entities involving the Company’s Executive Officers and Directors who serve as executive officers or directors of such other entities. During 2015,2019, no member of the Compensation Committee was a current or former officer or employee of the Company.

Review, Approval or Ratification of Transactions with Related Persons

The Board reviews issues involving potential conflicts of interest of its members and is responsible for reviewing and approving all related party transactions. The Board does not have a formal related party transaction policy but it considers each related party transaction individually.

Related Person Transactions

Mark Casady, a Board member, is a General Partner with a 50% interest in Vestigo Ventures, an early stage FinTech venture capital firm. On March 27, 2018, Horace Mann made a $5 million investment in a fund established by Vestigo Ventures, which represents an investment of less than 10% in the fund. The investment is not material to Vestigo Ventures.
BlackRock, Inc. (“BlackRock”), which owns beneficially more than 5% of the issued and outstanding shares of Common Stock, provides investment risk management services to the Company and has done so for more than 10 years. In 2015,2019, the Company paid approximately $0.5 million$378,681 in fees to BlackRock associatedin connection with the Company’s use of analytical software owned by BlackRock. In addition, the Company is invested in two Limited Partnership funds managed by BlackRock Capital Investment Advisors, LLC with total commitments of $40 million. The investments are not material to BlackRock.
Other than the BlackRock relationship,relationships described above, the Company does not have any contracts or other transactions with related parties that are required to be reported under the applicable securities laws and regulations.


14     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation

PROPOSAL NO.

Proposal No. 2 - ADVISORY RESOLUTION TO APPROVE NAMED EXECUTIVE OFFICERS’ COMPENSATION

Advisory Resolution to Approve Named Executive Officers’ Compensation

The Board is asking Shareholders to approve an advisory resolution to approve the compensation of the Company’s NamedChief Executive Officer, Chief Financial Officer and the other three highest compensated Executive Officers (“NEOs”employed at the end of 2019 (collectively the “Named Executive Officers” or “NEOs”) as reported in this Proxy Statement. The Compensation Committee has structured our NEOs’ compensation program as described below under “Compensation Discussion and Analysis”.

Analysis.”

The Board recommends that Shareholders read the “Compensation Discussion and Analysis” (“CD&A”) included in this Proxy Statement, which describes in more detail how our Executive Compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the “Summary Compensation Table” and other related compensation tables and narrative included within the CD&A, which provide detailed information on the compensation of our NEOs. The Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the CD&A are effective in achieving our goals.

In accordance with Section 14(a) of the Securities Exchange Act, and as a matter of good corporate governance, the Board is asking Shareholders to approve the following advisory resolution at the 20162020 Annual Meeting:

RESOLVED, that the Shareholders of Horace Mann Educators Corporation (the Company)(“the Company”) approve, on an advisory basis, the compensation of the Company’s Named Executive Officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 20162020 Annual Meeting of Shareholders.

This advisory resolution, commonly referred to as a “Say on Pay” resolution, is non-binding on the Board of Directors. Although non-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding ourthe NEOs’ compensation program.

The Board has adopted a policy providing for an annual advisory vote to approve NEOs’ compensation. Unless the Board modifies its policy on the frequency of holding such advisory votes, the next advisory vote will occur at the Company’s 20172021 Annual Meeting of Shareholders.

The Board recommends that Shareholders vote FOR the approval of the advisory resolution to approve Named Executive Officers’ compensation.



10Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Proposals and Company Information15



Compensation Discussion and Analysis
In this section, we describe the material components of our executive compensation program for our Named Executive Officers (“NEOs”), whose compensation is displayed in the 2019 Summary

Compensation Table and the other compensation tables contained in this Proxy Statement. We also provide an overview of our executive compensation philosophy and we explain how and why the Compensation Committee of our Board (the “Committee”) arrives at specific compensation policies and decisions.
Our 2019 NEOs are our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the three other most highly compensated Executive Officers employed at the end of 2019:
Marita Zuraitis, President and CEO;
Bret A. Conklin, Executive Vice President and CFO;
Matthew P. Sharpe, Executive Vice President, Distribution & Business Strategy;

In this section, we describe the material components of our executive compensation program for our Named Executive Officers, or “NEOs,” whose compensation is displayed in the 2015 Summary Compensation Table and the other compensation tables contained in this Proxy Statement. We also provide an overview of our executive compensation philosophy and we explain how and why the Compensation Committee (the “Committee”) arrives at specific compensation policies and decisions.

Our 2015 NEOs are our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the three other most highly compensated Executive Officers employed at the end of 2015:

Marita Zuraitis, President and Chief Executive Officer;

Dwayne D. Hallman, Executive Vice President and Chief Financial Officer;

Matthew P. Sharpe, Executive Vice President, Annuity and Life;

William J. Caldwell(1), Executive Vice President, Property & Casualty and Casualty;Life & Retirement; and

Kelly J. Stacy, Senior Vice President, Field Operations and Distribution.

Wade A. Rugenstein, Executive Vice President, Supplemental & Operations
(1) As disclosed in an 8-K filed on April 1, 2020, William J. Caldwell has resigned from his position at Horace Mann effective April 10, 2020.
Executive Summary

This summary highlights information from this Compensation Discussion and Analysis section and may not contain all the information that is necessary to gain a full understanding of our policies and decisions. Please read the entire Compensation Discussion and Analysis section and compensation tables for a more complete understanding of our compensation program.

Our Business

We are

Horace Mann is a personal insurance and financial services business with approximately $10.1$12.5 billion of assets and approximately $1.4 billion in total revenue as of December 31, 2015.2019. Founded by Educators for Educators®, we offer ourthe Company offers products and services primarily to K-12 teachers, administrators, and other employees of public schoolsschool employees and their families. We underwriteHorace Mann underwrites personal lines of auto, property, life and lifesupplemental insurance, andas well as retirement annuitiesproducts in the United StatesStates.
2019 Business Highlights
Horace Mann had a strong 2019, with net income up more than core earnings because of America.

2015 Business Highlights

$107 million in after-tax realized gains on assets transferred as consideration in the annuity reinsurance transaction. Core earnings of $92.2 million increased three-fold over prior year and core return on equity improved by five points. These results illustrated the potential of the company’s strategic initiatives as well as the three significant transactions completed during the year. Segment results included:

Property and Casualty - The Company delivered solidProperty and Casualty combined ratio of 96.5% reflected a 4.0-point improvement in the underlying financialauto loss ratio as well as catastrophe losses well below 2018, when results across all three segmentsincluded $38 million in catastrophe costs from the Camp Fire;
Retirement - Continued growth in annuity sales as well as an improved net interest spread due to the annuity reinsurance transaction despite declining interest rates;
Life - Core earnings in line with expectations despite lower net investment income and higher expenses;
Supplemental - The addition of its multiline insurance platformthe Supplemental business provided important diversification to revenue and earnings, adding $18.0 million to core earnings in 2015. Full year Operating Income was $2.00 per diluted share. the second half of 2019.

16     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


To determine annual compensation incentive awards, we make adjustments to core earnings for items that are highly volatile and outside the control of management. On that basis, core earnings would have increased to $104.7 million, reflecting 2019 adjustments for:
Property and Casualty catastrophes above plan
Retirement and Life DAC unlocking due to market and other factors
Change in gross minimum death benefits due to capital gains and losses as well as market performance variance from plan
Costs related to transactions
Annuity reinsurance transaction
The Committee does not make adjustments for these items in long-term incentives, as management should be held accountable for these outcomes, and has more ability to manage through one-time items over a longer period of time.
Book value per share* increased 6%11% in 2015 driven by2019, primarily reflecting the solid operating results and positive contributions from investment portfolio performance. In addition, broad-based increasesrealized gain on assets transferred in new business sales and solid policy retentions were achieved during the past year.annuity reinsurance transaction, as well as strong earnings. Total Shareholder Return was 3.0%19.8% in 2015.

LOGOLOGO

*

Excluding the fair value adjustment for investments

These results reflect significant progress2019, under-performing property and casualty and life insurance indices.

chart-01b227e831e178f65c3a01.jpgchart-f6727c67ae6eb3662e0a01.jpg
Driving long-term shareholder value creation remains a priority for the Company. In 2020, the Board approved a shareholder dividend increase for the 12th consecutive year. The company returned $47 million to shareholders in 2019 through dividends. The Company has $23 million remaining on numerous strategic initiatives, including:

Increased sales levels year-over-year in all lines of business excluding life

New auto sales premium increased 7%

Auto policy-in-force growth of 1.2%

Horace Mann agency annuity sales increased 8% including the new fixed indexed annuity product

Strong auto and property retention ratios

Improved profitability in the underlying Property and Casualty book of business

Increased annuity assets under management by 5%

Introduction of new indexed universal life product

its buyback authorization and continues to evaluate the potential for opportunistic buyback of shares. Since 2011, repurchases have totaled $77 million.

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in HMEC’s 20152019 Annual Report on Form 10-K for a more detailed description of these financial results.


2016Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis1117



2019 Executive Compensation Highlights
These elements of the executive compensation program are described more fully below.
Pay Practicemix comprised of base salary, cash annual incentives under the Annual Incentive Plan (“AIP”), and Governance

equity-based long-term incentives under the Long-term Incentive Plan (“LTIP”)
Over 75% of the CEO’s target compensation and in aggregate over 60% of all other NEOs’ target compensation linked to performance-based or service-vested incentives
Balanced performance measures designed with a focus on Shareholder return, both absolute and relative, and incenting operating growth while managing risk
Performance incentives tied to multiple overlapping performance periods
Annual cash incentives tied to Company and business line performance measures
Long-term incentives entirely equity-based:

     Balanced pay mix comprised of Base Salary, Long-term Equity Incentive Awards, and Annual Cash Incentives

     Over 70% of the CEO’s target compensation and over 56% of all other NEOs’ target compensation is linked to performance and service-based incentives and is at risk

     Balanced performance

Performance-based RSUs vest following a 3-year period, based on relative measures designed with a focus on(relative total shareholder return and incenting profitable growth while managing risk

     Performance incentives tied to multiple overlapping performance periods

     Annual Incentive Plan tied to absolute performance measures

     Long-term Incentive Plan had been tied to all relative performance measures until the introduction ofoperating return on equity) and an absolute total revenue growth measure in 2015

     Long-term Incentives are entirely equity based

Ø       Service-based

Service-vested stock options with a 4-year vesting period

Ø       Performance-based RSUs vest following a 3-year performance period

Ø       Service-based

Service-vested RSUs with a 3-year vesting period

     Stock Ownership Requirements for NEOs (500% of salary for CEO, 350% of salary for other NEOs) and a 12-month

Stock ownership guidelines for NEOs
Twelve-month post-exercise holding requirement onfor stock options

     Clawback Policy applicable to both cash and equity awards

     Executive Change in Control Plan excludes “tax gross-up” provisions

Pay Practice

Strong Pay for Performance

We target compensation around the median of the competitive market, with executives earning more or less than median based on the performance of the Company and value delivered to Shareholders. The overall executive compensation program includes base salary, long-term equity awards and annual cash incentives. Incentive awards are earned upon the achievement of short-term and long-term business goals that are reviewed and approved by the Committee at the beginning of each performance period. Performance goals are structured to reward for business growth and profitability, balanced with productivity and risk and capital management.

Long-term Incentive Plan

Our Long-term Incentive is comprised of three vehicles, performance-based RSUs, service-based RSUs and stock options, as described below. The performance-based RSUs provide an effective vehicle for rewarding executives based on a three-year performance period and have a high value in promoting executive retention. The performance-based RSUs, along with the service-based RSUs and stock options provide strong alignment with Shareholder interests and assist in the retention of key executive talent.

Long-term Incentive Vehicles

LOGO

Performance-based RSUs - Earned over a three-year period, based upon Relative and Absolute Measures. If any shares are earned at the end of the three-year performance period, the executive fully vests in the award

Service-based RSUs - Vest 1/3 per year after years 1, 2 and 3

Stock options - Granted at fair market value with a 10 year life; options vest ratably over 4 years

Minimum 12-month vesting for all equity awards

122016 Proxy Statement • Compensation Discussion and Analysis


Long-term Incentive Plan Performance-based Measures

Our Long-term Incentive performance-based measures cover a three year period. Each year, a new three year period starts, partially overlapping the periods that started the prior two years. The Committee may alter the performance measures as any new three year period starts. The performance measures adopted have been:

2013-2015 Performance-based RSU Measures

LOGO

Total Shareholder Return - Relates to the Total Shareholder Return for the three-year period measured against a peer group of companies

Operating Return on Equity - Relates to the average annual Operating Income return on average equity for the three-year period measured against a peer group of companies

Operating Earnings per Share Growth - Relates to the total percentage increase or decrease in Operating Earnings per share for the three-year period measured against a peer group of companies

2014-2016 Performance-based RSU Measures

LOGO

Total Shareholder Return - Relates to the Total Shareholder Return for the three-year period measured against a peer group of companies

Operating Return on Equity - Relates to the average annual Operating Income return on average equity for the three-year period measured against a peer group of companies

2015-2017 Performance-based RSU Measures

LOGO

Total Shareholder Return - Relates to the Total Shareholder Return for the three-year period measured against a peer group of companies

Operating Return on Equity - Relates to the average annual Operating Income return on average equity for the three-year period measured against a peer group of companies

Total Written Premium Growth - Relates to Horace Mann written premium growth measured as the compound annual growth rate from 2014 to 2017 for Auto, Property, Annuity and Life.

These three measures for the 2015-2017 period focus on the effective use of capital

Clawback policy applicable to both cash and delivering on growth objectives while retaining our strong alignment with Shareholder interests.

Annual Incentive Plan

The Annual Incentive performance measures provide balance between Shareholder return (operating income - 50%)equity awards

Executive change in control plan excludes “tax gross-up” provision
Limited perks and growth (sales and revenues - 50%). Further, these measures were designed to complement the metrics of the Long-term Incentive which focus on long-term shareholder value creation. The performance measures correspond to our financial plan (“Plan”) objectives approved by the Committee. The Annual Incentive is paid in cash.

2015 Annual Incentive Performance Measures

LOGO

Adjusted Operating Income - Operating income (GAAP net income after tax, excluding realized investment gains and losses other than those for FIA related options and embedded derivatives) adjusted for Property & Casualty (“P&C”) catastrophe costs different than Plan, Annuity & Life deferred acquisition costs (“DAC”) unlocking and change in guaranteed minimum death benefit (“GMDB”) reserve due to capital gains and losses and market performance different than Plan, the impact on investment income of share repurchases different than Plan, and debt structure/costs including debt retirement different than Plan

P&C Net Premium Written (GAAP) - Amount charged for property and casualty policies issued during the year; portions of such amounts may be earned and included in financial reports over future periods

Annuity Sales - The amount of new business from the sales of Horace Mann annuity products, from Horace Mann and independent agents, as measured by premiums and deposits to be collected over the 12 months following the sale

Life Sales - The amount of new Horace Mann individual life insurance products sold during the year, as measured by premiums and deposits to be collected over the 12 months following the sale

2016 Proxy Statement • Compensation Discussion and Analysis13


executive benefits

Pay Governance

Committee

Oversight

The Committee oversees theour executive compensation program for our NEOs.program. The compensation program is designed to provide a direct and clear link between the performancecurrent members of the CompanyCommittee are Mr. Hasenmiller, Mr. Konen, Ms. McClure, and executive pay. To assist inMr. Reece. Mr. Hasenmiller serves as the constructCommittee Chair. Consistent with the listing standards of the compensation program design,NYSE, the assessmentCommittee is composed entirely of the program’s relevance to current market trends and the analysis of the program’s effectiveness, theindependent Directors.
The Committee retained Compensation Advisory Partners LLC (“CAP”) as independent compensation consultants who report directly to the Committee.consultants. CAP attends Committee meetings, including portions of executive sessions, and serves solely at the pleasure of the Committee.

As will be discussed in more detail in next year’s proxy statement, in March 2016, the Company made performance-based Restricted Stock Unit (RSUs) grants to key executives, including the NEOs, under our 2010 Comprehensive Executive Compensation Plan (as amended and restated effective May 20, 2015) (“CECP”). All such grants are subject to satisfaction of certain objective threshold company-wide performance standards. The Company’s success makes our leadership team more vulnerable to recruitment by competitors. The Committee believes the grants promote continuity and retention of our strong leadership team as we pursue our aggressive 20/20 Vision, and also strengthen management’s alignment with Shareholder interests.

In addition, the Committee believes its oversight of executive compensation is strongly enhanced by the on-going education of each Committee member on emerging legislation, regulatory guidelines and industry best practices. This is done through review of topical publications, participation in webcasts, attendance at seminars and conferences on executive compensation and formal updates by CAP and other external experts during Committee meetings. Committee members provide management and CAP with topics for presentation and discussion prior to each meeting. During the Committee meetings, Committee members, the Board’s outside legal counsel, management and CAP discuss executive compensation, benefits and related issues and their relevancy to the Company, its Shareholders and its executive compensation program. The Committee has an executive session, without management present, during each of its meetings.

Stock Ownership & Holding Requirements

The Company’s Long-term Incentive Plan has been 100% equity-based since 2009. The equity is
comprised of a combination of stock options, performance-based RSUs and service-based RSUs.
Paying these incentives solely in equity-based instruments and requiring executives to meet
specific stock ownership requirements further serves to align our executives’ and Shareholders’
interests. As part of its 2015 overall review of the executive compensation program, the
Committee determined the existing multiples of base salary stock ownership requirements for the
Executive Officers were appropriate and would be continued in 2016. The CEO is required to
accumulate and maintain beneficial stock ownership with a book value of at least 500% of base
salary and all other NEOs to accumulate and maintain beneficial stock ownership with a book
value of at least 350% of base salary. Currently, our NEOs are required to satisfy stock ownership

Stock Ownership

Requirements (1)

CEO500%
All other NEOs350%

(1) Percentage of base salary

levels within five years of attaining their position. Beginning with the March 9, 2011 stock option grants, the NEOs are required to hold shares equivalent to any proceeds from a long-term incentive stock option exercise, net of exercise price and related taxes and the costs of the exercise, for a minimum of twelve months after the date of exercise. All NEOs have met or are on target to meet the stock ownership requirements.

Annual Performance & Pay Review

To further reinforce the tie between Company results and compensation, each executive officer’s performance is reviewed by the Committee every 12 months, coinciding with the review of corporate performance results. Each executive officer is reviewed not only on prior year business results but also on the individual’s demonstration of leadership skills and progress on specific strategic initiatives and other key priorities. The Committee also considers any adjustments to base salary, long-term incentive opportunity and annual incentive opportunity at this review.

The Committee recognizes the need to have market-competitive compensation opportunities to attract, retain, and reward high performing executive talent. CAP reviews our executive compensation and compensation practices relative to the competitive market. Overall, our total target compensation is comparable to the market median, with above-target performance allowing for the possibility of total compensation greater than market median and below-target performance resulting in total compensation below market median.

Risk Assessment

Our programs are structured to discourage excessive risk-taking through a balanced use of compensation vehicles and metrics with an overall goal of delivering sustained long-term shareholder value while aligning our executives’ interests with those of our Shareholders. To this end, management and CAP conduct, and the Committee and the Board’s outside legal counsel reviews, an annual risk analysis of the compensation plans and incentive metrics. Our programs require that a substantial portion of each executive officer’s compensation be contingent on delivering performance results that benefit our Shareholders. In addition, a significant portion of our NEOs’ compensation is delivered in equity over a multi-year timeframe and each executive is expected to satisfy meaningful stock ownership requirements as well as comply with holding requirements. Furthermore, incentive compensation is subject to clawbacks. Similarly, we have stock ownership requirements for our non-employee Directors which are described under “Director Compensation.” The Committee has been advised by the Board’s outside legal counsel and agrees that no unreasonable risk exists that a compensation policy or incentive plan would have a material adverse impact on the Company.

142016 Proxy Statement • Compensation Discussion and Analysis


Succession Planning Process

To further mitigate enterprise risk and ensure the Company does not suffer sustained gaps in leadership, the Committee approves, oversees and monitors the Company’s succession planning process. This process identifies candidates that have the skill sets, background, training, and industry knowledge to assume critical positions on an emergency basis and also for the long-term executive succession plan. The Company’s succession plan is reviewed by the full Board annually.

Minimal Use of Employment Agreements

As of the time of this Proxy Statement, the Company did not have any individual employment agreements with any executive and intends to continue to minimize their use, while recognizing that in isolated situations they may be needed for attraction and retention of key executive talent.

Change in Control and Elimination of Prospective Gross-ups

Four of the NEOs are covered under the Horace Mann Service Corporation Executive Change in Control Plan (“Executive CIC Plan”). This plan provides “double trigger” benefits and does not contain a tax gross-up provision. The Company does have an individual change in control severance agreement with Mr. Hallman, which provides severance pay, including a “parachute tax” gross-up payment, in the event of an actual or constructive termination of employment within a fixed time after a change in control of the Company, as defined in the agreement (a “double trigger”). The Committee has determined that, while it cannot change unilaterally any existing change in control severance agreements with current executives, it does not plan to include tax gross-up provisions in any future agreements.

Clawbacks

The Committee further believes that our compensation program should reward performance that supports the Company’s culture of integrity through compliance with applicable laws and regulations and our codes of ethics and conduct. As a further step to support that belief, the Committee has determined that all executive officers are subject to the same standards as the CEO and CFO regarding cash compensation clawbacks as defined under Section 404 of the Sarbanes-Oxley Act of 2002. In addition, under the CECP, the Company has the right to recover any cash or equity award if it is determined that an executive’s own misconduct contributed materially to the executive’s receipt of an award. New guidance under the Dodd-Frank Act related to clawbacks has been proposed by the Securities and Exchange Commission and the Company will modify the current clawback provisions to comply with the guidance when finalized.

Favorable Say on Pay

At our 2015 Annual Meeting of Shareholders, we received substantial support for the compensation of our NEOs, with 97.27% of the votes cast in favor of the “Say on Pay” advisory vote on executive compensation. The Compensation Committee and the Board appreciate and value the views of our Shareholders. In considering the results of this advisory vote, the Compensation Committee was pleased that a significant majority of our Shareholders approved the proposal, showing strong support for the structure of the compensation plans, the absence of excessive perquisites, the demonstrated pay-for-performance practices and the strength of the Company’s compensation processes and practices.

Hedging Prohibition

NEOs and other executive officers are prohibited from engaging in hedging transactions in HMEC common stock.

Pledging Prohibition

Beginning in 2013, NEOs and other executive officers have been prohibited from pledging their HMEC common stock shares.

Perquisites and Personal Benefits

We provide limited perquisites, which are commonly provided among our peer companies. Please see the “Summary Compensation Table” for further details.

2016 Proxy Statement • Compensation Discussion and Analysis15


Executive Compensation Program

Oversight

The Committee oversees our executive compensation program. The current members of the Committee are Dr. Futrell, Mr. Hasenmiller, Ms. McClure, and Mr. Shaheen. Mr. Hasenmiller serves as the Committee Chair. Consistent with the listing standards of the NYSE, the Committee is composed entirely of independent Directors.

The Compensation Committee is composed entirely of independent Directors.

The Committee has retained CAP to provide information and advice on the competitive market for executive talent, evolving market practices in our industry and the general employment market, regulatory and other external developments, and our executive compensation philosophy and incentive program design. In this way, CAP assists the Committee with ongoing education. Also, Committee members comply with Directors’ education requirements to help ensure each remains up to date on current issues relevant to the Company and its business.

The CAP consultants report directly to the Committee, attend the Committee meetings and portions of executive sessions of the Committee at the Chair’s request and serve(generally with the Board’s outside legal counsel, but without management present). CAP serves at the pleasure of the Committee. CAPCommittee, and performs no other services for management or the Committee.related to executive compensation. CAP works with management to obtain necessary data and perspectives on the Company’s strategic objectives, business environment, corporate culture, performance, and other areas.relevant factors. This information is used by CAP to formulate its recommendations related to competitive compensation performance targets and overall design. CAP’s findings and recommendations are reported directly to the Committee. The services provided by CAP during 20152019 are described in more detail throughout this analysis. Pursuant to regulatory requirements, the Committee has

18     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


assessed CAP’s independence (along with that of its other direct and indirect consultants and advisors) in 2019 and concluded that CAP’s work did not raise any conflict of interest. In addition, the Committee has the authority to hire other experts and advisors as it deems necessary.

Management also supports the Committee by providing analysis and recommendations. When setting levels of executive compensation, the Committee requests, receives, and considers the recommendations of the CEO regarding the performance of her direct reports and other Executive Officers. Members of management also attend and contribute to Committee meetings as relevant to the Committee agenda.

The Committee discusses its fundamental views on compensation and guiding principles, as well as its expectations of the CEO’s performance and annual goals, with the CEO and subsequently proposes the CEO’s goals to the Board for approval. The Committee does not include the CEO or other members of management unless specifically invited by Committee Chair in its discussions with CAP on the CEO’s compensation, nor does the CEO or management participate in the Committee’s recommendation to the Board on the CEO’s compensation.
Say on Pay
At the 2019 Annual Meeting of Shareholders, 98.0% of Shareholders voted, on an advisory basis, to ratify the NEO compensation. The Committee reviewedwelcomes the opportunity to provide additional insight into our executive compensation practices and appreciates the positive support from our Shareholders. We continue to believe that the overall structure of our compensation plans, the absence of excessive perquisites, and our demonstrated pay-for-performance practices reflect the strength of the Company’s executive compensation programs.
Executive Compensation Program
Guiding Principles
The Committee has established a set of core principles that underlie our executive compensation program. These core principles provide guidance to the Committee and management in making decisions while administering the program or when considering changes. These core principles include strong alignment between pay and performance, incentive to drive Shareholder value, and market competitiveness.
Strong pay for performance alignment
We target compensation around the median of the competitive market, with executives earning more or less than median, generally based on the performance and compensation of specified Long-term Incentive Plan (“LTI”) participants on a common review date concurrent with the annual review of the prior year’s performanceCompany and value delivered to Shareholders. Our core executive compensation program includes base salary, an annual cash incentive plan (“AIP”), and long-term equity awards (“LTIP”). Both AIP and LTIP are administered under the incentive plans.

Guiding Principles

The Committee has established the following core principles that underlie our executive compensation program:

    Executive interests should be aligned with Shareholders;

Shareholder-approved 2010 Comprehensive Executive Compensation Plan, as amended (“CECP”). Incentive awards are earned upon the achievement of short-term and long-term business goals that are reviewed and approved by the Committee at the beginning of each performance period. Performance goals are structured to reward business growth, profitability, relative total shareholder return, balanced with productivity and risk and capital management.

Incentive compensation should be structured to drive long-term value creation and reward strong performance;

    A significant portion of compensation should be “at risk” based on the Company’s performance; and

    Compensation levels should be market competitive.

Executive interests should be aligned with Shareholders

Our incentive plans facilitate stock ownership and include performance measures that drive long-term sustained shareholder value. The Company grants equity awards with multi-year performance periods to reward sustained performance and multi-year vesting to encourage retention. We allow deferrals of RSU awards and our executives are also required to satisfy meaningful stock ownership requirements. In 2015 through the Long-term Incentive Plan, we delivered approximately 43% of Ms. Zuraitis’s compensation in equity. With respect to the other NEOs, approximately 37% to 44% of their compensation was delivered in equity.

Incentive compensation should be structured to drive long-term value creation and reward strong performance

Our executive compensation program includes significant equity-based

The AIP performance goals are based on premiums and cash-based incentives intended toadjusted operating income which drive long-term value and short-termare metrics management can control. The LTIP performance goals are directly linked to multi-year growth and return measures to keep executives focused on value creation. The Long-term Incentive Plan delivers 50% of the long-term incentive opportunities in performance-based and 50% in service-based equity awards. The minimum vesting period for any equity award is three years and the maximum is four years. The Annual Incentive is solely performance-based and paid in cash.

creation, with multiple metrics based on performance versus peers to focus on outperforming our peers.

16Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis19


A significant


Significant portion of compensation should be “at risk” based on the Company’s performance

Over 70% of the CEO’s target
total pay is at risk and over
56% of target total pay for all
other NEOs is at risk.

Generally, over 70% of the CEO’s target total pay and over 56% of target total pay for all other
NEOs (base salary plus target annual incentive plus target long-term incentive) is at risk, is
variable from year to year, and demonstrates a strong link between pay and performance. To
further enhance the pay-for-performance linkage, we incorporate performance relative to
comparable companies into our long-term incentive measures.

and aligned with Shareholders’ interests

For 2019, over 75% of the CEO’s target total pay (base salary, target annual incentive, and target long-term incentive) and in aggregate over 60% of target total pay for all other NEOs is at risk, and is variable from year to year, and for the majority of the compensation, the level of payout is dependent on the Company’s performance. To encourage executive performance on a long-term basis, and to align executive interests with Shareholders’, the Committee grants equity awards with multi-year performance periods and multi-year vesting. In 2019, Ms. Zuraitis received approximately 49% of her target compensation in equity. With respect to the other NEOs, approximately 32% to 45% of their compensation was equity-based.
Compensation levels should be market competitive

The Committee believessets total direct compensation for the NEOs – salary and target annual and long-term incentive opportunities – within a reasonable range of the median of the competitive market, while providing the ability to decrease or increase compensation programif warranted by performance and experience. To determine competitive pay levels, we use an established peer group of similarly sized insurance companies in the Russell 3000® Index. The Committee worked with CAP to select our peer insurance companies for 2019 (noted below), based upon assets under management and revenue. The peer group does not include reinsurance or insurance brokers. We supplement this information with survey market data from published sources including Equilar, Towers Watson, and Korn Ferry. The data from these surveys is critical in attracting and retaining top executives. Consequently, when making compensation decisions,scaled to our size by CAP based on revenues or asset ranges. Annually, CAP provides the Committee considerswith a comparison of the compensation opportunities providedbase salary, annual incentives and long-term incentives of the CEO with those of other Chief Executive Officers based on the peer group and survey data obtained. For 2020, the peer group will be updated to similarly situated executives at comparable companiesremove Navigators Group, Inc. and MBIA, Inc. as well as howto add ProAssurance Corporation.
The Committee does not seek to benchmark or set executive compensation is delivered (e.g., short-term vs. long-termat any specific level relative to the peer group. Instead, the Committee uses this information primarily as a general reference point to determine pay levels and fixed vs. variable).

Assessing Compensation Competitiveness

The Committee intends to set total direct compensation for the NEOs – salary and target annual and long-term incentive opportunities – within a reasonable range of the median of the competitive market, while providing the opportunity for additional compensation if warranted by performance. To determine competitive pay levels, we use comparable survey market data provided by our independent consultant, CAP,

and from published survey sources including LOMA, Towers Watson, and proxy data for similar sized insurance companies in the Russell 2000® Index. The data from these surveys is scaled to our size by CAP based on revenues or asset ranges as provided by the various surveys. The NEOs are assessed against comparable functional matches in the insurance industry and the broader general industry, as appropriate.

Every year, CAP provides the Committee with a comparison of the base salary, annual incentives and long-term incentives of the CEO with those of other chief executive officers based on survey data. Based on the data, CAP

2015 Consultant Survey Sources

    LOMA: Executive Compensation Survey

    Towers Watson: Top Management Compensation Survey

    Proxy Data for Insurance companies in the Russell 2000® Index

makes recommendations for CEO compensation for the Committee’s consideration. The Committee then deliberates in executive session to determine its recommendation for approval by the Board of Directors.

forms of plan design that effectively recognize favorable executive performance and experience, and ensure executive retention. For 2015, the CAP2019, CAP’s analysis demonstrated that the average of 2015overall core total direct compensation for Ms. Zuraitis was consistent with target pay positioning at the median of the market. This is consistent withBased on the Committee’s compensation philosophy.

data received, and CAP’s analysis, the Committee deliberates in executive session to determine its recommendation for approval by the Board. The other NEOs are assessed against comparable functional matches in the insurance industry and the broader general industry, as appropriate.
2016 Proxy Statement • Compensation Discussion and Analysis2019 Peer Group
Ambac Financial Group, Inc. Kemper Corporation Primerica, Inc. 
American Equity Investment Life Holding Co MBIA, Inc.RLI Corporation
Argo Group International Holdings, Ltd.National General Holdings CorporationSelective Insurance Group, Inc.
CNO Financial Group, Inc. National Western Life Group, Inc.State Auto Financial Corporation
Employers Holdings, Inc.Navigators Group, Inc.United Fire Group, Inc.
FBL Financial Group, Inc. 17


20     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Compensation Mix

We structure our executive

Our NEOs’ annual compensation program to deliver the majorityconsists of pay through incentives driving both operating resultsbase salary, annual and long-term value and positioning more than half of each NEO’s pay at risk.incentives. The targeted compensation mix of total direct compensation for the NEOs at the beginning of 2015for 2019 is illustrated below. The mix of 20152019 actual compensation varied as a result of actual incentives earned.

LOGO

chart-c461ef5287f4b713b3ba01.jpg

Base Salary

Competitive base salaries are critical to attracting and retaining high performing executive talent. The Committee seeks to pay salaries that approximate median industry salaries for executives of similar companies in like positions. In order to determine competitive positioning, the Committee requests CAP to assess compensation for the CEO and the four other NEOs. CAP makes their comparisons based on industry norms, represented by survey compensation for comparable positions in the insurance industry and general industry, and this information is used as a reference point for the Committee. However, in recruiting new executives, we vary from these guidelines are sometimes exceeded to attract qualified candidates. There may also be instances wheredesired talent. Additionally, an existing executive’s compensation deviatesmay deviate from the median either up or down, due to experience, performance, responsibilities, compensation history, internal equity, and/or retention risk with no pre-determined goals assigned to such considerations.

risk.

Salaries for Executive Officersthe NEOs and other executive officers are reviewed every 12 months in connection with the review of financial results for the prior fiscal year.year and the annual performance review discussed under “Annual Performance and Pay Review” below. In 2019, Ms. Zuraitis, Mr. Conklin and Mr. Caldwell received base salary increases to move overall compensation closer to the market median. Mr. Sharpe did not receive a base salary increase in 2019. In addition, to considering market data,Mr. Rugenstein joined the Committee reviews each executive’s performance, includingcompany in July 2019 as part of the accomplishmentacquisition of key corporate, strategic, operational, financial and management goals, and upholding our standards of ethical conduct.

Name

   

 

 

2014

Annualized

Salary

  

  

  

   

 

 

2015

Annualized

Salary

  

  

  

  

 

 

 

 

 

Percent

of 2015

Increase

 

  

  

  

    

Reason

For

Increase

Marita Zuraitis

   $704,000     $750,000     6.53%      (1)

Dwayne D. Hallman

   $444,000     $444,000     0%       

Matthew P. Sharpe

   $364,000     $400,000     9.89%      (2)

William J. Caldwell

   $300,000     $350,000     16.67%      (3)

Kelly J. Stacy

   N/A     $300,000     N/A      (4)

N/A – Not applicable

National Teachers Associates. Base salary adjustments for 2019 are shown in the chart below.
Named Individual
2018
Annualized
Salary
($)
2019
Annualized
Salary
($)
Percent
Increase
Marita Zuraitis900,000930,0003.3%
Bret A. Conklin 350,000400,00014.3%
Matthew P. Sharpe 425,000425,0000.0%
William J. Caldwell385,000400,0003.9%
Wade A. RugensteinN/A 400,000N/A

(1)

Ms. Zuraitis’ adjustment was made to move her overall compensation closer to the market median

(2)

Salary adjustment was made based on Mr. Sharpe’s performance in 2014, specifically in product development and annuity sales, and to move his overall compensation closer to the market median

(3)

Salary adjustment reflects Mr. Caldwell increased role and responsibilities due to his promotion to EVP, Property & Casualty

(4)

New Hire in 2015

18Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis21


Long-term


Annual Incentive Plan

The Company awards long-term incentives

Our AIP is a cash incentive plan, administered under the CECP, and designed to NEOsdrive and other executives who can havereward strong performance over a one-year period. Annually, the greatest impact onCommittee establishes the Company’s long-term success. Long-term incentivesperformance objectives, threshold, target and maximum performance levels, and the related threshold, target and maximum AIP opportunities for each NEO, expressed as a percentage of base salary. Target incentive opportunity levels for the NEOs are intended to approximate the median of the target bonus potential for similarly situated executives in comparable companies. Maximum incentive opportunities are set at 200% of target.
For 2019, there were five performance measures, with 50% of the award based on Company-wide adjusted core earnings, and the remaining 50% divided among specific sales and premiums metrics of the different business lines: P&C net written premium (17.5%), retirement sales (17.5%), life sales (10%), and supplemental premium (5%), as shown in the chart below. Supplemental was added effective July 1, 2019 with the close of the National Teachers Associates acquisition. This provides a balance between shareholder return and growth, while complementing the longer-term LTIP metrics, which focus executives on drivinglong-term shareholder value creation. For 2020, the performance measures will include an additional focus on Return on Equity.

2019 Annual Incentive Plan Performance Measures
Adjusted Core Earnings - Operating income (GAAP net income before tax, excluding realized investment gains and losses other than those for Fixed Indexed Annuity related options and embedded derivatives) adjusted for P&C catastrophe costs different than the annual Plan, Annuity & Life DAC unlocking and GMDB reserve due to capital gains and losses and market performance different than Plan, the impact on investment income of share repurchases different than Plan, and debt structure/costs including debt retirement different than Plan
P&C Net Premium Written (GAAP) - Amount charged for property and casualty policies issued during the year (portions of such amounts may be earned and included in financial reports over future periods)
Retirement Sales - The amount of new business from the sales of Horace Mann retirement products, from Horace Mann and independent agents, as measured by premiums and deposits to be collected over the 12 months following the sale
Life Sales - The amount of new Horace Mann individual life insurance products sold during the year, as measured by premiums and deposits to be collected over the 12 months following the sale
Supplemental Premium - The amount charged for supplemental policies issued during the year (portions of such amounts may be earned and included in financial reports over future periods)
chart-1fa7d9ee1c77fc3c8c7a01.jpg

22     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


All the NEOs’ 2019 annual incentive amounts are based on the same corporate and business line objectives to promote cooperation. The targets for the operating performanceincome and sales or premium measures were based on a review of market conditions and expectations of other companies in the industry as well as long-termour financial plan for 2019 (“2019 Plan”). The 2019 Plan was the basis of our 2019 earnings guidance, which was publicly disclosed in February 2019 in connection with the announcement of results for the year ended December 31, 2018. The Committee believes that tying the AIP to overall Company performance provides appropriate alignment for an executive’s compensation as it recognizes that the Company as a whole must perform well in order to deliver value creation. They are also an effective vehicle for attracting and retaining executive talent. All long-term incentive grants are made underto our Shareholders. It is the Company’s CECP. As discussed previously, the Company’s Long-term Incentive Plan is comprisedgoal of three vehicles, performance-based RSUs, service-based RSUs and stock options.

LOGO

N/A – Not applicable

(1)

Graph represents percent of target performance-based awards earned in the year the long-term incentive measurement period ended. Performance-based RSUs comprise 45-50% of the total long-term incentive opportunity.

(2)

Due to the Company adopting a three-year performance period in 2013, the performance period ended in 2015 and no long-term period ended in 2014.

In setting targets for performance-based RSUs under the Long-term Incentive Plan, the Committee considers, amongto establish measurements and targets that are reasonable, but not easily achieved. The measures and targets are discussed with the CEO, other things, the external competitive and financial markets environment, the strategic goalsNEOs, other members of the Company, internal financial projections,Board and CAP before they are set.

Each March, the difficultyCommittee certifies performance and determines AIP payouts for the prior year. Based on the 2019 results of meeting those goals and projections. For the five most recently completed performance periods, awards earned under the Long-term Incentive Plan have ranged from approximately 90% to 176% of target, with an annual average of 121.4%121.8% of target for Ms. Zuraitis and the performance periods,other NEOs, the 2019 AIP payouts (paid in March 2020) were as illustrated in the graph above.

The variability and average level of the awards earned confirms the Committee’s practice of establishing reasonable yet aggressive goals for the Company’s follows:

2019 AIP Measures (in $M)ThresholdTargetMaximumActualResultsWeightingPayout
Adjusted Core Earnings (Jan-Jun) 36.639.443.544.2200.0%25%50.0%
Adjusted Core Earnings (Jul-Dec)52.356.262.160.5174.0%25%43.4%
P&C Net Premium Written692.2702.7716.8683.10.0%17.5%0.0%  
Retirement Sales619.1631.7657.0643.8148.0%17.5%25.9%
Horace Mann Life Sales22.223.224.317.70.0%10%0.0%
Supplemental Premium65.766.767.065.750.0%5%2.5%
Total     100%121.8%
Named Individual2019 Target
AIP Opportunity
2019 Actual AIP Payout
($)
2019 Actual AIP Payout
as a % of Base Salary
Marita Zuraitis115% 1,295,542139.3% 
Bret A. Conklin  60% 286,20771.6% 
Matthew P. Sharpe  60% 310,56473.1% 
William J. Caldwell60% 290,46972.6%
Wade A. Rugenstein60% 
154,856(1)  
38.7% 
(1)Based on eligible earnings from July through December 2019
chart-2d84c11393adb5f80e3a01.jpg

Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement 23


Long-term Incentive Plan.

Plan

The intent of the programour LTIP is to focus executives on shareholderShareholder value and key strategic objectives, while promoting retention and recognizing the market trend to deliver long-term incentives through a mix of equity-based compensation vehicles. Further, in combination with the cash component of the Annual Incentive Plan (“AIP”), the compensation program provides a meaningful incentive without encouraging excessive risk taking. To ensure that our executives’ interests are aligned with those of our Shareholders, our executives are required to defer earned and vested RSU awards until their stock ownership requirements are met.

2016 Proxy Statement • Compensation Discussion and Analysis19


Long-term Incentive Plan Design andretention.

2019 LTIP Aggregate Target Setting

2013-2015 Long-term Incentive Plan Grants and Awards

The 2013 awards were 100% equity-based and were comprised of 50% performance-based RSUs, 20% service-based RSUs and 30% service-based stock options. All measures were defined as relative, specified performance levels measured against a peer group of companies. The peer group of companies was made up of all insurance companies included in the Russell 2000® Index, except for brokerages, reinsurance, financial guarantee and health companies. The performance measures and targets for the performance-based RSUs were as follows:

2013-2015

Performance Measures (1)

 

Measurement

Weighting

  

2013-2015

Performance

Period Targets

 

2013-2015

Performance

Period Results

 

2013-2015

Performance

Period Weighted
Results

  

Absolute

vs. Relative

 

Operating Earnings per Share Growth

  30 50th Percentile of Peer Group Below Threshold  0.00  Relative  

Operating Return on Equity

  30 50th Percentile of Peer Group 59th Percentile of Peer Group  36.90  Relative  

Total Shareholder Return

  40 50th Percentile of Peer Group 63rd Percentile of Peer Group  53.06  Relative  

Total

  100      89.96    

(1)

The Performance Measures, as defined under the Long-term Incentive Plan, include:

Operating Earnings per Share Growth – Relates to the total percentage increase or decrease in Operating Earnings per share for the three-year period measured against a peer group of companies in the Russell 2000® Index.

Operating Return on Equity – Relates to the average annual Operating Income return on average equity for the three-year period measured against a peer group of companies in the Russell 2000® Index.

Total Shareholder Return – Relates to the Total Shareholder Return for the three-year period measured against a peer group of companies in the Russell 2000® Index.

2014-2016 Long-term Incentive Plan Grants and Awards

The 2014 awards were 100% equity-based and were comprised of 50% performance-based RSUs, 20% service-based RSUs and 30% service-based stock options. All measures are defined as relative, specified performance levels measured against a peer group of companies. The peer group of companies is made up of all insurance companies included in the Russell 2000® Index, except for brokerages, reinsurance, financial guarantee and health companies. The two relative performance measures for the 2014-2016 performance period – operating return on equity and total shareholder return – continue to support the objective of out-performing our peers as the Company focuses on investments needed in these three years to allow for strategic growth. These two measures focus on the effective use of capital and delivering on growth objectives while retaining our strong alignment with Shareholder interests. The performance measures and targets for the performance-based RSUs are as follows:

2014-2016

Performance Measures (1)

Measurement

Weighting

2014-2016

Performance Period Targets

Absolute

vs. Relative

Operating Return on Equity

  50%50th Percentile of Peer GroupRelative

Total Shareholder Return

  50%50th Percentile of Peer GroupRelative

Total

100%

(1)

The Performance Measures, as defined under the Long-term Incentive Plan, include:

Operating Return on Equity – Relates to the average annual Operating Income return on average equity for the three-year period measured against a peer group of companies in the Russell 2000® Index.

Total Shareholder Return – Relates to the Total Shareholder Return for the three-year period measured against a peer group of companies in the Russell 2000® Index.

202016 Proxy Statement • Compensation Discussion and Analysis


2015-2017 Long-term Incentive Plan Grants and Awards

The 2015 awards were 100% equity-based and were comprised of 50% performance-based RSUs, 20% service-based RSUs and 30% service-based stock options. The 2015-2017 performance measures are comprised of two relative measures and one absolute measure. The third measure is absolute and reflects the company’s focus on year over year premium growth in all lines of business. Together, these three measures support our long term strategy to continue our effective use of capital, increasing and sustaining our momentum in profitable multiline premium growth while retaining our strong alignment with Shareholder interest. The performance measures and targets for the performance-based RSUs are as follows:

Peer Group for Relative Measures

•    Russell 2000® Index (except for brokerage, reinsurance, financial guarantee and health companies)

2015-2017

Performance Measures (1)

  

Measurement

Weighting

  

2015-2017

Performance Period Targets

  

Absolute

vs. Relative

Operating Return on Equity

    40%  50th Percentile of Peer Group  Relative

Total Shareholder Return

    40%  50th Percentile of Peer Group  Relative

Total Written Premium Growth

    20%  3%  Absolute

Total

  100%      

(1)

The Performance Measures, as defined under the Long-term Incentive Plan, include:

Operating Return on Equity – Relates to the average annual Operating Income return on average equity for the three-year period measured against a peer group of companies in the Russell 2000® Index.

Total Shareholder Return – Relates to the Total Shareholder Return for the three-year period measured against a peer group of companies in the Russell 2000® Index.

Total Written Premium Growth – Relates to Horace Mann written premium growth measured as the compound annual growth rate from 2014 to 2017 for Auto, Property, Annuity and Life.

Long-term Incentive Target for Period beginning in 2014

Opportunity

In setting the dollar values of the 2014 and 2015 long-term incentive2019 opportunities under LTIP for each NEO, the Committee targeted amounts that would achieve the Company’s overall objective of positioning total compensation at approximately the market median. The 2014 and 20152019 target grant values for the NEOs for the 2014-2016 and 2015-2017 performance periods were as follows:

Name

   

 

Long-term Incentive

Target in 2014

  

  

   

 

Long-term Incentive

Target in 2015

  

  

Marita Zuraitis

 

   

 

$1,000,000    

 

  

 

   

 

$1,100,000    

 

  

 

Dwayne D. Hallman

       $500,000             $500,000      

Matthew P. Sharpe

 

   

 

    $400,000    

 

  

 

   

 

    $500,000    

 

  

 

William J. Caldwell

       $175,000             $300,000      

Kelly J. Stacy

 

   

 

 N/A (1)    

 

  

 

   

 

    $300,000    

 

  

 

N/A – Not applicable

(1)
Named Individual 

Mr. Stacy was hired in 2015.

2019 LTIP Target
($)
Marita Zuraitis1,950,000
Bret A. Conklin450,000
Matthew P. Sharpe550,000
William J. Caldwell425,000
Wade A. Rugenstein300,000

2019 LTIP Award Vehicles
For 2019, the LTIP is comprised of three vehicles, as illustrated in the chart below: (1) performance-based RSUs; (2) service-vested RSUs; and (3) service-vested stock options.
Performance-based RSUs - Earned over a three-year period, based upon Relative (80%) and Absolute Measures (20%). If any shares are earned at the end of the three-year performance period, the executive fully vests in the award
Service-vested RSUs - Vest ratably over three years
Stock options - Granted at fair market value with a 10 year life; options vest ratably over four years
Performance-Based RSUs    We believe the RSUs are (PBRSUs)
The Committee believes that PBRSUs provide an effective vehicle for rewarding executives based on a three-year performance and haveperiod. Each year, a high value in promoting executive retention. RSUsnew three-year period starts, partially overlapping the periods that started the prior two years. PBRSUs were granted on March 5, 20132019 for the 2013-20152019-2021 performance period on March 5, 2014 forand comprise 50% of the 2014-2016 performance period, on March 4, 2015 for the 2015-2017 performance period.2019 LTIP opportunity. These RSUs will be earned on December 31, 2015, December 31, 2016, and December 31, 2017, respectively, based on achievements relative to the three-year performance period targets. Participants can earn up to 200% of their target award of RSUs based on performance. For the 2013-2015 program, the RSUs earned at the end of 2015 were 100% vested on January 1, 2016 following2022, if at all, based on the performance period. Under the 2014-2016 program, any RSUs earned at the endlevel of 2016 are 100% vested on January 1, 2017 following the performance period. Under the 2015-2017 program, any RSUs earned at the end of 2017 are 100% vested on January 1, 2018 following the performance period. Once vested, the RSUs are subject to holding requirements until the executive’s stock ownership requirements are met. See “Stock Ownership and Holding Requirements.”achievement. From the date of grant, RSUsPBRSUs accrue dividendsdividend equivalents at the same rate as dividends paid to our Shareholders, but the dividend equivalents are only paid on the corresponding shares that are earned. If no shares are earned, the dividendsdividend equivalents are forfeited. Earned dividendsdividend equivalents are converted into additional RSUs.

Target RSU opportunities for the 2013-2015, 2014-2016, and 2015-2017 performance periods for the NEOs were established as 50% of the total long-term incentive opportunities. On an annualized basis, the awards of RSUs ranged from approximately 35% to 73% of base salary. Maximum opportunities were set at 200% of target and threshold opportunities were set at 50% of target.

Each of the relative performance measures are required to be at or above the 25th percentile to earn an award. At the 25th percentile, participants can earn 50% of their target award.


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201624     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Compensation Discussion and Analysis21Horace Mann Educators Corporation


Service-Based


Service-Vested RSUs    We believe service-based
The Committee believes that service-vested RSUs like stock options, provide strong alignment with Shareholder interests and a long-term focus for our executives and assist in the retention of key executive talent. Service-basedService-vested RSUs were granted on March 4, 20155, 2019 and comprise 20% of the long-term incentive2019 LTIP opportunity. For the 2015-2017 award, service-basedService-vested RSUs vest 33% after the first year, vest an additional 33% after the second year and vest the final 34% after the third year in each casefrom the grant date, and are subject to continued employment tothrough the vesting date. Once vested, the RSUs are subject to a holding requirement until the executive’s stock ownership requirements are met. See “Stock Ownership and Holding Requirements.” From the date of the grant, the RSUs accrue dividendsdividend equivalents at the same rate as dividends paid to our Shareholders. These dividendsdividend equivalents are converted into additional RSUs and vest when the underlying RSUs vest.

Stock Options    We believe
The Committee believes that non-qualified stock options (“NQSO”) provide strong alignment with Shareholder interests, as participants do not realize any value unless our stock price appreciates. They also promote retention. Stock options granted under the Long-term Incentive PlanLTIP have an exercise price equal to the closing stock price of our Common Stock on the date of grant, vest ratably over a four-year period subject to continued employment toon each vesting date and have a ten-year term. In determining the number of stockStock options were granted on March 4, 2015, we divided5, 2019 and comprise 30% of the total target long-term incentive opportunity by2019 LTIP opportunity. The number of options granted was determined using the Black-Scholes value of an option.valuation method. For additional information regarding assumptions used for these valuations, see the Company’s 20152019 Annual Report on Form 10-K “Notes to Consolidated Financial Statements – Note 1 – Summary of Significant Accounting Policies – Share-Based Compensation.” Beginning with the options granted March 9, 2011, uponUpon exercise, Executive Officers are required to hold shares equivalent to any proceeds (net of exercise price and related taxes and the costs of the exercise) for a minimum of twelve months.

Timing of Equity Grants
The Committee has granted long-term incentives only at its regularly scheduled Board meetings. The Company uses the closing stock price on the date of the grant to determine the exercise price for stock options. For regularly scheduled annual awards or for awards pursuant to the Long-term Incentive Plan, the grant effective date is the approval date of the applicable resolution as approved or a future date as otherwise specified in the duly authorized resolution. For other awards,
2019-2021 Performance-based RSUs
The Performance-based RSUs granted in 2019 have three performance measures as shown below:
Relative Total Shareholder Return - Relative Total Shareholder Return for the grant effective datethree-year period measured against a peer group of companies.
Relative Operating Return on Equity - Average annual relative Operating Income return on average equity for the three-year period measured against a peer group of companies.
Total Revenue Growth - Measured as the CAGR over the period 12/31/2018 to 12/31/2021 for Written Premium Growth for HMN auto, property, supplemental, and life and total retirement sales for annuity (HMN, RIA and institutional platform) and Horace Mann General Agency (“HMGA”).


chart-a1e320f6f705fc88aeda01.jpg


Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement 25


Prior Years PBRSU Grants
2018-2020 PBRSUs
The PBRSUs granted in 2018 will not mature until January 1, 2021. Since the applicable three-year performance period has not yet ended, actual performance against targets is not yet known. Additional information on these targets and actual performance will be provided at the first business dayend of the next securitiesperformance period.
2017-2019 PBRSUs
The performance-based RSUs granted in 2017 matured and vested as of January 1, 2020. The performance measures, targets and payout levels for the PBRSUs granted in 2017 are as follows:
2017-2019 Performance Measures
Threshold (2)
Target (2)
Maximum (2)
WeightingResult
Relative (1) Measures
TSR (3)
25th Percentile
Ranking vs Peer Companies
50th Percentile Ranking vs Peer Companies90th Percentile Ranking vs Peer Companies40%41.4%
Operating ROE (4)
25th Percentile
Ranking vs Peer Companies
50th Percentile Ranking vs Peer Companies90th Percentile Ranking vs Peer Companies40%39.2%
Absolute Measure
Total Revenue Growth (5)
2%3%4%20%19.9%
    Total100.5%
(1) Peer group comprised of Russell 2000® Index insurance companies excluding brokerage, reinsurance, financial guarantee, and health companies.
(2) Threshold award (25th percentile) is 50% of target LTIP opportunity; Target award (50th percentile) is 100%; Maximum (90th percentile) is 200% of target. Awards for results between Threshold-Target and Target-Maximum are interpolated.
(3) Total Shareholder Return for the three-year period. Measured from the average price five trading window established bydays before and five trading days after the Company followingbeginning of the approval date. Under no circumstances doesmeasurement period (1/1/17) to the grant effective date precedeaverage price five trading days before and five trading days after the approval dateend of a given award.

the measurement period (12/31/19). Source: S&P Market Intelligence

(4) Average annual Operating Income Return on Average Equity (excluding the fair value adjustment for investments) for the three-year performance period. Source: S&P Market Intelligence
(5) Total Revenue Growth is measured as the CAGR over the period from 12/31/2016 to 12/31/2019 for Written Premium Growth for HMN auto, property, supplemental, and life and Total Retirement Sales for annuity (HMN, RIA, and institutional platform) and HMGA.
Additional Pay Practices
Stock Ownership and& Holding Requirements

Stock ownership requirements were established in 1998. Currently, our NEOsGuidelines

Our Executive Officers are required to satisfy meaningfulaccumulate and maintain beneficial stock ownership levels– calculated as a percentage of base salary - as displayed in the table below:
Position
Stock Ownership
Target %
CEO500%
Executive Vice President350%
Senior Vice President300%
For 2019, book value was used to measure the value of the shares we require the NEOs to own. For this purpose, the Company’s book value per share is determined by dividing total Shareholders’ equity, less the fair value adjustment for investments, by the number of outstanding shares of common stock.

26     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


The NEOs must satisfy stock ownership guidelines within five years of attaining their position. Stock ownership may be achieved by direct ownership or beneficial ownership through a spouse, child, or child.trust. The following types of beneficial ownership are considered in determining stock ownership: direct ownership, of HMEC Common Stock, HMEC Common Stockshares held in the Companythrough our Horace Mann 401(k) Plan, HMEC deferred Common Stock equivalent units and RSUs (vested and unvested). Outstanding stock options are not used in determining stock ownership. The CEO is required to maintain beneficial
Beginning with stock ownership with a book value of at least 500% of base salary and all otheroption grants made in 2011, NEOs are required to maintain beneficial stock ownership with a book value of at least 350% of base salary. Given the volatility of the stock market in recent years, we have migrated to an approach whereby the value of the shares required to be owned is based on the Company’s book value, not stock price, as book value is less volatile than stock price. For this purpose, the Company’s book value per share is determined by dividing total shareholders’ equity, less the fair value adjustment for investments, by the number of outstanding shares of common stock.

For stock options granted after 2010, NEOs are also required to hold shares equivalent to any proceeds from a long-term incentive stock option exercise, net of exercise price and related taxes and the costs of the exercise, for a minimum of twelve12 months after the date of exercise. As part of its 2017 overall review of the executive compensationprogram, the Committee reviewed the stock ownership guidelines for the Executive Officers, and determined they were appropriate and will be continued in 2019.

As indicated in the following chart, all NEOs have met or exceeded their stock ownership requirementsguidelines except for Mr. Caldwell andRugenstein. Mr. Stacy. Mr. Caldwell has been withRugenstein joined the Company less than three yearsin July 2019 and Mr. Stacy has been with the Company less than one year. Mr. Caldwell and Mr. Stacy areis on target to meet the requirement by their respective deadlines.

LOGO

the deadline.
chart-1f2ecf88347733faff9a01.jpg
Named IndividualStock Ownership Target %Stock Ownership Actual %
Stock
Ownership(1)
Book Value(2)
($)
Marita Zuraitis500% 1123%
322,108 10,442,741
Bret A. Conklin350% 556%
68,5852,223,526
Matthew P. Sharpe350% 906%
118,798 3,851,431
William J. Caldwell350%481%
59,3521,924,192
Wade A. Rugenstein350% 110%
13,565439,777
HMN Stock Price @ 12/31/2019 =
$43.66
  
HM Book Value @ 12/31/2019 =
$32.42
  
(1) Represents share ownership as of 12/31/2019
(2) Represents book value per share excluding the fair value adjustment for investments

22Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis27


   Name    

 

2015 Stock

Ownership

     

2015 Book

Value (1)

 
  

Marita Zuraitis

     210,032      $5,641,460  
  

Dwayne D. Hallman

     151,278      $4,063,327  
  

Matthew P. Sharpe

     66,726      $1,792,260  
  

William J. Caldwell

     18,383      $493,767(2) 
  

Kelly J. Stacy

     9,351      $251,168(2) 

(1)

Based on the Company’s December 31, 2015 book value per share excluding the fair value adjustment for investments of $26.86.

(2)

Mr. Caldwell’s length of service with the Company is less than three years. Mr. Stacy’s length of service is less than one year.


Minimum Vesting Period
In 2017, through an amendment approved by the Board, the Company updated the CECP to reflect a minimum vesting period of one year for all equity grants. No portion of any equity grant, including Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, will become vested before the first anniversary of the grant date except in the cases of death or disability.
Annual Incentive Plan

Our Annual Incentive Plan (“AIP”)Performance and Pay Review

To further reinforce a performance-based culture and the tie between Company results and compensation, the Committee reviews each Executive Officer’s performance annually, coinciding with the review of corporate performance results. Each Executive Officer is designedreviewed not only on prior year business results but also on the individual’s demonstration of leadership skills and progress on specific strategic initiatives and other key priorities. The Committee also considers any adjustments to drivebase salary, annual incentive opportunity, and long-term incentive opportunity at this review. The Committee recognizes the need to have market-competitive compensation opportunities to attract, retain, and reward stronghigh performing executive talent.
Risk Assessment
Our programs are structured to discourage excessive risk-taking through a balanced use of compensation vehicles and metrics with an overall goal of delivering sustained long-term Shareholder value while aligning our executives’ interests with those of our Shareholders. To this end, management and CAP conduct, and the Committee and the Board’s outside legal counsel reviews, an annual risk analysis of the compensation plans and incentive metrics. Our executive compensation program requires that a substantial portion of each Executive Officer’s compensation be contingent on delivering performance results. In addition, a significant portion of our NEOs’ compensation is delivered in equity over a one-year period.multi-year timeframe. The annualCommittee has been advised by the Board’s outside legal counsel and agrees that no unreasonable risk exists that a compensation policy or incentive plan would have a material adverse impact on the Company.
Succession Planning Process
To mitigate enterprise risk and leadership gaps, the Committee oversees and monitors the Company’s succession planning process on a regular basis. This process identifies candidates that have the skill sets, background, training, and industry knowledge to assume critical positions on an emergency basis and also for the long-term, if necessary. The Company’s succession plan is aalso reviewed by the full Board annually.
Minimal Use of Employment Agreements
Standard practice for the Company is to not have any individual employment agreements with any Executive Officer and intends to continue to minimize their use, while recognizing that in isolated situations an agreement may be needed for attraction and retention of key executive talent. As part of our overall compensation structure and is directly linkedthe acquisition of NTA, Mr. Rugenstein’s offer included a special trigger for Change in Control tied to the Company’s annual business plan. Under the Company’s CECP, the Committee establishes Company-wide and business unit/division performance objectives every March, as well as the related threshold, target and maximum bonus opportunities for each NEO. In setting these objectives and opportunities, the Committee considers, among other things, the strategic goalsdeparture of the CEO within two years of his employment date.
Executive Severance and Change in Control Plans
To maintain market competitiveness and allow for the successful recruitment of key executives, the Company corporate financial projectionsmaintains the Horace Mann Service Corporation Executive Severance Plan (“Executive Severance Plan”) and the degreeHorace Mann Service Corporation Executive Change in Control Plan (“CIC Plan”). The Executive Severance Plan provides benefits due to loss of difficultyposition with or without a change in achieving the targets. Itcontrol. The CIC Plan is the goalintended to provide a level of security consistent with market practices, mitigate some of the Committeeconflicts an executive may be exposed to establish measurementsin a potential acquisition or merger situation, and targets that are reasonable, but not easily achieved. As evidence of this,serve to ensure a more stable transition if a corporate transaction were to occur. The CIC Plan provides for benefits only in the AIP has generated awards ranging from approximately 102% to 172% of target over the past 5 years, with an average of approximately 135% for the five-year period. During this period, the Company has consistently maintained strong earnings and dividend growth that has provided solid total shareholder returns. The variability and average levelevent of the awards earned confirmloss of position following a change in control, as defined in the Committee’s practice of establishing reasonable yet aggressive goals forCIC Plan. Participants in the Company’s AIP. The measures and targetsCIC Plan are discussed with the CEO, other NEOs, other membersdesignated by position. This plan does not have tax gross-up provisions. Currently, all of the Board and CAP before they are set. Each March, the Committee also certifies performance and determines annual incentive award payouts for the prior year.

LOGO

Target incentive opportunities for the NEOs are intended to approximate the median of the target bonus potential for similarly situated executives in comparable companies. Maximum incentive opportunities are set at 200% of target. Changes made to these opportunities, if any, generally take effect for the next fiscal year. Based on the 2015 performance of the Company relative to the Corporate Measures described below, the Committee approved the resulting award of 112.2% of target for Ms. Zuraitis and the other NEOs. The annual incentives paid to the NEOs are shownparticipate in the Non-Equity IncentiveExecutive Severance and CIC Plans. The CIC Plan Compensation column ofdoes not permit duplicate benefits under the “Summary Compensation Table.” For 2015, the target annual incentive opportunities for the NEOs, the actual AIP paid (112.2% of target) along with the actual AIP payment expressed as a percentage of base salary as of December 31, 2015, were as follows:

Name  

2015 Target

AIP Opportunity

  

2015 Actual

AIP Paid

   

2015 Actual AIP Paid

as a Percent of Salary

 

Marita Zuraitis

  90%  $749,809     99.97

Dwayne D. Hallman

  60%  $298,981     67.34

Matthew P. Sharpe

  60%  $265,312     66.33

William J. Caldwell

  45%  $164,136     46.90

Kelly J. Stacy

  40%  $134,676     44.89

Executive Severance Plan.

201628     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Compensation Discussion and Analysis23Horace Mann Educators Corporation


For 2015, 100%


The multiple is based on the sum of the CEO’s and all other NEOs’salary plus target annual incentive, opportunities were tied to Company-wide performance. The Committee believes that tying this incentive to Company performance provides appropriate alignment for an executive’s compensation as it recognizes thatpayable in the Company asform of salary continuation (for the Executive Severance Plan), and payable in a whole must perform well in order to deliver value to our Shareholders.

Annual Incentive Plan Targets

The Committee finalized targets forlump sum (for the 2015 corporate performance measures in its March 2015 meeting. The targets for the Operating Income and Insurance Sales measures wereCIC Plan), based on a review of market conditions and expectations of other companies in the industry as well as our financial plan for 2015 (“Plan”). The financial plan was the basis of our 2015 earnings guidance, which was publicly disclosed in February 2015 in connection with our release of earnings for the year ended December 31, 2014. All measures are defined as absolute (meeting specific established internal goals, i.e., earnings, revenues and sales). For 2015, the corporate measures (“Corporate Measures”), bonus targets and results were as follows:

Annual 2015 Corporate

Measures (1)

 

Measurement

Weighting

  Target  Results  

Actual

Weighted

Results

  

Absolute vs.

Relative

 

Adjusted Operating Income

  50 $92.9 million   $93.4 million    52.30  Absolute  

P&C Net Premium Written

  20 $603.0 million   $605.8 million    25.60  Absolute  

Horace Mann Annuity Sales

  20 $362.1 million   $370.7 million    34.33  Absolute  

Horace Mann Life Sales

  10 $12.1 million   $10.8 million    0  Absolute  

Total

  100          112.23    

(1)

The Corporate Measures, as defined by the AIP, include:

following table:

Adjusted Operating Income—Operating income (GAAP net income after tax, excluding realized investment gains and losses other than those for FIA related options and embedded derivatives) adjusted for Property & Casualty (“P&C”) catastrophe costs different than Plan, Annuity & Life deferred acquisition costs (“DAC”) unlocking and change in guaranteed minimum death benefit (“GMDB”) reserve due to capital gains and losses and market performance different than Plan, the impact on investment income of share repurchases different than Plan, and debt structure/costs including debt retirement different than Plan.

P&C Net Premium Written (GAAP)—Amount charged for property and casualty policies issued during the year; portions of such amounts may be earned and included in financial reports over future periods.

 Multiple
Named Individual
Executive
Severance
Change In
Control
Marita Zuraitis2.02.5
Bret A. Conklin1.52.0
Matthew P. Sharpe1.52.0
William J. Caldwell1.52.0
Wade A. Rugenstein1.52.0

Annuity Sales—The amount of new business from the sales of Horace Mann annuity products, from Horace Mann and independent agents, as measured by premiums and deposits to be collected over the 12 months following the sale.

Life Sales—The amount of new Horace Mann individual life insurance products sold during the year, as measured by premiums and deposits to be collected over the 12 months following the sale.

Retirement Plans

The NEOs participate in our Company-wide tax-qualified retirement plansHorace Mann 401(k) Plan and a nonqualified supplemental defined contribution plan designed to provide benefits that cannot be provided under our tax-qualified defined contribution plan because of variouscertain limitations imposed by the Internal Revenue Code.Code (“IRC”). Each of these two plans includes a Company contribution and thecontribution. The amounts contributed for each NEO are included in the “Summary Compensation Table.” The Company’s intent is to provideThese types of plans that are customarily offered within our industry to enhance our ability to attract and retain executive talent.industry. No NEO participates in the Company’s defined benefit plan or supplemental defined benefit retirement plan because participation in those plans was limited to individuals hired prior to January 1, 1999 and all of our NEOs were hired after that date. We formerly maintained a money purchase pension plan, which was terminated in 2014.

Deferred Compensation

Prior to 2009, the Long-term Incentive Plan provided a performance-based cash component. To further encourage ownership of HMEC’s Common Stock, deferred compensation accounts were established thatLTIP permitted executives to defer their long-term cash incentives intocertain elective deferrals. Pre-2009 account balances are maintained in notional deferred Common Stock equivalent units. Deferred Common Stock equivalent units, which accrue dividendsdividend equivalents at the same rate as dividends paid to our Shareholders. These dividendsdividend equivalents are converted into additional deferred Common Stock equivalent units. Mr. Conklin is the only NEO with an account balance under this arrangement.
Nonqualified Supplemental Defined Contribution and Other Nonqualified Deferred Compensation Plans
The Company sponsors an unfunded nonqualified supplemental defined contribution plan, the Nonqualified Supplemental Defined Contribution Plan (“NQDCP”), which covers only the base salary compensation in excess of the IRC Section 401(a)(17) limit, which in 2019 was $280,000. The NQDCP accounts are established for the executives at the time their compensation exceeds the IRC Section 401(a)(17) limit and the NEOs are credited with an amount equal to 5% of the excess. In addition, the NQDCP accounts are credited with the same rate of return as the stable value fund available as an investment option under the qualified plan sponsored by the Company for all employees.
The Company offered a nonqualified deferred compensation plan to executives, which allowed them to defer receipt of long-term incentive cash compensation prior to 2009 when cash was a component of the LTIP. Executives were allowed to defer up to 100% of their earned long-term cash incentive into HMEC’s deferred Common Stock equivalent units. All the NEOs except Mr. Conklin were hired after 2009 and do not have an account in the plan.
Clawbacks
The Committee believes that our compensation program should reward performance that supports the Company’s culture of integrity through compliance with applicable laws and regulations and our codes of ethics and conduct. As a further step to support that belief, the Committee has determined that all Executive Officers are subject to the same standards as the CEO and CFO regarding cash compensation clawbacks as defined under Section 304 of the Sarbanes-Oxley Act of 2002. In addition, under the CECP, the Company is entitled to recover any cash or equity award if it is determined that an executive’s own misconduct contributed materially to the executive’s receipt of an award. If changes are made in future applicable legislative or regulatory guidance, the Company will modify the current clawback provisions to comply.

Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement 29


Hedging, Pledging Prohibitions
The Board, NEOs and other Executive Officers are prohibited from engaging in hedging transactions or from pledging their shares of our Common Stock. Any employee granted shares by the Company is prohibited from engaging in hedging transactions. No other investment optionsemployees are provided.

subject to hedging or pledging prohibitions.

Perquisites and Personal Benefits

As of April 1, 2014

The only perquisites we discontinued all executive perquisites with the exception of limitedprovide are financial planning services. The Company pays an annual retainer to a third-party service provider of $10,000services and an annual feeexecutive physical program, both of $14,000 for each executive participating.which are commonly provided among our peer companies. Please see the “Summary Compensation Table” for further details.

Our NEOs do not receive other personal benefits.

Tax Implications

Favorable accounting and tax treatment of the various elements of the Company’s total compensation program is an important, but not the sole, consideration in the design of the compensation program. On December 22, 2017, legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”) was enacted that significantly impacted the tax treatment of executive compensation.
Historically, Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporationsprovided an exemption from taxation for compensation overin excess of $1,000,000 paid to certain Executive Officers pursuant to a plan that is approved by our Shareholders, and is performance-related and non-discretionary. The Tax Act eliminated the exception for performance-based compensation, and provides that any fiscal year toindividual identified as a Covered Employee (CEO, CFO and the corporation’s Chief Executive Officer and three other most highly compensated Executive Officers (other thanOfficers) beginning after December 31, 2016 remains a Covered Employee for all future years, and applies the CFO)$1,000,000 limitation to any compensation paid to such Covered Employees after employment ends or death. The Tax Act also included a transition rule according to which the deduction limitation as described above, does not apply to compensation arrangements in place pursuant to a written binding contract that was in effect on November 2, 2017 as long as it is not materially modified after that date. To the extent applicable to our existing contracts and awards, the Committee may avail itself of this transition rule. However, due to uncertainties as to the application and interpretation of Section 162(m), including the scope of the endtransition relief, we expect that compensation paid to our Executive Officers in excess of the fiscal year. However, the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met.

The Annual Incentive Plan and Long-term Incentive Plan are designed to permit full deductibility and the Committee expects all compensation to$1,000,000 generally will not be fully deductible. However, the

The Committee believes that Shareholder interests are best served by not restricting the Committee’s discretion and flexibility in developing compensation programs, even though such programs may result in certain non-deductible compensation expenses. In

expenses as a result of the Tax Act, and still intends to utilize performance-based compensation programs.

24201630     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Compensation Discussion and AnalysisHorace Mann Educators Corporation


order to satisfy the Section 162(m) qualification requirements, the Committee allocated an incentive pool equal to 4% of adjusted operating income to certain individuals under the Company’s compensation program. Once the amount of the pool and the specific allocations are determined at the end of the year, the Committee can apply “negative discretion” to reduce (but not increase) the amount of any award payable from the incentive pool to individuals, as determined by the amount payable to each individual based on performance criteria and actual results.

Executive Severance and CIC Plans

To maintain market competitiveness and allow for the successful recruitment of key executives, the Company adopted the Horace Mann Service Corporation Executive Severance Plan and the Horace Mann Service Corporation Executive CIC Plan. The Executive Severance Plan provides benefits due to loss of position with or without a Change in Control. Currently, all NEOs participate in the Executive Severance Plan. The Executive CIC Plan provides for benefits only in the event of the loss of position following a “Change-in-Control” and only includes those positions that typically would be at risk in the event of a change of control or which are integral to negotiating a transaction. This plan does not have tax gross-up provisions. Currently, Ms. Zuraitis, Mr. Sharpe, Mr. Caldwell, and Mr. Stacy participate in the Executive CIC Plan. Those who participate in both the Executive Severance Plan and the Executive CIC Plan, or have individual CIC agreements, would not receive duplicate benefits.

Change in Control Agreements

The Company does have an individual severance agreement with Mr. Hallman. This agreement was entered into at the time of his employment and cannot be unilaterally changed. The agreement provides payments, benefits and tax gross-up provisions only if both a change in control of the Company and Mr. Hallman’s actual or constructive termination of employment occur (“double trigger”). The CIC agreement provision is described in “Potential Payments upon Termination or Change in Control.” The agreement is intended to provide a level of security consistent with market practices, mitigate some of the conflicts an executive may be exposed to in a potential acquisition or merger situation and serve to insure a more stable transition if a corporate transaction were to occur. The Company determined that it will not provide individual CIC agreements for future hires or renew existing individual CIC agreements.


Compensation Tables
Summary Compensation Table

The following table sets forth information regarding compensation of the Company’s Chief Executive Officer, Chief Financial OfficerCEO, CFO, and the three other most highly compensated Executive Officers,executive officers during 2019, 2018, and 2017.
Name & Principal PositionYear
Salary
($) (1)
Bonus
($)
Stock
Awards
($) (2)
Option
Awards
($) (3)
Non-Equity Incentive Plan Compensation ($) (4)
All Other
Compensation
($) (5)
Total
($)
Marita Zuraitis
President & Chief Executive Officer
2019925,00001,365,000585,0001,295,54171,0204,241,561
2018891,66701,190,000510,000966,74568,5783,626,990
2017841,66701,085,000465,000803,45560,2613,255,383
Bret A. Conklin
Executive Vice President & Chief Financial Officer
2019391,6670315,000135,000286,20727,9831,155,856
2018345,0000227,50097,500224,42925,354919,783
2017308,1260226,00054,000134,20018,079740,405
Matthew P. Sharpe
Executive Vice President, Distribution & Business Strategy
2019425,0000385,000165,000310,56446,0201,331,584
2018423,3330385,000165,000375,38743,7241,392,444
2017412,5000395,500169,500236,26441,6961,255,460
William J. Caldwell
Executive Vice President, Property & Casualty and Life & Retirement
2019397,5000297,500127,500290,46944,6451,157,614
2018383,3330280,000120,000249,36642,1621,074,861
2017370,8330252,000108,000212,39841,080984,311
Wade A. Rugenstein Executive Vice President, Supplemental & Operations2019211,9160566,000114,000154,85619,5581,066,330
2018n/an/an/an/an/an/an/a
2017n/an/an/an/an/an/an/a
(1) Represents each NEO’s actual base salary earnings as of December 31, 2019, 2018 and 2017, respectively. Mr. Rugenstein was hired on 7/1/2019.
(2) Represents the NEOs, during 2015, 2014,grant date fair value of service-based and 2013.

Name Year    

Salary      

($) (1)      

  

Bonus      

($) (2)      

   

Stock    

Awards    

($) (3)    

   

Option  

Awards  

($) (4)  

  

Non-Equity

Incentive Plan

Compensation

($) (5)

  

 

Change in

Pension Value

And Non-

Qualified

Deferred

Compensation

Earnings

($)

   

All Other 

Compensation 

($) 

   

Total 

($) 

 

Marita Zuraitis

  2015    742,333    0     770,000     330,000    749,809    0     55,587     2,647,729  
   2014    690,500    0     700,000     300,000    929,068    0     45,609     2,665,177  
   2013    413,750    2,858,940     560,000     240,000    500,063    0     192,174     4,764,927  

Dwayne D. Hallman

  2015    444,000    0     350,000     150,000    298,981    0     28,000     1,270,981  
   2014    440,502    0     350,000     150,000    329,275    0     30,200     1,299,977  
   2013    403,642    0     350,000     150,000    281,540    0     29,797     1,214,979  

Matthew P. Sharpe

  2015    394,000    0     350,000     150,000    265,312    0     41,508     1,200,820  
   2014    354,252    0     280,000     120,000    264,803    0     36,053     1,055,108  
   2013    318,756    0     210,000     90,000    222,332    0     25,528     866,616  

William J. Caldwell

  2015    325,000    0     210,000     90,000    164,136    0     22,929     812,065  
   2014    254,174    0     122,500     52,500    136,163    0     25,142     590,479  
   2013    41,668    220,000     88,494     37,926    127,000    0     3,658     518,746  

Kelly J. Stacy

  2015    130,769    200,000     310,000     90,000    134,676    0     44,287     909,732  

performance-based RSUs granted in 2017, 2018, and 2019. Performance-based RSUs are valued based on the probable performance of Target with the potential of 50% to 200% being earned based on performance results. In 2017, 2018, and 2019 it represents the grant date fair value of service based and performance based RSUs.
(3) Represents the grant date fair value of $6.24 per share for stock options granted on March 5, 2019, the grant date fair value of $7.13 per share for stock options granted on March 6, 2018, and the grant date fair value of $6.60 per share for stock options granted on March 7, 2017.
(4) Represents the cash payout for the Annual Incentive Plan (“AIP”) earned in each year.
(5) Components of All Other Compensation are set forth on the following page.

(1)

Represents each NEO’s actual base salary paid for the years ended December 31, 2015, 2014 and 2013, respectively. Mr. Stacy was hired in July 2015.

(2)

For 2013, this represents sign-on awards for Ms. Zuraitis and Mr. Caldwell. For 2015, this represents sign-on awards for Mr. Stacy.

(3)

Represents the grant date fair value of service-based and performance-based RSUs granted in each year. Performance-based RSUs are valued based on the probable performance of Target with the potential of 50% to 200% being earned based on performance results. For 2015, this includes an additional sign-on award for Mr. Stacy.

(4)

Represents the grant date fair value of $11.15 per share for stock options granted on March 4, 2015. For Mr. Stacy, it represents the grant date fair value of $11.52 per share for stock options granted on September 29, 2015.

(5)

Represents the cash payout for the AIP earned in each year.

2016Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis2531



Detail of All Other Compensation

The following table sets forth information regarding all other compensation paid to, or earned by, the NEOs during 2015.

Name  

Perquisites &

Other Personal

Benefits

($) (1)

   Relocation ($)   

 

Company
Contributions to

Defined
Contribution
Plans ($)

     

Total        

($)        

Marita Zuraitis

   14,000     0     41,587          55,587            

Dwayne D. Hallman

   0     0     28,000          28,000            

Matthew P. Sharpe

   14,000     0     27,508          41,508            

William J. Caldwell

   0     0     22,929          22,929            

Kelly J. Stacy

   0     38,114     6,173          44,287            

in 2019.
Name & Principal Position
Perquisites & Other Personal Benefits
($) (1)
Relocation
Company Contributions
to Defined Contribution
Plans
 ($)
  Total
 ($)
Marita Zuraitis
President and Chief Executive Officer
16,370054,65071,020
Bret A. Conklin
Executive Vice President and Chief Financial Officer
0027,98327,983
Matthew P. Sharpe
Executive Vice President, Distribution & Business Strategy
16,370029,65046,020
William J. Caldwell
Executive Vice President, Property & Casualty and Life & Retirement
16,370028,27544,645
Wade A. Rugenstein
Executive Vice President, Supplemental & Operations
4,485015,07319,558
(1) Includes the use of a financial planning service to help minimize distractions and help ensure appropriate focus on his or her Company responsibilities.
CEO Pay Ratio
Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we calculate a ratio of total pay for our CEO compared to total pay for our median employee (“CEO Pay Ratio”). To identify our median employee, we use total cash at target (annualized base salary as of 12/31/2019 plus annual bonus target), as we believe this is the most representative measure of annual compensation for our broader employee population.
Once the median employee is identified, we compile the same pay elements for the median employee that we do for the NEOs as displayed in the Summary Compensation Table. We then compare total pay of our CEO (as displayed in the “Total $” column of the Summary Compensation Table) to total pay of our median employee.
The following table sets forth information regarding CEO Pay Ratio.
(1)

Includes use of a financial planning service to help minimize distractions and help ensure appropriate focus on Company responsibilities.

Total Pay ($)Pay Ratio
 Chief Executive Officer4,241,561
65:1
 Median Employee65,511


32     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Grants of Plan-BasedPlan Based Awards

The following table sets forth information concerning the grant of the 20152019 Annual Incentive and the grant of the 20152019 Long-term Incentive for the 2015-20172019 – 2021 performance period, and the sign-on RSU grant made to Mr. Stacy.period. Actual payouts under the 20152019 AIP are included in the “Summary Compensation Table.” Payouts for the 20152019 Long-term Incentiveincentive grant and the determination of the actual RSUs earned will not occur until after the completion of the 2015-20172019 – 2021 performance period.

                                        

 

All

Other

Stock
Awards:
Number
of
Shares
of

Stock

or Units

(#)

  

All

Other

Option

Awards:

Number

of

Securities
Underlying
Options

(#) (4)

  

Exercise
or Base
Price

of
Option
Awards

($/Sh)

  

Grant
Date

Fair
Value

of
Stock &
Option
Awards
($) (5)

 
                                  
                                  
Name 

Grant

Date

  Incentive
Plan (1)
  

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards (2)

    

Estimated Future Payouts

Under Equity Incentive

Plan Awards (3)

     
   

Threshold

($)

  

Target

($)

  

Maximum

($)

    Threshold
(#)
   Target
(#)
   Maximum
(#)
     

Marita Zuraitis

      AIP    334,050    668,100    1,336,200      N/A     N/A     N/A    N/A    N/A    N/A    N/A  
   3/4/2015    LTI    N/A    N/A    N/A     8,501     17,002     34,004    N/A    N/A    $32.35    550,015  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     6,801     N/A    N/A    N/A    $32.35    220,012  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     N/A     N/A    N/A    29,596    $32.35    330,026  

Dwayne D. Hallman

   AIP    133,200    266,400    532,800     N/A     N/A     N/A    N/A    N/A    N/A    N/A  
   3/4/2015    LTI    N/A    N/A    N/A     3,864     7,728     15,456    N/A    N/A    $32.35    250,001  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     3,093     N/A    N/A    N/A    $32.35    100,059  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     N/A     N/A    N/A    13,452    $32.35    150,004  

Matthew P. Sharpe

   AIP    118,200    236,400    472,800     N/A     N/A     N/A    N/A    N/A    N/A    N/A  
   3/4/2015    LTI    N/A    N/A    N/A     3,864     7,728     15,456    N/A    N/A    $32.35    250,001  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     3,093     N/A    N/A    N/A    $32.35    100,059  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     N/A     N/A    N/A    13,452    $32.35    150,004  

William J. Caldwell

   AIP    73,125    146,250    292,500     N/A     N/A     N/A    N/A    N/A    N/A    N/A  
   3/4/2015    LTI    N/A    N/A    N/A     2,319     4,637     9,274    N/A    N/A    $32.35    150,007  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     1,857     N/A    N/A    N/A    $32.35    60,074  
   3/4/2015    LTI    N/A    N/A    N/A     N/A     N/A     N/A    N/A    8,072    $32.35    90,011  

Kelly J. Stacy

   AIP    60,000    120,000    240,000     N/A     N/A     N/A    N/A    N/A    N/A    N/A  
   9/29/2015    LTI    N/A    N/A    N/A     2,245     4,490     8,980    N/A    N/A    $33.41    150,011  
   9/29/2015    LTI    N/A    N/A    N/A     N/A     1,797     N/A    N/A    N/A    $33.41    60,038  
   9/29/2015    LTI    N/A    N/A    N/A     N/A     N/A     N/A    N/A    7,816    $33.41    90,012  
   9/29/2015    Service    N/A    N/A    N/A      N/A     2,994     N/A    N/A    N/A    $33.41    100,030  

Named IndividualGrant Date 
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
Estimated Future Payouts Under Equity Incentive Plan Awards(2)
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)
Exercise
or Base
Price of
Option
Awards
($/Sh)
Grant Date
Fair Value
of Stock
Option
Awards
($)(5)        
Incentive
Plan
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Marita Zuraitis AIP531,8751,063,7502,127,500N/AN/AN/AN/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/A12,50425,00750,014N/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/A10,005N/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/AN/A93,75638.99
585,000
Bret A. Conklin AIP117,500235,000470,000N/AN/AN/AN/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/A2,8865,77111,542N/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/A2,310N/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/AN/A21,63638.99
135,000
Matthew P. Sharpe AIP127,500255,000510,000N/AN/AN/AN/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/A3,5277,05414,108N/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/A2,823N/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/AN/A26,44438.99
165,000
William J. Caldwell AIP119,250238,500477,000N/AN/AN/AN/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/A2,7265,45110,902N/AN/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/A2,181N/AN/A
N/A
3/5/2019LTIN/AN/AN/AN/AN/AN/AN/A20,43638.99
127,500
Wade A. Rugenstein AIP63,575127,150254,300N/AN/AN/AN/AN/AN/A
N/A
8/1/2019LTIN/AN/AN/A2,2244,4478,894N/AN/AN/A
N/A
7/12/2019LTIN/AN/AN/AN/AN/AN/A7,167N/AN/A
N/A
8/1/2019LTIN/AN/AN/AN/AN/AN/A1,779N/AN/A
N/A
8/1/2019LTIN/AN/AN/AN/AN/AN/AN/A17,59242.73
114,000
N/A = Not applicable

(1) Represents performance-based 2019 Annual Incentive.
(2) Represents the performance-based portion of the 2019 Long-term Incentive grant.
(3) Represents the service-based RSU portion of the 2019 Long-term Incentive grant. Mr. Rugenstein’s grant dated 7/12/19 was a sign-on grant.
(4) Represents the stock option portion of the 2019 Long-term Incentive grant.
(5) Totals equate to each NEO’s 2019 Long-term Incentive amount. The fair value of stock options was determined using the Black-Scholes model.

(1)

Service grant represents a sign-on award to Mr. Stacy.

(2)

Represents performance-based 2015 Annual Incentive.

(3)

Represents performance-based and service-based RSU portions of the 2015 Long-term Incentive grants.

(4)

Represents the stock option portion of the 2015 Long-term Incentive grant.

(5)

Totals equate to each NEO’s 2015 Long-term Incentive target amount and the service grant described in footnote (1). The fair value of stock options was determined using the Black-Scholes model.

26Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis33



Outstanding Equity Awards at Fiscal Year End

The following table sets forth information regarding the exercisable and unexercisable stock options, as well as the unvested RSUs held by each NEO at December 31, 2015.

   Name Option Awards     

 

Stock Awards

(RSUs)

 
  

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

  

Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

(1)

  

Option

Exercise

Price

($)

  

Grant

Date

  

Option

Expiration

Date

     

Number of

Shares or

Units of

Stock

that Have

Not Vested

(#) (2)

  

Market

Value of

Shares or

Units of

Stock

that Have

Not Vested

($) (3)

  

Equity

Incentive

Plan

Awards:

Number

of

Unearned

Shares,

Units, or

Other

Rights

that

Have

Not Vested

(#) (4)

  

Equity

Incentive

Plan

Awards:

Market or

Payout

Value of

Unearned

Shares,

Units, or

Other

Rights

that Have

Not Vested

($) (3)

 
  

Marita Zuraitis

  13,438    13,438    22.69    05/22/13    05/22/20        
    8,324    24,972    28.88    03/05/14    03/05/24        
    0    29,596    32.35    03/04/15    03/04/25     67,234   $2,230,824    54,979   $1,824,203  
  

Dwayne D. Hallman

  8,220    0    13.83    03/03/10    03/03/17        
    19,800    0    17.01    03/09/11    03/09/18        
    16,848    5,616    17.32    03/07/12    03/07/19        
    9,248    9,248    20.60    03/05/13    03/05/20        
    4,162    12,486    28.88    03/05/14    03/05/24        
    0    13,452    32.35    03/04/15    03/04/25     17,644   $585,428    30,146   $1,000,244  
  

Matthew P. Sharpe

  11,232    3,744    17.32    03/07/12    03/07/19        
    5,550    5,550    20.60    03/05/13    03/05/20        
    3,330    9,990    28.88    03/05/14    03/05/24        
    0    13,452    32.35    03/04/15    03/04/25     11,900   $394,842    23,270   $772,099  
  

William J. Caldwell

  1,594    1,594    30.24    12/11/13    12/11/20        
    1,457    4,371    28.88    03/05/14    03/05/24        
    0    8,072    32.35    03/04/15    03/04/25     5,871   $194,800    10,222   $339,166  
  

Kelly J. Stacy

  0    7,816    33.41    09/29/15    09/29/25      4,827   $160,160    4,524   $150,106  

2019.
Named IndividualOption AwardsStock Awards (Restricted Stock Units)
Number of Securities Underlying Unexercised Options Exercisable
(#)
Number of Securities Underlying Unexercised Options Unexercisable
(#)(1)
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
Option Exercise Price
($)
Grant DateOption Expiration Date
Number
of Shares or Units of Stock that Have Not Vested
(#)(2)
Market Value of Shares or Units of Stock that Have Not Vested
($)(3)
Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested
(#)(4)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights that Have Not Vested
($)(3)
Marita Zuraitis9,2480022.6905/22/1305/22/2018,624813,12466,6792,911,205
33,2960028.8803/05/1403/05/24
29,5960032.3503/04/1503/04/25
62,93720,979031.0103/09/1603/09/26
35,21235,212041.9503/07/1703/07/27
17,88353,649042.9503/06/1803/06/28
093,756038.9903/05/1903/05/29
Bret A. Conklin5,8280028.8803/05/1403/05/244,204183,54713,556591,855
4,7120032.3503/04/1503/04/25
7,8692,623031.0103/09/1603/09/26
4,0904,090041.9503/07/1703/07/27
3,41910,257042.9503/06/1803/06/28
021,636038.9903/05/1903/05/29
Matthew P. Sharpe4,8130028.8803/05/1403/05/245,710249,29921,329931,224
13,4520032.3503/04/1503/04/25
22,4797,493031.0103/09/1603/09/26
12,83612,836041.9503/07/1703/07/27
5,78617,358042.9503/06/1803/06/28
026,444038.9903/05/1903/05/29
William J. Caldwell5,8980032.3503/04/1503/04/254,343189,61515,183662,890
5,2455,245031.0103/09/1603/09/26
8,1808,180041.9503/07/1703/07/27
4,20812,624042.9503/06/1803/06/28
020,436038.9903/05/1903/05/29
Wade A. Rugenstein017,592042.7308/01/1908/01/299,061395,6034,504196,645
(1) Long-term Incentive stock option grants are service-based and all exercisable options vest on each anniversary of the grant date at a rate of 25% of the original grant.
(2) Represents the unvested service-based RSUs granted in 2017, 2018, and 2019.
(3) Represents the value of the RSUs based on the closing price of our Common Stock ($43.66) at December 31, 2019.
(4) The performance-based RSUs granted in 2017 will not be earned until the end of the 2017-2019 performance period. RSUs earned at the end of the performance period will vest 100% in 2020. The performance-based RSUs granted in 2018 will not be earned until the end of the 2018-2020 performance period. RSUs earned at the end of the performance period will vest 100% in 2021. The performance-based RSUs granted in 2019 will not be earned until the end of the 2019-2021 performance period. RSUs earned at the end of the performance period will vest 100% in 2022.

(1)

Long-term Incentive stock option grants are service-based and all unexercisable options vest on each anniversary of the grant date at a rate of 25% of the original grant.

(2)

Represents the unvested service-based RSUs granted in 2011, 2012, 2013, 2014 and 2015.

(3)

Represents the value of the RSUs based on the closing stock price of $33.18 at December 31, 2015.

(4)

The performance-based RSUs granted in 2013 were not earned until the end of the 2013-2015 performance period. RSUs earned at the end of the performance period vested 100% in January 2016. The performance-based RSUs granted in 2014 will not be earned until the end of the 2014-2016 performance period. RSUs earned at the end of the performance period will vest 100% in 2017. The performance-based RSUs granted in 2015 will not be earned until the end of the 2015-2017 performance period. RSUs earned at the end of the performance period will vest 100% in 2018.

201634     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Compensation Discussion and Analysis27Horace Mann Educators Corporation



Option Exercises and Stock Vested

Vesting

The following table sets forth information regarding options exercised and stock awards acquired on vesting by the NEOs in 2015:

       Option Awards      Stock Awards (RSUs) 
   Name  

Number of Shares
Acquired on
Exercise

(#)

   

Value Realized
on Exercise

($)

      

Number of
Shares
Acquired
on Vesting

(#) (1)

   

Value

Realized
on
Vesting

($) (2)

 
  

Marita Zuraitis

   0          0           0     0  
  

Dwayne D. Hallman

   0          0           0     0  
  

Matthew P. Sharpe

   0          0           0     0  
  

William J. Caldwell

   0          0           1,687     55,097  
  

Kelly J. Stacy

   0          0            0     0  

(1)

For Mr. Caldwell, it represents the number of shares vested and acquired as part of a RSU sign-on consideration.

(2)

2019.

Named IndividualOption AwardsStock Awards
Number of Shares
Acquired on Exercise
(#)
Value Realized on
Exercise
($)
Number of Shares
Acquired on
Vesting
(#)
Value Realized
on Vesting
($)(1)
Marita Zuraitis0090,8383,532,919
Bret A. Conklin13,040165,57013,824537,365
Matthew P. Sharpe0033,4891,302,595
William J. Caldwell0026,0431,014,014
Wade A. Rugenstein0000
(1) The value realized on vesting of stock awards is determined by multiplying the number of shares vested by the closing stock price on the date of vesting. The actual amounts realized from vested stock awards will depend upon the sale price of the shares when they are actually sold.

Pension Benefits

The defined benefit plans (qualified and nonqualified) sponsored by the Company were amended to freeze participation to those who were hired prior to January 1, 1999. As allclosing stock price on the date of vesting. The actual amounts realized from vested stock awards will depend upon the sale price of the Company’s NEOs were hired subsequent to that date,shares when they are not eligible to participate in the defined benefit plans.

actually sold.

Nonqualified Supplemental Defined Contribution and Other Nonqualified Deferred Compensation Plans

The Company offered a nonqualified deferred compensation plan to executives, which allowed them to defer receipt of Long-term Incentive cash compensation prior to 2009 when cash was a component of the Long-term Incentive Plan. Executives were allowed to defer up to 100% of their earned long-term cash incentive into HMEC’s deferred Common Stock equivalent units. All the NEOs except Mr. Hallman were hired after 2009 and do not have an account in the plan. Contributions and earnings reported below are for the year ended December 31, 2015 and the aggregate balance is as of December 31, 2015.

The Company also sponsors an unfunded excess pension plan, the Nonqualified Defined Contribution Plan (“NQDCP”), which covers only the base salary compensation in excess of the Section 415 limit, which in 2015 was $265,000. The NQDCP accounts are established for the executives at the time their compensation exceeds the Section 415 limit and the NEOs are credited with an amount equal to 5% of the excess. In addition, the NQDCP accounts are credited with the same rate of return as the qualified plan sponsored by the Company for all employees.

The following table sets forth information regarding participation by the NEOs in the Company’s NQDCP and the nonqualified deferred compensation plan as of December 31, 2015.

   Name  Account          

 

Executive

  Contributions in  

Last FY

($)

   

Registrant

  Contributions in  

Last FY

($) (1)

   

Earnings

  in Last FY  

($) (2)

   

Balance

  at Last FYE  

($)

 
  Marita Zuraitis  NQDCP Account   0     23,867     559     34,936  
    Deferred Compensation Account   0     0     0     0  
  Dwayne D. Hallman  NQDCP Account   0     8,950     1,935     49,666  
    Deferred Compensation Account   0     0     6,824     237,649  
  Matthew P. Sharpe  NQDCP Account   0     6,450     401     14,879  
    Deferred Compensation Account   0     0     0     0  
  William J. Caldwell  NQDCP Account   0     3,000     0     3,000  
    Deferred Compensation Account   0     0     0     0  
  Kelly J. Stacy  NQDCP Account   0     0     0     0  
     Deferred Compensation Account   0     0     0     0  

2019.
Named IndividualAccount Name
Executive Contributions in Last FY
($)
Registrant Contributions in Last FY
($)(1)
Aggregate Earnings in Last FY
($)(2)
Aggregate Balance at Last FYE
($)
Marita ZuraitisNQDCP Account032,2503,449160,383
Deferred Compensation Account0000
Bret A. ConklinNQDCP Account05,58338620,418
Deferred Compensation Account0069,652419,808
Matthew P. SharpeNQDCP Account07,25097745,497
Deferred Compensation Account0000
William J. CaldwellNQDCP Account05,87548124,461
Deferred Compensation Account0000
Wade A. RugensteinNQDCP Account0000
Deferred Compensation Account0000
(1) Represents the 2019 NQDCP registrant Company contributions. These contributions are included in the All Other Compensation column of the “Summary Compensation Table” for 2019.
(2) Represents (a) the gains/losses in the NQDCP in 2019 and (b) the change in the deferred compensation account balance reflecting changes in the closing stock price of HMEC Common Stock from December 31, 2018 to December 31, 2019, each excluding contributions reflected in the first two columns.

(1)

Represents the 2015 NQDCP Company contributions. These contributions are included in the All Other Compensation column of the “Summary Compensation Table” for 2015.

(2)

Represents (a) the gains in the NQDCP in 2015 and (b) the change in the deferred compensation account balance reflecting changes in the closing stock price of HMEC Common Stock from December 31, 2014 to December 31, 2015, each excluding contributions reflected in the first two columns.

28Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Compensation Discussion and Analysis35


Potential Payments upon Termination or Change in Control

The NEOs are entitled to receive certain payments on termination of employment in certain circumstances, including disability or death, involuntary termination other than for cause, or within a stated period after a change in control of the Company, as discussed in more detail below. An overview of benefits available under each scenario is provided below and should be read along with the footnotes accompanying the related table. These calculations are an estimate only for purposes of this Proxy Statement.

Termination for Cause or Voluntary Resignation

Generally, on a voluntary termination or a termination for cause, no amounts are paid other than salary earned through the date of termination, any annual incentive earned for the prior year that has not yet been paid, and other vested amounts (including equity) that are required to be paid or provided in those circumstances by law or under the Company’s plans and programs (“Minimum Benefit Obligations”). Unvested equity awards and unexercised options are generally forfeited, with some pro-rata vesting in the event of retirement. None of the NEOs was eligible for retirement as of December 31, 2015.

Disability or Death

Upon termination of employment for disability or death, NEOs do not receive payments other than the Minimum Benefit Obligations and a pro-rata annual incentive. Our equity plan gives the Committee discretion to address the treatment of equity awards on death or disability. Currently the award agreements provide as follows:

Stock Options – All stock options vest immediately. In the case of a termination for disability, executives have the full remaining option term to exercise the stock options. In the case of termination on account of death, the executive’s estate may exercise the stock options for the lesser of two years after death or over the remaining option term.

Service-based RSUs – All service-based RSUs vest immediately, including performance-based RSUs that have been earned but remain unvested at the termination date.

Performance-based RSUs – In the case of termination on account of disability, RSUs that remain subject to performance conditions will vest pro-rata at the end of the performance period, based on actual performance and the portion of the performance period the executive was employed. In the case of termination by death, RSUs that remain subject to performance conditions will vest pro-rata at target, based on the portion of the performance period the executive was employed.

Involuntary Termination other than for Cause and not under a Change in Control arrangement

The NEOs are covered under the Executive Severance Plan which provides the following benefits, in addition to the Minimum Benefit Obligations, in the event of an involuntary termination of employment initiated by the Company other than for cause, not due to disability or death, not under a Company mandatory retirement program, not covered by a change in control arrangement, and not where the executive is offered similar employment with an affiliate:

Pro-rata annual incentive for the fiscal year of termination, based on actual performance and the portion of the fiscal year employed prior to termination, payable at the same time as employees receive their annual incentive for that fiscal year.

Multiple of the sum of salary plus target annual incentive, payable in the form of salary continuation, based on the following table:

      Name

Executive
Severance
Plan Multiple

      Marita Zuraitis2.0
      Dwayne D. Hallman1.5
      Matthew P. Sharpe1.5
      William J. Caldwell1.5
      Kelly J. Stacy1.0

Continued applicable group health coverage under COBRA, if elected, at employee rates.

Our equity plan gives the Committee discretion to address the treatment of equity awards in the award agreements or at the time of termination. Currently the award agreements provide as follows with respect to involuntary termination of employment (not for cause) prior to or more than one year after a change in control:

Stock Options – Unexercised options terminate immediately, whether or not vested.

Service-based RSUs – All unvested service-based RSUs are forfeited, including performance-based RSUs that have been earned but remain unvested at the termination date.

Performance-based RSUs – All unvested RSUs that remain subject to performance conditions are forfeited.

These payments and benefits are subject to potential cutback to the extent they trigger a “golden parachute” excise tax unless the executive would be better off, net after tax, receiving the full amount and paying the tax.

2016 Proxy Statement • Compensation Discussion and Analysis29


Payment of these severance amounts and provision of these benefits is subject to the executive’s entry into a customary waiver and release. The executives are also subject to restrictive covenants, including confidentiality, non-compete, non-solicitation, non-interference and non-disparagement provisions (“Restrictive Covenants”).

Qualifying termination after a Change in Control of the Company

The NEOs other than Mr. Hallman are covered under the Executive CIC Plan.

Under the Executive CIC Plan, benefits are provided in the event of an involuntary termination (other than for cause, disability or death) or a constructive discharge (a “good reason” termination, as defined in the Executive CIC Plan) within one year following a change in control of the Company (as defined in the Executive CIC Plan) - a so-called “double trigger” arrangement. In addition to the Minimum Benefit Obligations, the following payments and benefits are provided:

An amount equal to the target annual incentive for the fiscal year of termination, prorated for the time elapsed in the fiscal year prior to termination.

The multiple of the sum of salary plus target annual incentive indicated in the following table, payable in a lump sum:


      Name

CIC

Multiple

      Marita Zuraitis2.5
      Dwayne D. Hallman2.0
      Matthew P. Sharpe2.0
      William J. Caldwell2.0
      Kelly J. Stacy

1.0

Continued applicable group health coverage under COBRA, if elected, at employee rates.

Our equity plan generally gives the Committee discretion to address treatment of equity in the applicable award agreements. Currently the award agreements provide for the following treatment in the event of a change in control:

Stock Options – If the acquiror assumes the options, then in the event of an involuntary termination (not for cause) within one year after the change in control, all stock options vest immediately, and executives have the full remaining option term to exercise the stock options. If the acquiror does not assume the options, they vest immediately upon the change in control, and the executives have the full remaining option term to exercise the options.

Service-based RSUs – All service-based RSUs vest immediately, including performance-based RSUs that have been earned but remain unvested at the termination date, if the grantee has an involuntary termination of employment (not for cause) within one year after the change in control.

Performance-based RSUs – All performance-based RSUs vest immediately if the grantee has an involuntary termination of employment (not for cause) within one year after the change in control.

There is no tax gross-up under the Executive CIC Plan. However, if the payments and benefits are such that the executive would become subject to the “golden parachute” tax, then, unless the executive would be better off, net after tax, receiving the entire amount of payments and benefits and paying the “golden parachute” tax (in which case the full amount will be paid or provided), the payments and benefits will be cut back to the highest level that does not trigger the “golden parachute” tax. There is no duplication of benefits with the Executive Severance Plan.

Each covered NEO is also subject to Restrictive Covenants and, as a condition of receiving payment, would be required to enter into a customary waiver and release of claims against the Company.

Mr. Hallman has an individual severance agreement under which he will become entitled to severance benefits only if he has an involuntary termination of employment by the Company (other than for cause) within three years following a change in control of the Company (as defined in the agreement). This is also a “double trigger” arrangement.

Under his individual severance agreement, Mr. Hallman would be entitled to the payments and benefits listed below in addition to the Minimum Benefit Obligations:

Two times the sum of his base salary plus his highest annual bonus in the 5 years preceding the year of his termination, payable in a lump sum, and

Two years continued coverage under disability, life, accident and health plans at employee rates.

Mr. Hallman would also be entitled to a tax gross-up if the amount of his payments and benefits is such that he becomes subject to the 20% “golden parachute” tax. The tax gross-up would be in an amount sufficient to leave Mr. Hallman in the same after-tax position as if he had not been subject to the 20% “golden parachute” tax.

Mr. Hallman would also be subject to Restrictive Covenants and would be required to enter into a customary waiver and release of claims against the Company. There is no duplication of benefits under the Executive Severance Plan.

302016 Proxy Statement • Compensation Discussion and Analysis


Illustration of Potential Payments upon Termination or Change in Control

The following table presents the estimated payments and benefits that would have been payable as of the end of 20152019 in the event of separation due to disability or death, cause, voluntary termination of employment, retirement, involuntary termination of employment without cause, and a change of control of the Company.

Consistent with SEC requirements, these estimated amounts have been calculated as if the NEOs’ employment had been terminated as of December 31, 2015,2019, the last business day of 2015,2019, using the closing market price of our Common Stock on that date ($33.18)43.66). The amounts reported in the following table are hypothetical amounts based on the disclosure of compensation information about the NEOs. Actual payments will depend on the circumstances and timing of any termination of employment or other triggering event.

   

 

Estimated Payments ($) Assuming Termination as of December 31, 2015 (1)(2)

 
   

Name

& Benefits

    

Disability or

Death

     

For

Cause

     Voluntary     

Involuntary
Termination w/o

Cause

     Change in
Control
 
  

Marita Zuraitis

                     
  

Cash Severance

     0       0       0       2,850,000       3,562,500  
  

AIP

     675,000       0       0       675,000       675,000  
  

Acceleration of Stock Options

     272,909       0       0       0       272,909  
  

Acceleration of RSUs

     2,654,102       0       0       0       3,221,679  
  

Health and Welfare

     0       0       0       38,019       38,019  
  

Modified Cap Adjustment (3)

     N/A       N/A       N/A       N/A       N/A  
  

TOTAL

     3,602,011       0       0       3,563,019       7,770,107  
  

Dwayne D. Hallman (4)

                     
  

Cash Severance

     0       0       0       1,065,600       1,546,550  
  

AIP

     266,400       0       0       266,400       266,400  
  

Acceleration of Stock Options

     316,943       0       0       0       316,943  
  

Acceleration of RSUs

     816,029       0       0       0       1,082,763  
  

Health and Welfare

     0       0       0       31,416       52,607  
  

Tax Gross-Up

     N/A       N/A       N/A       N/A       1,038,443  
  

TOTAL

     1,399,372       0       0       1,363,416       4,303,706  
  

Matthew P. Sharpe

                     
  

Cash Severance

     0       0       0       960,000       1,280,000  
  

AIP

     240,000       0       0       240,000       240,000  
  

Acceleration of Stock Options

     183,321       0       0       0       183,321  
  

Acceleration of RSUs

     606,575       0       0       0       854,120  
  

Health and Welfare

     0       0       0       38,019       38,019  
  

Modified Cap Adjustment (3)

     N/A       N/A       N/A       N/A       N/A  
  

TOTAL

     1,029,896       0       0       1,238,019       2,595,460  
  

William J. Caldwell

                     
  

Cash Severance

     0       0       0       761,250       1,015,000  
  

AIP

     157,500       0       0       157,500       157,500  
  

Acceleration of Stock Options

     30,181       0       0       0       30,181  
  

Acceleration of RSUs

     302,790       0       0       0       438,861  
  

Health and Welfare

     0       0       0       10,887       10,887  
  

Modified Cap Adjustment (3)

     N/A       N/A       N/A       N/A       (361,562
  

TOTAL

     490,471       0       0       929,637       1,290,867  
  

Kelly J. Stacy

                     
  

Cash Severance

     0       0       0       420,000       630,000  
  

AIP

     120,000       0       0       120,000       120,000  
  

Acceleration of Stock Options

     0       0       0       0       0  
  

Acceleration of RSUs

     208,624       0       0       0       307,943  
  

Health and Welfare

     0       0       0       17,408       17,408  
  

Modified Cap Adjustment (3)

     N/A       N/A       N/A       N/A       N/A  
  

TOTAL

     328,624       0       0       557,408       1,075,351  

Estimated Payments ($) Assuming Termination as of December 31, 2019 (1)(2)(4)
Name
& Benefits
Disability or
Death
For
Cause
Voluntary
Involuntary
Termination w/o
Cause
Change in
Control
Marita Zuraitis     
Cash Severance0
003,999,0004,998,750
AIP1,069,500
001,069,5001,069,500
Acceleration of Stock Options801,528
000801,528
Acceleration of RSUs2,518,915
0003,537,333
Health and Welfare0
0024,22424,224
Modified Cap Adjustment (3)N/A
N/AN/AN/AN/A
TOTAL4,389,943
005,092,72410,431,335
Bret A. Conklin     
Cash Severance0
00960,0001,280,000
AIP240,000
00240,000240,000
Acceleration of Stock Options148,497
000148,497
Acceleration of RSUs514,208
000737,766
Health and Welfare0
0035,55835,558
Modified Cap Adjustment (3)N/A
N/AN/AN/A-300,466
TOTAL902,705
001,235,5582,141,355
Matthew P. Sharpe     
Cash Severance0
001,020,0001,360,000
AIP255,000
00255,000255,000
Acceleration of Stock Options252,554
000252,554
Acceleration of RSUs819,304
0001,118,613
Health and Welfare0
0033,02933,029
Modified Cap Adjustment (3)N/A
N/AN/AN/AN/A
TOTAL1,326,858
001,308,0293,019,196
William J. Caldwell     
Cash Severance0
00960,0001,280,000
AIP240,000
00240,000240,000
Acceleration of Stock Options184,736
000184,736
Acceleration of RSUs576,116
000803,125
Health and Welfare0
0022,65222,652
Modified Cap Adjustment (3)N/A
N/AN/AN/A-157,935
TOTAL1,000,852
001,222,6522,372,578
Wade Rugenstein     
Cash Severance0
00960,0001,280,000
AIP120,000
00120,000120,000
Acceleration of Stock Options16,361
00016,361
Acceleration of RSUs455,123
000584,738
Health and Welfare0
0035,79935,799
Modified Cap Adjustment (3)N/A
N/AN/AN/A-344,518
TOTAL591,484
001,115,7991,692,380
N/A – Not applicable

(1) All AIP and LTI earned payouts are assumed to be at target.
(2) As of December 31, 2019, Bret A. Conklin is only the NEO who is retirement eligible.
(3) Benefit reduction to avoid the imposition of a “golden parachute” tax.
(4) The amounts reflected for Pro Rata Short-Term (Annual) Incentive Compensation represent the entire value of the estimated liability at target, even though the actual value has also been disclosed in the Summary Compensation Table within this Proxy Statement as earned in 2019.

(1)

All AIP and LTI earned payouts are assumed to be at target.

(2)

None of the NEOs were retirement eligible at December 31, 2015.

(3)

Benefit reduction to avoid the imposition of a “golden parachute” tax.

(4)

Mr. Hallman is entitled to change in control benefits if his involuntary termination (without cause) is up to 3 years after the Change in Control.

201636     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Compensation Discussion and Analysis31Horace Mann Educators Corporation



Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on our review of, and the discussions with management with respect to, the Compensation Discussion and Analysis, wethe Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

COMPENSATION COMMITTEE

STEPHEN J. HASENMILLER,Chairman

MARY H. FUTRELL,

MARK E. KONEN, BEVERLEY J. MCCLURE and GABRIEL L. SHAHEEN,H. WADE REECE, Members

Equity Compensation Plan Information

The following table provides information as of December 31, 20152019 regarding outstanding awards and shares remaining available for future issuance under the Company’s equity compensation plans (excluding the Horace Mann 401(k) plan):

   Equity Compensation Plans  

 

Securities to be
Issued Upon the
Exercise of
Outstanding
Options,
Warrants and
Rights

   Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
   Securities Available for
Future Issuance Under Equity
Compensation Plans (4)
 
  

Plans Approved by Shareholders

               
  

Stock Incentive Plans (1)

               
  

Stock Options

   669,693    $24.00     N/A  
  

Restricted Stock Units (2)

   1,442,325     N/A     N/A  
  

Subtotal

   2,112,018     N/A     N/A  
  

Deferred Compensation (2)(3)

   140,643     N/A     N/A  
  

Subtotal

   2,252,661     N/A     3,923,760  
  

Plans Not Approved by Shareholders

   N/A     N/A     N/A  
  

Total

   2,252,661     N/A     3,923,760  

Equity Compensation PlansNumber of Securities to be Issued Upon Exercise of Outstanding Options and Rights
Weighted-Average Exercise Price of Outstanding Options and Rights
($)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (4)
Plans Approved by Shareholders   
   Stock Incentive Plans (1)   
        Stock Options908,55737.57
N/A
        Restricted Stock Units (2)889,438N/A
N/A
            Subtotal1,797,995N/A
N/A
   Deferred Comp Plan for Directors (2) & Employees (3)53,720N/A
N/A
            Subtotal1,851,715N/A
1,187,220
Plans Not Approved by ShareholdersN/AN/A
N/A
Total1,851,715N/A
1,187,220
N/A – Not applicable

(1)

Includes grants under the HMEC 2010 Comprehensive Executive Compensation Plan, as amended, (“CECP”).

(2)

No exercise price is associated with the shares of Common Stock issuable under these rights.

(3)

The CECP permits Directors and participants in certain cash incentive programs to defer compensation in the form of Common Stock equivalent units, which can be settled in cash at the end of the specified deferral period. For purposes of the CECP, Common Stock equivalent units are valued at 100% of the fair market value of Common Stock on the date of crediting to the participant’s deferral account. There are 43 senior executives of the Company currently eligible to participate in the CECP. The CECP does not reserve a specific number of shares for delivery in settlement of Common Stock equivalent units but instead provides that shares will be available to the extent needed for such settlements. Further information on the CECP appears in the “Compensation Discussion and Analysis”.

(4)

Excludes securities reflected in the Securities to be Issued column and represents shares remaining as part of a fungible share pool. The pool of shares is reduced by 2.5 shares for every “full-value” Award that is granted.

322016 Proxy Statement • Proposals and Company Information


(1) Includes grants under the CECP.
(2) No exercise price is associated with the shares of Common Stock issuable under these rights.
(3) The CECP permits Directors and participants in certain cash incentive programs to defer compensation in the form of deferred cash RSUs, which can be settled in cash at the end of the specified deferral period. For purposes of the CECP, deferred cash RSUs are valued at 100% of the fair market value of Common Stock on the date of crediting to the participant’s deferral account. There are 48 senior executives of the Company currently eligible to participate in the CECP. The CECP does not reserve a specific number of shares for delivery in settlement of deferred cash RSUs but instead provides that shares will be available to the extent needed for such settlements. Further information on the CECP appears in the “Compensation Discussion and Analysis.”
(4) Excludes securities reflected in the Securities to be Issued column and represents shares remaining as part of a fungible share pool. The pool of shares is reduced by 2.5 shares for every “full-value” award that is granted.
Executive Officers

The following is certainprovides biographical information, as of March 15, 2016,2020, with respect to the executive officersExecutive Officers of the Company and its subsidiaries who are not Directors of the Company (together with Marita(Marita Zuraitis, President and Chief Executive Officer, whois a Director and is discussed above under “Board Nominees”, the “Executive Officers”):

.

Dwayne D. Hallman, 53


Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement 37


Bret A. Conklin, 56
Executive Vice President and Chief Financial Officer

Mr. Hallman was appointed to his present position as Executive Vice President and Chief Financial Officer in October 2010. He joined the Company in January 2003 as Senior Vice President, Finance. From September 2000 to December 2002, he served as the Chief Financial Officer of Acceptance Insurance Companies, where he was responsible for financial reporting, investor relations, the treasury and investment management functions and property-casualty operations. From July 1995 to August 2000, Mr. Hallman served as Vice President, Finance and Treasurer at Highlands Insurance Group, where he was responsible for financial reporting, treasury, planning and office services. He served as Vice President and Controller of Ranger Insurance Company from 1988 to 1995. From 1984 to 1988, Mr. Hallman was associated with KPMG Peat Marwick, specializing in its insurance industry practice. Mr. Hallman has over 30 years of experience in the insurance industry.

Matthew P. Sharpe, 54

Executive Vice President, Annuity and Life

Mr. Sharpe joined the Company in January 2012 as Executive Vice President, Annuity and Life. Mr. Sharpe was previously with Genworth Financial, Inc. from 1999 to 2011 where he most recently served as Senior Vice President. During his tenure at Genworth, he gained an extensive annuity and life background while leading a variety of successful growth, product development, strategic, marketing and sales initiatives. Mr. Sharpe has over 25 years of experience in the insurance industry.

William J. Caldwell, 45

Executive Vice President, Property & Casualty

Mr. CaldwellConklin was appointed to his present position of Executive Vice President Property and CasualtyChief Financial Officer in July 2015.April 2017. He joined the Company in November 2013 as Senior Vice President, Personal Lines, and was appointed Senior Vice President, Property & Casualty in October 2014. Mr. Caldwell previously served as Head of Property Products at QBE North America from June 2011 through November 2013, Senior Vice President of Bank of America from August 2007 to June 2011 and Vice President of Unitrin from June 2001 to August 2007. Mr. Caldwell has over 20 years of experience in the insurance industry.

Kelly J. Stacy, 57

Senior Vice President, Field Operations and Distribution

Mr. Stacy joined the Company in July 2015 as Senior Vice President, Field Operations and Distribution. Mr. Stacy previously served as Northeast Regional President with The Hanover Insurance Group, a position he held since 2011. He served as Regional President and led Travelers Select commercial field operations from 2007 to 2011 and he served as Senior Vice President of marketing and field operations at the Main Street America Group from 1998 to 2007. Mr. Stacy has more than 30 years of property and casualty industry experience leading field operations, distribution and sales.

Bret A. Conklin, 52

Senior Vice President and Controller

Mr. Conklin joined the Company as Senior Vice President and Controller in January 2002. Mr. Conklin previously served as Vice President of Kemper Insurance from January 2000 through January 2002, where he was responsible for all corporate financial reporting and accounting operations; Vice President and Controller of the Company from July 1998 through January 2000; and Vice President and Controller of Pekin Insurance from September 1992 through June 1998. He has seven years of public accounting experience with KPMG Peat Marwick from 1985 to 1992, specializing in its insurance industry practice. Mr. Conklin has over 3035 years of experience in the insurance industry.

Sandra L. Figurski, 52

William J. Caldwell(1), 49
Executive Vice President, Property & Casualty and Life & Retirement
Mr. Caldwell was appointed to his present position of Executive Vice President, Property & Casualty and Life & Retirement in November 2019. He previously served as Executive Vice President, Property & Casualty, a position he held since July 2015. Mr. Caldwell joined the Company in November 2013 as Senior Vice President, Personal Lines, and was appointed Senior Vice President, Property & Casualty in October 2014. Prior to joining the Company, he served as Head of Property Products at QBE North America from June 2011 through November 2013, Senior Vice President of Bank of America from August 2007 to June 2011 and Vice President of Unitrin from June 2001 to August 2007. Mr. Caldwell has over 25 years of experience in the insurance industry.
Wade A. Rugenstein, 45
Executive Vice President, Supplemental & Operations 
Mr. Rugenstein joined the Company in July 2019 as Executive Vice President, Supplemental and Operations. Mr. Rugenstein is President and Chief Executive Officer of National Teachers Associates Life Insurance Company and its affiliates (“NTA”), positions he has held since 2015. He served as Vice President, Chief Information Officer and Chief Operating Officer of the NTA companies from 2013 to 2015. Prior to joining NTA, he served as Vice President, Information Technology and Chief Information Officer

Ms. Figurski of The Republic Group, an insurance group located in Dallas, Texas. His previous experience includes extensive technology and leadership roles across varied industries, including service with Greyhound Lines and Ernst & Young, LLP. Mr. Rugenstein has over 15 years of experience in the insurance industry.

Matthew P. Sharpe, 57
Executive Vice President, Distribution & Business Strategy
Mr. Sharpe was appointed to herhis present position as SeniorExecutive Vice President, Distribution and Chief Information OfficerBusiness Strategy in November 2014. She joined2019. He took on the Business Strategy role in November 2017 after modernizing our Life & Retirement suite and infrastructure as Executive Vice President, Life & Retirement, a position he held since joining the Company in September 2013 as Chief Technology Officer. Ms. FigurskiJanuary 2012. Prior to joining the Company, Mr. Sharpe was previously with Allstate Insurance CompanyGenworth Financial, Inc. from 19811999 to 20132011, where shehe most recently served as Senior Vice President. During his tenure at Genworth, he gained an extensive annuity and life background while leading a variety of successful growth, product development, strategic, marketing and sales initiatives. He is Board President and Divisional Chief Information Officer. Ms. Figurskiof the Central Illinois Foodbank. Mr. Sharpe has over 30 years of experience in the insurance and financial services industry.

John P. McCarthy, 60

Senior


(1) As disclosed in an 8-K filed on April 1, 2020, William J. Caldwell has resigned from his position at Horace Mann effective April 10, 2020.


38     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Donald M. Carley, 52
Executive Vice President, General Counsel, Corporate Secretary and Chief Human ResourcesCompliance Officer

Mr. McCarthy joined the Company in May 2014 as Senior Vice President and Chief Human Resources Officer. Mr. McCarthy’s previous experience includes Guardian Life Insurance Company where he worked from December 2008 through March 2014, joining the companyCarley was appointed to his present position as Executive Vice President Human Resources where he helped build a high-performing organization focusing on talent, leadership and culture.in November 2019. He was with Wachovia Corporation from December 1998 to December 2008, where he held multiple positions including Senior Managing Director. Mr. McCarthy has over 30 years of experience in the financial services and insurance industries.

Ann M. Caparrós, 63

Chief Compliance Officer and Corporate Secretary

Ms. Caparrós joined the Company in March 1994 as Vice President, General Counsel and Corporate Secretary and the additional responsibilities of Chief Compliance Officer were formalized in 2000. Prior to March 1994, she was associated with John Deere Insurance Group from 1989 to 1994 as Vice President and General Counsel. She also was staff counsel for the Kellogg Company from 1988 to 1989 and United of Omaha Life Insurance Company from 1978 to 1988. Ms. Caparrós has over 35 years of experience in the insurance industry.

Donald M. Carley, 48

General Counsel

Mr. Carley joined the company in January 2016 as General Counsel. He assumed the additional responsibilities of Corporate Secretary and Chief Compliance Officer in May 2016 and was appointed Senior Vice President in November 2016. Mr. Carley previously served as Associate General Counsel at State Farm Mutual Automobile Insurance Company, a position he heldan insurance provider, since 2008. Prior to that, he spent 10 years in private practice at Sonnenschein Nath & Rosenthal LLP (now known as Dentons), most recently as partner of thefirm. Mr. Carley has more than 25 years of private practice and corporate experience with a focus on insurance industry litigation, legislative, regulatory, claims and operational issues.

Elizabeth P. Moore, 56

2016 Proxy Statement • Proposals and Company Information33


Senior Vice President and Chief Human Resources Officer
Ms. Moore was appointed to her present position as Senior Vice President in November 2019. She joined the Company in December 2014 as Vice President, Talent Management, and was appointed to the Chief Human Resources Officer position in November 2018. Ms. Moore previously served as Vice President, Talent Management of Guardian Life Insurance from April 2009 through November 2014, Senior Manager HRBP Team of Wells Fargo/Wachovia from 1996 through 2009, and HR Generalist of Northrop Grumman (formerly TRW, Inc.) from 1996 through 1998. She has held roles both as a Human Resources Business Partner and in centers of expertise with a focus on delivering business performance through strategic human capital management. Ms. Moore has over 20 years of experience primarily within the financial services industry.
Kimberly A. Johnson, 53
Senior Vice President and Controller
Ms. Johnson was appointed to her present position as Senior Vice President in November 2019. She joined the Company in 2002 as Assistant Controller and was appointed Vice President and Controller in April 2017. Prior to joining the Company, she was with MSI Insurance from 1991 to 2002 where she held multiple positions, including Vice President and Controller, responsible for financial planning and all property and casualty accounting and reporting functions. Ms. Johnson has over 25 years of experience in the insurance industry.
Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding beneficial ownership of shares of Common Stock by each person who is known by the Company to own beneficially more than 5% of the issued and outstanding shares of Common Stock, and by each of the Company’s Directors, Board Nominees and the Company’s Chief Executive Officer, Chief Financial Officer and the other three highest compensated Executive Officers employed at the end of 2015 (collectively the “Named Executive Officers”),NEOs, and by all Directors and Executive Officers of the Company as a group. Information in the table is as of March 15, 2016, except that the ownership information for the 5% beneficial owners is as of December 31, 2015 based on information reported by such persons to the SEC.2020. Except as otherwise indicated, to the Company’s knowledge all shares of Common Stock are beneficially owned, and investment and voting power is held solely by the persons named as owners.

   Common Stock Ownership    

 

Beneficial Ownership Amount        

    Percent of Class     
  

5% Beneficial Owners

            
  

BlackRock, Inc. (1)

    3,841,578      9.4
  

Dimensional Fund Advisors LP (2)

    3,512,479      8.6
  

Hotchkis and Wiley Capital Management, LLC (3)

    3,073,086      7.6
  

The Vanguard Group, Inc (4)

    3,042,326      7.5
  

Silvercrest Asset Management Group, LLC (5)

    2,517,759      6.2
  

Directors, Board Nominees and Executive Officers

            
  

Daniel A. Domenech (6)

    2,023      *  
  

Mary H. Futrell (7)

    72,375      *  
  

Stephen J. Hasenmiller

    28,570      *  
  

Ronald J. Helow (8)

    28,286      *  
  

Beverley J. McClure (9)

    10,322      *  
  

H. Wade Reece

         0.0
  

Gabriel L. Shaheen (10)

    48,454      *  
  

Robert Stricker (11)

    37,081      *  
  

Steven O. Swyers (12)

    3,278      *  
  

Marita Zuraitis (13)

    190,978      *  
  

Dwayne D. Hallman (14)

    197,862      *  
  

Matthew P. Sharpe (15)

    75,422      *  
  

William J. Caldwell (16)

    11,750      *  
  

Kelly J. Stacy

    633      *  
  

All Directors and Executive Officers as a group (18 persons) (17)

    872,155      2.1

*

Less than 1%

  (1)

BlackRock, Inc. (“BlackRock”) has a principal place of business at 55 East 52nd Street, New York, New York 10055. BlackRock has sole voting power with respect to 3,745,288 shares and sole investment power with respect to 3,841,578 shares. The foregoing is based on Amendment No. 6 to Schedule 13G filed by BlackRock on January 26, 2016.

  (2)

Dimensional Fund Advisors LP (“Dimensional”) has a principal place of business at Building One, 6300 Bee Cave Road, Austin, Texas 78746. Dimensional has sole voting power with respect to 3,398,982 shares and sole investment power with respect to 3,512,479 shares. Dimensional disclaims beneficial ownership of such securities. The foregoing is based on Amendment No. 10 to Schedule 13G filed by Dimensional on February 9, 2016.

  (3)

Hotchkis and Wiley Capital Management, LLC (“Hotchkis and Wiley”) has a principal place of business at 725 South Figueroa Street, 39th Floor, Los Angeles, California 90017. Hotchkis and Wiley has sole voting power with respect to 2,547,386 shares and sole investment power with respect to 3,073,086 shares. Hotchkis and Wiley disclaims beneficial ownership of such securities. The foregoing is based on Amendment No. 1 to Schedule 13G filed by Hotchkis and Wiley on February 12, 2016.

  (4)

The Vanguard Group, Inc. (“Vanguard”) has a principal place of business at 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. Vanguard has sole voting power with respect to 51,631 shares, sole investment power with respect to 2,989,895 shares, and shared investment power with respect to 52,431 shares. The foregoing is based on Amendment No. 4 to Schedule 13G filed by Vanguard on February 11, 2016.

  (5)

Silvercrest Asset Management Group, LLC (“Silvercrest”) has a principal place of business at 1330 Avenue of the Americas, 38th Floor, New York, New York 10019. Silvercrest has shared voting and investment power with respect to 2,517,759 shares. The foregoing is based on Amendment No. 2 to Schedule 13G filed by Silvercrest on February 16, 2016.

  (6)

Consists entirely of 2,023 CSUs pursuant to the CECP.

  (7)

Includes 34,885 CSUs and 32,479 vested RSUs pursuant to the CECP.

  (8)

Consists entirely of 28,286 vested RSUs pursuant to the CECP.

  (9)

Consists entirely of 3,223 CSUs and 7,099 vested RSUs pursuant to the CECP.

(10)

Consists entirely of 14,202 CSUs and 34,252 vested RSUs pursuant to the CECP.

(11)

Includes 9,609 CSUs and 24,264 vested RSUs pursuant to the CECP.

(12)

Consists entirely of 3,278 vested RSUs pursuant to the CECP.

(13)

Consists entirely of 37,485 vested stock options and 153,493 vested RSUs pursuant to the CECP.

(14)

Includes 76,043 vested stock options, 7,162 CSUs and 112,161 vested RSUs pursuant to the CECP.

(15)

Consists entirely of 33,324 vested stock options and 42,098 vested RSUs pursuant to the CECP.

(16)

Includes 6,526 vested stock options and 2,934 vested RSUs pursuant to the CECP.

(17)

Includes 202,301 vested stock options, 92,661 CSUs and 520,930 vested RSUs pursuant to the CECP.

34Horace Mann Educators Corporation20162020 Annual Meeting of Shareholders Notice & Proxy Statement • Proposals and Company Information39



Common Stock OwnershipBeneficial Ownership Amount    Percent of Class
5% Beneficial Owners  
BlackRock, Inc. (1)5,971,20714.5%
The Vanguard Group, Inc. (2)4,453,18810.8%
Dimensional Fund Advisors LP (3)3,340,9458.1%
Franklin Mutual Advisers, LLC (4)2,900,8527.0%
Directors, Board Nominees and Executive Officers  
Mark S. Casady00.0%
Daniel A. Domenech (5)17,824   *
Stephen J. Hasenmiller26,851   *
Perry G. Hines (6)2,230   *
Mark Konen00.0%
Beverley J. McClure (7)16,761   *
H. Wade Reece (8)11,175   *
Robert Stricker (9)34,790   *
Steven O. Swyers (10)14,628   *
Marita Zuraitis (11)521,1061.3%
Bret A. Conklin (12)93,740   *
Matthew P. Sharpe (13)174,066   *
William J. Caldwell (14)88,123   *
Wade A. Rugenstein00.0%
All Directors and Executive Officers as a group (17 persons)(15)1,086,8422.6%
*  Less than 1%
(1) BlackRock has a principal place of business at 55 East 52nd Street, New York, New York 10055. BlackRock has sole voting power with respect to 5,879,114 shares and sole investment power with respect to 5,971,207 shares. The foregoing is based on Amendment No. 11 to Schedule 13G filed by BlackRock on February 4, 2020.
(2) The Vanguard Group, Inc. (“Vanguard”) has a principal place of business at 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. Vanguard has sole voting power with respect to 40,009 shares, sole investment power with respect to 4,410,840 shares, shared voting power with respect to 6,971 shares and shared investment power with respect to 42,348 shares. The foregoing is based on Amendment No. 9 to Schedule 13G filed by Vanguard on February 12, 2020.
(3) Dimensional Fund Advisors LP (“Dimensional”) has a principal place of business at Building One, 6300 Bee Cave Road, Austin, Texas 78746. Dimensional has sole voting power with respect to 3,234,721 shares and sole investment power with respect to 3,340,945 shares. Dimensional disclaims beneficial ownership of such securities. The foregoing is based on Amendment No. 14 to Schedule 13G filed by Dimensional on February 12, 2020.
(4) Franklin Mutual Advisers, LLC (“Franklin”) has a principal place of business at 101 John F. Kennedy Parkway, Short Hills, New Jersey 07078. Franklin has sole voting power with respect to 2,688,488 shares and sole investment power with respect to 2,900,852 shares. The foregoing is based on Amendment No. 1 to Schedule 13G filed by Franklin on February 3, 2020.
(5) Consists entirely of 6,860 deferred cash RSUs and 10,963 vested share-based RSUs pursuant to the CECP.
(6) Consists entirely of 2,230 vested share-based RSUs pursuant to the CECP.
(7) Includes 10,963 vested share-based RSUs pursuant to the CECP.
(8) Consists entirely of 3,121 deferred cash RSUs and 8,054 vested share-based RSUs pursuant to the CECP.
(9) Includes 10,743 deferred cash RSUs and 13,080 vested share-based RSUs pursuant to the CECP.
(10) Consists entirely of 14,628 vested share-based RSUs pursuant to the CECP.
(11) Includes 258,831 vested stock options and 174,518 vested share-based RSUs pursuant to the CECP.
(12) Includes 39,414 vested stock options, 9,615 deferred cash RSUs and 30,504 vested share-based RSUs pursuant to the CECP.
(13) Includes 85,674 vested stock options and 49,534 vested share-based RSUs pursuant to the CECP.
(14) Includes 42,183 vested stock options and 6,718 vested share-based RSUs pursuant to the CECP.
(15) Includes 479,529 vested stock options, 30,340 deferred cash RSUs and 345,223 vested share-based RSUs pursuant to the CECP.

40     2020 Annual Meeting of Shareholders Meeting Notice & Proxy StatementHorace Mann Educators Corporation


Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires the Company’s Executive Officers and Directors and other persons who beneficially own more than ten10 percent of HMEC’s outstanding Common Stock, whom the Company refers to collectively as the “Reporting Persons”,Persons,” to file reports of ownership and changes in ownership with the SEC.

The Company has established procedures by which Reporting PersonsDirectors and Executive Officers provide relevant information regarding transactions in Common Stock to a Company representative, and the Company prepares and files the required ownership reports. Based on a review of those reports and other written representations, the Company believes that all suchin the most recent fiscal year the Reporting Persons filed the required reports wereon a timely filed in 2015.

basis under Section 16(a).

PROPOSAL NO.
Proposal No. 3 - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Ratification of Independent Registered Public Accounting Firm

The Audit Committee is directly responsible for theselection, compensation, retention, performance and evaluation of the Company’s independent registered public accounting firm. The Audit Committee considers the independence and evaluates the selection of the independent registered public accounting firm each year.

KPMG LLP has been the Company’s independent registered public accounting firm for the past 2730 years (since the Company’s 1989 leveraged buyout). After careful consideration of a number of factors, including length of time the firm has served in this role, the firm’s past performance, and an assessment of the firm’s qualifications and resources, the Audit Committee selected KPMG LLP to serve as the independent registered public accounting firm for the year ending December 31, 2016.2020. As a matter of good corporate governance, the Audit Committee submits its selection of the auditors to the Shareholders for ratification. If the selection of KPMG LLP is not ratified, the Audit Committee will review its future selection of an independent registered public accounting firm in light of the vote result.result, but may nonetheless appoint KPMG LLP if it determines doing so to be in the best interest of the Company and Shareholders. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its Shareholders. A representative from KPMG LLP is expected to be present atwill attend the Annual Meeting. The representative will be given an opportunity to make a statement to Shareholders and is expected to be available to respond to appropriate questions from Shareholders.

The Board recommends that Shareholders vote FOR the ratification of KPMG LLP, an independent registered public accounting firm, as the Company’s auditors for the year ending December 31, 2016.

2020.

Report of the Audit Committee

Acting under a written charter, the Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. The Audit Committee is comprised of four directors, each of whom is independent as defined by the New York Stock Exchange listing standards. Management has the primary responsibility for the Company’s financial statements and its reporting process, including the Company’s systems of internal controls. In fulfilling its oversight responsibilities, prior to the filing, the Audit Committee reviewed the audited consolidated financial statements in the Annual Report on Form 10-K with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and clarity of disclosures in the financial statements.

The Audit Committee has discussed with the Company’s independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with United States generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required by applicable requirements of the Public Company Accounting Oversight Board. In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with them their independence from the Company and its management taking into account the potential effect of any non-audit services provided by the independent registered public accounting firm.


Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement 41


The Audit Committee discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope and plans for their respective audits. The Audit Committee meets with the internal auditors and the independent registered public accounting firm, with and without management present, to discuss the results of their audits, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. The Audit Committee held twelve meetings during fiscal year 2015.

2019.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 20152019 for filing with the Securities and Exchange Commission. The Audit Committee approved the selection of the Company’s independent registered public accounting firm.

AUDIT COMMITTEE

STEVEN O. SWYERS,Chairman

RONALD

STEPHEN J. HELOW, BEVERLEY J. MCCLURE, and ROBERT STRICKER,HASENMILLER, PERRY G. HINES AND MARK E. KONEN, Members

2016 Proxy Statement • Proposals and Company Information35


The Company’s Independent Registered Public Accounting Firm

The independent registered public accounting firm selected by the Audit Committee to serve as the Company’s auditors for the year ending December 31, 20162020 is KPMG LLP. KPMG LLP served in that capacity for the year ended December 31, 2015.

2019.

Fees of KPMG LLP

The following were the fees of KPMG LLP for the years ended December 31, 20152019 and 2014.

   Fees               2015              2014 
  

Audit (1)

   $    2,188,900       $    1,918,400  
  

Audit-Related (2)

   $       256,000       $       226,300  
  

Tax (3)

   0       0  
  

All Other (4)

   0       0  

(1)

Represents the aggregate fees billed for professional services rendered by KPMG LLP for the audit of the Company’s annual financial statements for the years ended December 31, 2015 and 2014, the audit of the Company’s internal control over financial reporting as of December 31, 2015 and 2014, the reviews of the financial statements included in the Company’s quarterly reports on Forms 10-Q for the years ended December 31, 2015 and 2014 and services in connection with the Company’s statutory and regulatory filings for the years ended December 31, 2015 and 2014. Fees in 2015 included $148,500 related to the Company’s issuance of its 4.50% Senior Notes due 2025.

(2)

Represents the aggregate fees billed for assurance and related services rendered by KPMG LLP that are reasonably related to the audit and review of the Company’s financial statements for the years ended December 31, 2015 and 2014, exclusive of the fees disclosed under “Audit Fees”. In 2015 and 2014, KPMG LLP audited the Company’s employee benefits plans. Also in 2015 and 2014, KPMG LLP prepared SOC1 reports on the Company’s annuity operations.

(3)

Represents the aggregate fees billed for tax compliance, consulting and planning services rendered by KPMG LLP during the years ended December 31, 2015 and 2014.

(4)

Represents the aggregate fees billed for all other services, exclusive of the fees disclosed above relating to audit, audit-related and tax services, rendered by KPMG LLP during the years ended December 31, 2015 and 2014.

2018.

Fees ($)20192018
Audit Fees(1)
4,897,400
3,405,200
Audit-Related Fees(2)
132,500
110,400
Tax Fees(3)
0
0
All Other(4)
0
939,800
(1) Represents the aggregate fees billed for professional services rendered by KPMG LLP for the audit of the Company’s annual financial statements for the years ended December 31, 2019 and 2018, the audit of the Company’s internal control over financial reporting as of December 31, 2019 and 2018, the reviews of the financial statements included in the Company’s quarterly reports on Forms 10-Q for the years ended December 31, 2019 and 2018 and services in connection with the Company’s statutory and regulatory filings for the years ended December 31, 2019 and 2018.
(2) Represents the aggregate fees billed for assurance and related services rendered by KPMG LLP that are reasonably related to the audit and review of the Company’s financial statements for the years ended December 31, 2019 and 2018, exclusive of the fees disclosed under “Audit Fees.” In 2019 and 2018, KPMG LLP audited the Company’s employee benefits plans.
(3) Represents the aggregate fees billed for tax compliance, consulting and planning services rendered by KPMG LLP during the years ended December 31, 2019 and 2018, which were none.
(4) For the year ended December 31, 2019, represents the aggregate fees billed for all other services exclusive of the fees disclosed above relating to audit, audit-related and tax services rendered by KPMG LLP, which were none. For the year ended December 31, 2018, represents the aggregate fees billed for merger and acquisition due diligence services rendered by KMPG LLP.
Pre-Approval of Services Provided by the Independent Registered Public Accounting Firm

The Audit Committee approves in advance any significant audit and all non-audit engagements or services between the Company and the independent registered public accounting firm. As a practice, the Audit Committee does not allow “prohibited non-auditing services” as defined by regulatory authorities to be performed by the same firm that audits the Company’s annual financial statements. The Audit Committee may delegate to one or more of its members the authority to approve in advance all significant audit and all non-audit services to be provided by the independent registered public accounting firm so long as it is presented to the full Audit Committee at the next regularly scheduled meeting. Pre-approval is not necessary for de minimis audit services as long as such services are presented to the full Audit Committee at the next regularly scheduled meeting. The Audit Committee approvedpre-approved all of the above listed expenses. KPMG LLP did not provide any non-audit related services during the years ended December 31, 2015 and 2014.


36201642     2020 Annual Meeting of Shareholders Meeting Notice & Proxy Statement • Proposals and Company InformationHorace Mann Educators Corporation



2020 Proxy Statement |Other Matters

Delivery of Proxy Materials

Electronic Access to Proxy Materials and Annual Report

As we did last year, we are delivering a Notice of Internet Availability of Proxy Materials to Shareholders in lieu of a paper copy of the Proxy Statement and related materials and the Company’s Annual Report to Shareholders and Form 10-K. If you received a Notice by mail, you will not receive a paper copy of the Proxy Materials unless you request one. Instead, the Notice will instruct you as to how you may access and review the Proxy Materials and cast your vote. If you received a Notice by mail and would like to receive a paper copy of our Proxy Materials, please follow the instructions included in the Notice.

Shareholders also can elect to receive an email message that will provide a link to the Proxy Materials on the Internet. By opting to access your Proxy Materials via email, you will save the Company the cost of producing and mailing documents to you, reduce the amount of mail you receive and help preserve environmental resources. Shareholders who have enrolled previously in the electronic access service will receive their Proxy Materials via email this year. If you received a Notice by mail and would like to receive your Proxy Materials via email, please follow the instructions included in the Notice.

Copies of Annual Report on Form 10-K

The Company will furnish, without charge, a copy of its most recent Annual Report on Form 10-K filed with the SEC to each person solicited hereunder who mails a written request to Investor Relations, Horace Mann Educators Corporation, 1 Horace Mann Plaza, C-120, Springfield, Illinois, 62715-0001.

The Company will furnish, without charge, a copy of its most recent Annual Report on Form 10-K filed with the SEC to each person solicited hereunder who mails a written request to Investor Relations, Horace Mann Educators Corporation, 1 Horace Mann Plaza, C-738, Springfield, Illinois, 62715-0001.
The Company also will furnish, upon request to the Investor Relations address above, a copy of all exhibits to the Annual Report on Form 10-K. In addition, the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and all amendments to those reports are available free of charge through the Company’s Internet website, www.horacemann.com,horacemann.com, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. The EDGAR filings of such reports are also available at the SEC’s website, www.sec.gov.

sec.gov.

Eliminating Duplicative Proxy Materials

If you are a beneficial owner, your bank or broker may deliver a single Proxy Statement and Annual Report, along with individual proxy cards, or individual Notices to any household at which two or more shareholdersShareholders reside unless contrary instructions have been received from you. This procedure, referred to as householding, reduces the volume of duplicate materials shareholdersShareholders receive, and reduces mailing expenses.expenses and helps preserve environmental resources. Shareholders may revoke their consent to future householding mailings or enroll in householding by contacting the Company’s facilitator for distribution of Proxy Materials, Broadridge Financial Solutions, Inc., at 1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Alternatively, if you wish to receive a separate set of Proxy Materials for this year’s Annual Meeting, we will deliver them promptly upon request to Investor Relations, Horace Mann Educators Corporation, 1 Horace Mann Plaza, C-120,C-738, Springfield, Illinois, 62715-0001 or 217-789-2500.

Submitting Shareholder Proposals for the 20172021 Annual Meeting of Shareholders

Any proposals of Shareholders submitted under Rule 14a-8 of the Securities Exchange Act, of 1934, as amended, for inclusion in the Company’s Proxy Statement and Form of Proxy for the next Annual Meeting of Shareholders scheduled to be held in 20172021 must be received in writing by the Corporate Secretary, Horace Mann Educators Corporation, 1 Horace Mann Plaza, Springfield, Illinois, 62715-0001, not later than the close of business on December 12, 20167, 2020 in order for such proposal to be considered for inclusion in the Company’s Proxy Statement and Form of Proxy relating to the 20172021 Annual Meeting of Shareholders.

The submission of a shareholder proposal does not guarantee that it will be included in the Company’s Proxy Statement and Form of Proxy. In the event that a Shareholder intends to present any proposal at the 20172021 Annual Meeting of Shareholders other than in accordance with the procedures set forth in Rule 14a-8, the Shareholder must give written notice to the Corporate Secretary no less than 45 days prior to the date of the Annual Meeting setting forth the business to be brought before the meeting. Accordingly, proxies solicited by the Board for the 20172021 Annual Meeting will confer upon the proxy holders discretionary authority to vote on any matter so presented of which the Company does not have notice prior to April 9, 2017,11, 2021, which is 45 days prior to the anticipated Annual Meeting date of May 24, 2017.

26, 2021.

2016Horace Mann Educators Corporation2020 Annual Meeting of Shareholders Notice & Proxy Statement • Other Matters3743



Appendix| Reconciliations of GAAP measures to Non-GAAP Measures
Reconciliation of Net Income to Core Earnings
 201920182017
Net Income184.4
18.3
169.4
Less: Net investment gains (losses)120.2
(10.1)(1.7)
           Other expense - goodwill impairment(28.0)

           Re-measurement of DTL

99.0
Core earnings (loss)92.2
28.4
72.1
Reconciliation of Book Value per Common Share to Book Value per Common Share Excluding Net Unrealized Investment Gains on Fixed Maturity Securities
 201920182017
Book value per common share

   
Numerator: Common shareholders' equity$1,567.3
$1,290.6
$1,501.6
Denominator: Common shares outstanding41.2
41.0
40.7
Book value per common share$38.01
$31.50
$36.88
    
Book value per common share, excluding net unrealized investment gains on fixed maturity securities 
Numerator: Common shareholders' equity$1,567.3
$1,290.6
$1,501.6
Less: Net unrealized investment gains on fixed maturity securities230.4
96.9
300.1
Adjusted common shareholders' equity1,336.9
1,193.7
1,201.5
Denominator: Common shares outstanding41.2
41.0
40.7
Book value per common share, excluding net unrealized investment gains on fixed maturity securities$32.42
$29.13
$29.51




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HA-C00377 (Mar. 16)


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The Board of Directors recommends you vote FOR the following:

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1.

Election of Directors

Nominees

ForAgainstAbstain

1a    Daniel A. Domenech

1b    Stephen J. Hasenmiller

1c    Ronald J. Helow

1d    Beverley J. McClure

1e    H. Wade Reece

1f    Gabriel L. Shaheen

1g    Robert Stricker

1h    Steven O. Swyers

1i     Marita Zuraitis

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The Board of Directors recommends you vote FOR proposals 2 and 3.

For

Against

Abstain

2      

Approval of the advisory resolution to approve Named Executive Officers' compensation.

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3     

Ratification of the appointment of KPMG LLP, an independent registered public accounting firm, as the company's auditors for the year ending December 31, 2016.

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NOTE: Such other business as may properly come before the meeting or any adjournment thereof.

Materials Election - Check this box if you want to receive a complete set of future proxy materials by mail, at no extra cost. If you do not take action you may receive only a Notice to inform you of the Internet availability of proxy materials.

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SHARES  

CUSIP #  

SEQUENCE #  

JOB #

Signature [PLEASE SIGN WITHIN BOX]    

Date    

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice & Proxy Statement, Form 10-K/Annual Report is/are available atwww.proxyvote.com

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HORACE MANN EDUCATORS CORPORATION                                    

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS                                    

FOR THE ANNUAL MEETING OF SHAREHOLDERS MAY 25, 2016                                    

The undersigned Shareholder of Horace Mann Educators Corporation (the “Company”) hereby appoints Gabriel L. Shaheen and Marita Zuraitis, or any of them, with full power of substitution, proxies to vote at the

2020 Annual Meeting of Shareholders of the Company (the “Meeting”), to be held on May 25, 2016 at 9:00 a.m. Central Daylight Saving Time, at the Horace Mann Lincoln Auditorium, 1 Horace Mann Plaza, Springfield, Illinois, and at any adjournment thereof and to vote all shares of Common Stock of the Company held or owned by the Undersigned as directed on the reverse side and in their discretion upon such other matters as may come before the Meeting.

THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES UNDER PROPOSAL 1, FOR PROPOSALS 2 AND 3, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Continued and to be signed on reverse side

Notice & Proxy Statement 44



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