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Filed by the Registrant ☒ | | | Filed by a Party other than the Registrant ☐ |
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Preliminary Proxy Statement | |||
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☒ | | | Definitive Proxy Statement |
☐ | | | Definitive Additional Materials |
☐ | | | Soliciting Material Pursuant to §240.14a-12 |
Unum Group |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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2020 PROXY STATEMENT |
| VOTING ITEMS | | | Pg. # | | |||
| | | | Election of Directors | | | | |
| | | | | ||||
| | Advisory Vote to Approve Executive Compensation | | | ||||
| | | | | | |||
| | | Ratification of Appointment of Independent Public Accounting Firm | | | | ||
| | | | | | |||
| | |||||||
Approval of | | | ||||||
| | | | | | |||
| | |||||||
| | |||||||
Approval of the | ||||||||
Unum European Holding Company Limited Savings-Related Share Option Scheme 2021 | ||||||||
|
Internet | | | www.proxyvote.com (if in advance of meeting) Deadline: 11:59 p.m. Eastern Daylight Time, May 27, 2020 You may also vote your shares during the meeting at www.virtualshareholdermeeting.com/UNM2020. |
Telephone | | | 1-800-690-6903 or the telephone number on your voting instruction form Deadline: 11:59 p.m. Eastern Daylight Time,May 27, 2020 |
Mail | | | Vote Processing c/o Broadridge 51 Mercedes Way, Edgewood, NY 11717 Receipt due by close of business day on May 27, 2020 |
| | Year Ended December 31 | | |||||||
| | 2019 | | | 2018 | | | 2017 | | |
Net Income | | | $1,100.3 | | | $523.4 | | | $994.2 | |
Net Income per share* | | | $5.24 | | | $2.38 | | | $4.37 | |
Total Stockholders' Equity (book value) | | | $9,965.0 | | | $8,621.8 | | | $9,574.9 | |
Total Stockholders' Equity (book value) per share | | | $49.10 | | | $40.19 | | | $43.02 | |
Return on Equity | | | 11.8% | | | 5.8% | | | 10.7% | |
2019 Say-on-Pay Vote and Shareholder Outreach | | | |
| |||
Our 2019 shareholder advisory vote to approve executive compensation passed with 95% support. As we have done for several years, we continued our shareholder engagement through an extensive outreach effort, contacting each of our top 50 investors, representing over 71% of our outstanding shares. Consistent with prior years, our independent Board Chairman joined several meetings with shareholders. Details of 2019 feedback from our shareholders can be found on page 49. | |
| Executive Compensation Practices | | | Board Practices | |
| A pay-for-performance philosophy Annual say-on-pay votes Programs that mitigate undue risk taking in compensation Independent compensation consultant to the Human Capital Committee No golden parachute excise tax gross-ups Minimal perquisites No NEO employment agreements Double-trigger provisions for severance Restrictive covenants in our long-term incentive grant agreements Clawback provisions A balance of short- and long-term incentives Robust stock ownership and retention requirements Relevant peer groups for benchmarking compensation Robust individual performance assessments of executives and directors | | | All directors other than the CEO are independent, including theBoard Chairman All Board Committees fully independent Commitment to diversity at the Board level and within the enterprise High meeting attendance by directors (average attendance of 98% in 2019) Limits on outside board and audit committee service | |
| Governance Practices | | |||
| Annual election of directors Majority vote requirement for directors (in uncontestedelections) Proxy access bylaws Shareholder right to call special meetings Annual, proactive shareholder engagement No supermajority vote requirements Anti-pledging and anti-hedging policies applicable to executives and directors Annual Board, committee, and individual director evaluations Regular executive sessions of independent directors | | |||
| | | | |
| Record earnings | | | | |
| |||||
Unum achieved strong earnings per share and record after-tax adjusted operating earnings per share, continuing our recent history of strong financial performance. For | | | | ||
| Return on equity | | | | |
| We continued to put | | | | |
| Book value | | | | |
| Our book value per share at the end of | | | |
(1) | Operating results referenced below include non-GAAP financial measures. Information about the non-GAAP measures used in this proxy statement is set forth in “A Note About Non-GAAP Measures” on page 2. For a reconciliation of the most directly comparable GAAP measures to the non-GAAP measures, refer to Appendix A of this proxy statement. |
| | | 1 Year | | | 3 Year | | | 5 Year | | |
| Unum | | | 2.6% | | | (28.53)% | | | (5.92)% | |
| Proxy Peer Group | | | 31.27 | | | 25.57 | | | 50.66 | |
| S&P 500 | | | 31.49 | | | 53.17 | | | 73.86 | |
| S&P Life & Health Index | | | 23.18 | | | 13.63 | | | 32.92 | |
Component | | | 2018 | | | 2019 | |
Base Salary | | | $1,000,000 | | | $1,000,000 | |
Annual Incentive Payout | | | 1,900,000 | | | 1,710,000 | |
Approved LTI Grant | | | 6,175,000 | | | 6,370,000 | |
Annual Compensation | | | $ 9,075,000 | | | $ 9,080,000 | |
| ||||||||||||||||||||||||||||||
| as of 2/25/20(1) |
| Executive | | | Target Share Grant | | | | | Operating Performance Factor | | | | | Adjusted Shares | | | | | TSR Modifier | | | | | Earned Shares | | | Adjusted Shares | | | Earned Shares | | ||||
| CEO | | | 59,889 | | | x | | | 109% | | | = | | | 65,279 | | | x | | | 80% | | | = | | | 52,223 | | | $1,671,142 | | | $1,336,909 | |
| | Board's Recommendation | | | Page Reference: | | ||||||||
Item 1: Election of Directors | | FOR | | | | |||||||||
| Eleven director nominees are standing for election this year, each for a one-year term expiring at the | |
| | | Director Nominee | | | Director Since | | | Independent | | | Current Committees | | ||||
| | | Theodore H. Bunting, Jr. | | | | | | | Human Capital | | | Regulatory Compliance (Chair) | | |||
| | | Susan L. Cross | | | 2019 | | | | | Audit | | | Risk and Finance | | ||
| | | Susan D. DeVore | | | 2018 | | | | | Audit | | | Risk and Finance | | ||
| | | Joseph J. Echevarria | | | 2016 | | | | | Governance | | | Risk and Finance (Chair) | | ||
| | | Cynthia L. Egan | | | 2014 | | | | | Human Capital (Chair) | | | Regulatory Compliance | | ||
| | | Kevin T. Kabat,Board Chairman | | | 2008 | | | | | Governance | | | Human Capital | | ||
| | | Timothy F. Keaney | | | 2012 | | | | | Audit (Chair) | | | Risk and Finance | | ||
| | | Gloria C. Larson | | | 2004 | | | | | Governance (Chair) | | | Regulatory Compliance | | ||
| | | Richard P. McKenney,President and CEO | | | 2015 | | | — | | | — | | | — | | |
| | | Ronald P. | | | 2015 | | | | | Governance | | | Human Capital | | ||
| | | Francis J. Shammo | | | 2015 | | | | | Audit | | | Regulatory Compliance | |
| Item 2: Advisory Vote to Approve Executive Compensation | | | FOR | | | | ||||||||
| |||||||||||||||
We are seeking a non-binding advisory vote to approve the compensation of our named executive officers. We describe our compensation programs in the Compensation Discussion and Analysis section of this proxy statement. The Human Capital Committee believes these programs reward performance and align the long-term interests of management and shareholders. Although non-binding, the Human Capital Committee will take into account the outcome of the advisory vote and shareholder feedback when making future | | ||||||||||||||
| Item 3: Ratification of | | FOR | | | | |||||||||
| The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for | | |||||||||||||
| Item 4: Approval of | | FOR | | | | |||||||||
| The | | |||||||||||||
| Item 5: Approval of | | | FOR | | | | ||||||||
| The Human Capital Committee has adopted the Unum European Holding Company Limited Savings-Related Share Option Scheme 2021, and | |
| ||||||||
Qualifications and Attributes | | | Relevance to Unum | | | Board Composition(1) | | |
| Accounting/Auditing | | | We operate in a complex financial and regulatory environment with disclosure requirements, detailed business processes and internal controls. | | | | |
| Business Operations | | | We have significant operations focused on customer service, claims management, sales, marketing and various back-house functions. | | | | |
| Capital Management | | | We allocate capital in various ways to run our operations, grow our core businesses and return value to shareholders. | | | | |
| Corporate | | | As a public company and responsible corporate citizen, we expect effective oversight and transparency, and our stakeholders demand it. | | | | |
| Financial Expertise/Literacy | | | Our business involves complex financial transactions and reporting requirements. | | | | |
Independence | | | Independent directors have no material relationships with us and are essential in providing unbiased oversight. | | | | ||
| Industry Experience | | | Experience in the insurance and financial services industry provides a relevant understanding of our business, strategy, and marketplace dynamics. | | | | |
International | | | With global operations in several countries and prospects for further expansion, international experience helps us understand opportunities and challenges. | | | | ||
| Investment Markets | | | We manage a large and long-term investment portfolio to uphold our promises to pay the future claims of our policyholders. | | | | |
Recent Public Board Experience | | | We value individuals who understand public company reporting responsibilities and have experience with the issues commonly faced by public companies. | | | | ||
| Public Company Executive Experience | | | Experience leading a large, widely-held organization provides practical insights on need for transparency, accountability, and integrity. | | | | |
| Regulatory/Risk Management | | | A complex regulatory and risk environment requires us to develop policies and procedures that effectively manage compliance and risk. | | | | |
Technology/Digital Transformation | | | We rely on technology to manage customer data, deliver products and services to the market, pay claims, and | | | |
(1) | Director nominees only. |
(1) | Director nominees only. |
14 2020 PROXY STATEMENT | ||||
(1) | Director nominees only. |
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Director since 2013 Age at Annual Meeting 61 Independent Director Committees Human Capital Regulatory Compliance (chair) | | | Theodore H. Bunting, Jr. | | |||
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| Mr. Bunting retired as the Group President, Utility Operations of Entergy Corporation, an integrated energy company, and previously served as Senior Vice President and Chief Accounting Officer for Entergy. He has extensive financial, accounting and operational experience as a senior executive with a public company in a regulated industry. Mr. Bunting is a director at another publicly traded company and is also a certified public accountant. | | |||||
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| Career Experience | | | Qualifications | | ||
| Entergy Corporation Group President, Utility Operations (2012-2017) Senior Vice President and Chief Accounting Officer (2007-2012) Numerous executive roles with Entergy, which he joined in 1983 | | | Accounting/Auditing Business Operations Capital Management Financial Expertise/Literacy Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management |
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| Public Company Board Experience NiSource Inc., since 2018 | | | |
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Director since 2019 Age at Annual Meeting 60 Independent Director Committees Audit Risk and Finance | | | Susan L. Cross | | |||
| | | | ||||
| Ms. Cross is the former Executive Vice President and Global Chief Actuary of XL Group Ltd (now AXA XL), a global insurance and reinsurance company. She previously held various chief actuarial positions for operational segments of XL. Ms. Cross brings more than three decades of financial, actuarial, insurance and risk experience as a senior executive with an international company in a regulated industry. She also qualifies as an audit committee financial expert under SEC regulations. | | |||||
| | | | ||||
| Career Experience | | | Qualifications | | ||
| XL Group Ltd. Executive Vice President and Global Chief Actuary (2008-2018) Senior Vice President and Chief Actuary, XL Group (2006-2008) XL Reinsurance (2000-2006) XL America (1999-2000) Significant consulting experience with Willis Towers Watson in the U.S. andBermuda | | | Accounting/Auditing Business Operations Capital Management Financial Expertise/Literacy Industry Experience International Public Company Executive Experience Regulatory/Risk Management | | ||
| |
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Director since 2018 Age at Annual Meeting 61 Independent Director Committee Audit Risk and Finance | | | Susan D. DeVore | | |||
| | | | ||||
| Ms. DeVore has served as the Chief Executive Officer of Premier, Inc., a leading health care improvement company, since its initial public offering in 2013. She previously served as President of Premier from 2013 to April 2019, and before that served as President and Chief Executive Officer for its predecessor company, Premier Healthcare Solutions, Inc. She also previously served as the Chief Operating Officer for a number of affiliated Premier entities. Prior to joining Premier, Ms. DeVore had two decades of finance, strategy and health care consulting experience. She also qualifies as an audit committee financial expert under SEC regulations. | | |||||
| | | | ||||
| Career Experience | | | Qualifications | | ||
| Premier, Inc. CEO (since 2013) President (2013-April 2019) Premier Healthcare Solutions, Inc. President and CEO (2009-2013) COO (2006-2009) Significant consulting experience with Ernst & Young LLP, including service as a Partner, Executive Committee member andSenior Healthcare Industry Management Practice Leader | | | Accounting/Auditing Business Operations Capital Management Corporate Governance/ESG Financial Expertise/Literacy Industry Experience Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management Technology/Digital Transformation | | ||
| | ||||||
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| Public Company Board Experience Premier, Inc., since 2013 | | | |
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Director since 2016 Age at Annual Meeting 63 Independent Director Committees Governance Risk and Finance (chair) | | | Joseph J. Echevarria | | |||
| | | | ||||
| Mr. Echevarria retired as the Chief Executive Officer of Deloitte LLP, a global provider of professional services, prior to which he served in increasingly senior leadership positions with Deloitte. He brings to the Board significant experience in finance, accounting, global operations, executive management and corporate governance. Mr. Echevarria has experience as a director at other publicly traded companies and is also a certified public accountant. | | |||||
| | | | ||||
| Career Experience | | | Qualifications | | ||
| Deloitte LLP CEO (2011-2014) Various executive positions during his 36 years with the company | | | Accounting/Auditing Business Operations Capital Management Corporate Governance/ESG Financial Expertise/Literacy Industry Experience International Other Public Company Board Experience Regulatory/Risk Management | | ||
| | ||||||
| Public Company Board Experience Xerox, since 2017 Bank of New York Mellon Corporation, | | |||||
| since 2015 (Non-Executive Chairman since September 2019) Pfizer, since 2015 | |
| | | |||||
Director since 2014 Age at Annual Meeting 64 Independent Director Committees Human Capital (Chair) Regulatory Compliance | | | Cynthia L. Egan | | |||
| | | | ||||
| Ms. Egan retired as the President of T. Rowe Price Retirement Plan Services, Inc., a subsidiary of the global investment management firm T. Row Price Group, Inc. Prior to her work at T. Rowe Price, she held various executive positions at Fidelity Investments. She has significant operational experience in delivering complex financial products and services on a large scale, as well as experience in using technology to lead businesses through growth and operational transitions. Ms. Egan is and has been a director at other publicly traded companies. | | |||||
| | | | ||||
| Career Experience | | | Qualifications | | ||
| U.S. Department of the Treasury Senior Advisor on the development of a Treasury-sponsoredretirement savings program (2014-2015) T. Rowe Price Retirement Plan Services, Inc. President (2007-2012) Fidelity Investments Various leadership and executive positions, includingPresident of the Fidelity Charitable Gift Fund (1989-2007) | | | Business Operations Corporate Governance/ESG Financial Expertise/Literacy Industry Experience Investment Markets Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management Technology/Digital Transformation | | ||
| | ||||||
| Public Company Board Experience BlackRock Fixed Income Funds, since 2016 The Hanover Insurance Group, Inc., since 2015 Envestnet, Inc. (2013-2016) | |
| | | ||||||
Director since 2008 Age at Annual Meeting 63 Independent Director Chairman of the Board of Directors Committees Governance Human Capital | | | Kevin T. Kabat | | ||||
| | | | |||||
| Mr. Kabat is the Chairman of Unum’s Board of Directors, and the retired Chief Executive Officer and Vice Chairman of Fifth Third Bancorp, a diversified financial services company. He also served in numerous executive positions with Fifth Third. He has executive leadership experience, extensive financial, operating and strategic planning expertise and understands the importance of risk management and the challenges of managing a business in a highly regulated industry. Mr. Kabat also has experience serving on boards of publicly traded companies. | | ||||||
| | | ||||||
| Career Experience | | | Qualifications | | |||
| Fifth Third Bancorp CEO (2007-2015) President (2006-2012) Other executive roles, including with predecessor companies | | | Business Operations Capital Management Corporate Governance/ESG Financial Expertise/Literacy Industry Experience Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management | | |||
| | | | |||||
| Public Company Board Experience | | ||||||
| E*TRADE Financial Corporation, since 2016 (Lead Independent Director since 2016) | | ||||||
| NiSource Inc., since 2015 since Fifth Third Bancorp (2007-2016, including ExecutiveChairman from 2008-2010 and Executive Vice Chairmanfrom 2012-2016) |
| |
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Director since 2012 Age at Annual Meeting 58 Independent Director Committees Audit (chair) Risk and Finance | | | Timothy F. Keaney | | ||||
| | | | |||||
| Mr. Keaney retired as the Vice Chairman of the Bank of New York Mellon Corporation (BNY Mellon), a global investments company, prior to which he held various executive positions within the organization. He possesses significant operational, investment and financial experience with a public company in a highly regulated industry, including lengthy periods of executive leadership service in the U.K. Mr. Keaney is considered an | | ||||||
| | | ||||||
| Career Experience | | | Qualifications | | |||
| The Bank of New York Mellon Corporation Vice Chairman (2010-2014) CEO, Investment Services (2013-2014) CEO and co-CEO, Asset Servicing (2007-2012) Other executive roles | | | Accounting/Auditing Business Operations Capital Management Corporate Governance/ESG Financial Expertise/Literacy Industry Experience International Investment Markets Public Company Executive Experience Regulatory/Risk Management |
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Director since 2004 Age at Annual Meeting 70 Independent Director Committees Governance (chair) Regulatory Compliance | | | Gloria C. Larson | | ||||
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| Ms. Larson | | ||||||
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| Career Experience | | | Qualifications | | |||
| Harvard University Graduate School of Education President in Residence (2018-2019) Bentley University President (2007-2018) Foley Hoag LLP Law firm partner and Co-Chair of GovernmentalPractices Group Other leadership positions with the Commonwealth of Massachusetts (Secretary of Economic Affairs) and the Federal Trade Commission (Deputy Director of Consumer Protection) | | | Business Operations Corporate Governance/ESG Financial Expertise/Literacy Other Public Company Board Experience Regulatory/Risk Management | | |||
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| Public Company Board Experience Boston Private Financial Holdings, Inc., since 2015 | |
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Director since 2015 Age at Annual Meeting 51 Director President and CEO | | | Richard P. McKenney | | ||||
| | | | |||||
| Mr. McKenney is the President and Chief Executive Officer of Unum, previously having served as Executive Vice President and Chief Financial Officer. He has significant executive management, financial and insurance industry experience through his prior service as CFO of Unum and other public insurance companies, and through his current service as CEO. He has an intimate knowledge of all aspects of our business and industry, including operational, risk management and public policy, and close working relationships with senior management. Mr. McKenney also has experience serving on boards of publicly traded companies. | | ||||||
| | | ||||||
| Career Experience | | | Qualifications | | |||
| Unum Group President and CEO (since 2015) Chief Financial Officer (2009-2015) Sun Life Financial, Inc. Executive Vice President and Chief Financial Officer | | | Accounting/Auditing Business Operations Capital Management Corporate Governance/ESG Financial Expertise/Literacy Industry Experience International Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management | | |||
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| Public Company Board Experience U.S. Bancorp, since 2017 | |
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Director since 2015 Age at Annual Meeting 63 Independent Director Committees Governance Human Capital | | | Ronald P. O'Hanley | | ||||
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| Mr. O’Hanley is the Chairman, President and Chief | | ||||||
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| Career Experience | | | Qualifications | | |||
| State Street Corporation Chairman, since 2020; President and CEO, since 2019 President and COO (2017-2018)Vice Chairman (during 2017) President and CEO, State Street Global Advisors (2015-2017) Fidelity Investments President of Asset Management and Corporate Services, and member of Executive Committee (2010-2014) Other senior leadership positions with The Bank of New York Mellon Corporation and McKinsey & Company, Inc. | | | Accounting/Auditing Business Operations Capital Management Corporate Governance/ESG Financial Expertise/Literacy Industry Experience International Investment Markets Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management |
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Public Company Board Experience State Street Corporation, since 2019, Chairman since 2020 | |
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Director since 2015 Age at Annual Meeting 59 Independent Director Committees Audit Regulatory Compliance | | | Francis J. Shammo | | ||||
| | | | |||||
| Mr. Shammo joined private equity firm Stonepeak Infrastructure Partners as a consultant in 2019. He retired in 2016 as | | ||||||
| | | ||||||
| Career Experience | | | Qualifications | | |||
| Stonepeak Infrastructure Partners Consultant since 2019 Verizon Communications, Inc. EVP and CFO (2010-2016) President and CEO, Verizon Telecom and Business (2010) President – Wireline (2009-2010) Other executive positions with Verizon and its predecessor, which he joined in 1989 | | | Accounting/Auditing Business Operations Capital Management Financial Expertise/Literacy International Other Public Company Board Experience Public Company Executive Experience Regulatory/Risk Management Technology/Digital Transformation |
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Public Company Board Experience | |||||
| | |
| | 2018 Pay | | | 2019 Pay | | |
All Directors: | | | | | | ||
Annual cash retainer | | | $110,000 | | | $120,000 | |
Annual restricted stock unit award | | | 150,000 | | | 160,000 | |
Committee Chairs: | | | | | | ||
Additional annual cash retainer - Audit Committee | | | 25,000 | | | 25,000 | |
Additional annual cash retainer - Human Capital Committee | | | 20,000 | | | 25,000 | |
Additional annual cash retainer - Risk and Finance Committee | | | 20,000 | | | 25,000 | |
Additional annual cash retainer - Governance Committee | | | 15,000 | | | 25,000 | |
Additional annual cash retainer - Regulatory Compliance Committee | | | 15,000 | | | 25,000 | |
Board Chairman: | | | | | | ||
Additional annual cash retainer (paid 50% in cash and 50% in equity for 2019) | | | 200,000 | | | 225,000 | |
NON-EMPLOYEE DIRECTOR COMPENSATION | ||||
2018 Pay | 2017 Pay | |||
All Directors: | ||||
Annual cash retainer | $110,000 | $110,000 | ||
Annual restricted stock unit award | 150,000 | 150,000 | ||
Committee Chairs: | ||||
Additional annual cash retainer - Audit Committee | 25,000 | 22,500 | ||
Additional annual cash retainer - Human Capital Committee | 20,000 | 17,500 | ||
Additional annual cash retainer - Risk and Finance Committee | 20,000 | 10,000 | ||
Additional annual cash retainer - Governance Committee | 15,000 | 10,000 | ||
Additional annual cash retainer - Regulatory Compliance Committee | 15,000 | 10,000 | ||
Board Chairman: | ||||
Additional annual cash retainer (paid in quarterly installments) | 200,000 | 200,000 |
NON-EMPLOYEE DIRECTOR COMPENSATION | ||||||||
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | All Other Compensation(3) | Total | ||||
Theodore H. Bunting, Jr. | $110,000 | $150,002 | — | $260,002 | ||||
E. Michael Caulfield | 132,500 | 150,002 | 10,000 | 292,502 | ||||
Joseph J. Echevarria | 109,959 | 150,002 | — | 259,961 | ||||
Cynthia L. Egan | 123,354 | 150,002 | 10,000 | 283,356 | ||||
Pamela H. Godwin | 120,000 | 150,002 | — | 270,002 | ||||
Kevin T. Kabat | 260,647 | 150,002 | — | 410,649 | ||||
Timothy F. Keaney | 120,000 | 150,002 | — | 270,002 | ||||
Gloria C. Larson | 119,992 | 150,002 | 10,000 | 279,994 | ||||
Edward J. Muhl | — | — | 5,000 | 5,000 | ||||
Ronald P. O'Hanley | 109,959 | 150,002 | 10,000 | 269,961 | ||||
Francis J. Shammo | 110,000 | 150,002 | — | 260,002 | ||||
Thomas R. Watjen | 80,000 | — | 5,000 | 85,000 |
| Name | | | Fees Earned or Paid in Cash(1) | | | Stock Awards(2) | | | All Other Compensation(3) | | | Total | |
| Theodore H. Bunting, Jr. | | | $145,000 | | | $160,010 | | | — | | | $305,010 | |
| E. Michael Caulfield | | | — | | | — | | | 10,000 | | | 10,000 | |
| Susan L. Cross | | | 119,982 | | | 160,010 | | | 5,000 | | | 284,992 | |
| Susan D. DeVore | | | 120,000 | | | 160,010 | | | — | | | 280,010 | |
| Joseph J. Echevarria | | | 144,968 | | | 160,010 | | | — | | | 304,978 | |
| Cynthia L. Egan | | | 145,000 | | | 160,010 | | | 10,000 | | | 315,010 | |
| Kevin T. Kabat | | | 220,479 | | | 272,497 | | | — | | | 492,976 | |
| Timothy F. Keaney | | | 145,000 | | | 160,010 | | | — | | | 305,010 | |
| Gloria C. Larson | | | 145,000 | | | 160,010 | | | 10,000 | | | 315,010 | |
| Ronald P. O'Hanley | | | 119,974 | | | 160,010 | | | 10,000 | | | 289,984 | |
| Francis J. Shammo | | | 120,000 | | | 160,010 | | | 5,000 | | | 285,010 | |
(1) | Amounts represent retainers, including for service as Board Chairman and committee chairs, which were paid in |
(2) | On May |
Director Name | Number of Unvested Restricted Stock Units at Fiscal Year End | Director Name | Number of Unvested Restricted Stock Units at Fiscal Year End | |
Theodore H. Bunting, Jr. | 3,334 | Kevin T. Kabat | 3,334 | |
E. Michael Caulfield | 3,334 | Timothy F. Keaney | 3,334 | |
Joseph J. Echevarria | 3,334 | Gloria C. Larson | 3,334 | |
Cynthia L. Egan | 3,334 | Ronald P. O'Hanley | 3,334 | |
Pamela H. Godwin | 3,334 | Francis J. Shammo | 3,334 |
| Director Name | | | Number of Restricted Stock Units Held at Fiscal Year End | | | Director Name | | | Number of Restricted Stock Units Held at Fiscal Year End | |
| Theodore H. Bunting, Jr. | | | 4,906 | | | Kevin T. Kabat | | | 8,355 | |
| Susan L. Cross | | | 5,888 | | | Timothy F. Keaney | | | 4,906 | |
| Susan D. DeVore | | | 4,906 | | | Gloria C. Larson | | | 4,906 | |
| Joseph J. Echevarria | | | 4,906 | | | Ronald P. O'Hanley | | | 4,906 | |
| Cynthia L. Egan | | | 4,906 | | | Francis J. Shammo | | | 4,906 | |
(3) | |
Name | Term Expires | Audit | Risk & Finance | Governance | Human Capital | Regulatory Compliance |
Theodore H. Bunting, Jr. | 2018 | ● | ● | |||
E. Michael Caulfield | 2018 | Chair | ● | |||
Susan D. DeVore(1) | 2018 | ● | ||||
Joseph J. Echevarria(2) | 2018 | ● | ● | |||
Cynthia L. Egan(3) | 2018 | Chair | ● | |||
Pamela H. Godwin(4)(5) | 2018 | ● | ● | |||
Kevin T. Kabat(6) | 2018 | Chair | ● | |||
Timothy F. Keaney | 2018 | ● | Chair | |||
Gloria C. Larson | 2018 | ● | Chair | |||
Richard P. McKenney | 2018 | |||||
Ronald P. O'Hanley | 2018 | ● | ● | |||
Francis J. Shammo | 2018 | ● | ● | |||
2017 Committee Meetings | 10 | 6 | 6 | 7 | 5 |
| Name | | | Term Expires | | | Audit | | | Risk & Finance | | | Governance | | | Human Capital | | | Regulatory Compliance | |
| Theodore H. Bunting, Jr. | | | 2020 | | | | | | | | | | • | | | Chair | | ||
| Susan L. Cross | | | 2020 | | | • | | | • | | | | | | | | |||
| Susan D. DeVore | | | 2020 | | | • | | | • | | | | | | | | |||
| Joseph J. Echevarria (1) | | | 2020 | | | | | | Chair | | | • | | | | | | ||
| Cynthia L. Egan | | | 2020 | | | | | | | | | Chair | | | • | | |||
| Kevin T. Kabat | | | 2020 | | | | | | | • | | | • | | | | |||
| Timothy F. Keaney (2) | | | 2020 | | | Chair | | | • | | | | | | | | |||
| Gloria C. Larson | | | 2020 | | | | | | | Chair | | | | | • | | |||
| Richard P. McKenney | | | 2020 | | | | | | | | | | | | |||||
| Ronald P. O'Hanley | | | 2020 | | | | | | | • | | | • | | | | |||
| Francis J. Shammo | | | 2020 | | | • | | | | | | | | | • | | |||
| 2019 Committee Meetings | | | | | 8 | | | 8 | | | 4 | | | 5 | | | 4 | |
(1) |
Mr. Echevarria |
(2) | |
Audit Committee(1) |
• | |
A complete description of the responsibilities of the Audit Committee is included in the Report of the Audit Committee on page 41. |
Governance Committee(2) |
Human Capital Committee(3) |
Regulatory Compliance Committee(4) |
Risk and Finance Committee(5) |
| |
(1) | All members of the Audit Committee meet the independence requirements of the SEC and the NYSE and our corporate governance guidelines. All five members of the Audit Committee are “audit committee financial experts” under SEC regulations, and are “financially literate” as required by the NYSE. |
(2) | All members of the Governance Committee meet the independence requirements of the NYSE and our corporate governance guidelines. |
(3) | All members of the Human Capital Committee meet the independence requirements of the NYSE for directors and compensation committee members and our corporate governance guidelines and are “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. |
(4) | All members of the Regulatory Compliance Committee meet the independence requirements of our corporate governance guidelines. |
(5) | All members of the Risk and Finance Committee meet the independence requirements of our corporate governance guidelines. |
In the late summer and early fall, we begin our shareholder engagement efforts by contacting each of our top 50 investors, which in | ||||
| Record earnings | | | | |
| |||||
Unum achieved strong earnings per share and record after-tax adjusted operating earnings per share, continuing our recent history of strong financial performance. For | | | | ||
| Return on equity | | | | |
| We continued to put | | | | |
| Book value | | | | |
| Our book value per share at the end of | | | |
(1) |
Unum US | | | |
| |||
Our Unum US segment, representing 64.2% of our consolidated premium income in 2019, continued its trend of profitable growth. The business delivered healthy premium increases and strong persistency while maintaining strong margins and industry-leading return on equity. Combined with the ongoing integration of new products and growth in our segment, Unum US delivered record adjusted operating income. | | ||
| | ||
Unum International | | ||
| | ||
Our Unum International segment, representing 6.7% of our consolidated premium income in 2019, continued to adjust to the ongoing headwinds from the uncertain environment in Europe due, in part, to Brexit. While adjusted operating income was down year-over-year, the addition of Unum Poland and growth of voluntary benefits in the U.K. helped drive premium and sales growth in our International segment. | | ||
| |||
Colonial Life | | ||
| | ||
Our Colonial Life segment, representing 18.0% of our consolidated premium income in 2019, strengthened the business through adjustments to its distribution strategy and enhancements to its capabilities. Growth improved in the latter half of the year as these changes drove positive sales and premium trends. Consistent with past years, Colonial Life continues to generate solid margins and returns. | |
| | | 1 Year | | | 3 Year | | | 5 Year | | |
| Unum | | | 2.6% | | | (28.53)% | | | (5.92)% | |
| Proxy Peer Group | | | 31.27 | | | 25.57 | | | 50.66 | |
| S&P 500 | | | 31.49 | | | 53.17 | | | 73.86 | |
| S&P Life & Health Index | | | 23.18 | | | 13.63 | | | 32.92 | |
Our Five investors, representing approximately 21% of our |
• | |
Continuation of the use of the CEO Compensation Summary (see page 7); |
• | Continuing to enhance disclosure related to our Environmental, Social and Governance journey and related initiatives (see page 37); and |
• | Expanding board gender diversity including leadership representation (see page 14). |
| | | | | | | | | | | |
| | | | | SHORT-TERM | | | LONG-TERM | | | | ||||||
| | | |||||||||||||||
BASE PAY | ANNUAL INCENTIVE | | | PERFORMANCE- BASED RSUs | | PSUs | | | RETIREMENT & WORKPLACE BENEFITS | |
| Primary Purpose | | | Reflects the market for similar positions as well as individual skills, abilities & performance | | | Rewards short-term performance(1) | | | Rewards long-term performance, aligns interest with stockholders & promotes a culture of ownership and accountability(1) | | | Addresses health, welfare & retirement needs | | |||
| Performance Period | Ongoing | | | 1 year | | | | | 3 years prospective | | | N/A | | |||
Form | | | <--------------- Cash ---------------> | | | <--------------- Equity ---------------> | | | N/A | | |||||||
| Payment/Grant Date | | Ongoing | | | <----- In March based on prior year performance -----> | | | Ongoing | |
(1) | |
For details on performance measures see “Annual and Long-Term Incentive Programs” beginning on page 57. |
(2) | A performance threshold goal must be achieved before participants are eligible to receive an award. If the goal is not achieved, no awards are earned. |
| | | | | | | | | Proxy Peer Group Indicators | |
| Company | | | DIS Survey Participant(1) | | | PSU Peer Group(2) | | | 2019 Proxy Peer Group(3) | | Life & Health GICS | | | 0.4x to 2.5x Unum Revenues | | | 0.4x to 2.5x Unum Assets | | | 0.5x to 5.0x Unum Market Capitalization | | | List Unum as a Peer | | |
Aflac | • | • | | • | | | • | | | • | | | • | | | • | | | • | | ||||||
AIG | | | • | | | | | | | | | | | | | | | | ||||||||
Allstate | | | • | | | | | | | | | | | | | | | | ||||||||
AXA Group | | | • | | | | | | | | | | | | | | | | ||||||||
| Brighthouse Financial | | | • | | | | | • | | | • | | | • | | | | | • | | | • | | ||
| Cigna | | | • | | | | | | | | | | | | | | | | |||||||
| CNO Financial Group | | • | • | | | • | | | • | | | • | | | | | • | | |||||||
| Genworth Financial | | • | | | | | | | | | | | | | |||||||||||
Globe Life (f/k/a Torchmark) | | | | • | | | • | | | • | | | • | | | • | | | • | | | • | | |||
| Guardian Life | | | • | | | | | | | | | | | | | | | | |||||||
| Hartford Financial Services Group | • | | • | • | | | | | • | | | | | • | | | • | | |||||||
| John Hancock | | • | | | | | | | | | | | | | | | | ||||||||
| Lincoln | • | • | • | | | • | | | • | | | | | • | | | • | | |||||||
| Massachusetts Mutual | | • | | | | | | | | | | | | | | | | ||||||||
MetLife | • | | | • | | | • | | | • | | | | | | | | | | |||||||
Nationwide | | | • | | | | | | | | | | | | | | | | ||||||||
| New York Life | | • | | | | | | | | | | | | | | | | ||||||||
| Northwestern Mutual | | • | | | | | | | | | | | | | | | | ||||||||
| OneAmerica Financial Partners | | • | | | | | | | | | | | | | | | | ||||||||
| Pacific Life | | • | | | | | | | | | | | | | | | | ||||||||
Principal Financial Group | • | • | | • | | | • | | | • | | | | | • | | | | ||||||||
Protective Life | • | | | | | | | | | | | | | | | | ||||||||||
| Prudential Financial | | | • | | | • | | | • | | | • | | | | | | | • | | | | |||
| Reinsurance Group of America | | | | • | | | | | • | | | • | | | • | | | • | | ||||||
| Securian Financial Group | | • | | | | | | | | | | | | | | | | ||||||||
| Sun Life Financial | | • | | | | | | | | | | | | | | | | ||||||||
Symetra Financial | | • | | | | | | | | | | | | | | | | |||||||||
Thrivent Financial | | | • | | | | | | | | | | | | | | | | ||||||||
Transamerica | • | | | | | | | | | | | | | | ||||||||||||
USAA | | | • | | | | | | | | | | | | | | | | ||||||||
Voya Financial Services | • | | • | • | | | | | • | | | | | • | | | • | |
(1) | |
For compensation decisions made in early |
(2) | |
This peer group will be used for the relative TSR comparison under the |
(3) | |
The Proxy Peer Group includes both property and casualty insurers and life and health insurers, with Unum’s assets equal to 40% of the peer median as of December 31, 2018, |
• | Severance Benefits: Like other NEOs, Mr. Zabel entered into a standalone change in control severance agreement with the company providing for enhanced severance benefits in the event of a termination of employment following a change in control. The specific terms of such agreements are outlined on page 88. |
| | | CEO | | | | | Other NEOs | ||
| ✓ | | | Financial performance | | | ✓ | | | Demonstrated performance |
✓ | | | Leads strategy and | |||||||
✓ | ||||||||||
| Commitment to the enterprise and their business unit | |||||||||
✓ | | | Directs resources and talent to achieve strategic initiatives | | | ✓ | | | Ability to balance complex and competing factors | |
| ✓ | | | Drives execution | | | ✓ | | | Humility and ego maturity |
| ✓ | | | Manages risk while leading for the future | | | ✓ | | | Effectively manages board relations |
| ✓ | | | Sets cultural norms | | | ✓ | | | Strategic |
| ✓ | | | Understands and proactively addresses emerging issues | | | ✓ | | | Demonstrates leadership |
| ✓ | | | Builds relationships and communicates to all stakeholders | | | ✓ | | | Building and sustaining a high-functioning organization |
| ✓ | | | Understands governance and fosters board relationships | | | | |
| Incentive Metric | | | 2019 Weighting | | | | | Purpose | |
| After-Tax Adjusted Operating Income | | | 35% | | | ⇨ | | | Measures profitability achievement |
| Consolidated Adjusted Operating Return on Equity | | | 15% | | | ⇨ | | | Measures effectiveness of balancing profitability and capital management priorities |
| Earned Premium | | | 15% | | | ⇨ | | | Measures growth and competitiveness of the business |
| Sales | | | 15% | | |||||
| Customer Experience | | | 10% | | | ⇨ | | | Measures effective and efficient customer service |
| Operating Expense Ratio | | | 10% | |
| If the 2019 Performance Threshold was met, then: | |
| ($) | | | × | | | (%) | | | × | | | (%) | | | = | | | ($) | |
| 2019 Annual Incentive Target for NEOs | | | 2019 Company Performance(1) | | | 2019 Individual Performance(2) | | | 2019 Annual Incentive Award | | |||||||||
| | | | | | | | | | | |
| If threshold was not met, then no award is paid | |
| (1) | | | The Committee exercises discretion as to the final percentage considering all performance factors, including, but not limited to, the quality of financial results. For details on adjustments for 2019, see page 59. | |
| (2) | | | Individual performance may range from 0% to 125%. Individual performance adjustments for 2019 are described beginning on page 66. | |
2017 ANNUAL INCENTIVE AWARD PERFORMANCE TARGETS AND RESULTS ($s/£s IN MILLIONS) | |||||
Performance Measure | Component Weighting | Threshold(1) | Target | Maximum | Actual |
Unum Group | |||||
After-tax adjusted operating income(2) | 35% | $688.8 | $918.4 | $1,056.2 | $976.2 |
Consolidated adjusted operating return on equity(3) | 15% | 8.22% | 10.95% | 12.60% | 11.6% |
Earned premium(4) | 15% | $6,355.2 | $7,476.7 | $8,972.1 | $7,467.9 |
Sales | 15% | $1,248.4 | $1,664.6 | $2,330.4 | $1,734.6 |
Customer experience(5) | 10% | 270% | 300% | 450% | 307% |
Operating expense ratio(6) | 10% | 19.70% | 17.70% | 15.70% | 17.42% |
Investments | |||||
Net investment income(7) | 50% | $2.299.6 | $2,424.6 | $2,549.6 | $2,454.3 |
Avoided losses(8) | 25% | $(100.0) | $7.4 | $150.0 | $14.9 |
Market composite(9) | 25% | 83% | 100% | 175% | 119.2% |
TARGETS FOR PERFORMANCE SHARE UNITS (PSUs) GRANTED IN 2017 | |||||
Corporate Performance Factors | Driver of Shareholder Value | Component Weighting | Threshold | Target | Maximum |
Average 3-year Adjusted Operating Return on Equity (2017-2019) | Capital Management Effectiveness | 50% | 8.10% | 10.80% | 12.42% |
Average 3-year After-Tax Adjusted Operating EPS (2017-2019) | Profitability | 50% | $3.22 | $4.30 | $4.95 |
Relative Total Shareholder Return | Modifier Percentile | -20% @ 35th | 0 @ 50th | +20% @ 75th |
| | | Threshold(1) | | | Target(1) | | | Maximum(1) | | | Component Weight | | | Result | | |
| Unum Group (actual results in blue) | | |||||||||||||||
After-tax adjusted operating income(2) | | | | | 35% | | | Slightly below target | | ||||||||
| Consolidated adjusted operating return on equity(3) | | | | | 15% | | | Slightly below target | | |||||||
| Earned premium(4) | | | | | 15% | | | Slightly below target | | |||||||
| Sales | | | | | 15% | | | Below target | | |||||||
| Customer experience(5) | | | | | 10% | | | Below target | | |||||||
| Operating expense ratio(6) | | | | | 10% | | | Above target | | |||||||
| | | | | | | | | | | |
(1) | For each performance measure, there is no payout at or below the threshold. The payout would be 150% for performance at or above the maximum. For performance between defined levels, the payout is interpolated. |
(2) | After-tax adjusted operating income is defined as net income adjusted to exclude after-tax net realized investment gains or losses and certain other items specified in the reconciliation of non-GAAP financial measures in Appendix A of this proxy statement. |
(3) | Consolidated adjusted operating return on equity is calculated by dividing after-tax adjusted operating income by the average of the beginning- and end-of-year stockholders’ equity adjusted to exclude the net unrealized gain or loss on securities and the net gain on hedges. |
(4) | Earned premium is calculated for our core operations (Unum US, Unum International, and Colonial Life). |
(5) | Customer experience is based on the quality of our customers' experiences and includes measures focused on areas that impact customer loyalty and satisfaction. |
(6) | The operating expense ratio is equal to operating expenses as a percentage of earned premium (or total company expense over total company earned premium) inclusive of the Closed Block and Corporate segments. |
2017 ANNUAL BASE SALARY DECISIONS | |||
Name | 2017 | 2016 | Change |
Mr. McKenney | $1,000,000 | $1,000,000 | – |
Mr. McGarry | 630,000 | 600,000 | +5.0% |
Mr. Simonds | 615,000 | 600,000 | +2.5% |
Ms. Farrell | 460,000 | 453,000 | +1.5% |
Ms. Iglesias | 505,000 | 495,000 | +2.0% |
2017 ANNUAL INCENTIVE TARGET DECISIONS | |||
Name | 2017 | 2016 | Change |
Mr. McKenney | 175% | 175% | – |
Mr. McGarry | 100% | 100% | – |
Mr. Simonds | 90% | 90% | – |
Ms. Farrell | 120% | 120% | – |
Ms. Iglesias | 75% | 75% | – |
2017 LONG-TERM INCENTIVE TARGET DECISIONS | |||
Name | 2017 | 2016 | Change |
Mr. McKenney | $5,500,000 | $5,250,000 | +4.8% |
Mr. McGarry | 175% | 150% | +25 pts |
Mr. Simonds | 160% | 150% | +10 pts |
Ms. Farrell | 110% | 100% | +10 pts |
Ms. Iglesias | 125% | 125% | – |
| | 90% | |
(for 2019 performance) |
| Executive | | | 2019 Incentive Target (%) | | | | | Eligible Earnings ($) | | | | | Company Performance (%) | | | | | Individual Performance (%) | | | | | 2019 Annual Incentive Paid ($) | | ||||
| Mr. McKenney | | | 200% | | | X | | | 1,000,000 | | | X | | | 90% | | | X | | | 95% | | | = | | | 1,710,000 | |
| Mr. Zabel(1) | | | 83.26% | | | X | | | 456,308 | | | X | | | 90% | | | X | | | 120% | | | = | | | 410,335 | |
| Mr. Simonds(2) | | | 110% | | | X | | | 634,817 | | | X | | | 90% | | | X | | | 100% | | | = | | | 628,469 | |
| Mr. Arnold | | | 90% | | | X | | | 500,035 | | | X | | | 90% | | | X | | | 100% | | | = | | | 405,029 | |
| Ms. Iglesias | | | 95% | | | X | | | 544,277 | | | X | | | 90% | | | X | | | 100% | | | = | | | 465,357 | |
| Mr. McGarry | | | 110% | | | X | | | 606,981 | | | X | | | 90% | | | X | | | 100% | | | = | | | 600,911 | |
(1) | Mr. Zabel’s annual incentive target was increased from 60% to 100% upon his promotion to Chief Financial Officer in July 2019. His actual 2019 annual incentive target was prorated (rounded to two decimal places) based on his time in each position. Additionally, his eligible earnings are different from the annual salary amount because his promotion was effective in July 2019. |
ANNUAL INCENTIVE PAID IN 2018 | (for 2017 performance) | ||||||||
Executive | 2017 Incentive Target (%) | Eligible Earnings ($) | Company Performance (%) | Individual Performance (%) | 2017 Annual Incentive Paid ($) | ||||
Mr. McKenney(1) | 175% | X | 1,000,000 | X | 120% | X | 115% | = | 2,415,000 |
Mr. McGarry(1) | 100% | X | 623,077 | X | 120% | X | 110% | = | 822,462 |
Mr. Simonds(1) | 90% | X | 611,538 | X | 120% | X | 120% | = | 792,554 |
Ms. Farrell(2) | 120% | X | 458,385 | X | 118.5% | X | 100% | = | 651,822 |
Ms. Iglesias(1) | 75% | X | 502,692 | X | 120% | X | 100% | = | 452,423 |
| If the 2018 Performance Threshold was met, then: | |
| ($) | | | × | | | (%) | | | = | | | ($) | |
| 2018 Long-term Incentive Target for NEOs | | | 2018 Individual Performance(1) | | | 2019 Long-term Incentive Award | | ||||||
| | | | | | | | | |
| If threshold was not met, then no award granted | |
| (1) | | | |
• | Applying the individual long-term incentive targets, which were set in early 2018 by considering the market data from the appropriate comparator group (as described beginning on page 51 of our 2019 Proxy Statement ) as well as each individual’s target relative to other NEOs, given their respective levels of responsibility, to each individual’s base salary, except that, the long-term incentive target was set as a dollar amount for Mr. McKenney; |
• | Establishing an individual performance percentage (from 0% to 125%) using the individual assessment process described beginning on page 56 (for a discussion of the individual NEO performance assessments for 2018 that determined the individual performance percentage for these 2019 grants, other than for Mr. Zabel, see disclosure beginning on page 65 of our 2019 Proxy Statement). For Mr. Zabel, the Committee applied an individual performance percentage |
LONG-TERM INCENTIVE GRANTED IN 2019 | | | (for 2018 Performance) |
| Executive | | | 2018 Long-Term Incentive Target | | | | | Individual Performance | | | | | 2019 Long-Term Incentive Grant(2) | | ||
| Mr. McKenney(1) | | | $6,500,000 | | | X | | | 95% | | | = | | | $6,175,000 | |
| Mr. Zabel | | | 300,000 | | | X | | | 95% | | | = | | | 285,000 | |
| Mr. Simonds | | | 1,103,156 | | | X | | | 110% | | | = | | | 1,213,472 | |
| Mr. Arnold | | | 625,044 | | | X | | | 105% | | | = | | | 656,296 | |
| Ms. Iglesias | | | 682,760 | | | X | | | 110% | | | = | | | 751,036 | |
| Mr. McGarry | | | 1,260,000 | | | X | | | 100% | | | = | | | 1,260,000 | |
Mr. McKenney’s target was set as a dollar amount, rather than as a percentage of salary as for the other NEOs. |
(2) | The amount shown is the award approved by the Committee for each NEO. This amount is then converted to the respective number of PBRSUs and PSUs based on the closing stock price on the date of grant. The amount included in the Summary Compensation Table on page 79 was calculated using the closing stock price for PBRSUs and the Monte Carlo valuation methodology for PSUs. |
| Executive | | | PBRSUs Granted (Mar. 2019) | | | PSUs Granted (Mar. 2019) | |
| Mr. McKenney | | | 81,962 | | | 81,962 | |
| Mr. Zabel | | | 5,469 | | | 1,823 | |
| Mr. Simonds | | | 16,107 | | | 16,107 | |
| Mr. Arnold | | | 8,711 | | | 8,711 | |
| Ms. Iglesias | | | 9,969 | | | 9,969 | |
| Mr. McGarry | | | 16,724 | | | 16,724 | |
| Corporate Performance Factors | | | Driver of Shareholder Value | | | Component Weighting | | | Threshold | | | Target | | | Maximum | |
| Unum Group | | | | | | | | | | | | |||||
| | Capital Management Effectiveness | | | 50% | | | | ||||||||
Average 3-year After-Tax Adjusted Operating EPS (2019-2021) |
| | 50% | | | | ||||||||
| |||||||||||||
Relative Total Shareholder Return | | Modifier Percentile | | | -20% @ 35th | | | 0 @ 50th | | | +20% @ 75th | |
LONG-TERM INCENTIVE GRANTED IN 2017 | (for 2016 Performance) | ||||
Executive | Long-Term Incentive Target | Individual Performance | 2017 Long-Term Incentive Grant(2) | ||
Mr. McKenney(1) | $5,250,000 | X | 105% | = | $5,512,500 |
Mr. McGarry | 900,000 | X | 111% | = | $1,000,000 |
Mr. Simonds | 900,000 | X | 111% | = | $1,000,000 |
Ms. Farrell | 453,000 | X | 105% | = | $475,650 |
Ms. Iglesias | 618,750 | X | 100% | = | $618,750 |
Executive | Grant Date Fair Market Value | Performance Share Units Granted (Mar. 2017) | Restricted Stock Units Granted (Mar. 2017) |
Mr. McKenney | $5,499,957 | 55,154 | 55,154 |
Mr. McGarry | 999,992 | 10,028 | 10,028 |
Mr. Simonds | 999,992 | 10,028 | 10,028 |
Ms. Farrell | 475,664 | 4,770 | 4,770 |
Ms. Iglesias | 618,763 | 6,205 | 6,205 |
2015 PERFORMANCE SHARE UNIT (PSU) AWARDS | |||||
Corporate Performance Factors | Component Weighting | Threshold | Target | Maximum | Actual |
Average 3-year Adjusted Operating Return on Equity (2015-2017) | 50% | 8.12% | 10.83% | 12.45% | 11.33% |
Average 3-year After-Tax Adjusted Operating EPS (2015-2017) | 50% | $2.82 | $3.76 | $4.33 | $3.93 |
Relative Total Shareholder Return | Modifier Percentile | -20% @ 35th | 0 @ 50th | +20% @ 75th | @ 87.5th |
| Corporate Performance Factors | | | Component Weighting | | | Threshold | | | Target | | | Maximum | | | Result | |
| Unum Group | | | | | | | | | | | | |||||
| Average 3-year Adjusted Operating Return on Equity (2017-2019) | | | 50% | | | | | Above Target 12.51% | | |||||||
| Average 3-year After-Tax Adjusted Operating EPS (2017-2019) | | | 50% | | | | | Above Target $4.98 | | |||||||
| Relative Total Shareholder Return | | | Modifier Percentile | | | -20% @ 35th | | | 0 @ 50th | | | +20% @ 75th | | | @ 0th | |
2018 ANNUAL BASE SALARY DECISIONS | |||
Name | 2018 | 2017 | Change |
Mr. McKenney | $1,000,000 | $1,000,000 | – |
Mr. McGarry | 630,000 | 630,000 | – |
Mr. Simonds | 630,375 | 615,000 | +2.5% |
Ms. Farrell | 460,000 | 460,000 | – |
Ms. Iglesias | 525,200 | 505,000 | +4.0% |
2018 ANNUAL INCENTIVE TARGET DECISIONS | |||
Name | 2018 | 2017 | Change |
Mr. McKenney | 200% | 175% | +25 pts |
Mr. McGarry | 110% | 100% | +10 pts |
Mr. Simonds | 100% | 90% | +10 pts |
Ms. Farrell | 120% | 120% | – |
Ms. Iglesias | 90% | 75% | +15 pts |
2018 LONG-TERM INCENTIVE TARGET DECISIONS | |||
Name | 2018 | 2017 | Change |
Mr. McKenney | $6,500,000 | $5,500,000 | +18.2% |
Mr. McGarry | 200% | 175% | +25 pts |
Mr. Simonds | 175% | 160% | +15 pts |
Ms. Farrell | 110% | 110% | – |
Ms. Iglesias | 130% | 125% | +5 pts |
(1) | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2020 were adjusted based on 2019 performance and therefore are shown as 2019 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 79), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
| STEVEN A. ZABEL, Executive Vice President, Chief Financial Officer | | |||||||
| | | |||||||
| ANNUAL COMPENSATION(1) | | In assessing Mr. Zabels’s performance for 2019, the Committee noted that he: • Effectively transitioned into the Chief Financial Officer role. Mr. Zabel continued to foster a strong culture of performance and inclusion in the Finance organization and backfilled other key leadership roles with seasoned internal talent; | ||||||
| 2019 | | |||||||
| Base Salary | | | $456,308 | | ||||
| AI | | | $410,335 | | ||||
| LTI | | | $721,629 | | ||||
| 2020 | | |||||||
| Base Salary | | | $600,000 | | | • Achieved substantially all of the company’s financial objectives. Unum delivered growth in earnings per share, premiums, statutory earnings and book value per share while navigating a challenging environment; • Maintained a strong capital position. We returned value to shareholders through our ongoing share repurchase program and a nearly 10% dividend increase, and further improved our flexibility to invest in growth; • Strengthened relationships with key internal and external constituents. Mr. Zabel continued to develop partnerships and credibility with Unum’s board and senior leadership team, and with the investment community; and • Enhanced the stability of the Closed Block. Mr. Zabel implemented changes that placed the long-term care block on a path of greater sustainability and executed an effective leadership transition in the Closed Block upon his move to CFO. | | |
| AI | | | 110% | | ||||
| LTI | | | 200% | | ||||
| | | | ||||||
| COMPENSATION TARGETS | | |||||||
| 2019 for CFO | | |||||||
| Base Salary | | | $575,000 | | ||||
| AI Target | | | 100% | | ||||
| LTI Target | | | 175% | | ||||
| 2019 for Closed Block | | |||||||
| Base Salary | | | $358,000 | | ||||
| AI Target | | | 60% | | ||||
| LTI Target | | | $300,000 (approx. 84%) | | ||||
| | | | ||||||
| Given these accomplishments, the Committee applied individual performance percentages of 120% for Mr. Zabel’s 2019 annual incentive award and 120% for his long-term incentive award granted in March 2020. |
(1) | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2020 were adjusted based on 2019 performance and therefore are shown as 2019 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 79), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
| MICHAEL Q. SIMONDS, Executive Vice President, Chief Operating Officer | | |||||||
| | | |||||||
| ANNUAL COMPENSATION(1) | | | In assessing Mr. Simonds' performance for 2019, the Committee noted that he: • Led Unum US to solid financial results. Unum US delivered record adjusted operating income, strong margins and industry-leading return on equity while continuing to grow premiums and maintain strong persistency; | |||||
| 2019 | | | ||||||
| Base Salary | | | $634,817 | | ||||
| AI | | | $628,469 | | ||||
| LTI | | | $1,232,000 | | ||||
| 2018 | | | • Continued to drive meaningful operational improvements in Unum US. Technology enhancements have resulted in greater process efficiencies, improved experiences for our customers and new products; • Positioned Unum US for growth. The integration of new dental and vision products, the cultivation of our new stop loss offering, and the ongoing development of our services segment provide significant competitive advantages; • Drove transformational change across the enterprise. In partnership with the CEO and board, Mr. Simonds implemented plans to realign the business operations of Unum to position us for stronger growth; and • Built a lasting culture of change within Unum US. Through his strong leadership team, Mr. Simonds has mentored key talent and fostered inclusion and diversity within the organization. | | ||||
| Base Salary | | | $627,418 | | ||||
| AI | | | $627,418 | | ||||
| LTI | | | $1,213,472 | | ||||
| | | | ||||||
| COMPENSATION TARGETS | | |||||||
| 2020 | | |||||||
| Base Salary | | | $700,000 | | ||||
| AI Target | | | 130% | | ||||
| LTI Target | | | 250% | | ||||
| 2019 | | |||||||
| Base Salary | | | $640,000 | | ||||
| AI Target | | | 110% | | ||||
| LTI Target | | | 175% | | ||||
| | | | ||||||
| Given these accomplishments, the Committee applied individual performance percentages of 100% for Mr. Simonds’ 2019 annual incentive award and 110% for his long-term incentive award granted in March 2020. As discussed above, in light of his accomplishments, Mr. Simonds was appointed Chief Operating Officer effective February 1, 2020, and his 2020 compensation was correspondingly increased to reflect his additional responsibilities. | |
(1) | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2020 were adjusted based on 2019 performance and therefore are shown as 2019 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 79), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
| TIMOTHY G. ARNOLD, Executive Vice President, Voluntary Benefits and President, Colonial Life | | |||||||
| | | |||||||
| ANNUAL COMPENSATION(1) | | | In assessing Mr. Arnold's performance for 2019, the Committee noted that he: • Took important steps to strengthen the Colonial Life business. Through adjustments to our distribution strategy and enhancements to our capabilities, Colonial Life is on a more sustainable growth path in a changing voluntary benefits market; | |||||
| 2019 | | | ||||||
| Base Salary | | | $500,035 | | ||||
| AI | | | $405,029 | | ||||
| LTI | | | $687,548 | | ||||
| 2018 | | | • Drove continued technology enhancements at Colonial Life. Tools such as our Agent Assist app and ongoing progress in automation and modernization are improving our support of distribution partners and customers; • Differentiated Colonial Life in a crowded marketplace. Continued development of our already-strong capabilities in enrollment, benefits execution and product portfolio enhancments provide a meaningful competitive differentiator for the brand; • Was instrumental in establishing a future vision for voluntary benefits at Unum. His deep knowledge of the voluntary benefits industry and his success at Colonial Life are key to taking advantage of significant growth opportunities in this space; and • Continued to foster a strong culture. Mr. Arnold had developed a strong sense of shared mission and community at Colonial Life while emphasizing inclusion and diversity and shepherding a deep talent pipeline. | | ||||
| Base Salary | | | $497,144 | | ||||
| AI | | | $447,429 | | ||||
| LTI | | | $656,296 | | ||||
| | | | ||||||
| COMPENSATION TARGETS | | |||||||
| 2020 | | |||||||
| Base Salary | | | $500,035 | | ||||
| AI Target | | | 90% | | ||||
| LTI Target | | | 125% | | ||||
| 2019 | | |||||||
| Base Salary | | | $500,035 | | ||||
| AI Target | | | 90% | | ||||
| LTI Target | | | 125% | | ||||
| | | | ||||||
| Given these accomplishments, the Committee applied individual performance percentages of 100% for Mr. Arnold’s 2019 annual incentive award and 110% for his long-term incentive award granted in March 2020. | |
(1) | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2020 were adjusted based on 2019 performance and therefore are shown as 2019 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 79), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
| ||||||||
| | | ||||||
| ANNUAL COMPENSATION(1) | | In assessing Ms. Iglesias' performance for 2019, the Committee noted that she: • Effectively led and aligned various corporate teams with the needs of the business. Through her leadership of legal, audit, government affairs, ethics, compliance and supply management, these teams supported the evolving needs of the business; | |||||
| 2019 | | ||||||
| Base Salary | | | $544,277 | | |||
| AI | | | $465,357 | | |||
| LTI | | | $742,500 | | |||
| 2018 | | ||||||
| Base Salary | | | $521,315 | | |||
| AI | | | $469,184 | | | • Was influential in driving workplace change. Ms. Iglesias has continued to be a leader in our efforts to build a culture of inclusion and has delivered on our vision to create a more collaborative, flexible and dynamic work environment; • Enhanced our brand and reputation with external constituents. She and her team have taken a leadership role in communicating the social value of our business and our strong governance practices to legislators, advocacy groups and regulators; • Continued her work to further strengthen our culture of ethical conduct. Ms. Iglesias and her team are persuasive advocates for our Unum values and encourage ethical conduct through ongoing communication, education and awareness; and • Focused on building a strong leadership pipeline. Given the breadth of her responsibilities, developing effective leaders across her teams is critical to ensuring we remain prepared for the future. | |
| LTI | | | $751,036 | | |||
| | | | |||||
| COMPENSATION TARGETS | | ||||||
| 2020 | | ||||||
| Base Salary | | | $550,000 | | |||
| AI Target | | | 95% | | |||
| LTI Target | | | 135% | | |||
| 2019 | | ||||||
| Base Salary | | | $550,000 | | |||
| AI Target | | | 95% | | |||
| LTI Target | | | 135% | | |||
| | | | |||||
| Given these accomplishments, the Committee applied individual performance percentages of 100% for Ms. Iglesias' 2019 annual incentive award and 100% for her long-term incentive award granted in March 2020. |
(1) | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2020 were adjusted based on 2019 performance and therefore are shown as 2019 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 79), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
(1) | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual incentive paid in 2020 was adjusted based on 2019 performance and therefore is shown as 2019 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 79), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
| | STOCK OWNERSHIP AND RETENTION REQUIREMENTS FOR SENIOR OFFICERS | | |
| | | | | Ownership as Percent of Salary | | | Retention Requirements | | | | ||||||
| | | | | Required | | | Retention Percent | | | Holding Period | | | | |||
| | | Chief Executive Officer | | | 6x | | | 75% | | | 3 years | | | | ||
| | | Executive Vice President | | | 3x | | | 60% | | | 1 year | | | | ||
| | | Senior Vice President | | | 1x | | | 50% | | | 1 year | | | |
STOCK OWNERSHIP AND RETENTION REQUIREMENTS FOR CURRENT NEOs | | | (as of December 31, 2019) |
| | | | | | | Ownership as Percent of Salary | | | Retention Requirements | |
| Executive | | | Common Stock(1) | | | Restricted Stock Units(2) | | | Total Current Ownership | | | Owned | | | Required | | | Retention Percent(3) | | | Holding Period(4) | |
| Mr. McKenney | | | $11,127,555 | | | $4,426,671 | | | $15,554,226 | | | 15.6x | | | 6x | | | 75% | | | 3 years | |
| Mr. Zabel | | | 228,011 | | | 239,601 | | | 467,612 | | | 0.8x | | | 3x | | | 60% | | | 1 year | |
| Mr. Simonds | | | 2,116,248 | | | 826,659 | | | 2,942,907 | | | 4.6x | | | 3x | | | 60% | | | 1 year | |
| Mr. Arnold | | | 741,465 | | | 444,363 | | | 1,185,828 | | | 2.4x | | | 3x | | | 60% | | | 1 year | |
| Ms. Iglesias | | | 1,187,955 | | | 510,380 | | | 1,698,335 | | | 3.1x | | | 3x | | | 60% | | | 1 year | |
(1) | Amount includes shares held in certificate form, brokerage accounts, and 401(k) Plan accounts. Shares were valued using a closing stock price of $29.16 on December 31, 2019. |
(2) | Shares/units were valued using a closing stock price of $29.16 on December 31, 2019. Performance-based restricted stock units (PBRSUs) vest over three years (see the Vesting Schedule for Unvested Restricted Stock Units table on page 84). |
(3) | Retention percentage is the net percentage of shares to be held after the payment of taxes and the costs of exercise and commissions. Retention requirements apply to shares acquired upon the exercise of options and the vesting of PBRSUs and PSUs. |
(4) | After this holding period, the officer would then be able to sell the shares as long as his or her ownership requirement is met or would be reached in the time period allotted. |
• | A tax gross-up is provided to employees who incur income on company-sponsored events where attendance is expected, including a limited number of events we host each year to recognize the contributions of various employees. These functions serve specific business purposes, and in some cases the attendance of a NEO and his or her spouse or guest is expected. If so, we attribute income to the NEO for these costs when required under Internal Revenue Service regulations. For more information, see the All Other Compensation table on page 80. |
| Unum Group Pension Plan (Qualified Plan) | |
| Provides funded, tax-qualified benefits up to the limits on compensation and benefits under the Code. The Qualified Plan was designed to provide tax-qualified pension benefits for most employees. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Qualified Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Unum Group Supplemental Pension Plan (Excess Plan) | |
| Provides unfunded, non-qualified benefits for compensation that exceeds the Code limits applicable to the Qualified Plan. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Excess Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Credited service | |
| Measures of the time individuals are employed at the company. One year of credited service is granted for each plan year in which 1,000 hours of employment are completed. No additional credited service will accrue to any participant after December 31, 2013. | |
| Highest average earnings | |
| The average of the highest 5 years of compensation (whether or not consecutive) during the earlier of the last 10 years of employment or as of the date the plan was frozen on December 31, 2013. | |
| Social Security covered compensation | |
| The average of the taxable wage bases in effect for each calendar year during the 35-year period ending when the plan was frozen on December 31, 2013. | |
(1) | Can range from 3%, if the sum of an employee’s age and years of credited service is less than 30, to 8%, if the sum equals or exceeds 95. |
(2) | Equal to 9.0 for retirement at age 65 and increased by 0.2 for each whole year retirement occurs prior to age 65. |
| Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compen- sation ($) | | | Change in Pension Value & Non- qualified Deferred Compen-sation Earnings ($) | | | All Other Compensation ($) | | | TOTAL ($) | |
| Richard P. McKenney | | | | | | | | | | | | | | | | | | | | |||||||||
| President and Chief Executive Officer, and a Director | | | 2019 | | | 1,000,000 | | | — | | | 6,420,903 (2) | | | — | | | 1,710,000 (3) | | | 161,000 (4) | | | 435,283 (5) | | | 9,727,186 | |
| 2018 | | | 1,000,000 | | | — | | | 6,564,575 | | | — | | | 1,900,000 | | | — | | | 432,286 | | | 9,896,861 | | |||
| 2017 | | | 1,000,000 | | | — | | | 5,720,021 | | | — | | | 2,415,000 | | | 119,000 | | | 429,925 | | | 9,683,946 | | |||
| Steven A. Zabel | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Chief Financial Officer(6) | | | 2019 | | | 456,308 | | | — | | | 280,159 (2) | | | — | | | 410,335 (3) | | | — (4) | | | 73,235 (5) | | | 1,220,037 | |
| Michael Q. Simonds | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Chief Operating Officer(6) | | | 2019 | | | 634,817 | | | — | | | 1,261,822 (2) | | | — | | | 628,469 (3) | | | 340,000 (4) | | | 143,048 (5) | | | 3,008,156 | |
| 2018 | | | 627,418 | | | — | | | 1,125,485 | | | — | | | 627,418 | | | — | | | 146,822 | | | 2,527,143 | | |||
| 2017 | | | 611,538 | | | — | | | 1,040,004 | | | — | | | 792,554 | | | 248,000 | | | 132,521 | | | 2,824,617 | | |||
| Timothy G. Arnold | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Voluntary Benefits and President, Colonial Life | | | 2019 | | | 500,035 | | | — | | | 682,420 (2) | | | — | | | 405,029 (3) | | | 304,000 (4) | | | 298,749 (5) | | | 2,190,233 | |
| 2018 | | | 497,144 | | | — | | | 636,801 | | | — | | | 447,429 | | | — | | | 245,965 | | | 1,827,339 | | |||
| | | | | | | | | | | | | | | | | | | | ||||||||||
| Lisa G. Iglesias | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, General Counsel | | | 2019 | | | 544,277 | | | — | | | 780,971 (2) | | | — | | | 465,357 (3) | | | — (4) | | | 112,906 (5) | | | 1,903,511 | |
| 2018 | | | 521,315 | | | — | | | 690,652 | | | — | | | 469,184 | | | — | | | 104,501 | | | 1,785,652 | | |||
| 2017 | | | 502,692 | | | — | | | 643,520 | | | — | | | 452,423 | | | — | | | 105,505 | | | 1,704,140 | | |||
| John F. McGarry | | | | | | | | | | | | | | | | | | | | |||||||||
| Retired Former Executive Vice President, Chief Financial Officer | | | 2019 | | | 606,981 | | | — | | | 1,310,158 (2) | | | — | | | 600,911 (3) | | | 416,000 (4) | | | 208,679 (5) | | | 3,142,729 | |
| 2018 | | | 630,000 | | | — | | | 1,151,381 | | | — | | | 693,000 | | | — | | | 239,440 | | | 2,713,821 | | |||
| 2017 | | | 623,077 | | | — | | | 1,040,004 | | | — | | | 822,462 | | | 322,000 | | | 231,242 | | | 3,038,785 | |
(1) | “Stock Awards” consists of performance share units (PSUs) and performance-based restricted stock units (PBRSUs). The number of shares payable under the PSU awards will be based on the actual performance, modified (up to +/- 20%) based on relative TSR, and may result in the ultimate award of 40-180% of the initial number of PSUs issued, with the potential for no award if company performance goals are not achieved during the three-year performance period. |
(2) | These awards were comprised of 50% PSUs and 50% PBRSUs granted on March 1, 2019 for performance in 2018 except for Mr. Zabel's awards which were comprised of 25% PSUs and 75% PBRSUs. The grant date fair value of stock awards for the PSUs was calculated in accordance with FASB ASC Topic 718 “Compensation – Stock Compensation” (ASC 718) as the number of units multiplied by the Monte Carlo simulation value of $40.67 on the grant date. The grant date fair value of stock awards for the PBRSUs was calculated in accordance with ASC 718 as the number of units multiplied by the closing market price of $37.67 on the grant date. The value of PSUs, assuming the highest possible outcomes of performance conditions (180%) to which 2019 awards are subject, determined based on the award amount at the time of grant and thus excluding dividend equivalent units that accrue during the performance period, would be: $5,557,515 for Mr. McKenney; $123,610 for Mr. Zabel; $1,092,151 for Mr. Simonds; $590,658 for Mr. Arnold; $675,958 for Ms. Iglesias; and $1,133,988 for Mr. McGarry. |
(3) | Amounts reflect the annual incentive awards paid in March 2020 for performance in 2019. These are discussed in further detail beginning on page 57. |
(4) | The amounts shown reflect the actuarial present value increases from December 31, 2018 through December 31, 2019. Pension values may fluctuate from year-to-year depending on a number of factors, including age at benefit commencement and the assumptions used to determine the present value, such as the discount rate and mortality rate. The assumptions used by the company in calculating the change in pension value are described beginning on page 85 and are consistent with those set forth in Note 9 of our Consolidated Financial Statements in Part II, Item 8 of our 2019 Form 10-K, except as otherwise provided in footnotes to the Pension Benefits table on page 85. |
(5) | “All Other Compensation” amounts are set forth in the following table. |
| | | Mr. McKenney | | | Mr. Zabel | | | Mr. Simonds | | | Mr. Arnold | | | Ms. Iglesias | | | Mr. McGarry | | |
| Employee and Spouse/Guest Attendance at Company Business Functions(a) | | | 45,443 | | | 874 | | | 9,315 | | | 76,740 | | | 309 | | | — | |
| Total Perquisites | | | $45,443 | | | $874 | | | $9,315 | | | $76,740 | | | $309 | | | — | |
| Matching Gifts Program(b) | | | 10,000 | | | 8,250 | | | 5,000 | | | 10,000 | | | 10,000 | | | 1,150 | |
| Company Matching Contributions Under our Qualified and Non-Qualified Defined Contribution Retirement Plan(c) | | | 145,000 | | | 14,000 | | | 63,112 | | | 47,373 | | | 50,673 | | | 62,394 | |
| Company Contributions to the Qualified and Non-Qualified Defined Contribution Retirement Plan(d) | | | 130,500 | | | 29,511 | | | 56,801 | | | 106,508 | | | 45,606 | | | 141,057 | |
| Non-Resident State Taxes(e) | | | 28,854 | | | 11,800 | | | 2,968 | | | 1,834 | | | 2,570 | | | 1,542 | |
| Tax Reimbursement Payments(f) | | | 75,486 | | | 8,800 | | | 5,852 | | | 56,294 | | | 3,748 | | | 1,036 | |
| Foreign Assignment(g) | | | — | | | — | | | — | | | — | | | — | | | 1,500 | |
| Total All Other Compensation | | | $435,283 | | | $73,235 | | | $143,048 | | | $298,749 | | | $112,906 | | | $208,679 | |
(a) | Spouses or guests sometimes accompany the NEO at company business functions. When their attendance is expected, a tax gross up payment is provided. Where applicable, these payments have been included under “Tax Reimbursement Payments.” Additionally, when these trips included travel on the corporate aircraft, the incremental cost was calculated to determine amounts to be reported. For purposes of compensation disclosure, the use of company aircraft is valued using an incremental cost that takes into account fuel costs, landing fees, parking, weather monitoring and maintenance fees per hour of flight. Crew travel expenses are included based on the actual amount incurred for a particular trip. Fixed costs that do not change based on usage, such as pilot salaries and depreciation of the aircraft, are excluded. Amounts represent the imputed income each NEO incurred for such attendance plus the incremental cost of the aircraft when the aircraft was used. |
(b) | Amounts represent those provided through our Matching Gifts Program, available to all full-time employees and non-employee directors. During 2019, the company matched eligible gifts from a minimum of $50 to an aggregate |
(c) | Amounts represent the aggregate matching contributions into our 401(k) Plan as well as matching contributions into our Non-Qualified Plan. Matching contributions under our 401(k) Plan are provided to all eligible employees participating in the plan as described beginning on page 75 in the Retirement and Workplace Benefits section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2019. Matching contributions under our Non-Qualified Plan are provided to eligible officers participating in the plan as described beginning on page 75 in the Retirement and Workplace Benefits section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2019. |
(d) | These amounts represent the aggregate of company and transition contributions under our 401(k) and Non-Qualified Plans as described beginning on page 75 in the Retirement and Workplace Benefits section. Full-time employees with one year of service with the company receive 4.5% of their salary and annual incentive contributed into their 401(k) Plan. Full-time employees who, as of December 31, 2013, had either: (i) reached a minimum of 60 points (age plus service) and at least 15 years of service or (ii) reached the age of 50 with 10 years of service with the company, receive an additional contribution into their 401(k) and Non-Qualified Plans through the transition contributions, as disclosed above in the Retirement and Workplace Benefits section. |
(e) | Many of our employees are required to travel to other company locations outside of their primary state of employment. While working in a state other than their primary state of employment, employees may become subject to state income taxes in that state if days worked or earnings accrued exceed an amount specified under state law. When this happens, we pay the state income tax on behalf of those employees (including our NEOs) and gross up the income amount for taxes (gross ups on these amounts are included in “Tax Reimbursement Payments”). The employee remains responsible for any taxes they would have incurred had they worked only in their primary state of employment. |
(f) | Amounts represent tax payments made by us on behalf of each NEO relating to Employee and Spouse/Guest Attendance at Company Business Functions, Non-Resident State Taxes and/or Foreign Assignment expenses. As disclosed on page 74, given the changes with the Tax Cuts and Jobs Act, the Non-Resident State Taxes now includes a federal tax gross up in addition to the FICA and Medicare. The amount shown above for Mr. McKenney includes the Federal tax impact of Non-Resident State taxes for both 2018 and 2019; he was the only employee that had a material impact in 2018 due to his level of business travels. This amount was paid to him in 2019. |
(g) | We provide expatriate employees (including executives) foreign tax preparation services while they are on assignment outside their home countries and after they return for as long as they have a foreign tax liability related to their assignment or a foreign tax credit that belongs to Unum as a result of the assignment. In 2019, we provided this benefit to Mr. McGarry in connection with his non-permanent relocation to the United Kingdom, consistent with the company's expatriate assignment policy. |
(6) | Mr. Zabel became CFO on July 1, 2019. Amounts reported include compensation provided to Mr. Zabel in his prior position as President and Chief Executive Officer of Closed Block Operations. Mr. Simonds was appointed COO effective February 1, 2020 and during 2019 served as President and Chief Executive Officer of Unum US. Also effective February 1, 2020, Mr. Arnold now reports to Mr. Simonds and, in addition to leading Colonial Life, has a lead role in shaping and driving our approach to voluntary benefits across the enterprise. |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(3) | | | All Other Stock Awards (Number of Shares of Stock or Units (#)(4) | | | Grant Date Fair Value of Stock Awards ($) | | |||||||||||||
| Grant Date | | | Threshold | | | Target | | | Max | | | Threshold | | | Target | | | Max | | ||||||
| Mr. McKenney | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 500,000 | | | 2,000,000 | | | 3,750,000 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 81,962 | | | 3,087,509 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 32,785 | | | 81,962 | | | 147,532 | | | | | 3,333,395 (6) | | ||||
| Mr. Zabel | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 94,985 | | | 379,939 | | | 712,386 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 5,469 | | | 206,017 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 729 | | | 1,823 | | | 3,281 | | | | | 74,141 (6) | | ||||
| Mr. Simonds | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 174,575 | | | 698,299 | | | 1,309,311 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 16,107 | | | 606,751 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 6,443 | | | 16,107 | | | 28,993 | | | | | 655,072 (6) | | ||||
| Mr. Arnold (2) | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 112,508 | | | 450,032 | ��� | | 843,810 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 8,711 | | | 328,143 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 3,484 | | | 8,711 | | | 15,680 | | | | | 354,276 (6) | | ||||
| Ms. Iglesias | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 129,266 | | | 517,063 | | | 969,493 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 9,969 | | | 375,532 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 3,988 | | | 9,969 | | | 17,944 | | | | | 405,439 (6) | | ||||
| Mr. McGarry (2) | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 166,920 | | | 667,679 | | | 1,251,898 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 16,724 | | | 629,993 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 6,690 | | | 16,724 | | | 30,103 | | | | | 680,165 (6) | |
(1) | These amounts reflect the threshold, target, and maximum award under the Annual Incentive Plan. The threshold is 25% of the amount shown in the Target column and reflects the payout that would have been earned based on threshold achievement of each of the performance measures. Target amounts are based on the individuals’ earnings for 2019 and their annual incentive target. The maximum award is 187.5% of such target (150% plan maximum multiplied by 125% individual maximum). |
(2) | Mr. Arnold and Mr. McGarry's performance-based restricted stock units (PBRSUs) and performance share units (PSUs) were no longer subject to risk of forfeiture at the date of grant since they met the age and years of service requirements for retirement eligibility under the Stock Incentive Plan of 2017. Mr. Arnold's PBRSUs will continue to vest ratably over the three-year vesting period on each anniversary of the grant date. Mr. McGarry's PBRSUs accelerated vesting upon his retirement on October 31, 2019 and were subject to Internal Revenue Code Section 409A's settlement restrictions. The actual amount of PSUs that will vest will be determined based on the achievement of the three-year performance goals, modified by relative TSR, as described in further detail in the Long-term Incentives section beginning on page 62. |
(3) | The vesting of PSUs ranges from 40% to 180% of target based on the performance and market conditions described beginning on page 62 assuming threshold performance goals are exceeded. The grant date fair value of each PSU was calculated in accordance with Accounting Standards Codification (ASC) 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients. The actual amount that will be issued will be determined based on the achievement of the three-year performance goals (2019-2021), modified by relative TSR, as described in further detail in the Long-Term Incentives section beginning on page 62. |
(4) | The grant of PBRSUs made on March 1, 2019 for Messrs. McKenney, Zabel, Simonds, Arnold and McGarry as well as Ms. Iglesias were based on the achievement of a threshold of statutory after-tax operating earnings and individual performance for 2018 and vest ratably over three years. These awards were granted under the Stock Incentive Plan of 2017. Details are provided in the Long-Term Incentive Awards Granted in 2019 Table and related footnotes beginning on page 63. |
(5) | The grant date fair value of stock awards for the PBRSUs granted on March 1, 2019 was calculated as the number of units multiplied by the closing market price of $37.67 on the grant date. |
(6) | As noted above, the grant date fair value of PSUs granted on March 1, 2019 was calculated in accordance with ASC 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients as of March 1, 2019. The Monte Carlo valuation per share was $40.67. |
| Option Awards | | | Stock Awards | | ||||||||||||||||||
| Number of Securities Underlying Unexercised Options (# Exercisable) | | | Number of Securities Underlying Unexercised Options (# Unexercisable) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | | | Equity Incentive Plan Awards: Market or Pay-out Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | |
| Mr. McKenney | | | | | | | | | | | | | | | | |||||||
| 39,760 | | | — | | | 24.25 | | | 2/20/2021 | | | 151,806 | | | 4,426,663 | | | 154,969 | | | 4,518,896 | |
| Mr. Zabel | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 8,217 | | | 239,608 | | | 2,700 | | | 78,732 | |
| Mr. Simonds | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 28,349 | | | 826,657 | | | 28,681 | | | 836,338 | |
| Mr. Arnold | | | | | | | | | | | | | | | | |||||||
| | | — | | | — | | | — | | | 15,239 | | | 444,369 | | | 15,814 | | | 461,136 | | |
| Ms. Iglesias | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 17,503 | | | 510,387 | | | 17,688 | | | 515,782 | |
| Mr. McGarry | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | — | | | — | | | 29,595 | | | 862,990 | |
(1) | The amounts in this column represent the aggregate value of performance-based restricted stock units (PBRSUs), including dividend equivalents, shown in the “Number of Shares or Units of Stock That Have Not Vested” column based on the closing price of $29.16 on December 31, 2019, the last trading day of the year. |
(2) | This column reflects PSU awards that were granted on March 1, 2018 and March 1, 2019. They vest at the end of the respective performance period, subject to the level of achievement of applicable performance targets. In accordance with Instruction 3 to Regulation S-K Item 402(f)(2), the values for these awards in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and the “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns are reported at target levels since the company’s performance and relative TSR for 2018 and 2019 awards were below target. Actual shares to be issued under PSUs granted in connection with the 2018-2020 and 2019-2021 performance periods are not yet determinable and may differ from the performance level required to be disclosed in this table. The PSUs that were granted in 2017 (for the 2017-2019 performance period) vested on December 31, 2019 and are shown in the “2019 Option Exercises and Stock Vested” table. |
(3) | The amounts in this column represent the aggregate value of PSUs (including dividend equivalents) shown in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” column based on the closing price of $29.16 on December 31, 2019, the last trading day of the year. |
| | | | | Number of Units Vesting(1) | | |||||||||||||||||
| Vesting Date | | | Grant Date | | | Mr. McKenney | | | Mr. Zabel | | | Mr. Simonds | | | Mr. Arnold(2) | | | Ms. Iglesias | | | Mr. McGarry(2) | |
| March 1, 2020 | | | 3/1/2017 | | | 20,171 | | | 934 | | | 3,668 | | | 1,688 | | | 2,270 | | | — | |
| March 1, 2020 | | | 3/1/2018 | | | 23,335 | | | 818 | | | 4,000 | | | 2,263 | | | 2,456 | | | — | |
| March 1, 2020 | | | 3/1/2019 | | | 27,804 | | | 1,855 | | | 5,464 | | | 2,954 | | | 3,381 | | | — | |
| March 1, 2021 | | | 3/1/2018 | | | 24,043 | | | 843 | | | 4,123 | | | 2,333 | | | 2,529 | | | — | |
| March 1, 2021 | | | 3/1/2019 | | | 27,805 | | | 1,855 | | | 5,464 | | | 2,956 | | | 3,382 | | | — | |
| March 1, 2022 | | | 3/1/2019 | | | 28,648 | | | 1,912 | | | 5,630 | | | 3,045 | | | 3,485 | | | — | |
| Total | | | | | 151,806 | | | 8,217 | | | 28,349 | | | 15,239 | | | 17,503 | | | — | |
(1) | These PBRSUs include dividend equivalents earned through December 31, 2019. |
(2) | Mr. Arnold’s PBRSUs are no longer subject to the risk of forfeiture because he meets the age and years of service requirement for retirement eligibility. Mr. McGarry retired in 2019 and all of his PBRSUs vested because he met the age and years of service requirement for retirement eligibility. The PBRSUs will be distributed 6 months after his retirement date in compliance with Internal Revenue Code Section 409A. |
| | | Option Awards | | | Stock Awards(1) | |
| Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting(2) (#) | | | Value Realized on Vesting(3) ($) | |
| Mr. McKenney | | | — | | | — | | | 127,516 | | | 4,159,791 | |
| Mr. Zabel | | | — | | | — | | | 4,063 | | | 142,708 | |
| Mr. Simonds | | | — | | | — | | | 23,030 | | | 750,468 | |
| Mr. Arnold | | | — | | | — | | | 11,094 | | | 364,006 | |
| Ms. Iglesias | | | — | | | — | | | 14,553 | | | 475,640 | |
| Mr. McGarry(4) | | | — | | | — | | | 51,743 | | | 1,539,526 | |
(1) | Reflects the PBRSUs and PSUs that vested during 2019. |
(2) | Includes the total number of unrestricted shares acquired upon the vesting of PBRSUs and PSUs. A portion of these shares were withheld to cover taxes due upon vesting. |
(3) | PBRSUs were multiplied by the closing price on the vesting date. PSUs that were granted in 2017 (for the 2017-2019 performance period) and which vested on December 31, 2019, were multiplied by the closing stock price of $29.16 on December 31, 2019. The PSUs granted in 2017 were distributed on February 25, 2020 on which date the closing stock price was $25.60 per share. |
(4) | Mr. McGarry's vesting includes both normal, ratable, vesting in February/March as well as accelerated vesting as a result of his retirement. |
| Name | | | Plan Name | | | Number of Years of Credited Service (#) | | | Present Value of Accumulated Benefits(3) ($) | | | Payments During Last Fiscal Year ($) | |
| Mr. McKenney | | | Qualified | | | 4.42 | | | 125,000 | | | — | |
| | | Excess | | | 4.42 | | | 684,000 | | | — | | |
| Mr. Zabel(1) | | | Qualified | | | — | | | — | | | — | |
| | | Excess | | | — | | | — | | | — | | |
| Mr. Simonds | | | Qualified | | | 16.25 | | | 637,000 | | | — | |
| | | Excess | | | 16.25 | | | 845,000 | | | — | | |
| Mr. Arnold | | | Qualified | | | 28.83 | | | 1,280,000 | | | — | |
| | | Excess | | | 28.83 | | | 650,000 | | | — | | |
| Ms. Iglesias(1) | | | Qualified | | | — | | | — | | | — | |
| | | Excess | | | — | | | — | | | — | | |
| Mr. McGarry(2) | | | Qualified | | | 28.00 | | | 1,311,000 | | | — | |
| | | Excess | | | 28.00 | | | 1,934,000 | | | — | |
(1) | No amounts are shown for Mr. Zabel or Ms. Iglesias because the plans were frozen to further accruals on December 31, 2013, before their eligibility and/or employment began. |
(2) | Mr. McGarry retired on October 31, 2019. He did not begin receiving pension benefits during 2019. In regards to his Excess pension plan benefit, in compliance with Internal Revenue Code Section 409A, he will receive this benefit in 2020. With respect to his Qualified plan benefit, he is eligible to begin this at any time prior to reaching age 65 but must begin no later than age 65. |
(3) | The “Present Value of Accumulated Benefits” is based upon a measurement date of December 31, 2019, which is the same measurement date used for financial statement reporting purposes for the company’s audited financial statements as found in Note 9 to the Consolidated Financial Statements contained in the company’s 2019 Form 10-K. All calculations utilize credited service and pensionable earnings as of the pension freeze date, December 31, 2013, in addition to the following assumptions: |
| Name | | | Plan | | | Executive Contributions in Last FY(4) $ | | | Registrant Contributions in Last FY(5) $ | | | Aggregate Earnings in Last FY(6) $ | | | Aggregate Withdrawals/ Distributions $ | | | Aggregate Balance at Last FYE(7) $ | |
| Mr. McKenney | | | Non- Qualified DC | | | 131,000 | | | 248,900 | | | 548,105 | | | — | | | 2,593,206 | |
| Mr. Zabel(1) | | | Non- Qualified DC | | | — | | | 16,911 | | | 11,473 | | | — | | | 74,472 | |
| Mr. Simonds | | | Non- Qualified DC | | | 49,112 | | | 93,312 | | | 177,430 | | | — | | | 978,261 | |
| Mr. Arnold | | | Non- Qualified DC | | | 60,072 | | | 116,243 | | | 243,034 | | | — | | | 1,121,334 | |
| Ms. Iglesias | | | Non- Qualified DC | | | 110,019 | | | 69,679 | | | 115,348 | | | — | | | 746,994 | |
| Mr. McGarry(2) | | | Inactive NQ Plan | | | — | | | — | | | 2,065 | | | (26,860) | | | — | |
| | | Equity(3) | | | — | | | 795,713 | | | 54,884 | | | — | | | 850,597 | | |
| | | Non- Qualified DC | | | 96,789 | | | 166,451 | | | 407,869 | | | — | | | 1,911,723 | |
(1) | Mr. Zabel's balance in the Non-qualified DC plan was $46,088 at December 31, 2018, which is included in the aggregate balance at December 31, 2019. |
(2) | Mr. McGarry had a balance under one inactive deferred compensation plan. This plan is a non-qualified defined contribution plan and includes units denominated in 100% Unum stock to be paid out in cash. The change in market value and dividends earned is included in the “Aggregate Earnings in Last FY” amount. The balance was paid out upon retirement, per the terms of the inactive deferred compensation plan. It was not subject to any six-month delay under Internal Revenue Code Section 409A given its grandfathered status under that law. |
(4) | These amounts are included in the Summary Compensation Table in the “Salary” and “Non-Equity Incentive Plan Compensation” columns for 2019 for each NEO. |
(5) | These amounts represent company contributions through our Non-Qualified Plan, as described in the Retirement and Workplace Benefits section beginning on page 75. The amounts are included in the “All Other Compensation” column of the Summary Compensation Table for 2019 for each NEO. |
(6) | These amounts were not included in the Summary Compensation Table because investment earnings were not preferential or above market. The investment options under the non-qualified retirement plans are the same choices available to all employees that are eligible to participate in the 401(k) Plan and NEOs do not receive preferential earnings on their investments. |
(7) | This column includes the following amounts that were reported in prior years' Summary Compensation Tables in the “Salary,” “Non-Equity Incentive Plan Compensation,” or “All Other Compensation” columns, as applicable, to the extent that the NEO was an NEO at the time: $1,549,923 for Mr. McKenney; $641,123 for Mr. Simonds; $185,143 for Mr. Arnold; $440,732 for Ms. Iglesias; and $1,015,289 for Mr. McGarry. |
| Termination with cause |
| One or more of the following factors is present: the failure to substantially perform duties; the willful engagement in illegal conduct or gross misconduct harmful to the company; or the conviction of a felony (or plea of “guilty” or “no contest”). |
| Termination without cause |
| One or more of the following factors is present: poor performance, other than for misconduct or cause (as defined above); job elimination; job requalification; or the decision to fill the position with a different resource consistent with the direction of the company. |
| Resignation for good reason |
| One or more of the following events have preceded the resignation of the NEO: assignment to a position inconsistent with his or her existing position or any other action that diminishes such position; reduction of his or her base salary or annual incentive target; failure to continue any material employee benefit or compensation plan in which he or she participates; or relocation to an office more than 50 miles from his or her location. |
| Change in control |
| A change in control occurs when one of the following situations exists: (a) the incumbent directors cease to be a majority for two years; (b) an entity acquires 20% of our voting stock (30% in some instances); (c) we consummate certain transactions such as a merger or disposition of substantially all of our assets; or (d) shareholders approve a plan of liquidation or distribution. |
|
• | A tax gross-up is provided to employees who incur income on company-sponsored events where attendance is expected, including a limited number of events we host each year to recognize the contributions of various employees. These functions serve specific business purposes, and in some cases the attendance of a NEO and his or her spouse or guest is expected. If so, we attribute income to the NEO for these costs when required under Internal Revenue Service regulations. For more information, see the All Other Compensation table on page 80. |
| Unum Group Pension Plan (Qualified Plan) | |
| Provides funded, tax-qualified benefits up to the limits on compensation and benefits under the Code. The Qualified Plan was designed to provide tax-qualified pension benefits for most employees. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Qualified Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Unum Group Supplemental Pension Plan (Excess Plan) | |
Provides unfunded, non-qualified benefits for compensation that exceeds the Code limits applicable to the Qualified Plan. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Excess Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Credited service | |
| Measures of the time individuals are employed at the company. One year of credited service is granted for each plan year in which 1,000 hours of employment are completed. No additional credited service will accrue to any participant after December 31, 2013. | |
| Highest average earnings | |
| The average of the highest 5 years of compensation (whether or not consecutive) during the earlier of the last 10 years of employment or as of the date the plan was frozen on December 31, 2013. | |
| Social Security covered compensation | |
| The average of the taxable wage bases in effect for each calendar year during the 35-year period ending when the plan was frozen on December 31, 2013. | |
(1) | Can range from 3%, if the sum of an employee’s age and years of credited service is less than 30, to 8%, if the sum equals or exceeds 95. |
(2) | Equal to 9.0 for retirement at age 65 and increased by 0.2 for each whole year retirement occurs prior to age 65. |
STOCK OWNERSHIP AND RETENTION REQUIREMENTS | (as of December 31, 2017) | ||||||
Ownership as % of Salary | Retention Requirements | ||||||
Executive | Common Stock(1) | Restricted Stock Units(2) | Total Current Ownership | Owned | Required | Retention %(3) | Holding Period(4) |
Mr. McKenney | $10,940,840 | $7,434,905 | $18,375,745 | 18.4x | 6x | 75% | 3 years |
Mr. McGarry | 2,566,437 | 1,352,984 | 3,919,421 | 6.2x | 3x | 60% | 1 year |
Mr. Simonds | 2,120,565 | 1,473,632 | 3,594,197 | 5.8x | 3x | 60% | 1 year |
Ms. Farrell | 2,049,208 | 693,810 | 2,743,018 | 6.0x | 3x | 60% | 1 year |
Ms. Iglesias | 663,455 | 1,438,996 | 2,102,451 | 4.2x | 3x | 60% | 1 year |
| Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compen- sation ($) | | | Change in Pension Value & Non- qualified Deferred Compen-sation Earnings ($) | | | All Other Compensation ($) | | | TOTAL ($) | |
| Richard P. McKenney | | | | | | | | | | | | | | | | | | | | |||||||||
| President and Chief Executive Officer, and a Director | | | 2019 | | | 1,000,000 | | | — | | | 6,420,903 (2) | | | — | | | 1,710,000 (3) | | | 161,000 (4) | | | 435,283 (5) | | | 9,727,186 | |
| 2018 | | | 1,000,000 | | | — | | | 6,564,575 | | | — | | | 1,900,000 | | | — | | | 432,286 | | | 9,896,861 | | |||
| 2017 | | | 1,000,000 | | | — | | | 5,720,021 | | | — | | | 2,415,000 | | | 119,000 | | | 429,925 | | | 9,683,946 | | |||
| Steven A. Zabel | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Chief Financial Officer(6) | | | 2019 | | | 456,308 | | | — | | | 280,159 (2) | | | — | | | 410,335 (3) | | | — (4) | | | 73,235 (5) | | | 1,220,037 | |
| Michael Q. Simonds | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Chief Operating Officer(6) | | | 2019 | | | 634,817 | | | — | | | 1,261,822 (2) | | | — | | | 628,469 (3) | | | 340,000 (4) | | | 143,048 (5) | | | 3,008,156 | |
| 2018 | | | 627,418 | | | — | | | 1,125,485 | | | — | | | 627,418 | | | — | | | 146,822 | | | 2,527,143 | | |||
| 2017 | | | 611,538 | | | — | | | 1,040,004 | | | — | | | 792,554 | | | 248,000 | | | 132,521 | | | 2,824,617 | | |||
| Timothy G. Arnold | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Voluntary Benefits and President, Colonial Life | | | 2019 | | | 500,035 | | | — | | | 682,420 (2) | | | — | | | 405,029 (3) | | | 304,000 (4) | | | 298,749 (5) | | | 2,190,233 | |
| 2018 | | | 497,144 | | | — | | | 636,801 | | | — | | | 447,429 | | | — | | | 245,965 | | | 1,827,339 | | |||
| | | | | | | | | | | | | | | | | | | | ||||||||||
| Lisa G. Iglesias | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, General Counsel | | | 2019 | | | 544,277 | | | — | | | 780,971 (2) | | | — | | | 465,357 (3) | | | — (4) | | | 112,906 (5) | | | 1,903,511 | |
| 2018 | | | 521,315 | | | — | | | 690,652 | | | — | | | 469,184 | | | — | | | 104,501 | | | 1,785,652 | | |||
| 2017 | | | 502,692 | | | — | | | 643,520 | | | — | | | 452,423 | | | — | | | 105,505 | | | 1,704,140 | | |||
| John F. McGarry | | | | | | | | | | | | | | | | | | | | |||||||||
| Retired Former Executive Vice President, Chief Financial Officer | | | 2019 | | | 606,981 | | | — | | | 1,310,158 (2) | | | — | | | 600,911 (3) | | | 416,000 (4) | | | 208,679 (5) | | | 3,142,729 | |
| 2018 | | | 630,000 | | | — | | | 1,151,381 | | | — | | | 693,000 | | | — | | | 239,440 | | | 2,713,821 | | |||
| 2017 | | | 623,077 | | | — | | | 1,040,004 | | | — | | | 822,462 | | | 322,000 | | | 231,242 | | | 3,038,785 | |
(1) | “Stock Awards” consists of performance share units (PSUs) and performance-based restricted stock units (PBRSUs). The number of shares payable under the PSU awards will be based on the actual performance, modified (up to +/- 20%) based on relative TSR, and may result in the ultimate award of 40-180% of the initial number of PSUs issued, with the potential for no award if company performance goals are not achieved during the three-year performance period. |
(2) | These awards were comprised of 50% PSUs and 50% PBRSUs granted on March 1, 2019 for performance in 2018 except for Mr. Zabel's awards which were comprised of 25% PSUs and 75% PBRSUs. The grant date fair value of stock awards for the PSUs was calculated in accordance with FASB ASC Topic 718 “Compensation – Stock Compensation” (ASC 718) as the number of units multiplied by the Monte Carlo simulation value of $40.67 on the grant date. The grant date fair value of stock awards for the PBRSUs was calculated in accordance with ASC 718 as the number of units multiplied by the closing market price of $37.67 on the grant date. The value of PSUs, assuming the highest possible outcomes of performance conditions (180%) to which 2019 awards are subject, determined based on the award amount at the time of grant and thus excluding dividend equivalent units that accrue during the performance period, would be: $5,557,515 for Mr. McKenney; $123,610 for Mr. Zabel; $1,092,151 for Mr. Simonds; $590,658 for Mr. Arnold; $675,958 for Ms. Iglesias; and $1,133,988 for Mr. McGarry. |
(3) | Amounts reflect the annual incentive awards paid in March 2020 for performance in 2019. These are discussed in further detail beginning on page 57. |
(4) | The amounts shown reflect the actuarial present value increases from December 31, 2018 through December 31, 2019. Pension values may fluctuate from year-to-year depending on a number of factors, including age at benefit commencement and the assumptions used to determine the present value, such as the discount rate and mortality rate. The assumptions used by the company in calculating the change in pension value are described beginning on page 85 and are consistent with those set forth in Note 9 of our Consolidated Financial Statements in Part II, Item 8 of our 2019 Form 10-K, except as otherwise provided in footnotes to the Pension Benefits table on page 85. |
(5) | “All Other Compensation” amounts are set forth in the following table. |
| | | Mr. McKenney | | | Mr. Zabel | | | Mr. Simonds | | | Mr. Arnold | | | Ms. Iglesias | | | Mr. McGarry | | |
| Employee and Spouse/Guest Attendance at Company Business Functions(a) | | | 45,443 | | | 874 | | | 9,315 | | | 76,740 | | | 309 | | | — | |
| Total Perquisites | | | $45,443 | | | $874 | | | $9,315 | | | $76,740 | | | $309 | | | — | |
| Matching Gifts Program(b) | | | 10,000 | | | 8,250 | | | 5,000 | | | 10,000 | | | 10,000 | | | 1,150 | |
| Company Matching Contributions Under our Qualified and Non-Qualified Defined Contribution Retirement Plan(c) | | | 145,000 | | | 14,000 | | | 63,112 | | | 47,373 | | | 50,673 | | | 62,394 | |
| Company Contributions to the Qualified and Non-Qualified Defined Contribution Retirement Plan(d) | | | 130,500 | | | 29,511 | | | 56,801 | | | 106,508 | | | 45,606 | | | 141,057 | |
| Non-Resident State Taxes(e) | | | 28,854 | | | 11,800 | | | 2,968 | | | 1,834 | | | 2,570 | | | 1,542 | |
| Tax Reimbursement Payments(f) | | | 75,486 | | | 8,800 | | | 5,852 | | | 56,294 | | | 3,748 | | | 1,036 | |
| Foreign Assignment(g) | | | — | | | — | | | — | | | — | | | — | | | 1,500 | |
| Total All Other Compensation | | | $435,283 | | | $73,235 | | | $143,048 | | | $298,749 | | | $112,906 | | | $208,679 | |
(a) | Spouses or guests sometimes accompany the NEO at company business functions. When their attendance is expected, a tax gross up payment is provided. Where applicable, these payments have been included under “Tax Reimbursement Payments.” Additionally, when these trips included travel on the corporate aircraft, the incremental cost was calculated to determine amounts to be reported. For purposes of compensation disclosure, the use of company aircraft is valued using an incremental cost that takes into account fuel costs, landing fees, parking, weather monitoring and maintenance fees per hour of flight. Crew travel expenses are included based on the actual amount incurred for a particular trip. Fixed costs that do not change based on usage, such as pilot salaries and depreciation of the aircraft, are excluded. Amounts represent the imputed income each NEO incurred for such attendance plus the incremental cost of the aircraft when the aircraft was used. |
(b) | Amounts represent those provided through our Matching Gifts Program, available to all full-time employees and non-employee directors. During 2019, the company matched eligible gifts from a minimum of $50 to an aggregate |
(c) | Amounts represent the aggregate matching contributions into our 401(k) Plan as well as matching contributions into our Non-Qualified Plan. Matching contributions under our 401(k) Plan are provided to all eligible employees participating in the plan as described beginning on page 75 in the Retirement and Workplace Benefits section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2019. Matching contributions under our Non-Qualified Plan are provided to eligible officers participating in the plan as described beginning on page 75 in the Retirement and Workplace Benefits section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2019. |
(d) | These amounts represent the aggregate of company and transition contributions under our 401(k) and Non-Qualified Plans as described beginning on page 75 in the Retirement and Workplace Benefits section. Full-time employees with one year of service with the company receive 4.5% of their salary and annual incentive contributed into their 401(k) Plan. Full-time employees who, as of December 31, 2013, had either: (i) reached a minimum of 60 points (age plus service) and at least 15 years of service or (ii) reached the age of 50 with 10 years of service with the company, receive an additional contribution into their 401(k) and Non-Qualified Plans through the transition contributions, as disclosed above in the Retirement and Workplace Benefits section. |
(e) | Many of our employees are required to travel to other company locations outside of their primary state of employment. While working in a state other than their primary state of employment, employees may become subject to state income taxes in that state if days worked or earnings accrued exceed an amount specified under state law. When this happens, we pay the state income tax on behalf of those employees (including our NEOs) and gross up the income amount for taxes (gross ups on these amounts are included in “Tax Reimbursement Payments”). The employee remains responsible for any taxes they would have incurred had they worked only in their primary state of employment. |
(f) | Amounts represent tax payments made by us on behalf of each NEO relating to Employee and Spouse/Guest Attendance at Company Business Functions, Non-Resident State Taxes and/or Foreign Assignment expenses. As disclosed on page 74, given the changes with the Tax Cuts and Jobs Act, the Non-Resident State Taxes now includes a federal tax gross up in addition to the FICA and Medicare. The amount shown above for Mr. McKenney includes the Federal tax impact of Non-Resident State taxes for both 2018 and 2019; he was the only employee that had a material impact in 2018 due to his level of business travels. This amount was paid to him in 2019. |
(g) | We provide expatriate employees (including executives) foreign tax preparation services while they are on assignment outside their home countries and after they return for as long as they have a foreign tax liability related to their assignment or a foreign tax credit that belongs to Unum as a result of the assignment. In 2019, we provided this benefit to Mr. McGarry in connection with his non-permanent relocation to the United Kingdom, consistent with the company's expatriate assignment policy. |
(6) | Mr. Zabel became CFO on July 1, 2019. Amounts reported include compensation provided to Mr. Zabel in his prior position as President and Chief Executive Officer of Closed Block Operations. Mr. Simonds was appointed COO effective February 1, 2020 and during 2019 served as President and Chief Executive Officer of Unum US. Also effective February 1, 2020, Mr. Arnold now reports to Mr. Simonds and, in addition to leading Colonial Life, has a lead role in shaping and driving our approach to voluntary benefits across the enterprise. |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(3) | | | All Other Stock Awards (Number of Shares of Stock or Units (#)(4) | | | Grant Date Fair Value of Stock Awards ($) | | |||||||||||||
| Grant Date | | | Threshold | | | Target | | | Max | | | Threshold | | | Target | | | Max | | ||||||
| Mr. McKenney | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 500,000 | | | 2,000,000 | | | 3,750,000 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 81,962 | | | 3,087,509 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 32,785 | | | 81,962 | | | 147,532 | | | | | 3,333,395 (6) | | ||||
| Mr. Zabel | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 94,985 | | | 379,939 | | | 712,386 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 5,469 | | | 206,017 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 729 | | | 1,823 | | | 3,281 | | | | | 74,141 (6) | | ||||
| Mr. Simonds | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 174,575 | | | 698,299 | | | 1,309,311 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 16,107 | | | 606,751 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 6,443 | | | 16,107 | | | 28,993 | | | | | 655,072 (6) | | ||||
| Mr. Arnold (2) | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 112,508 | | | 450,032 | ��� | | 843,810 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 8,711 | | | 328,143 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 3,484 | | | 8,711 | | | 15,680 | | | | | 354,276 (6) | | ||||
| Ms. Iglesias | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 129,266 | | | 517,063 | | | 969,493 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 9,969 | | | 375,532 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 3,988 | | | 9,969 | | | 17,944 | | | | | 405,439 (6) | | ||||
| Mr. McGarry (2) | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 166,920 | | | 667,679 | | | 1,251,898 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 16,724 | | | 629,993 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 6,690 | | | 16,724 | | | 30,103 | | | | | 680,165 (6) | |
(1) | These amounts reflect the threshold, target, and maximum award under the Annual Incentive Plan. The threshold is 25% of the amount shown in the Target column and reflects the payout that would have been earned based on threshold achievement of each of the performance measures. Target amounts are based on the individuals’ earnings for 2019 and their annual incentive target. The maximum award is 187.5% of such target (150% plan maximum multiplied by 125% individual maximum). |
(2) | Mr. Arnold and Mr. McGarry's performance-based restricted stock units (PBRSUs) and performance share units (PSUs) were no longer subject to risk of forfeiture at the date of grant since they met the age and years of service requirements for retirement eligibility under the Stock Incentive Plan of 2017. Mr. Arnold's PBRSUs will continue to vest ratably over the three-year vesting period on each anniversary of the grant date. Mr. McGarry's PBRSUs accelerated vesting upon his retirement on October 31, 2019 and were subject to Internal Revenue Code Section 409A's settlement restrictions. The actual amount of PSUs that will vest will be determined based on the achievement of the three-year performance goals, modified by relative TSR, as described in further detail in the Long-term Incentives section beginning on page 62. |
(3) | The vesting of PSUs ranges from 40% to 180% of target based on the performance and market conditions described beginning on page 62 assuming threshold performance goals are exceeded. The grant date fair value of each PSU was calculated in accordance with Accounting Standards Codification (ASC) 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients. The actual amount that will be issued will be determined based on the achievement of the three-year performance goals (2019-2021), modified by relative TSR, as described in further detail in the Long-Term Incentives section beginning on page 62. |
(4) | The grant of PBRSUs made on March 1, 2019 for Messrs. McKenney, Zabel, Simonds, Arnold and McGarry as well as Ms. Iglesias were based on the achievement of a threshold of statutory after-tax operating earnings and individual performance for 2018 and vest ratably over three years. These awards were granted under the Stock Incentive Plan of 2017. Details are provided in the Long-Term Incentive Awards Granted in 2019 Table and related footnotes beginning on page 63. |
(5) | The grant date fair value of stock awards for the PBRSUs granted on March 1, 2019 was calculated as the number of units multiplied by the closing market price of $37.67 on the grant date. |
(6) | As noted above, the grant date fair value of PSUs granted on March 1, 2019 was calculated in accordance with ASC 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients as of March 1, 2019. The Monte Carlo valuation per share was $40.67. |
| Option Awards | | | Stock Awards | | ||||||||||||||||||
Number of Securities Underlying Unexercised Options | | | Number of Securities Underlying Unexercised Options (# Unexercisable) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | | | Equity Incentive Plan Awards: Market or Pay-out Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | |
| Mr. McKenney | | | | | | | | | | | | | | | | |||||||
| 39,760 | | | — | | | 24.25 | | | 2/20/2021 | | | 151,806 | | | 4,426,663 | | | 154,969 | | | 4,518,896 | |
| Mr. Zabel | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 8,217 | | | 239,608 | | | 2,700 | | | 78,732 | |
| Mr. Simonds | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 28,349 | | | 826,657 | | | 28,681 | | | 836,338 | |
| Mr. Arnold | | | | | | | | | | | | | | | | |||||||
| | | — | | | — | | | — | | | 15,239 | | | 444,369 | | | 15,814 | | | 461,136 | | |
| Ms. Iglesias | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 17,503 | | | 510,387 | | | 17,688 | | | 515,782 | |
| Mr. McGarry | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | — | | | — | | | 29,595 | | | 862,990 | |
(1) | The amounts in |
(2) | This column reflects PSU awards that were granted on March 1, 2018 and March 1, 2019. They vest at the end of the respective performance period, subject to the level of achievement of applicable performance targets. In accordance with Instruction 3 to Regulation S-K Item 402(f)(2), the values for these awards in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and the “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns are reported at target levels since the company’s performance and relative TSR for 2018 and 2019 awards were below target. Actual shares to be issued under PSUs granted in connection with the 2018-2020 and 2019-2021 performance periods are not yet determinable and may differ from the performance level required to be disclosed in this table. The PSUs that were granted in 2017 (for the 2017-2019 performance period) vested on December 31, 2019 and are shown in the “2019 Option Exercises and Stock Vested” table. |
| | | | | Number of Units Vesting(1) | | |||||||||||||||||
| Vesting Date | | | Grant Date | | | Mr. McKenney | | | Mr. Zabel | | | Mr. Simonds | | | Mr. Arnold(2) | | | Ms. Iglesias | | | Mr. McGarry(2) | |
| March 1, 2020 | | | 3/1/2017 | | | 20,171 | | | 934 | | | 3,668 | | | 1,688 | | | 2,270 | | | — | |
| March 1, 2020 | | | 3/1/2018 | | | 23,335 | | | 818 | | | 4,000 | | | 2,263 | | | 2,456 | | | — | |
| March 1, 2020 | | | 3/1/2019 | | | 27,804 | | | 1,855 | | | 5,464 | | | 2,954 | | | 3,381 | | | — | |
| March 1, 2021 | | | 3/1/2018 | | | 24,043 | | | 843 | | | 4,123 | | | 2,333 | | | 2,529 | | | — | |
| March 1, 2021 | | | 3/1/2019 | | | 27,805 | | | 1,855 | | | 5,464 | | | 2,956 | | | 3,382 | | | — | |
| March 1, 2022 | | | 3/1/2019 | | | 28,648 | | | 1,912 | | | 5,630 | | | 3,045 | | | 3,485 | | | — | |
| Total | | | | | 151,806 | | | 8,217 | | | 28,349 | | | 15,239 | | | 17,503 | | | — | |
(1) | These PBRSUs include dividend equivalents earned through December 31, 2019. |
(2) | Mr. Arnold’s PBRSUs are no longer subject to the risk of forfeiture because he meets the age and years of service requirement for retirement eligibility. Mr. McGarry retired in 2019 and all of his PBRSUs vested because he met the age and years of service requirement for retirement eligibility. The PBRSUs will be distributed 6 months after his retirement date in compliance with Internal Revenue Code Section 409A. |
| | Option Awards | | | Stock Awards(1) | |
| Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting(2) (#) | | | Value Realized on Vesting(3) ($) | |
| Mr. McKenney | | | — | | | — | | | 127,516 | | | 4,159,791 | |
| Mr. Zabel | | | — | | | — | | | 4,063 | | | 142,708 | |
| Mr. Simonds | | | — | | | — | | | 23,030 | | | 750,468 | |
| Mr. Arnold | | | — | | | — | | | 11,094 | | | 364,006 | |
| Ms. Iglesias | | | — | | | — | | | 14,553 | | | 475,640 | |
| Mr. McGarry(4) | | | — | | | — | | | 51,743 | | | 1,539,526 | |
(1) | Reflects the |
(2) | Includes the total number of |
(3) | PBRSUs were multiplied by the closing price on the vesting date. PSUs that were granted in 2017 (for the 2017-2019 performance period) and which vested on December 31, 2019, were multiplied by the closing stock price of $29.16 on December 31, 2019. The PSUs granted in 2017 were distributed on February 25, 2020 on which date the closing stock price was $25.60 per share. |
(4) | Mr. McGarry's vesting includes both normal, ratable, vesting in February/March as well as accelerated vesting as a result of his retirement. |
| Name | | | Plan Name | | | Number of Years of Credited Service (#) | | | Present Value of Accumulated Benefits(3) ($) | | | Payments During Last Fiscal Year ($) | |
| Mr. McKenney | | | Qualified | | | 4.42 | | | 125,000 | | | — | |
| | | Excess | | | 4.42 | | | 684,000 | | | — | | |
| Mr. Zabel(1) | | | Qualified | | | — | | | — | | | — | |
| | | Excess | | | — | | | — | | | — | | |
| Mr. Simonds | | | Qualified | | | 16.25 | | | 637,000 | | | — | |
| | | Excess | | | 16.25 | | | 845,000 | | | — | | |
| Mr. Arnold | | | Qualified | | | 28.83 | | | 1,280,000 | | | — | |
| | | Excess | | | 28.83 | | | 650,000 | | | — | | |
| Ms. Iglesias(1) | | | Qualified | | | — | | | — | | | — | |
| | | Excess | | | — | | | — | | | — | | |
| Mr. McGarry(2) | | | Qualified | | | 28.00 | | | 1,311,000 | | | — | |
| | | Excess | | | 28.00 | | | 1,934,000 | | | — | |
(1) | No amounts are shown for Mr. Zabel or Ms. Iglesias because the plans were frozen to further accruals on December 31, 2013, before their eligibility and/or employment began. |
(2) | Mr. McGarry retired on October 31, 2019. He did not begin receiving pension benefits during 2019. In regards to his Excess pension plan benefit, in compliance with Internal Revenue Code Section 409A, he will receive this benefit in 2020. With respect to his Qualified plan benefit, he is eligible to begin this at any time prior to reaching age 65 but must begin no later than age 65. |
(3) | The “Present Value of Accumulated Benefits” is based upon a measurement date of December 31, 2019, which is the same measurement date used for financial statement reporting purposes for the company’s audited financial statements as found in Note 9 to the Consolidated Financial Statements contained in the company’s 2019 Form 10-K. All calculations utilize credited service and pensionable earnings as of the pension freeze date, December 31, 2013, in addition to the following assumptions: |
| Name | | | Plan | | | Executive Contributions in Last FY(4) $ | | | Registrant Contributions in Last FY(5) $ | | | Aggregate Earnings in Last FY(6) $ | | | Aggregate Withdrawals/ Distributions $ | | | Aggregate Balance at Last FYE(7) $ | |
| Mr. McKenney | | | Non- Qualified DC | | | 131,000 | | | 248,900 | | | 548,105 | | | — | | | 2,593,206 | |
| Mr. Zabel(1) | | | Non- Qualified DC | | | — | | | 16,911 | | | 11,473 | | | — | | | 74,472 | |
| Mr. Simonds | | | Non- Qualified DC | | | 49,112 | | | 93,312 | | | 177,430 | | | — | | | 978,261 | |
| Mr. Arnold | | | Non- Qualified DC | | | 60,072 | | | 116,243 | | | 243,034 | | | — | | | 1,121,334 | |
| Ms. Iglesias | | | Non- Qualified DC | | | 110,019 | | | 69,679 | | | 115,348 | | | — | | | 746,994 | |
| Mr. McGarry(2) | | | Inactive NQ Plan | | | — | | | — | | | 2,065 | | | (26,860) | | | — | |
| | | Equity(3) | | | — | | | 795,713 | | | 54,884 | | | — | | | 850,597 | | |
| | | Non- Qualified DC | | | 96,789 | | | 166,451 | | | 407,869 | | | — | | | 1,911,723 | |
(1) | Mr. Zabel's balance in the Non-qualified DC plan was $46,088 at December 31, 2018, which is included in the aggregate balance at December 31, 2019. |
(2) | Mr. McGarry had a balance under one inactive deferred compensation plan. This plan is a non-qualified defined contribution plan and includes units denominated in 100% Unum stock to be paid out in cash. The change in market value and dividends earned is included in the “Aggregate Earnings in Last FY” amount. The balance was paid out upon retirement, per the terms of the inactive deferred compensation plan. It was not subject to any six-month delay under Internal Revenue Code Section 409A given its grandfathered status under that law. |
(3) | These amounts represent Mr. McGarry's unvested PBRSUs at his October 31, 2019 retirement date, which were subject to Internal Revenue Code Section 409A's settlement restrictions, and the value of the units at the end of the year. The balance is subject to earnings (losses) through the movement of our stock, as well as dividends provided, during that period. These amounts were reported as compensation in the Summary Compensation Table as the PBRSU awards were granted. |
(4) | These amounts are included in the Summary Compensation Table in the “Salary” and “Non-Equity Incentive Plan Compensation” columns for 2019 for each NEO. |
(5) | These amounts represent company contributions through our Non-Qualified Plan, as described in the Retirement and Workplace Benefits section beginning on page 75. The amounts are included in the “All Other Compensation” column of the Summary Compensation Table for 2019 for each NEO. |
(6) | These amounts were not included in the Summary Compensation Table because investment earnings were not preferential or above market. The investment options under the non-qualified retirement plans are the same choices available to all employees that are eligible to participate in the 401(k) Plan and NEOs do not receive preferential earnings on their investments. |
(7) | This column includes the following amounts that were reported in prior years' Summary Compensation Tables in the “Salary,” “Non-Equity Incentive Plan Compensation,” or “All Other Compensation” columns, as applicable, to the extent that the NEO was an NEO at the time: $1,549,923 for Mr. McKenney; $641,123 for Mr. Simonds; $185,143 for Mr. Arnold; $440,732 for Ms. Iglesias; and $1,015,289 for Mr. McGarry. |
| Termination with cause |
One or more of the | |
| Termination without cause |
| One or more of the following factors is present: poor performance, other than for misconduct or cause (as defined above); job elimination; job requalification; or the decision to fill the position with a different resource consistent with the direction of the company. |
| Resignation for good reason |
| One or more of the following events have preceded the resignation of the NEO: assignment to a position inconsistent with his or her |
| Change in control |
| A change in control occurs when one of the following situations exists: (a) the incumbent directors cease to be |
|
Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compen- sation | Change in Pension Value & Non-qualified Deferred Compensation Earnings | All Other Compen- sation | TOTAL | ||||||||||||||||||
Name and Principal Position(1) | Year | ($) | ($) | ($)(2) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
Richard P. McKenney | |||||||||||||||||||||||||
President and Chief Executive Officer, and a Director | 2017 | 1,000,000 | — | 5,720,021 | (3 | ) | — | 2,415,000 | (4 | ) | 119,000 | (5 | ) | 429,925 | (6 | ) | 9,683,946 | ||||||||
2016 | 994,231 | — | 5,176,835 | — | 2,100,937 | 84,000 | 315,316 | 8,671,319 | |||||||||||||||||
2015 | 905,000 | — | 3,051,050 | — | 1,527,033 | — | 247,931 | 5,731,014 | |||||||||||||||||
John F. McGarry | |||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2017 | 623,077 | — | 1,040,004 | (3 | ) | — | 822,462 | (4 | ) | 322,000 | (5 | ) | 231,242 | (6 | ) | 3,038,785 | ||||||||
2016 | 588,461 | — | 912,245 | — | 744,404 | 273,000 | 196,724 | 2,714,834 | |||||||||||||||||
2015 | 517,860 | — | 629,287 | — | 509,513 | — | 221,024 | 1,877,684 | |||||||||||||||||
Michael Q. Simonds | |||||||||||||||||||||||||
Executive Vice President, President and Chief Executive Officer, Unum US | 2017 | 611,538 | — | 1,040,004 | (3 | ) | — | 792,554 | (4 | ) | 248,000 | (5 | ) | 132,521 | (6 | ) | 2,824,617 | ||||||||
2016 | 594,231 | — | 953,678 | — | 676,532 | 168,000 | 127,479 | 2,519,920 | |||||||||||||||||
2015 | 566,346 | — | 961,052 | — | 564,888 | — | 113,967 | 2,206,253 | |||||||||||||||||
Breege A. Farrell | |||||||||||||||||||||||||
Executive Vice President and Chief Investment Officer | 2017 | 458,385 | — | 494,697 | (3 | ) | — | 651,822 | (4 | ) | 47,000 | (5 | ) | 112,834 | (6 | ) | 1,764,738 | ||||||||
2016 | 451,500 | — | 448,816 | — | 598,689 | 38,000 | 99,493 | 1,636,498 | |||||||||||||||||
2015 | 444,618 | — | 443,024 | — | 557,551 | — | 109,762 | 1,554,955 | |||||||||||||||||
Lisa G. Iglesias | |||||||||||||||||||||||||
Executive Vice President and General Counsel | 2017 | 502,692 | — | 643,520 | (3 | ) | — | 452,423 | (4 | ) | — | (5 | ) | 105,505 | (6 | ) | 1,704,140 | ||||||||
2016 | 492,692 | — | 639,854 | — | 424,946 | — | 91,033 | 1,648,525 | |||||||||||||||||
2015 | 470,077 | — | 1,149,997 | — | 381,291 | — | 40,410 | 2,041,775 |
2017 ALL OTHER COMPENSATION | |||||||||||||||
Mr. McKenney | Mr. McGarry | Mr. Simonds | Ms. Farrell | Ms. Iglesias | |||||||||||
Employee and Spouse/Guest Attendance at Company Business Functions(a) | 52,009 | — | 4,178 | — | 4,597 | ||||||||||
Total Perquisites | $52,009 | $— | $4,178 | $— | $4,597 | ||||||||||
Matching Gifts Program(b) | 10,000 | 3,200 | 200 | 10,000 | 10,000 | ||||||||||
Company Matching Contributions Under our Qualified and Non-Qualified Defined Contribution Retirement Plan(c) | 155,047 | 68,374 | 64,404 | 52,854 | 46,382 | ||||||||||
Non-Resident State Taxes(d) | 43,677 | 1,420 | 1,515 | 2,355 | 2,385 | ||||||||||
Company Contributions to the Qualified and Non-Qualified Defined Contribution Retirement Plan(e) | 139,542 | 154,811 | 57,963 | 47,568 | 41,744 | ||||||||||
Tax Reimbursement Payments(f) | 29,650 | 114 | 4,261 | 57 | 397 | ||||||||||
Foreign Assignment(g) | — | 3,323 | — | — | — | ||||||||||
Total All Other Compensation | $429,925 | $231,242 | $132,521 | $112,834 | $105,505 |
Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(3) | All Other Stock Awards (Number of Shares of Stock or Units) | Grant Date Fair Value of Stock Awards | |||||
Threshold | Target | Max | Threshold | Target | Max | (#)(4) | ($) | ||
Mr. McKenney | |||||||||
— | 437,500 | 1,750,000 | 3,281,250 | ||||||
3/1/2017 | 55,154 | 2,749,978 | (5) | ||||||
3/1/2017 | 22,062 | 55,154 | 99,277 | 2,970,043 | (6) | ||||
Mr. McGarry (2) | |||||||||
— | 155,769 | 623,077 | 1,168,269 | ||||||
3/1/2017 | 10,028 | 499,996 | (5) | ||||||
3/1/2017 | 4,011 | 10,028 | 18,050 | 540,008 | (6) | ||||
Mr. Simonds | |||||||||
— | 137,596 | 550,385 | 1,031,972 | ||||||
3/1/2017 | 10,028 | 499,996 | (5) | ||||||
3/1/2017 | 4,011 | 10,028 | 18,050 | 540,008 | (6) | ||||
Ms. Farrell | |||||||||
— | 137,516 | 550,062 | 1,031,366 | ||||||
3/1/2017 | 4,770 | 237,832 | (5) | ||||||
3/1/2017 | 1,908 | 4,770 | 8,586 | 256,865 | (6) | ||||
Ms. Iglesias | |||||||||
— | 94,255 | 377,019 | 706,911 | ||||||
3/1/2017 | 6,205 | 309,381 | (5) | ||||||
3/1/2017 | 2,482 | 6,205 | 11,169 | 334,139 | (6) |
Option Awards | Stock Awards | |||||||||||||
Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) | |||||||
(# Exercisable) | (# Unexercisable) | ($) | (#) | ($) | (#) | ($) | ||||||||
Mr. McKenney | ||||||||||||||
39,760 | — | 24.25 | 2/20/2021 | 135,450 | 7,434,851 | 272,680 | 14,967,405 | |||||||
Mr. McGarry | ||||||||||||||
— | — | — | — | 24,649 | 1,352,984 | 48,614 | 2,668,422 | |||||||
Mr. Simonds | ||||||||||||||
— | — | — | — | 26,847 | 1,473,632 | 49,991 | 2,744,006 | |||||||
Ms. Farrell | ||||||||||||||
— | — | — | — | 12,639 | 693,755 | 23,620 | 1,296,502 | |||||||
Ms. Iglesias | ||||||||||||||
— | — | — | — | 26,216 | 1,438,996 | 32,585 | 1,788,591 |
Number of Restricted Shares/Units Vesting(1) | |||||||||||
Vesting Date | Grant Date | Mr. McKenney | Mr. McGarry(2) | Mr. Simonds | Ms. Farrell | Ms. Iglesias | |||||
January 8, 2018 | 1/8/2015 | — | — | — | — | 8,909 | |||||
February 23, 2018 | 2/23/2016 | 31,544 | 5,559 | 5,811 | 2,735 | 3,898 | |||||
February 24, 2018 | 2/24/2015 | 15,505 | 3,199 | 4,884 | 2,252 | 3,102 | |||||
March 1, 2018 | 3/1/2017 | 18,446 | 3,354 | 3,354 | 1,595 | 2,075 | |||||
February 23, 2019 | 2/23/2016 | 32,500 | 5,727 | 5,988 | 2,818 | 4,017 | |||||
March 1, 2019 | 3/1/2017 | 18,448 | 3,354 | 3,354 | 1,595 | 2,076 | |||||
March 1, 2020 | 3/1/2017 | 19,007 | 3,456 | 3,456 | 1,644 | 2,139 | |||||
Total | 135,450 | 24,649 | 26,847 | 12,639 | 26,216 |
Option Awards | Stock Awards(3) | |||||||
Name | Number of Shares Acquired on Exercise(1) (#) | Value Realized on Exercise(2) ($) | Number of Shares Acquired on Vesting(4) (#) | Value Realized on Vesting(5) ($) | ||||
Mr. McKenney | 60,318 | 1,439,210 | 124,111 | 6,435,747 | ||||
Mr. McGarry | — | — | 25,423 | 1,318,728 | ||||
Mr. Simonds | — | — | 35,638 | 1,858,978 | ||||
Ms. Farrell | — | — | 17,787 | 922,839 | ||||
Ms. Iglesias | — | — | 15,659 | 728,307 |
| ||
Unum Group Pension Plan (Qualified Plan) | | |
| Provides funded, tax-qualified benefits up to the limits on compensation and benefits under the Code. The Qualified Plan was designed to provide tax-qualified pension benefits for most employees. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Qualified Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Unum Group Supplemental Pension Plan (Excess Plan) | |
| Provides unfunded, non-qualified benefits for compensation that exceeds the Code limits applicable to the Qualified Plan. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Excess Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Credited service | |
| ||
Measures of the time individuals are employed at the company. One year of credited service is granted for each plan year in which 1,000 hours of employment are completed. No additional credited service will accrue to any participant after December 31, 2013. | |
| Highest average earnings | |
| The average of the highest 5 years of compensation (whether or not consecutive) during the earlier of the last 10 years of employment or as of the date the plan was frozen on December 31, 2013. | |
| Social Security covered compensation | |
| The average of the taxable wage bases in effect for each calendar year during the 35-year period ending when the plan was frozen on December 31, 2013. | |
(1) | Can range from 3%, if the sum of an employee’s age and years of credited service is less than 30, to 8%, if the sum equals or exceeds 95. |
(2) | Equal to 9.0 for retirement at age 65 and increased by 0.2 for each whole year retirement occurs prior to age 65. |
| Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compen- sation ($) | | | Change in Pension Value & Non- qualified Deferred Compen-sation Earnings ($) | | | All Other Compensation ($) | | | TOTAL ($) | |
| Richard P. McKenney | | | | | | | | | | | | | | | | | | | | |||||||||
| President and Chief Executive Officer, and a Director | | | 2019 | | | 1,000,000 | | | — | | | 6,420,903 (2) | | | — | | | 1,710,000 (3) | | | 161,000 (4) | | | 435,283 (5) | | | 9,727,186 | |
| 2018 | | | 1,000,000 | | | — | | | 6,564,575 | | | — | | | 1,900,000 | | | — | | | 432,286 | | | 9,896,861 | | |||
| 2017 | | | 1,000,000 | | | — | | | 5,720,021 | | | — | | | 2,415,000 | | | 119,000 | | | 429,925 | | | 9,683,946 | | |||
| Steven A. Zabel | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Chief Financial Officer(6) | | | 2019 | | | 456,308 | | | — | | | 280,159 (2) | | | — | | | 410,335 (3) | | | — (4) | | | 73,235 (5) | | | 1,220,037 | |
| Michael Q. Simonds | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Chief Operating Officer(6) | | | 2019 | | | 634,817 | | | — | | | 1,261,822 (2) | | | — | | | 628,469 (3) | | | 340,000 (4) | | | 143,048 (5) | | | 3,008,156 | |
| 2018 | | | 627,418 | | | — | | | 1,125,485 | | | — | | | 627,418 | | | — | | | 146,822 | | | 2,527,143 | | |||
| 2017 | | | 611,538 | | | — | | | 1,040,004 | | | — | | | 792,554 | | | 248,000 | | | 132,521 | | | 2,824,617 | | |||
| Timothy G. Arnold | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, Voluntary Benefits and President, Colonial Life | | | 2019 | | | 500,035 | | | — | | | 682,420 (2) | | | — | | | 405,029 (3) | | | 304,000 (4) | | | 298,749 (5) | | | 2,190,233 | |
| 2018 | | | 497,144 | | | — | | | 636,801 | | | — | | | 447,429 | | | — | | | 245,965 | | | 1,827,339 | | |||
| | | | | | | | | | | | | | | | | | | | ||||||||||
| Lisa G. Iglesias | | | | | | | | | | | | | | | | | | | | |||||||||
| Executive Vice President, General Counsel | | | 2019 | | | 544,277 | | | — | | | 780,971 (2) | | | — | | | 465,357 (3) | | | — (4) | | | 112,906 (5) | | | 1,903,511 | |
| 2018 | | | 521,315 | | | — | | | 690,652 | | | — | | | 469,184 | | | — | | | 104,501 | | | 1,785,652 | | |||
| 2017 | | | 502,692 | | | — | | | 643,520 | | | — | | | 452,423 | | | — | | | 105,505 | | | 1,704,140 | | |||
| John F. McGarry | | | | | | | | | | | | | | | | | | | | |||||||||
| Retired Former Executive Vice President, Chief Financial Officer | | | 2019 | | | 606,981 | | | — | | | 1,310,158 (2) | | | — | | | 600,911 (3) | | | 416,000 (4) | | | 208,679 (5) | | | 3,142,729 | |
| 2018 | | | 630,000 | | | — | | | 1,151,381 | | | — | | | 693,000 | | | — | | | 239,440 | | | 2,713,821 | | |||
| 2017 | | | 623,077 | | | — | | | 1,040,004 | | | — | | | 822,462 | | | 322,000 | | | 231,242 | | | 3,038,785 | |
(1) | “Stock Awards” consists of performance share units (PSUs) and performance-based restricted stock units (PBRSUs). The number of shares payable under the PSU awards will be based on the actual performance, modified (up to +/- 20%) based on relative TSR, and may result in the ultimate award of 40-180% of the initial number of PSUs issued, with the potential for no award if company performance goals are not achieved during the three-year performance period. |
(2) | These awards were comprised of 50% PSUs and 50% PBRSUs granted on March 1, 2019 for performance in 2018 except for Mr. Zabel's awards which were comprised of 25% PSUs and 75% PBRSUs. The grant date fair value of stock awards for the PSUs was calculated in accordance with FASB ASC Topic 718 “Compensation – Stock Compensation” (ASC 718) as the number of units multiplied by the Monte Carlo simulation value of $40.67 on the grant date. The grant date fair value of stock awards for the PBRSUs was calculated in accordance with ASC 718 as the number of units multiplied by the closing market price of $37.67 on the grant date. The value of PSUs, assuming the highest possible outcomes of performance conditions (180%) to which 2019 awards are subject, determined based on the award amount at the time of grant and thus excluding dividend equivalent units that accrue during the performance period, would be: $5,557,515 for Mr. McKenney; $123,610 for Mr. Zabel; $1,092,151 for Mr. Simonds; $590,658 for Mr. Arnold; $675,958 for Ms. Iglesias; and $1,133,988 for Mr. McGarry. |
(3) | Amounts reflect the annual incentive awards paid in March 2020 for performance in 2019. These are discussed in further detail beginning on page 57. |
(4) | The amounts shown reflect the actuarial present value increases from December 31, 2018 |
(5) |
| | | Mr. McKenney | | | Mr. Zabel | | | Mr. Simonds | | | Mr. Arnold | | | Ms. Iglesias | | | Mr. McGarry | | |
| Employee and Spouse/Guest Attendance at Company Business Functions(a) | | | 45,443 | | | 874 | | | 9,315 | | | 76,740 | | | 309 | | | — | |
| Total Perquisites | | | $45,443 | | | $874 | | | $9,315 | | | $76,740 | | | $309 | | | — | |
| Matching Gifts Program(b) | | | 10,000 | | | 8,250 | | | 5,000 | | | 10,000 | | | 10,000 | | | 1,150 | |
| Company Matching Contributions Under our Qualified and Non-Qualified Defined Contribution Retirement Plan(c) | | | 145,000 | | | 14,000 | | | 63,112 | | | 47,373 | | | 50,673 | | | 62,394 | |
| Company Contributions to the Qualified and Non-Qualified Defined Contribution Retirement Plan(d) | | | 130,500 | | | 29,511 | | | 56,801 | | | 106,508 | | | 45,606 | | | 141,057 | |
| Non-Resident State Taxes(e) | | | 28,854 | | | 11,800 | | | 2,968 | | | 1,834 | | | 2,570 | | | 1,542 | |
| Tax Reimbursement Payments(f) | | | 75,486 | | | 8,800 | | | 5,852 | | | 56,294 | | | 3,748 | | | 1,036 | |
| Foreign Assignment(g) | | | — | | | — | | | — | | | — | | | — | | | 1,500 | |
| Total All Other Compensation | | | $435,283 | | | $73,235 | | | $143,048 | | | $298,749 | | | $112,906 | | | $208,679 | |
(a) | Spouses or guests sometimes accompany the NEO at company business functions. When their attendance is expected, a tax gross up payment is provided. Where applicable, these payments have been included under “Tax Reimbursement Payments.” Additionally, when these trips included travel on the corporate aircraft, the incremental cost was calculated to determine amounts to be reported. For purposes of compensation disclosure, the use of company aircraft is valued using an incremental cost that takes into account fuel costs, landing fees, parking, weather monitoring and maintenance fees per hour of flight. Crew travel expenses are included based on the actual amount incurred for a particular trip. Fixed costs that do not change based on usage, such as pilot salaries and depreciation of the aircraft, are excluded. Amounts represent the imputed income each NEO incurred for such attendance plus the incremental cost of the aircraft when the aircraft was used. |
(b) | Amounts represent those provided through our Matching Gifts Program, available to all full-time employees and non-employee directors. During 2019, the company matched eligible gifts from a minimum of $50 to an aggregate |
(c) | Amounts represent the aggregate matching contributions into our 401(k) Plan as well as matching contributions into our Non-Qualified Plan. Matching contributions under our 401(k) Plan are provided to all eligible employees participating in the plan as described beginning on page 75 in the Retirement and Workplace Benefits section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2019. Matching contributions under our Non-Qualified Plan are provided to eligible officers participating in the plan as described beginning on page 75 in the Retirement and Workplace Benefits section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2019. |
(d) | These amounts represent the aggregate of company and transition contributions under our 401(k) and Non-Qualified Plans as described beginning on page 75 in the Retirement and Workplace Benefits section. Full-time employees with one year of service with the company receive 4.5% of their salary and annual incentive contributed into their 401(k) Plan. Full-time employees who, as of December 31, 2013, had either: (i) reached a minimum of 60 points (age plus service) and at least 15 years of service or (ii) reached the age of 50 with 10 years of service with the company, receive an additional contribution into their 401(k) and Non-Qualified Plans through the transition contributions, as disclosed above in the Retirement and Workplace Benefits section. |
(e) | Many of our employees are required to travel to other company locations outside of their primary state of employment. While working in a state other than their primary state of employment, employees may become subject to state income taxes in that state if days worked or earnings accrued exceed an amount specified under state law. When this happens, we pay the state income tax on behalf of those employees (including our NEOs) and gross up the income amount for taxes (gross ups on these amounts are included in “Tax Reimbursement Payments”). The employee remains responsible for any taxes they would have incurred had they worked only in their primary state of employment. |
(f) | Amounts represent tax payments made by us on behalf of each NEO relating to Employee and Spouse/Guest Attendance at Company Business Functions, Non-Resident State Taxes and/or Foreign Assignment expenses. As disclosed on page 74, given the changes with the Tax Cuts and Jobs Act, the Non-Resident State Taxes now includes a federal tax gross up in addition to the FICA and Medicare. The amount shown above for Mr. McKenney includes the Federal tax impact of Non-Resident State taxes for both 2018 and 2019; he was the only employee that had a material impact in 2018 due to his level of business travels. This amount was paid to him in 2019. |
(g) | We provide expatriate employees (including executives) foreign tax preparation services while they are on assignment outside their home countries and after they return for as long as they have a foreign tax liability related to their assignment or a foreign tax credit that belongs to Unum as a result of the assignment. In 2019, we provided this benefit to Mr. McGarry in connection with his non-permanent relocation to the United Kingdom, consistent with the company's expatriate assignment policy. |
(6) | Mr. Zabel became CFO on July 1, 2019. Amounts reported include compensation provided to Mr. Zabel in his prior position as President and Chief Executive Officer of Closed Block Operations. Mr. Simonds was appointed COO effective February 1, 2020 and during 2019 served as President and Chief Executive Officer of Unum US. Also effective February 1, 2020, Mr. Arnold now reports to Mr. Simonds and, in addition to leading Colonial Life, has a lead role in shaping and driving our approach to voluntary benefits across the enterprise. |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(3) | | | All Other Stock Awards (Number of Shares of Stock or Units (#)(4) | | | Grant Date Fair Value of Stock Awards ($) | | |||||||||||||
| Grant Date | | | Threshold | | | Target | | | Max | | | Threshold | | | Target | | | Max | | ||||||
| Mr. McKenney | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 500,000 | | | 2,000,000 | | | 3,750,000 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 81,962 | | | 3,087,509 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 32,785 | | | 81,962 | | | 147,532 | | | | | 3,333,395 (6) | | ||||
| Mr. Zabel | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 94,985 | | | 379,939 | | | 712,386 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 5,469 | | | 206,017 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 729 | | | 1,823 | | | 3,281 | | | | | 74,141 (6) | | ||||
| Mr. Simonds | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 174,575 | | | 698,299 | | | 1,309,311 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 16,107 | | | 606,751 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 6,443 | | | 16,107 | | | 28,993 | | | | | 655,072 (6) | | ||||
| Mr. Arnold (2) | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 112,508 | | | 450,032 | ��� | | 843,810 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 8,711 | | | 328,143 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 3,484 | | | 8,711 | | | 15,680 | | | | | 354,276 (6) | | ||||
| Ms. Iglesias | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 129,266 | | | 517,063 | | | 969,493 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 9,969 | | | 375,532 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 3,988 | | | 9,969 | | | 17,944 | | | | | 405,439 (6) | | ||||
| Mr. McGarry (2) | | | | | | | | | | | | | | | | | | ||||||||
| — | | | 166,920 | | | 667,679 | | | 1,251,898 | | | | | | | | | | | | |||||
| 3/1/2019 | | | | | | | | | | | | | | | 16,724 | | | 629,993 (5) | | ||||||
| 3/1/2019 | | | | | | | | | 6,690 | | | 16,724 | | | 30,103 | | | | | 680,165 (6) | |
(1) | These amounts reflect the threshold, target, and maximum award under the Annual Incentive Plan. The threshold is 25% of the amount shown in the Target column and reflects the payout that would have been earned based on threshold achievement of each of the performance measures. Target amounts are based on the individuals’ earnings for 2019 and their annual incentive target. The maximum award is 187.5% of such target (150% plan maximum multiplied by 125% individual maximum). |
(2) | Mr. Arnold and Mr. McGarry's performance-based restricted stock units (PBRSUs) and performance share units (PSUs) were no longer subject to risk of forfeiture at the date of grant since they met the age and years of service requirements for retirement eligibility under the Stock Incentive Plan of 2017. Mr. Arnold's PBRSUs will continue to vest ratably over the three-year vesting period on each anniversary of the grant date. Mr. McGarry's PBRSUs accelerated vesting upon his retirement on October 31, 2019 and were subject to Internal Revenue Code Section 409A's settlement restrictions. The actual amount of PSUs that will vest will be determined based on the achievement of the three-year performance goals, modified by relative TSR, as described in further detail in the Long-term Incentives section beginning on page 62. |
(3) | The vesting of PSUs ranges from 40% to 180% of target based on the performance and market conditions described beginning on page 62 assuming threshold performance goals are exceeded. The grant date fair value of each PSU was calculated in accordance with Accounting Standards Codification (ASC) 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients. The actual amount that will be issued will be determined based on the achievement of the three-year performance goals (2019-2021), modified by relative TSR, as described in further detail in the Long-Term Incentives section beginning on page 62. |
(4) | The grant of PBRSUs made on March 1, 2019 for Messrs. McKenney, Zabel, Simonds, Arnold and McGarry as well as Ms. Iglesias were based on the achievement of a threshold of statutory after-tax operating earnings and individual performance for 2018 and vest ratably over three years. These awards were granted under the Stock Incentive Plan of 2017. Details are provided in the Long-Term Incentive Awards Granted in 2019 Table and related footnotes beginning on page 63. |
(5) | The grant date fair value of stock awards for the PBRSUs granted on March 1, 2019 was calculated as the number of units multiplied by the closing market price of $37.67 on the grant date. |
(6) | As noted above, the grant date fair value of PSUs granted on March 1, 2019 was calculated in accordance with ASC 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients as of March 1, 2019. The Monte Carlo valuation per share was $40.67. |
| Option Awards | | | Stock Awards | | ||||||||||||||||||
| Number of Securities Underlying Unexercised Options (# Exercisable) | | | Number of Securities Underlying Unexercised Options (# Unexercisable) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | | | Equity Incentive Plan Awards: Market or Pay-out Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | |
| Mr. McKenney | | | | | | | | | | | | | | | | |||||||
| 39,760 | | | — | | | 24.25 | | | 2/20/2021 | | | 151,806 | | | 4,426,663 | | | 154,969 | | | 4,518,896 | |
| Mr. Zabel | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 8,217 | | | 239,608 | | | 2,700 | | | 78,732 | |
| Mr. Simonds | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 28,349 | | | 826,657 | | | 28,681 | | | 836,338 | |
| Mr. Arnold | | | | | | | | | | | | | | | | |||||||
| | | — | | | — | | | — | | | 15,239 | | | 444,369 | | | 15,814 | | | 461,136 | | |
| Ms. Iglesias | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | 17,503 | | | 510,387 | | | 17,688 | | | 515,782 | |
| Mr. McGarry | | | | | | | | | | | | | | | | |||||||
| — | | | — | | | — | | | — | | | — | | | — | | | 29,595 | | | 862,990 | |
(1) | The amounts in this column represent the aggregate value of performance-based restricted stock units (PBRSUs), including dividend equivalents, shown in the “Number of Shares or Units of Stock That Have Not Vested” column based on the closing price of $29.16 on December 31, 2019, the last trading day of the year. |
(2) | This column reflects PSU awards that were granted on March 1, 2018 and March 1, 2019. They vest at the end of the respective performance period, subject to the level of achievement of applicable performance targets. In accordance with Instruction 3 to Regulation S-K Item 402(f)(2), the values for these awards in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and the “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns are reported at target levels since the company’s performance and relative TSR for 2018 and 2019 awards were below target. Actual shares to be issued under PSUs granted in connection with the 2018-2020 and 2019-2021 performance periods are not yet determinable and may differ from the performance level required to be disclosed in this table. The PSUs that were granted in 2017 (for the 2017-2019 performance period) vested on December 31, 2019 and are shown in the “2019 Option Exercises and Stock Vested” table. |
(3) | The amounts in this column represent the aggregate value of PSUs (including dividend equivalents) shown in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” column based on the closing price of $29.16 on December 31, 2019, the last trading day of the year. |
| | | | | Number of Units Vesting(1) | | |||||||||||||||||
| Vesting Date | | | Grant Date | | | Mr. McKenney | | | Mr. Zabel | | | Mr. Simonds | | | Mr. Arnold(2) | | | Ms. Iglesias | | | Mr. McGarry(2) | |
| March 1, 2020 | | | 3/1/2017 | | | 20,171 | | | 934 | | | 3,668 | | | 1,688 | | | 2,270 | | | — | |
| March 1, 2020 | | | 3/1/2018 | | | 23,335 | | | 818 | | | 4,000 | | | 2,263 | | | 2,456 | | | — | |
| March 1, 2020 | | | 3/1/2019 | | | 27,804 | | | 1,855 | | | 5,464 | | | 2,954 | | | 3,381 | | | — | |
| March 1, 2021 | | | 3/1/2018 | | | 24,043 | | | 843 | | | 4,123 | | | 2,333 | | | 2,529 | | | — | |
| March 1, 2021 | | | 3/1/2019 | | | 27,805 | | | 1,855 | | | 5,464 | | | 2,956 | | | 3,382 | | | — | |
| March 1, 2022 | | | 3/1/2019 | | | 28,648 | | | 1,912 | | | 5,630 | | | 3,045 | | | 3,485 | | | — | |
| Total | | | | | 151,806 | | | 8,217 | | | 28,349 | | | 15,239 | | | 17,503 | | | — | |
(1) | These PBRSUs include dividend equivalents earned through December 31, 2019. |
(2) | Mr. Arnold’s PBRSUs are no longer subject to the risk of forfeiture because he meets the age and years of service requirement for retirement eligibility. Mr. McGarry retired in 2019 and all of his PBRSUs vested because he met the age and years of service requirement for retirement eligibility. The PBRSUs will be distributed 6 months after his retirement date in compliance with Internal Revenue Code Section 409A. |
| | | Option Awards | | | Stock Awards(1) | |
| Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting(2) (#) | | | Value Realized on Vesting(3) ($) | |
| Mr. McKenney | | | — | | | — | | | 127,516 | | | 4,159,791 | |
| Mr. Zabel | | | — | | | — | | | 4,063 | | | 142,708 | |
| Mr. Simonds | | | — | | | — | | | 23,030 | | | 750,468 | |
| Mr. Arnold | | | — | | | — | | | 11,094 | | | 364,006 | |
| Ms. Iglesias | | | — | | | — | | | 14,553 | | | 475,640 | |
| Mr. McGarry(4) | | | — | | | — | | | 51,743 | | | 1,539,526 | |
(1) | Reflects the PBRSUs and PSUs that vested during 2019. |
(2) | Includes the total number of unrestricted shares acquired upon the vesting of PBRSUs and PSUs. A portion of these shares were withheld to cover taxes due upon vesting. |
(3) | PBRSUs were multiplied by the closing price on the vesting date. PSUs that were granted in 2017 (for the 2017-2019 performance period) and which vested on December 31, 2019, were multiplied by the closing stock price of $29.16 on December 31, 2019. The PSUs granted in 2017 were distributed on February 25, 2020 on which date the closing stock price was $25.60 per share. |
(4) | Mr. McGarry's vesting includes both normal, ratable, vesting in February/March as well as accelerated vesting as a result of his retirement. |
PENSION BENEFITS | |||||||
Name | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefits(2) | Payments During Last Fiscal Year | |||
(#) | ($) | ($) | |||||
Mr. McKenney | Qualified | 4.42 | 112,000 | — | |||
Excess | 4.42 | 615,000 | — | ||||
Mr. McGarry | Qualified | 28.00 | 1,203,000 | — | |||
Excess | 28.00 | 1,775,000 | — | ||||
Mr. Simonds | Qualified | 16.25 | 567,000 | — | |||
Excess | 16.25 | 752,000 | — | ||||
Ms. Farrell | Qualified | 3.00 | 112,000 | — | |||
Excess | 3.00 | 274,000 | — | ||||
Ms. Iglesias(1) | Qualified | — | — | — | |||
Excess | — | — | — |
| Name | | | Plan Name | | | Number of Years of Credited Service (#) | | | Present Value of Accumulated Benefits(3) ($) | | | Payments During Last Fiscal Year ($) | |
| Mr. McKenney | | | Qualified | | | 4.42 | | | 125,000 | | | — | |
| | | Excess | | | 4.42 | | | 684,000 | | | — | | |
| Mr. Zabel(1) | | | Qualified | | | — | | | — | | | — | |
| | | Excess | | | — | | | — | | | — | | |
| Mr. Simonds | | | Qualified | | | 16.25 | | | 637,000 | | | — | |
| | | Excess | | | 16.25 | | | 845,000 | | | — | | |
| Mr. Arnold | | | Qualified | | | 28.83 | | | 1,280,000 | | | — | |
| | | Excess | | | 28.83 | | | 650,000 | | | — | | |
| Ms. Iglesias(1) | | | Qualified | | | — | | | — | | | — | |
| | | Excess | | | — | | | — | | | — | | |
| Mr. McGarry(2) | | | Qualified | | | 28.00 | | | 1,311,000 | | | — | |
| | | Excess | | | 28.00 | | | 1,934,000 | | | — | |
(1) | No amounts are shown for Mr. Zabel or Ms. Iglesias because the plans were frozen to further accruals on December 31, 2013, before |
(2) | Mr. McGarry retired on October 31, 2019. He did not begin receiving pension benefits during 2019. In regards to his Excess pension plan benefit, in compliance with Internal Revenue Code Section 409A, he will receive this benefit in 2020. With respect to his Qualified plan benefit, he is eligible to begin this at any time prior to reaching age 65 but must begin no later than age 65. |
The |
NON-QUALIFIED DEFERRED COMPENSATION | |||||||||||
Name | Plan | Executive Contributions in Last FY(2) | Registrant Contributions in Last FY(3) | Aggregate Earnings in Last FY(4) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(5) | |||||
$ | $ | $ | $ | $ | |||||||
Mr. McKenney | Non-Qualified DC | 141,547 | 268,939 | 217,387 | — | 1,407,751 | |||||
Mr. McGarry(1) | Inactive NQ Plan | — | — | 9,654 | — | 45,194 | |||||
Non-Qualified DC | 109,748 | 187,184 | 153,940 | — | 1,033,584 | ||||||
Mr. Simonds | Non-Qualified DC | 50,904 | 96,717 | 117,579 | — | 661,619 | |||||
Ms. Farrell | Non-Qualified DC | 55,095 | 74,772 | 86,454 | — | 568,285 | |||||
Ms. Iglesias | Non-Qualified DC | 98,646 | 62,476 | 35,591 | — | 313,241 |
| Name | | | Plan | | | Executive Contributions in Last FY(4) $ | | | Registrant Contributions in Last FY(5) $ | | | Aggregate Earnings in Last FY(6) $ | | | Aggregate Withdrawals/ Distributions $ | | | Aggregate Balance at Last FYE(7) $ | |
| Mr. McKenney | | | Non- Qualified DC | | | 131,000 | | | 248,900 | | | 548,105 | | | — | | | 2,593,206 | |
| Mr. Zabel(1) | | | Non- Qualified DC | | | — | | | 16,911 | | | 11,473 | | | — | | | 74,472 | |
| Mr. Simonds | | | Non- Qualified DC | | | 49,112 | | | 93,312 | | | 177,430 | | | — | | | 978,261 | |
| Mr. Arnold | | | Non- Qualified DC | | | 60,072 | | | 116,243 | | | 243,034 | | | — | | | 1,121,334 | |
| Ms. Iglesias | | | Non- Qualified DC | | | 110,019 | | | 69,679 | | | 115,348 | | | — | | | 746,994 | |
| Mr. McGarry(2) | | | Inactive NQ Plan | | | — | | | — | | | 2,065 | | | (26,860) | | | — | |
| | | Equity(3) | | | — | | | 795,713 | | | 54,884 | | | — | | | 850,597 | | |
| | | Non- Qualified DC | | | 96,789 | | | 166,451 | | | 407,869 | | | — | | | 1,911,723 | |
(1) | Mr. Zabel's balance in the Non-qualified DC plan was $46,088 at December 31, 2018, which is included in the aggregate balance at December 31, 2019. |
Mr. McGarry |
(3) | These amounts represent Mr. McGarry's unvested PBRSUs at his October 31, 2019 retirement date, which were subject to Internal Revenue Code Section 409A's settlement restrictions, and the value of the units at the end of the year. The balance is |
(4) | |
These amounts are included in the Summary Compensation Table in the |
These amounts represent company contributions through our Non-Qualified Plan, as described in the Retirement and Workplace Benefits section beginning on page |
These amounts were not included in the Summary Compensation Table because investment earnings were not preferential or above market. The investment options under the non-qualified retirement plans are the same choices available to all employees that are eligible to participate in the 401(k) Plan and NEOs do not receive preferential earnings on their investments. |
This column includes the following amounts that were reported in prior |
| |
Termination with cause | |
| One or more of the following factors is present: the failure to substantially perform duties; the willful engagement in illegal conduct or gross misconduct harmful to the company; or the conviction of a felony (or plea of |
| Termination without cause |
| One or more of the following factors is present: poor performance, other than for misconduct or cause (as defined above); job elimination; job requalification; or the decision to fill the position with a different resource consistent with the direction of the company. |
| Resignation for good reason |
| One or more of the following events have preceded the resignation of the NEO: assignment to a position inconsistent with his or her existing position or any other action that diminishes such position; reduction of his or her base salary or annual incentive target; failure to continue any material employee benefit or compensation plan in which he or she participates; or relocation to an office more than 50 miles from his or her location. |
| Change in control |
| A change in control occurs when one of the following situations exists: (a) the incumbent directors cease to be a majority for two years; (b) an entity acquires 20% of our voting stock (30% in some instances); (c) we consummate certain transactions such as a merger or disposition of substantially all of our assets; or (d) shareholders approve a plan of liquidation or distribution. |
|
| |||||||||||||||||
Benefits Received | | | Termination for Cause or Voluntary Resignation | | | Termination Without Cause or Resignation with Good Reason* | Disability | | | Death | | | Retirement | | |||
| Severance(1) | | | | | CEO, NEOs | | | | | | | | ||||
| Prorated Annual Incentive(2) | | | | CEO | | | CEO, NEOs | | | CEO, NEOs | | | If Retirement Eligible | | ||
| Early Vesting of Equity(3) | | | | CEO | | | CEO, NEOs | | | CEO, NEOs | | | If Retirement Eligible | | ||
| Benefit Continuation(4) | | | | CEO | | | | | | | | |||||
| Outplacement Services(5) | | | | | CEO, NEOs | | | | | | | | ||||
| Disability Benefits(6) | | | | | | | CEO, NEOs | | | | | | ||||
| Group Life Ins. Benefits(7) | | | | | | | | | CEO, NEOs | | | | ||||
| Corporate Owned Life Ins.(7) | | | | | | | | NEOs who gave approval | | | |
(1) | If Mr. McKenney is terminated without cause or resigns with good reason, he will receive severance of two times the sum of his annual base salary and the average annual incentive paid to him in the three years prior to the date of |
(2) | Annual incentive will be prorated based on the date of termination of employment. For all NEOs other than Mr. McKenney, the NEO will be eligible for prorated annual incentive in the event of death, disability, or retirement (if eligible) only if such termination occurs on or after the last pay period in |
(3) | If Mr. McKenney is terminated without cause, a prorated portion of his unvested equity awards, with the exception of his performance share units (PSUs) will accelerate vesting under the terms of the award agreements. In the event of his death, disability, or retirement (if eligible at the time) or if he is terminated without cause or resigns for good reason, Mr. McKenney would be eligible to receive a prorated portion of the PSUs based on actual performance at the end of the |
(4) | If Mr. McKenney is terminated without cause or resigns with good reason, he will receive health and welfare benefits for up to 2 years. |
(5) | Outplacement services are |
(6) | Monthly benefits from the company’s long-term disability plan until the earlier of age 65 or death. |
(7) | Group life insurance benefits are $50,000 for each full-time |
TERMINATION TABLE | |||||||||||||||
Termination Scenario | Mr. McKenney | Mr. McGarry | Mr. Simonds | Ms. Farrell | Ms. Iglesias | ||||||||||
($) | ($) | ($) | ($) | ($) | |||||||||||
Termination for Cause or Voluntary Resignation | |||||||||||||||
— | — | — | — | — | |||||||||||
Total | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Termination Without Cause or Resignation with Good Reason (CEO) | |||||||||||||||
Severance | 6,217,399 | 945,000 | 922,500 | 690,000 | 757,500 | ||||||||||
Prorated Annual Incentive(1) | 2,108,699 | — | — | — | — | ||||||||||
Early Vesting of Equity(2) | 19,126,786 | — | — | — | — | ||||||||||
Benefit Continuation | 88,472 | — | — | — | — | ||||||||||
Outplacement Services | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||
Total | $ | 27,591,356 | $ | 995,000 | $ | 972,500 | $ | 740,000 | $ | 807,500 | |||||
Disability | |||||||||||||||
Prorated Annual Incentive(1) | 2,108,699 | 822,462 | 792,554 | 651,822 | 452,423 | ||||||||||
Early Vesting of Equity(2)(3) | 19,126,786 | 3,531,900 | 4,061,736 | 1,904,333 | 2,432,696 | ||||||||||
Disability Benefits | 358,714 | 140,500 | 435,181 | 188,087 | 298,630 | ||||||||||
Total | $ | 21,594,199 | $ | 4,494,862 | $ | 5,289,471 | $ | 2,744,242 | $ | 3,183,749 | |||||
Death | |||||||||||||||
Prorated Annual Incentive(1) | 2,108,699 | 822,462 | 792,554 | 651,822 | 452,423 | ||||||||||
Early Vesting of Equity(2)(3) | 19,126,786 | 3,531,900 | 4,061,736 | 1,904,333 | 2,432,696 | ||||||||||
Group Life Ins. Benefits | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||
Corporate Owned Life Ins. | — | 200,000 | — | — | — | ||||||||||
Total | $ | 21,285,485 | $ | 4,604,362 | $ | 4,904,290 | $ | 2,606,155 | $ | 2,935,119 | |||||
Termination Related to a Change in Control | |||||||||||||||
Severance | 9,326,098 | 2,748,808 | 2,583,064 | 2,117,378 | 1,859,892 | ||||||||||
Prorated Annual Incentive(1) | 2,108,699 | 630,000 | 553,500 | 552,000 | 378,750 | ||||||||||
Early Vesting of Equity | 19,126,786 | 3,531,900 | 4,061,736 | 1,904,333 | 2,432,696 | ||||||||||
Benefit Continuation | 132,708 | 80,299 | 97,331 | 70,616 | 93,722 | ||||||||||
Outplacement Services | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||
DC Enhancement(4) | 279,000 | 310,000 | 116,000 | 95,000 | — | ||||||||||
Total | $ | 31,023,291 | $ | 7,351,007 | $ | 7,461,631 | $ | 4,789,327 | $ | 4,815,060 | |||||
Retirement | |||||||||||||||
Prorated Annual Incentive(5) | — | — | — | — | — | ||||||||||
Early Vesting of Equity(2)(3)(6) | — | 3,531,900 | — | — | — | ||||||||||
Total | $ | — | $ | 3,531,900 | $ | — | $ | — | $ | — |
| Termination Scenario | | | Mr. McKenney ($) | | | Mr. Zabel ($) | | | Mr. Simonds ($) | | | Mr. Arnold ($) | | | Ms. Iglesias ($) | |
| Termination for Cause or Voluntary Resignation | | |||||||||||||||
| | | — | | | — | | | — | | | — | | | — | | |
| Total | | | $ — | | | $ — | | | $ — | | | $ — | | | $ — | |
| Termination Without Cause or Resignation with Good Reason (CEO) | | |||||||||||||||
| Severance | | | 6,277,291 | | | 862,500 | | | 960,000 | | | 750,053 | | | 825,000 | |
| Prorated Annual Incentive(1) | | | 2,138,646 | | | — | | | — | | | — | | | — | |
| Early Vesting of Equity(2) | | | 10,675,485 | | | — | | | — | | | — | | | — | |
| Benefit Continuation | | | 82,315 | | | — | | | — | | | — | | | — | |
| Outplacement Services | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | |
| Total | | | $19,223,737 | | | $912,500 | | | $1,010,000 | | | $800,053 | | | $875,000 | |
| Disability | | |||||||||||||||
| Prorated Annual Incentive(1) | | | 2,138,646 | | | 410,335 | | | 628,469 | | | 405,029 | | | 465,357 | |
| Early Vesting of Equity(2)(3) | | | 10,675,485 | | | 345,002 | | | 1,977,540 | | | 1,050,198 | | | 1,220,774 | |
| Disability Benefits | | | 328,046 | | | 322,081 | | | 413,047 | | | 198,994 | | | 261,792 | |
| Total | | | $13,142,177 | | | $1,077,418 | | | $3,019,056 | | | $1,654,221 | | | $1,947,923 | |
| Death | | |||||||||||||||
| Prorated Annual Incentive(1) | | | 2,138,646 | | | 410,335 | | | 628,469 | | | 405,029 | | | 465,357 | |
| Early Vesting of Equity(2)(3) | | | 10,675,485 | | | 345,002 | | | 1,977,540 | | | 1,050,198 | | | 1,220,774 | |
| Group Life Ins. Benefits | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | |
| Corporate Owned Life Ins. | | | 200,000 | | | 200,000 | | | 200,000 | | | 400,000 | | | 200,000 | |
| Total | | | $13,064,131 | | | $1,005,337 | | | $2,856,009 | | | $1,905,227 | | | $1,936,131 | |
| Termination Related to a Change in Control | | |||||||||||||||
| Severance | | | 9,415,937 | | | 2,300,000 | | | 2,688,000 | | | 1,900,133 | | | 2,145,000 | |
| Prorated Annual Incentive(1) | | | 2,138,646 | | | 575,000 | | | 704,000 | | | 450,032 | | | 522,500 | |
| Early Vesting of Equity | | | 10,675,485 | | | 345,002 | | | 1,977,540 | | | 1,050,198 | | | 1,220,774 | |
| Benefit Continuation | | | 123,473 | | | 75,305 | | | 98,432 | | | 107,683 | | | 95,254 | |
| Outplacement Services | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | |
| DC Enhancement(4) | | | 261,000 | | | — | | | 114,000 | | | — | | | — | |
| 280G Cut-back(5) | | | — | | | (121,156) | | | — | | | — | | | — | |
| Total | | | $22,664,541 | | | $3,224,151 | | | $5,631,972 | | | $3,558,046 | | | $4,033,528 | |
| Retirement | | |||||||||||||||
| Prorated Annual Incentive(6) | | | — | | | — | | | — | | | — | | | — | |
| Early Vesting of Equity(2)(3) | | | — | | | — | | | — | | | 1,050,198 | | | — | |
| Total | | | $ — | | | $ — | | | $ — | | | $1,050,198 | | | $ — | |
(1) | In these scenarios, per the terms of Mr. McKenney’s severance agreement, he would be entitled to a prorated annual incentive. The amount is to be calculated using the average annual bonuses paid for the three most-recent calendar |
(2) | |
In the event of job elimination, the prorated early vesting of equity awards would be as follows: Mr. McKenney |
(3) | |
The amounts reported include PBRSUs and PSUs that would accelerate vesting in the event of disability, death or retirement. The PSUs granted in |
(4) | Defined Contribution (DC) enhancement is a lump sum payment representing the amount resulting from multiplying the company’s non-contributory retirement plan contributions times two additional years of eligible earnings for |
(5) | Mr. Zabel's benefits and payments are subject to a cutback to eliminate any excise tax payable under section 4999 of the Code if the net after-tax amount that he would receive with respect to such payments or benefits exceeds the net after-tax amount Mr. Zabel would receive if the amounts of such payments and benefits were not reduced and he paid the excise tax. In respect of a termination occurring as of December 31, 2019, Mr. Zabel would receive a greater benefit by having such benefits and payments reduced than by receiving such benefits and payments and paying the excise tax. The amount included above (which reduces the total for the termination scenario) is the amount by which such payments and benefits must be reduced in order for Mr. Zabel to avoid paying the excise tax. |
Messrs. McKenney, |
• | A prorated bonus per the terms of the Annual Incentive Plan. Details can be found on page 61 in the Annual Incentive Paid in 2020 table; |
• | Acceleration of |
• | Accrued pension benefits as described in the |
• | |
Non-qualified deferred compensation payments as described in the Non-Qualified Deferred Compensation section beginning on page 86. |
| Plan Category | | | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | (b) Weighted average exercise price of outstanding options, warrants and rights(5) | | | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |
| Equity Compensation Plans Approved by Shareholders(1) | | | 2,081,673 (3) | | | $24.09 | | | 14,462,321 (6) | |
| Equity Compensation Plans Not Approved by Shareholders(2) | | | 38,012 (4) | | | N/A | | | 13,407 (7) | |
| Total | | | 2,119,685 | | | N/A | | | 14,475,728 | |
(1) | Our shareholders have approved the following plans: (a) Stock Incentive Plan of 2007, (b) Unum Group Employee Stock Purchase Plan (ESPP), (c) Stock Incentive Plan of 2012, (d) Unum European Holding Company Limited Savings-Related Share Option Scheme 2016 (2016 SAYE), and (e) Stock Incentive Plan of 2017. |
(2) | Our shareholders have not approved the Unum Group Non-Employee Director Compensation Plan of 2004. |
(3) | Includes 73,802 shares issuable upon the exercise of outstanding options; 1,130,226 shares issuable under performance-based restricted stock units; 47,618 shares issuable under deferred share rights on outstanding awards; and 830,027 shares issuable under performance share units assuming maximum achievement (with 461,126 shares issuable at target achievement). Shares issuable include accrued dividend equivalents. The awards shown are issuable under the 2007 Plan, the 2012 Plan, and the 2017 Plan. |
(4) | Consists of 35,397 deferred share rights (each representing the right to one share of common stock), and 2,615 deferred restricted stock units, including dividend equivalents accrued thereon, granted to non-employee directors under the Unum Group Non-Employee Director Compensation Plan of 2004 in accordance with the deferral elections of such directors in respect of cash retainers and meeting fees payable to them. |
(5) | RSUs, PSUs, and deferred share rights are not included in determining the weighted average exercise price in column (b) because they have no exercise price. |
(6) | Includes 73,356 shares and 126,841 shares available for future issuance as dividend equivalents in respect of outstanding awards under the 2007 Plan and the 2012 Plan, respectively, which were otherwise replaced by the 2017 Plan for purposes of granting new awards; 13,940,660 shares remaining available for future issuance under the 2017 Plan; 122,162 shares remaining available for issuance under the ESPP; and 199,302 shares remaining available for future issuance under the 2016 SAYE. Any award outstanding under the 2012 Plan as of the effective date of the 2017 Plan that after such date is not issued because the award is forfeited, terminates, expires or otherwise lapses without being exercised, or is settled for cash, will be returned to the 2017 Plan. Each PSU, RSU or other full-value award under the 2017 Plan is counted as 1.76 shares. |
(7) | Represents number of shares available for future issuance as dividend equivalents in respect of outstanding awards under the Non-Employee Director Compensation Plan of 2004. |
BENEFICIAL OWNERSHIP OF COMMON STOCK | (as of March 15, 2018) | ||||
Name | Shares of Common Stock(1) | Shares Subject to Exercisable Options(2) | Shares Subject to Settleable Rights or Units(3)(4)(5) | Total Shares Beneficially Owned | Percent of Class |
Theodore H. Bunting, Jr. | 16 | — | 18,477 | 18,493 | * |
E. Michael Caulfield | 3,890 | — | 31,830 | 35,719 | * |
Susan D. DeVore | — | — | — | — | * |
Joseph J. Echevarria | — | — | 11,034 | 11,034 | * |
Cynthia L. Egan | 6,978 | — | — | 6,978 | * |
Pamela H. Godwin | 32,737 | — | 9,613 | 42,351 | * |
Kevin T. Kabat | 27,434 | — | 11,386 | 38,820 | * |
Timothy F. Keaney | 23,477 | — | 3,349 | 26,826 | * |
Gloria C. Larson | — | — | 72,847 | 72,847 | * |
Ronald P. O'Hanley | 4,918 | — | 5,326 | 10,244 | * |
Francis J. Shammo | 4,279 | — | 3,257 | 7,536 | * |
Richard P. McKenney | 278,355 | 39,760 | — | 318,115 | * |
John F. McGarry | 59,459 | — | 24,330 | 83,790 | * |
Michael Q. Simonds | 52,943 | — | — | 52,943 | * |
Breege A. Farrell | 49,371 | — | — | 49,371 | * |
Lisa G. Iglesias | 25,362 | — | — | 25,362 | * |
All directors and executive officers as a group (20 persons) | 638,054 | 39,760 | 201,274 | 879,088 | * |
| BENEFICIAL OWNERSHIP OF COMMON STOCK | | | (as of March 31, 2020) | |
| Name | | | Shares of Common Stock(1) | | | Shares Subject to Exercisable Options(2) | | | Shares Subject to Settleable Rights or Units(3)(4)(5) | | | Total Shares Beneficially Owned | | | Percent of Class | |
| Theodore H. Bunting, Jr. | | | 1,456 | | | — | | | 22,471 | | | 23,927 | | | * | |
| Susan L. Cross | | | — | | | — | | | 10,170 | | | 10,170 | | | * | |
| Susan D. DeVore | | | 4,757 | | | — | | | 4,953 | | | 9,709 | | | * | |
| Joseph J. Echevarria | | | — | | | — | | | 31,934 | | | 31,934 | | | * | |
| Cynthia L. Egan | | | 19,539 | | | — | | | 4,953 | | | 24,492 | | | * | |
| Kevin T. Kabat | | | 45,052 | | | — | | | 19,362 | | | 64,414 | | | * | |
| Timothy F. Keaney | | | 33,191 | | | — | | | 5,846 | | | 39,037 | | | * | |
| Gloria C. Larson | | | 2,404 | | | — | | | 82,655 | | | 85,059 | | | * | |
| Ronald P. O'Hanley | | | 11,174 | | | — | | | 15,961 | | | 27,136 | | | * | |
| Francis J. Shammo | | | 7,579 | | | — | | | 12,651 | | | 20,231 | | | * | |
| Richard P. McKenney | | | 456,939 | | | 39,760 | | | — | | | 496,699 | | | * | |
| Steven A. Zabel | | | 11,248 | | | — | | | — | | | 11,248 | | | * | |
| Michael Q. Simonds | | | 89,338 | | | — | | | — | | | 89,338 | | | * | |
| Timothy G. Arnold | | | 33,983 | | | — | | | — | | | 33,983 | | | * | |
| Lisa G. Iglesias | | | 51,324 | | | — | | | — | | | 51,324 | | | * | |
| John F. McGarry | | | 20,468 | | | — | | | 15,886 | | | 36,354 | | | * | |
| All directors and executive officers as a group (20 persons) | | | 843,184 | | | 39,760 | | | 210,955 | | | 1,093,900 | | | * | |
* | Denotes less than 1%. |
(1) | Includes shares credited to the accounts of certain current and former executive officers, including Mr. Arnold - 651 shares and Mr. McGarry – |
(2) | Represents the number of shares underlying stock options that may be exercised within 60 days after March |
Represents the number of shares underlying deferred share rights and RSUs payable solely in shares (including dividend |
(4) | As of March |
Mr. Bunting | — | Mr. Kabat | 8,978 | |||||
Mr. Caulfield | 14,445 | Mr. Keaney | 2,292 | |||||
Ms. DeVore | — | Ms. Larson | 43,316 | |||||
Mr. Echevarria | 6,061 | Mr. O'Hanley | 5,326 | |||||
Ms. Egan | — | Mr. Shammo | — | |||||
Ms. Godwin | 10,585 |
Mr. Bunting | | | — | | | Mr. Kabat | | | 5,462 |
Ms. Cross | | | 4,226 | | | Mr. Keaney | | | 894 |
Ms. DeVore | | | — | | | Ms. Larson | | | 46,203 |
Mr. Echevarria | | | 13,979 | | | Mr. O'Hanley | | | 9,358 |
Ms. Egan | | | — | | | Mr. Shammo | | | — |
(5) | As of March |
Mr. Bunting | | | 27,304 | | | Mr. Kabat | | | 22,065 | | | Mr. McKenney(a) | | | 217,897 |
Ms. Cross | | | 5,944 | | | Mr. Keaney | | | 4,953 | | | Mr. McGarry | | | — |
Ms. DeVore | | | 4,953 | | | Ms. Larson | | | 36,452 | | | Mr. Simonds | | | 41,788 |
Mr. Echevarria | | | 17,955 | | | Mr. O'Hanley | | | 9,079 | | | Mr. Arnold | | | 23,161 |
Ms. Egan | | | 4,953 | | | Mr. Shammo | | | 12,651 | | | Ms. Iglesias | | | 25,413 |
| | | | | | | | All directors and executive officers as a group(a) | | | 555,335 |
(a) | Includes 68,318 shares underlying cash-settled restricted stock units that have been granted to Mr. McKenney. |
Mr. Bunting | 18,477 | Mr. Kabat | 22,275 | Mr. McKenney | 137,186 | |||||
Mr. Caulfield | 17,384 | Mr. Keaney | 3,349 | Mr. McGarry | 24,330 | |||||
Ms. DeVore | 730 | Ms. Larson | 29,531 | Mr. Simonds | 24,328 | |||||
Mr. Echevarria | 8,321 | Mr. O'Hanley | 3,349 | Ms. Farrell | 11,215 | |||||
Ms. Egan | 8,361 | Mr. Shammo | 6,606 | Ms. Iglesias | 15,309 | |||||
Ms. Godwin | 10,472 | All directors and executive officers as a group | 383,939 |
BENEFICIAL OWNERSHIP | |||
Name of Beneficial Owner | Address of Beneficial Owner | Amount of Beneficial Ownership | Percent of Common Stock Outstanding |
The Vanguard Group, Inc.(1) | 100 Vanguard Blvd. Malvern, PA 19355 | 24,734,732 | 11.02% |
FMR LLC(2) | 245 Summer Street Boston, MA 02210 | 19,504,945 | 8.69% |
BlackRock, Inc.(3) | 55 East 52nd Street New York, NY 10022 | 16,736,174 | 7.50% |
State Street Corporation(4) | One Lincoln Street Boston, MA 02111 | 11,606,825 | 5.17% |
| Name of Beneficial Owner | | | Address of Beneficial Owner | | | Amount of Beneficial Ownership | | | Percent of Common Stock Outstanding | |
| The Vanguard Group, Inc.(1) | | | 100 Vanguard Blvd. Malvern, PA 19355 | | | 25,318,319 | | | 12.27% | |
| FMR LLC(2) | | | 245 Summer Street Boston, MA 02210 | | | 18,543,535 | | | 8.99% | |
| BlackRock, Inc.(3) | | | 55 East 52nd Street New York, NY 10022 | | | 18,315,039 | | | 8.90% | |
(1) | This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by The Vanguard Group, Inc. on February |
This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by FMR LLC on February |
(3) | This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by BlackRock, Inc. on |
| Types of Fees | | | 2019 | | | 2018 | |
| Audit Fees | | | $8,316,250 | | | $8,445,000 | |
| Audit-Related Fees(1) | | | 421,500 | | | 445,500 | |
| Tax Fees(2) | | | 608,950 | | | 770,900 | |
| All Other Fees | | | — | | | — | |
| Total | | | $9,346,700 | | | $9,661,400 | |
(1) | The year-over-year decrease in Audit-Related Fees was primarily due to reduced efforts related to SSAE 18 reports. |
(2) | The year-over-year decrease in Tax Fees was primarily due to work related to tax reform in 2018. |
Types of Fees | 2017 | 2016 |
Audit Fees | $7,864,000 | $7,932,000 |
Audit-Related Fees | 407,000 | 424,000 |
Tax Fees1 | 615,000 | 127,000 |
All Other Fees | — | — |
Total | $8,886,000 | $8,483,000 |
• | Shares Remaining Available Under the Current ESPP. If our shareholders approve this proposal, the Current ESPP will terminate effective as of April 1, 2020 and 1,500,000 shares, plus the 53,505 shares that as of April 1, 2020 remained available for issuance under the Current ESPP, will be available for issuance under the ESPP. Subject to approval of this proposal by our shareholders, the ESPP will become effective as of April 1, 2020 and be used for all future offering periods in lieu of the Current ESPP. |
• | Dilution. Dilution is commonly measured by “overhang,” which generally refers to the amount of potential dilution to current shareholders that could result from the future issuance of the shares reserved under an equity compensation plan. Overhang is typically expressed as a percentage (equal to a fraction where the numerator is the sum of the number of shares reserved but not issued under equity compensation plans plus the number of shares subject to |
• | Shareholder participation. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the 2020 Annual Meeting online, vote your shares electronically, and submit questions during the meeting electronically. |
• | Accessing the meeting online. You may attend and participate in the 2020 Annual Meeting via the Internet at www.virtualshareholdermeeting.com/UNM2020. You will need the 16-digit control number included on your Notice, proxy card, or voting instruction form to log-in. The meeting webcast will begin promptly at 10:00 a.m. Eastern Daylight Time on May 28, 2020. We encourage you to access the meeting prior to the start time. Online check-in will begin approximately 15 minutes prior to the start time, and you should allow ample time for the check-in procedures. |
• | Technical Assistance. If you encounter any difficulties accessing the virtual meeting during the check-in or during the meeting, please call the technical support number that will be posted on the virtual meeting log-in page. |
• | Submitting questions. An online portal will be available at www.proxyvote.com on or about April 16, 2020. By accessing this portal, shareholders will be able to submit questions and vote in advance of the 2020 Annual Meeting. Shareholders may also submit questions and vote on the day of, or during, the 2020 Annual Meeting on www.virtualshareholdermeeting.com/UNM2020. We will try to answer as many shareholder-submitted questions as time permits that comply with the meeting rules of conduct. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. Answers to questions not addressed during the meeting will be posted on our investor relations website www.investors.unum.com under the “Proxy Materials” heading. |
• | Shareholder of record. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, the shareholder of record, and the Notice was sent directly to you. As the shareholder of record, you have the right to grant your voting proxy directly to the company or to vote at the 2020 Annual Meeting. If you requested to receive printed proxy materials, we have enclosed a proxy card for you to use. You may also vote on the Internet, or by telephone. You are also invited to attend the 2020 Annual Meeting via the Internet. |
• | Beneficial owner. If your shares are held in an account in the name of a brokerage firm, bank, broker-dealer, trust or other similar organization (i.e., in street name), like the vast majority of our shareholders, you are considered the beneficial owner of shares held in street name. As the beneficial owner, you must instruct the broker or other nominee about how to vote your shares. Under the rules of the New York Stock Exchange (NYSE), if you do not provide such instructions, the firm that holds your shares will have discretionary authority to vote your shares only with respect to “routine” matters, as described in “Voting your shares” below. You are also invited to attend the 2020 Annual Meeting via the Internet. |
| |
Items to be Voted on | | | Board Voting Recommendation | | | Vote Required for Approval | | | Effect of Abstention | | | Effect of Broker Non-Vote | | |
| Item 1: Election of 11 directors for terms expiring in | | | FOR each nominee | | | Majority of votes cast with respect to the nominee | | | No effect because not counted as vote cast | | | No effect because not counted as vote cast | |
| Item 2: Advisory vote to approve executive compensation | | | FOR | | | Majority of shares represented and entitled to vote | | | Same effect as AGAINST because is entitled to vote | | | No effect because not entitled to vote | |
| Item 3: Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for | | | FOR | | | Majority of shares represented and entitled to vote | | | Same effect as AGAINST because is entitled to vote | | | Not applicable; may be discretionarily voted by broker | |
| Item 4: Approval of | | | FOR | | | Majority of represented and entitled to vote | | | Same effect as AGAINST because is entitled to vote | | | No effect because not entitled to vote | |
| Item 5: Approval of the Unum European Holding Company Limited Savings-Related Share Option Scheme 2021 | | | FOR | | | Majority of shares represented and entitled to vote | | | Same effect as AGAINST because is entitled to vote | | | No effect because not entitled to vote | |
• | By Internet. Before the meeting, you may vote via the Internet by going to www.proxyvote.com and following the instructions on the screen. You will need the control number found on your Notice, proxy card (for shareholders of record) or voting instruction form (for beneficial owners) when you access the web page. Voting by Internet before the 2020 Annual Meeting is available until 11:59 p.m. Eastern Daylight Time on May 27, 2020. |
• | By telephone. You may vote by telephone by calling the applicable toll-free telephone number, 1-800-690-6903 (for shareholders of record) or 1-800-454-8683 (for beneficial owners), which is available 24 hours a day, and following the pre-recorded instructions. You will need the control number found on your Notice, proxy card, or voting instruction form when you call. You may vote by telephone until 11:59 p.m. Eastern Daylight Time on May 27, 2020. |
• | By mail. If you received a paper copy of your proxy materials, you may vote by mail by completing the enclosed proxy card or voting instruction form, dating and signing it, and returning it in the postage-paid envelope provided or returning it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your proxy card or voting instruction form, as applicable, must be received by May 27, 2020. |
After-Tax Adjusted Operating Income (Loss) | Average Allocated Equity(1) | Adjusted Operating Return on Equity | |||||||
Year Ended December 31, 2017 | |||||||||
Unum US | $ | 656.2 | $ | 4,130.2 | 15.9 | % | |||
Unum UK | 92.1 | 607.3 | 15.2 | % | |||||
Colonial Life | 211.2 | 1,308.1 | 16.2 | % | |||||
Core Operating Segments | 959.5 | 6,045.6 | 15.9 | % | |||||
Closed Block | 86.4 | 3,290.1 | |||||||
Corporate | (69.7 | ) | (893.3 | ) | |||||
Total | $ | 976.2 | $ | 8,442.4 | 11.6 | % | |||
Year Ended December 31, 2016 | $ | 915.6 | $ | 8,140.8 | 11.2 | % | |||
Year Ended December 31, 2015 | $ | 893.2 | $ | 7,961.1 | 11.2 | % |
| | | After-Tax Adjusted Operating Income (Loss) | | | Average Allocated Equity(1) | | | Adjusted Operating Return on Equity | | |
| Year Ended December 31, 2019 | | | | | | | | |||
| Unum US | | | $816.3 | | | $4,526.6 | | | 18.0% | |
| Unum International | | | 88.4 | | | 757.9 | | | 11.7% | |
| Colonial Life | | | 272.7 | | | 1,558.6 | | | 17.5% | |
| Core Operating Segments | | | 1,177.4 | | | 6,843.1 | | | 17.2% | |
| Closed Block | | | 104.4 | | | 3,842.2 | | | | |
| Corporate | | | (141.2) | | | (1,764.5) | | | | |
| Total | | | $ 1,140.6 | | | $ 8,920.8 | | | 12.8% | |
12/31/2017 | 12/31/2016 | 12/31/2015 | 12/31/2014 | ||||||||||||
Total Stockholders' Equity | $ | 9,574.9 | $ | 8,968.0 | $ | 8,663.9 | $ | 8,521.9 | |||||||
Excluding: | |||||||||||||||
Net Unrealized Gain on Securities | 607.8 | 440.6 | 204.3 | 290.3 | |||||||||||
Net Gain on Cash Flow Hedges | 282.3 | 327.5 | 378.0 | 391.0 | |||||||||||
Total Adjusted Stockholders' Equity | $ | 8,684.8 | $ | 8,199.9 | $ | 8,081.6 | $ | 7,840.6 | |||||||
Twelve Months Ended | Twelve Months Ended | Twelve Months Ended | |||||||||||||
12/31/2017 | 12/31/2016 | 12/31/2015 | |||||||||||||
Average Stockholders' Equity Excluding Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | $ | 8,442.4 | $ | 8,140.8 | $ | 7,961.1 |
| | | 12/31/2019 | | | 12/31/2018 | | | | | | |||
| Total Stockholders’ Equity | | | $ 9,965.0 | | | $ 8,621.8 | | | | | | ||
| Excluding: | | | | | | | | | | ||||
| Net Unrealized Gain (Loss) on Securities | | | 615.9 | | | (312.4) | | | | | | ||
| Net Gain on Hedges | | | 187.8 | | | 250.6 | | | | | | ||
| Total Adjusted Stockholders’ Equity | | | $9,161.3 | | | $8,683.6 | | | | | |
| | | Twelve Months Ended | | | | | | | | ||||
| | | 12/31/2019 | | | | | | | | ||||
Year Ended December 31 | ||||||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||||
(in millions) | per share * | (in millions) | per share * | (in millions) | per share * | |||||||||||||||||||
Net Income | $ | 994.2 | $ | 4.37 | $ | 931.4 | $ | 3.95 | $ | 867.1 | $ | 3.50 | ||||||||||||
Excluding: | ||||||||||||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $15.0; $8.4; $(17.7)) | 25.3 | 0.11 | 15.8 | 0.07 | (26.1 | ) | (0.11 | ) | ||||||||||||||||
Loss from Guaranty Fund Assessment (net of tax benefit of $7.2; $-; $-) | (13.4 | ) | (0.06 | ) | — | — | — | — | ||||||||||||||||
Unclaimed Death Benefits Reserve Increase (net of tax benefit $13.6; $-; $-) | (25.4 | ) | (0.11 | ) | — | — | — | — | ||||||||||||||||
Net Tax Benefit from Impacts of TCJA | 31.5 | 0.14 | — | — | — | — | ||||||||||||||||||
After-tax Adjusted Operating Income | $ | 976.2 | $ | 4.29 | $ | 915.6 | $ | 3.88 | $ | 893.2 | $ | 3.61 | ||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(in millions) | per share * | (in millions) | per share * | (in millions) | per share * | |||||||||||||||||||
Net Income | $ | 402.1 | $ | 1.57 | $ | 847.0 | $ | 3.19 | $ | 888.1 | $ | 3.15 | ||||||||||||
Excluding: | ||||||||||||||||||||||||
Net Realized Investment Gain (net of tax expense of $3.3; $2.9; $19.1) | 12.8 | 0.05 | 3.9 | 0.02 | 37.1 | 0.13 | ||||||||||||||||||
Costs Related to Early Retirement of Debt (net of tax benefit of $2.8; $-; $-) | (10.4 | ) | (0.04 | ) | — | — | — | — | ||||||||||||||||
Reserve Charges for Closed Block (net of tax benefit of $244.4; $-; $-) | (453.8 | ) | (1.77 | ) | — | — | — | — | ||||||||||||||||
Pension Settlement Loss (net of tax benefit of $22.5; $-; $-) | (41.9 | ) | (0.16 | ) | — | — | — | — | ||||||||||||||||
Unclaimed Death Benefits Reserve Increase (net of tax benefit of $-; $33.4; $-) | — | — | (62.1 | ) | (0.24 | ) | — | — | ||||||||||||||||
Group Life Waiver of Premium Benefit Reserve Reduction (net of tax expense of $-; $29.8; $-) | — | — | 55.2 | 0.21 | — | — | ||||||||||||||||||
After-tax Adjusted Operating Income | $ | 895.4 | $ | 3.49 | $ | 850.0 | $ | 3.20 | $ | 851.0 | $ | 3.02 |
$ 8,920.8 | | | | | | | |
| | Year Ended December 31 | ||||||||||||||||
| | 2019 | | | 2018 | | | 2017 | ||||||||||
| | (in millions) | | | per share* | | | (in millions) | | | per share * | | | (in millions) | | | per share* | |
Net Income | | | $ 1,100.3 | | | $ 5.24 | | | $ 523.4 | | | $ 2.38 | | | $ 994.2 | | | $ 4.37 |
Excluding: | | | | | | | | | | | | | ||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(4.5); $(11.0); $15.0) | | | (18.7) | | | (0.09) | | | (28.5) | | | (0.12) | | | 25.3 | | | 0.11 |
Cost Related to Early Retirement of Debt (net of tax benefit $5.7; $-; $-) | | | (21.6) | | | (0.11) | | | | | | | | | ||||
Long-term Care Reserve Increase (net of tax benefit of $-; $157.7; $-) | | | — | | | — | | | (593.1) | | | (2.70) | | | — | | | — |
Loss from Guaranty Fund Assessment (net of tax benefit of $-; $-; $7.2;) | | | — | | | — | | | — | | | — | | | (13.4) | | | (0.06) |
Unclaimed Death Benefits Reserve Increase (net of tax benefit $-; $-; $13.6) | | | — | | | — | | | — | | | — | | | (25.4) | | | (0.11) |
Net Tax Benefit from Impacts of TCJA | | | — | | | — | | | — | | | — | | | 31.5 | | | 0.14 |
After-tax Adjusted Operating Income | | | $1,140.6 | | | $5.44 | | | $1,145.0 | | | $5.20 | | | $976.2 | | | $4.29 |
| | Year Ended December 31 | ||||||||||||||||
| | 2016 | | | 2015 | | | 2014 | ||||||||||
| | (in millions) | | | per share* | | | (in millions) | | | per share * | | | (in millions) | | | per share* | |
Net Income | | | $ 931.4 | | | $ 3.95 | | | $ 867.1 | | | $ 3.50 | | | $ 402.1 | | | $ 1.57 |
Excluding: | | | | | | | | | | | | | ||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $8.4; $(17.7); $3.3) | | | 15.8 | | | 0.07 | | | (26.1) | | | (0.11) | | | 12.8 | | | 0.05 |
Costs Related to Early Retirement of Debt (net of tax benefit of $-; $-; $2.8) | | | — | | | — | | | — | | | — | | | (10.4) | | | (0.04) |
Reserve Charge for Closed Block (net of tax benefit of $-; $-; $244.4) | | | — | | | — | | | — | | | — | | | (453.8) | | | (1.77) |
Pension Settlement Loss (net of tax benefit of $-; $-; $22.5) | | | — | | | — | | | — | | | — | | | (41.9) | | | (0.16) |
After-tax Adjusted Operating Income | | | $915.6 | | | $3.88 | | | $893.2 | | | $3.61 | | | $895.4 | | | $3.49 |
Year Ended December 31 | ||||||||||||||||||||||||
2011 | 2010 | 2009 | ||||||||||||||||||||||
(in millions) | per share * | (in millions) | per share * | (in millions) | per share * | |||||||||||||||||||
Net Income | $ | 283.6 | $ | 0.94 | $ | 877.6 | $ | 2.69 | $ | 847.3 | $ | 2.55 | ||||||||||||
Excluding: | ||||||||||||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(1.3); $9.0; $11.5) | (3.6 | ) | (0.01 | ) | 15.7 | 0.05 | 0.2 | — | ||||||||||||||||
Reserve Charges for Closed Block (net of tax benefit of $265.0; $-; $-) | (492.1 | ) | (1.62 | ) | — | — | — | — | ||||||||||||||||
Deferred Acquisition Costs for Closed Block (net of tax benefit of $68.5; $-; $-) | (127.5 | ) | (0.42 | ) | — | — | — | — | ||||||||||||||||
Special Tax Items | 22.7 | 0.08 | (10.2 | ) | (0.03 | ) | — | — | ||||||||||||||||
After-tax Adjusted Operating Income | $ | 884.1 | $ | 2.91 | $ | 872.1 | $ | 2.67 | $ | 847.1 | $ | 2.55 | ||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||
2008 | 2007** | 2006** | ||||||||||||||||||||||
(in millions) | per share * | (in millions) | per share * | (in millions) | per share * | |||||||||||||||||||
Net Income | $ | 553.4 | $ | 1.62 | $ | 679.3 | $ | 1.91 | $ | 411.0 | $ | 1.23 | ||||||||||||
Excluding: | ||||||||||||||||||||||||
Income from Discontinued Operations | — | — | 6.9 | 0.02 | 7.4 | 0.02 | ||||||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(161.8); $(22.0); $0.7) | (304.1 | ) | (0.89 | ) | (43.2 | ) | (0.12 | ) | 1.5 | 0.01 | ||||||||||||||
Regulatory Reassessment Charges (net of tax benefit of $-; $31.3; $129.0) | — | — | (34.5 | ) | (0.10 | ) | (267.4 | ) | (0.79 | ) | ||||||||||||||
Debt Extinguishment Costs (net of tax benefit of $-; $20.5; $8.9) | — | — | (38.3 | ) | (0.11 | ) | (16.9 | ) | (0.05 | ) | ||||||||||||||
Other (net of tax expense (benefit) of $-; $-; $(5.8)) | — | — | — | — | (12.7 | ) | (0.04 | ) | ||||||||||||||||
Special Tax Items | — | — | 2.2 | 0.01 | 95.8 | 0.28 | ||||||||||||||||||
After-tax Adjusted Operating Income | $ | 857.5 | $ | 2.51 | $ | 786.2 | $ | 2.21 | $ | 603.3 | $ | 1.80 |
Year Ended December 31 | ||||||||||||||||
2005** | ||||||||||||||||
(in millions) | per share * | |||||||||||||||
Net Income | $ | 513.6 | $ | 1.64 | ||||||||||||
Excluding: | ||||||||||||||||
Income from Discontinued Operations | 9.6 | 0.03 | ||||||||||||||
Net Realized Investment Loss (net of tax benefit of $2.4) | (4.3 | ) | (0.02 | ) | ||||||||||||
Regulatory Reassessment Charges (net of tax benefit of $1.1) | (51.6 | ) | (0.16 | ) | ||||||||||||
Other (net of tax expense of $1.7) | 4.0 | 0.01 | ||||||||||||||
Special Tax Items | 42.8 | 0.14 | ||||||||||||||
After-tax Adjusted Operating Income | $ | 513.1 | $ | 1.64 |
| | Year Ended December 31 | ||||||||||||||||
| | 2013 | | | 2012 | | | 2011 | ||||||||||
| | (in millions) | | | per share* | | | (in millions) | | | per share* | | | (in millions) | | | per share* | |
Net Income | | | $ 847.0 | | | $ 3.19 | | | $ 888.1 | | | $ 3.15 | | | $ 283.6 | | | $ 0.94 |
Excluding: | | | | | | | | | | | | | ||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $2.9; $19.1; $(1.3)) | | | 3.9 | | | 0.02 | | | 37.1 | | | 0.13 | | | (3.6) | | | (0.01) |
Reserve Charge for Closed Block (net of tax benefit of $-; $-; $265.0) | | | — | | | — | | | — | | | — | | | (492.1) | | | (1.62) |
Unclaimed Death Benefits Reserve Increase (net of tax benefit of $33.4; $-; $-) | | | (62.1) | | | (0.24) | | | — | | | — | | | — | | | — |
Deferred Acquisition Costs for Closed Block (net of tax benefit of $-; $-; $68.5) | | | — | | | — | | | — | | | — | | | (127.5) | | | (0.42) |
Group Life Waiver of Premium Benefit Reserve Reduction (net of tax expenses of $29.8; $-; $-) | | | 55.2 | | | 0.21 | | | — | | | — | | | — | | | — |
Special Tax Items | | | — | | | — | | | — | | | — | | | 22.7 | | | 0.08 |
After-tax Adjusted Operating Income | | | $850.0 | | | $3.20 | | | $851.0 | | | $3.02 | | | $884.1 | | | $2.91 |
| | Year Ended December 31 | ||||||||||||||||
| | 2010 | | | 2009 | | | 2008 | ||||||||||
| | (in millions) | | | per share * | | | (in millions) | | | per share* | | | (in millions) | | | per share* | |
Net Income | | | $ 877.6 | | | $ 2.69 | | | $ 847.3 | | | $ 2.55 | | | $ 553.4 | | | $ 1.62 |
Excluding: | | | | | | | | | | | | | ||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $9.0; $11,5; $(161.8)) | | | 15.7 | | | 0.05 | | | 0.2 | | | — | | | (304.1) | | | (0.89) |
Special Tax Items | | | (10.2) | | | (0.03) | | | — | | | — | | | — | | | — |
After-tax Adjusted Operating Income | | | $872.1 | | | $2.67 | | | $847.1 | | | $2.55 | | | $857.5 | | | $2.51 |
12/31/2017 | 12/31/2016 | 12/31/2015 | |||||||||||||||||||||
(in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 9,574.9 | $ | 43.02 | $ | 8,968.0 | $ | 39.02 | $ | 8,663.9 | $ | 35.96 | |||||||||||
Excluding: | |||||||||||||||||||||||
Net Unrealized Gain on Securities | 607.8 | 2.73 | 440.6 | 1.92 | 204.3 | 0.84 | |||||||||||||||||
Net Gain on Cash Flow Hedges | 282.3 | 1.27 | 327.5 | 1.42 | 378.0 | 1.57 | |||||||||||||||||
Subtotal | 8,684.8 | 39.02 | 8,199.9 | 35.68 | 8,081.6 | 33.55 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||
Foreign Currency Translation Adjustment | (254.5 | ) | (1.15 | ) | (354.0 | ) | (1.54 | ) | (173.6 | ) | (0.72 | ) | |||||||||||
Subtotal | 8,939.3 | 40.17 | 8,553.9 | 37.22 | 8,255.2 | 34.27 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (508.1 | ) | (2.28 | ) | (465.1 | ) | (2.02 | ) | (392.6 | ) | (1.63 | ) | |||||||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income (Loss) | $ | 9,447.4 | $ | 42.45 | $ | 9,019.0 | $ | 39.24 | $ | 8,647.8 | $ | 35.90 |
| | Year Ended December 31 | ||||||||||||||||
| | 2007** | | | 2006** | | | 2005** | ||||||||||
| | (in millions) | | | per share* | | | (in millions) | | | per share* | | | (in millions) | | | per share* | |
Net Income | | | $ 679.3 | | | $ 1.91 | | | $ 411.0 | | | $ 1.23 | | | $ 513.6 | | | $ 1.64 |
Excluding: | | | | | | | | | | | | | ||||||
Income from Discontinued Operations | | | 6.9 | | | 0.02 | | | 7.4 | | | 0.02 | | | 9.6 | | | 0.03 |
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(22.0); $0.7; $(2.4)) | | | (43.2) | | | (0.12) | | | 1.5 | | | 0.01 | | | (4.3) | | | (0.02) |
Regulatory Reassessment Charges (net of tax benefit of $31.3; $129.0; $1.1) | | | (34.5) | | | (0.10) | | | (267.4) | | | (0.79) | | | (51.6) | | | (0.16) |
Debt Extinguishment Costs (net of tax benefit of $20.5; $8.9; $-) | | | (38.3) | | | (0.11) | | | (16.9) | | | (0.05) | | | — | | | — |
Other (net of tax expense (benefit) of $-; $(5.8); $1.7) | | | (12.7) | | | (0.04) | | | 4.0 | | | 0.01 | | | | | ||
Special Tax Items | | | 2.2 | | | 0.01 | | | 95.8 | | | 0.28 | | | 42.8 | | | 0.14 |
After-tax Adjusted Operating Income | | | $786.2 | | | $2.21 | | | $603.3 | | | $1.80 | | | $513.1 | | | $1.64 |
| | 12/31/2019 | | | 12/31/2018 | | | 12/31/2017 | ||||||||||
| | (in millions) | | | per share | | | (in millions) | | | per share | | | (in millions) | | | per share | |
Total Stockholders’ Equity (Book Value) | | | $ 9,965.0 | | | $ 49.10 | | | $ 8,621.8 | | | $ 40.19 | | | $ 9,574.9 | | | $ 43.02 |
Excluding: | | | | | | | | | | | | | ||||||
Net Unrealized Gain (Loss) on Securities | | | 615.9 | | | 3.03 | | | (312.4) | | | (1.46) | | | 607.8 | | | 2.73 |
Net Gain on Hedges | | | 187.8 | | | 0.93 | | | 250.6 | | | 1.17 | | | 282.3 | | | 1.27 |
Subtotal | | | 9,161.3 | | | 45.14 | | | 8,683.6 | | | 40.48 | | | 8,684.8 | | | 39.02 |
Excluding: | | | | | | | | | | | | | ||||||
Foreign Currency Translation Adjustment | | | (281.6) | | | (1.39) | | | (305.2) | | | (1.42) | | | (254.5) | | | (1.15) |
Subtotal | | | 9,442.9 | | | 46.53 | | | 8,988.8 | | | 41.90 | | | 8,939.3 | | | 40.17 |
Excluding: | | | | | | | | | | | | | ||||||
Unrecognized Pension and Postretirement Benefit Costs | | | (484.8) | | | (2.39) | | | (447.2) | | | (2.08) | | | (508.1) | | | (2.28) |
Total Stockholders’ Equity, Excluding Accumulated Other Comprehensive Income (Loss) | | | $9,927.7 | | | $48.92 | | | $9,436.0 | | | $43.98 | | | $9,447.4 | | | $42.45 |
12/31/2014 | 12/31/2013 | 12/31/2012 | |||||||||||||||||||||
(in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 8,521.9 | $ | 33.78 | $ | 8,639.9 | $ | 33.23 | $ | 8,604.6 | $ | 31.84 | |||||||||||
Excluding: | |||||||||||||||||||||||
Net Unrealized Gain on Securities | 290.3 | 1.15 | 135.7 | 0.52 | 873.5 | 3.23 | |||||||||||||||||
Net Gain on Cash Flow Hedges | 391.0 | 1.55 | 396.3 | 1.52 | 401.6 | 1.48 | |||||||||||||||||
Subtotal | 7,840.6 | 31.08 | 8,107.9 | 31.19 | 7,329.5 | 27.13 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||
Foreign Currency Translation Adjustment | (113.4 | ) | (0.45 | ) | (47.1 | ) | (0.18 | ) | (72.6 | ) | (0.26 | ) | |||||||||||
Subtotal | 7,954.0 | 31.53 | 8,155.0 | 31.37 | 7,402.1 | 27.39 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (401.5 | ) | (1.59 | ) | (229.9 | ) | (0.88 | ) | (574.5 | ) | (2.13 | ) | |||||||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 8,355.5 | $ | 33.12 | $ | 8,384.9 | $ | 32.25 | $ | 7,976.6 | $ | 29.52 |
12/31/2011 | 12/31/2010 | 12/31/2009 | |||||||||||||||||||||
(in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 8,168.0 | $ | 27.91 | $ | 8,483.9 | $ | 26.80 | $ | 8,045.0 | $ | 24.25 | |||||||||||
Excluding: | |||||||||||||||||||||||
Net Unrealized Gain on Securities | 614.8 | 2.11 | 416.1 | 1.31 | 382.7 | 1.16 | |||||||||||||||||
Net Gain on Cash Flow Hedges | 408.7 | 1.39 | 361.0 | 1.14 | 370.8 | 1.12 | |||||||||||||||||
Subtotal | 7,144.5 | 24.41 | 7,706.8 | 24.35 | 7,291.5 | 21.97 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||
Foreign Currency Translation Adjustment | (117.6 | ) | (0.41 | ) | (107.1 | ) | (0.34 | ) | (75.3 | ) | (0.23 | ) | |||||||||||
Subtotal | 7,262.1 | 24.82 | 7,813.9 | 24.69 | 7,366.8 | 22.20 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (444.1 | ) | (1.51 | ) | (318.6 | ) | (1.00 | ) | (330.7 | ) | (1.00 | ) | |||||||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 7,706.2 | $ | 26.33 | $ | 8,132.5 | $ | 25.69 | $ | 7,697.5 | $ | 23.20 | |||||||||||
12/31/2008 | |||||||||||||||||||||||
(in millions) | per share | ||||||||||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 5,941.5 | $ | 17.94 | |||||||||||||||||||
Excluding: | |||||||||||||||||||||||
Net Unrealized Loss on Securities | (837.4 | ) | (2.53 | ) | |||||||||||||||||||
Net Gain on Cash Flow Hedges | 458.5 | 1.38 | |||||||||||||||||||||
Subtotal | 6,320.4 | 19.09 | |||||||||||||||||||||
Excluding: | |||||||||||||||||||||||
Foreign Currency Translation Adjustment | (172.8 | ) | (0.52 | ) | |||||||||||||||||||
Subtotal | 6,493.2 | 19.61 | |||||||||||||||||||||
Excluding: | |||||||||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (406.5 | ) | (1.23 | ) | |||||||||||||||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss | $ | 6,899.7 | $ | 20.84 |
| | 12/31/2016 | | | 12/31/2015 | | | 12/31/2014 | ||||||||||
| | (in millions) | | | per share | | | (in millions) | | | per share | | | (in millions) | | | per share | |
Total Stockholders’ Equity (Book Value) | | | $ 8,968.0 | | | $ 39.02 | | | $ 8,663.9 | | | $ 35.96 | | | $ 8,521.9 | | | $ 33.78 |
Excluding: | | | | | | | | | | | | | ||||||
Net Unrealized Gain on Securities | | | 440.6 | | | 1.92 | | | 204.3 | | | 0.84 | | | 290.3 | | | 1.15 |
Net Gain on Hedges | | | 327.5 | | | 1.42 | | | 378.0 | | | 1.57 | | | 391.0 | | | 1.55 |
Subtotal | | | 8,199.9 | | | 35.68 | | | 8,081.6 | | | 33.55 | | | 7,840.6 | | | 31.08 |
Excluding: | | | | | | | | | | | | | ||||||
Foreign Currency Translation Adjustment | | | (354.0) | | | (1.54) | | | (173.6) | | | (0.72) | | | (113.4) | | | (0.45) |
Subtotal | | | 8,553.9 | | | 37.22 | | | 8,255.2 | | | 34.27 | | | 7,954.0 | | | 31.53 |
Excluding: | | | | | | | | | | | | | ||||||
Unrecognized Pension and Postretirement Benefit Costs | | | (465.1) | | | (2.02) | | | (392.6) | | | (1.63) | | | (401.5) | | | (1.59) |
Total Stockholders’ Equity, Excluding Accumulated Other Comprehensive Income | | | $9,019.0 | | | $39.24 | | | $8,647.8 | | | $35.90 | | | $8,355.5 | | | $33.12 |
| | 12/31/2013 | | | 12/31/2012 | | | 12/31/2011 | ||||||||||
| | (in millions) | | | per share | | | (in millions) | | | per share | | | (in millions) | | | per share | |
Total Stockholders’ Equity (Book Value) | | | $ 8,639.9 | | | $ 33.23 | | | $ 8,604.6 | | | $ 31.84 | | | $ 8,168.0 | | | $ 27.91 |
Excluding: | | | | | | | | | | | | | ||||||
Net Unrealized Gain on Securities | | | 135.7 | | | 0.52 | | | 873.5 | | | 3.23 | | | 614.8 | | | 2.11 |
Net Gain on Hedges | | | 396.3 | | | 1.52 | | | 401.6 | | | 1.48 | | | 408.7 | | | 1.39 |
Subtotal | | | 8,107.9 | | | 31.19 | | | 7,329.5 | | | 27.13 | | | 7,144.5 | | | 24.41 |
Excluding: | | | | | | | | | | | | | ||||||
Foreign Currency Translation Adjustment | | | (47.1) | | | (0.18) | | | (72.6) | | | (0.26) | | | (117.6) | | | (0.41) |
Subtotal | | | 8,155.0 | | | 31.37 | | | 7,402.1 | | | 27.39 | | | 7,262.1 | | | 24.82 |
Excluding: | | | | | | | | | | | | | ||||||
Unrecognized Pension and Postretirement Benefit Costs | | | (229.9) | | | (0.88) | | | (574.5) | | | (2.13) | | | (444.1) | | | (1.51) |
Total Stockholders’ Equity, Excluding Accumulated Other Comprehensive Income | | | $8,384.9 | | | $32.25 | | | $7,976.6 | | | $29.52 | | | $7,706.2 | | | $26.33 |
| | 12/31/2010 | | | 12/31/2009 | | | 12/31/2008 | ||||||||||
| | (in millions) | | | per share | | | (in millions) | | | per share | | | (in millions) | | | per share | |
Total Stockholders’ Equity (Book Value) | | | $ 8,483.9 | | | $ 26.80 | | | $ 8,045.0 | | | $ 24.25 | | | $ 5,941.5 | | | $ 17.94 |
Excluding: | | | | | | | | | | | | | ||||||
Net Unrealized Gain (Loss) on Securities | | | 416.1 | | | 1.31 | | | 382.7 | | | 1.16 | | | (837.4) | | | (2.53) |
Net Gain on Hedges | | | 361.0 | | | 1.14 | | | 370.8 | | | 1.12 | | | 458.5 | | | 1.38 |
Subtotal | | | 7,706.8 | | | 24.35 | | | 7,291.5 | | | 21.97 | | | 6,320.4 | | | 19.09 |
Excluding: | | | | | | | | | | | | | ||||||
Foreign Currency Translation Adjustment | | | (107.1) | | | (0.34) | | | (75.3) | | | (0.23) | | | (172.8) | | | (0.52) |
Subtotal | | | 7,813.9 | | | 24.69 | | | 7,366.8 | | | 22.20 | | | 6,493.2 | | | 19.61 |
Excluding: | | | | | | | | | | | | | ||||||
Unrecognized Pension and Postretirement Benefit Costs | | | (318.6) | | | (1.00) | | | (330.7) | | | (1.00) | | | (406.5) | | | (1.23) |
Total Stockholders’ Equity, Excluding Accumulated Other Comprehensive Income (Loss) | | | $8,132.5 | | | $25.69 | | | $7,697.5 | | | $23.20 | | | $6,899.7 | | | $20.84 |
(a) | Employees who own (or would own immediately following the grant of an option under the Plan) stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary. For purposes of this section, the attribution rules of Code Section 424(b) shall apply in determining stock ownership of any employee. |
(b) | Employees who customarily work less than 20 hours per week. |
(c) | Employees who customarily work 5 months or less per calendar year. |
DEFINITIONS AND INTERPRETATION |
In this Scheme, the following words and expressions shall, where the context so permits, have the following meanings: |
| “Acquisition Price” | | | means the price at which each Share subject to an Option may be acquired on the exercise of that Option, being (subject to Rule 10) the higher of: | | ||||||
| | | (a) | | | ninety per cent (90%) of the Market Value of a Share on the day preceding the date that the invitation to apply for that Option was issued pursuant to Rule 2; or | | ||||
| | (b) | | | if Shares are to be subscribed for, the nominal value of a Share; | | |||||
| “Appropriate Period” | | | means the applicable period prescribed in paragraph 38 of Schedule 3; | | ||||||
| “Associated Company” | | | has the meaning it bears in paragraph 47 of Schedule 3; | | ||||||
| “Auditors” | | | means the auditors for the time being of Unum Group (acting as experts and not as arbitrators); | | ||||||
| “Bonus” | | | means any sum payable by way of bonus under a Savings Contract being the additional payment made by the nominated Savings Authority when repaying contributions under a Savings Contract and: | | ||||||
| | | (a) | | | “Three Year Bonus” shall mean the Bonus payable under a Three Year Savings Contract; and | | ||||
| | | (b) | | | “Five Year Bonus” shall mean the Bonus payable on the first date on which a Bonus is payable under a Five Year Savings Contract; | | ||||
| “Bonus Date” | | | means the earliest date on which the relevant Bonus is payable; | | ||||||
| “Constituent Company” | | | means Unum Group and any other company which is for the time being nominated by the board of Unum Group to be a Constituent Company being: | | ||||||
| | | (a) | | | a company of which Unum Group has Control; or | | ||||
| | | (b) | | | a jointly owned company which: | | ||||
| | | | | (i) | | | is not under the Control of any single person; and | | ||
| | | | | (ii) | | | is under the joint Control of the Unum Group and one other person; and | | ||
| | | | | (iii) | | | is not a participating company in any savings-related share option scheme established by any other company and which is either approved by HMRC under Schedule 3, or a Schedule 3 SAYE option scheme (within the meaning of paragraph 1 of Schedule 3); or | | ||
| | | (c) | | | a company which is under the Control of a jointly owned company which satisfies the conditions in paragraph (b) above and which itself satisfies the condition in subparagraph (iii) thereof provided that if any company which has been nominated as a Constituent Company by virtue of satisfying the conditions in paragraphs (b) or (c) above shall cease to satisfy any of those conditions (unless as a consequence of such cessation it becomes under the Control of Unum Group) it shall forthwith cease to be a Constituent Company; | |
| “Control” | | | has the meaning given by section 995 of the Income Tax Act of 2007; | | ||||||
| “Date of Grant” | | | means, in relation to any Option, the date on which the Option is, was or is to be granted; | | ||||||
“Dealing Day” | | | means any weekday (excluding Saturday) which is not a statutory, public or bank holiday in either the United Kingdom or the United States of America; | | |||||||
| “Eligible Employee” | | | means: | | ||||||
| | | (a) | | | any employee of any Constituent Company, or | | ||||
| | | (b) | | | any director of any Constituent Company who devotes to his duties 25 hours or more per week (excluding meal breaks), | | ||||
| | | in each case who: | | |||||||
| | | | | (i) | | | had on the day preceding the date of issue of the relevant invitations pursuant to Rule 2.1 been such an employee or director for 6 weeks or more, and; | | ||
| | | | | (ii) | | | is chargeable to tax in respect of his office or employment under section 15 of ITEPA; or | | ||
| | | (c) | | | any other director or employee of any Constituent Company whom the board of Unum European Holding Company Limited may in its discretion and from time to time select; | | ||||
| “HMRC” | | | means Her Majesty’s Revenue & Customs; | | ||||||
| “ITEPA” | | | means the Income Tax (Earnings and Pensions) Act 2003; | | ||||||
| “Key Feature” | | | means a provision of this Scheme which is necessary in order to meet the requirements of Schedule 3; | | ||||||
| “Market Value” | | | means in relation to a Share: | | ||||||
| | | (a) | | | if the Shares are not listed on the New York Stock Exchange or other recognised stock exchange (within the meaning of section 1005 of the Income Tax Act 2007), the market value as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed in advance for the purposes of this Scheme with HMRC Shares and Assets Valuation; or | | ||||
| | | (b) | | | if the Shares are listed on the New York Stock Exchange or other recognised investment or stock exchange, the closing market quotation of the New York Stock Exchange, as reported in the Wall Street Journal, for the Dealing Day preceding the relevant date of invitation to apply for the Option to acquire such Shares issued pursuant to Rule 2; | | ||||
| “Maximum Contribution” | | | means the maximum permitted aggregate Monthly Contribution which may be made under all Savings Contracts linked to Options granted to a participant under this Scheme or any other savings-related share option scheme notified to HMRC under Schedule 3, being the lesser of: | | ||||||
| | | (a) | | | £500 per month (or, if greater, the maximum amount specified in paragraph 25(3)(a) of Schedule 3); and | | ||||
| | | (b) | | | such other maximum as may be determined from time to time by the board of Unum European Holding Company Limited; | | ||||
| “Monthly Contribution” | | | means the monthly savings contribution (being a multiple of £1 and no less than £10) agreed to be paid by an Optionholder under his Savings Contract; | | ||||||
| “Option” | | | means a right to acquire Shares by purchase or subscription granted (whether by Unum European Holding Company Limited or a third party) pursuant to this Scheme; | | ||||||
| “Optionholder” | | | means an Eligible Employee to whom an Option has been granted under this Scheme, or his personal representatives; | |
| “Option Certificate” | | | means a certificate issued to an Optionholder in respect of any Option; | | ||||||
| “Personal Data” | | | means any personal information which could identify an Optionholder, including but not limited to, the Optionholder’s date of birth, home address, telephone number, e-mail address or National Insurance number; | | ||||||
| “Savings Authority” | | | means the building society, bank or Department of National Savings recognised by the board of Unum European Holding Company Limited from time to time for the purpose of receiving Monthly Contributions under Savings Contracts; | | ||||||
| “Savings Contract” | | | means a contract under a certified SAYE savings arrangement (within the meaning of section 703 of the Income Tax (Trading and Other Income) Act 2005) approved by HMRC for the purpose of Schedule 3 and “Three Year Savings Contract” and “Five Year Savings Contract” shall be construed accordingly; | | ||||||
| “Schedule 3” | | | means Schedule 3 to ITEPA; | | ||||||
| “this Scheme” | | | means the Unum European Holding Company Limited Savings-Related Share Option Scheme 2021 constituted and governed by these Rules, as from time to time amended; | | ||||||
| “Share” | | | means common stock in the capital of Unum Group which satisfies the conditions specified in paragraphs 18 to 22 inclusive of Schedule 3; | | ||||||
| “Subsisting Option” | | | means an Option which has neither lapsed nor been exercised; and | | ||||||
| “Unum Group” | | | means Unum Group, a Delaware general business corporation whose principal executive offices are at 1 Fountain Square, Chattanooga, Tennessee 37402, United States of America, and including any delegates of Unum Group as may be set forth in this Scheme. | |
References to any statutory provision are to that provision as amended or re-enacted from time to time, and, unless the context otherwise requires, words in the singular shall include the plural and vice versa and words importing the masculine shall include the feminine and vice versa. |
INVITATIONS TO APPLY FOR OPTIONS |
2.1 | The board of Unum European Holding Company Limited may, if in their absolute discretion they think fit, invite all Eligible Employees to apply for the grant of Options. Such invitations shall be made on identical terms to all Eligible Employees at such times as the board of Unum European Holding Company Limited shall direct. |
2.2 | Invitations shall be made in writing and shall include details of the following matters which shall be determined by the board of Unum European Holding Company Limited in accordance with any resolution or other actions by the Human Capital Committee of Unum Group: |
(a) | the Acquisition Price at which each Share may be acquired on the exercise of an Option granted in response to the application; |
(b) | the latest date by which applications must be received, being neither earlier than 14 days nor later than 21 days after the date of the invitations; |
(c) | the Maximum Contribution; and |
(d) | whether the applicable Savings Contract is: |
(i) | a Three Year Savings Contract; |
(ii) | a Five Year Savings Contract; or |
(iii) | either a Three Year Savings Contract or a Five Year Savings Contract, as the applicant shall select. |
(e) | whether or not the Shares may be subject to any restrictions (as defined in paragraph 48(3) of Schedule 3) and if they are, the details of the restrictions. |
2.3 | Each invitation shall be accompanied by: |
(a) | a proposal form for a Savings Contract; and |
(b) | an application form. |
2.4 | An application form shall be in such form as the board of Unum European Holding Company Limited may from time to time prescribe save that it must provide for the applicant to state: |
(a) | the Monthly Contribution (being a multiple of £1 and not less than £10) which he wishes to make under the related Savings Contract; |
(b) | that his proposed Monthly Contribution (when taken together with any Monthly Contribution he makes under any other Savings Contract linked to an Option granted to him under this Scheme or any other savings-related share option scheme which is either approved by HMRC under Schedule 3 or a Schedule 3 SAYE option scheme (within the meaning of paragraph 1 of Schedule 3)) will not exceed the Maximum Contribution specified in the invitation; and |
(c) | if the board of Unum European Holding Company Limited has determined that an applicant may select either a Three Year Savings Contract or a Five Year Savings Contract, his selection in that respect. |
2.5 | Each application shall provide that, in the event of scaling down in accordance with Rule 3, the board of Unum European Holding Company Limited is authorised by the applicant to modify his application to apply such scaling down. |
2.6 | Each application shall be deemed to be for an Option over the largest whole number of Shares as can be acquired at the Acquisition Price with the expected repayment under the related Savings Contract at the appropriate Bonus Date. |
SCALING DOWN |
3.1 | To the extent that valid applications are received in excess of any maximum number of Shares which may be determined by the board of Unum Group or, in the absence of any such determination after the effective date of this Scheme, the limit in Rule 5, including any reductions provided for therein, the board of Unum European Holding Company Limited shall scale down applications to the extent necessary in one of the following ways as may be determined by it in its discretion: |
(a) | in the event that the applicable Savings Contracts are Five Year Savings Contracts or applicants are permitted to select Five Year Savings Contracts: |
(i) | by treating all Five Year Savings Contracts as Three Year Savings Contracts; and then so far as necessary |
(ii) | first by reducing pro rata the proposed monthly contributions in excess of £10 and then, so far as necessary selecting by lot; |
(b) | alternatively, by reducing pro rata the proposed Monthly Contributions in excess of £10 and then, so far as necessary, selecting by lot. |
3.2 | Each application shall be deemed to have been modified or withdrawn in accordance with the application of the foregoing provisions and the board of Unum European Holding Company Limited shall complete each Savings Contract proposal form to apply any reduction in Monthly Contributions resulting therefrom. |
GRANT OF OPTIONS |
4.1 | No later than 30 days (or 42 days in the event that applications are scaled down under Rule 3) after the day by reference to which the Acquisition Price was fixed, the board of Unum European Holding Company Limited shall grant to each applicant who is still at the Date of Grant an Eligible Employee and is not precluded from participation in this Scheme by virtue of paragraph 10 of Schedule 3 an Option over the number of Shares for which, pursuant to Rule 2.6 and subject to Rule 3 he is deemed to have applied. |
4.2 | As soon as is practicable after having granted an Option to an Eligible Employee the board of Unum European Holding Company Limited shall issue to him an Option Certificate in respect of such Option. |
4.3 | The Option Certificate shall be in such form, not inconsistent with these Rules, as the board of Unum European Holding Company Limited shall determine from time to time and shall state: |
(a) | the Date of Grant of the Option; and |
(b) | the Acquisition Price payable for each Share under the Option. |
4.4 | Subject to the right of an Optionholder’s personal representatives to exercise an Option as provided in Rule 6.4, every Option shall be personal to the Eligible Employee to whom it is granted and shall not be capable of being transferred, assigned or charged. Any purported transfer, assignment or charge shall cause the Option to lapse forthwith. Each Option Certificate shall carry a statement to this effect. |
SCHEME LIMITS |
5.1 | The maximum number of Shares which may be allocated for subscription or purchase under this Scheme shall not exceed 200,000 Shares of Unum Group’s issued common stock, as adjusted pursuant to Rule 10 below, if applicable. |
5.2 | For the purpose of the limit contained in Rule 5.1: |
(a) | any Shares which are already in issue when placed under Option; and |
(b) | any Shares comprised in any Option which is exercised, |
shall be included for the purpose of calculating the number of Shares under option as well as the number of Shares available for placing under Option. For the avoidance of doubt, any Shares granted under an option that has lapsed without exercise (in whole or in part) shall be excluded for the purpose of calculating the number of Shares under Option as well as the number of Shares available for placing under Option, for the purpose of the limit contained in Rule 5.1. |
5.3 | No Option shall be granted to an Eligible Employee if the Monthly Contribution under the related Savings Contract would, when added to the Monthly Contributions then being made under any other Savings Contract, exceed the maximum specified in paragraph 25 of Schedule 3. |
RIGHTS OF EXERCISE OF OPTIONS |
6.1 | Save as provided |
(a) | in Rules 6.4, 6.5 and 6.7, and subject to Rule 7 an Option may be exercised only during the period commencing with the Bonus Date under the related Savings Contract; and |
(b) | in Rules 6.4(a) and (b), an Option may not be exercised after the expiry of the period of six months following the relevant Bonus Date. |
6.2 | Save as provided in Rules 6.4 and 6.5, an Option may only be exercised by an Optionholder while he is a director or employee of a Constituent Company or an Associated Company of a Constituent Company. |
6.3 | An Option may be exercised by the personal representatives of a deceased Optionholder: |
(a) | during the period of one year following the date of the Optionholder’s death if such death occurs before the Bonus Date; or |
(b) | during the period of one year following the Bonus Date if the Optionholder’s death occurs within the period of six months after the Bonus Date. |
6.5 | If an Optionholder ceases to be an Eligible Employee by reason of: |
(a) | injury or disability (evidenced to the satisfaction of Unum European Holding Company Limited) ; or |
(b) | redundancy (within the meaning of the Employment Rights Act 1996 or Employment Rights (Northern Ireland) Order 1996; or |
(c) | retirement; or |
(d) | a service provision charge or the transfer of the business, undertaking or part-undertaking in which the Optionholder is employed to a person other than a Constituent Company; or |
(e) | the company by which the Optionholder is employed ceasing to be under the Control of Unum Group; or |
(f) | the circumstances described in paragraph 34(2)(d) of Schedule 3; or |
(g) | provided more than three years have elapsed since the relevant Date of Grant: |
(i) | early retirement by agreement with his employer; or |
(ii) | pregnancy, and for the purposes of this Scheme, a woman who leaves employment due to pregnancy or confinement will be regarded as having left such employment on the earlier of the date she notifies the relevant Constituent Company of her intention not to return and the last day of the 52 week period of maternity leave; or |
(iii) | where an individual gives notification that they will not be returning from parental leave (within the meaning of the Employment Relations Act 1999), |
the Option may be exercised within the period of six months following such cessation provided that if at a Bonus Date an Optionholder has ceased to hold any office or employment with a Constituent Company but holds an office or employment within an Associated Company or a company under the Control of Unum Group he may exercise an Option within six months of that Bonus Date. |
6.6 | An Option shall lapse on the occurrence of the earliest of the following: |
(a) | subject to Rule 6.6(b), the expiry of the period of six months following the Bonus Date; or |
(b) | where the Optionholder has died, the expiry of the period during which the Option may be exercised in accordance with Rules 6.4(a) or (b); or |
(c) | subject to Rule 9, the expiry of any of the applicable periods specified in Rules 6.4 and 6.5 and Rules 8.1, 8.2 and 8.3 but where an Optionholder dies while time is running under Rule 6.5, the Option shall not lapse until the expiry of the relevant period in Rule 6.4(a) or (b); or |
(d) | the date on which an Optionholder ceases to be a director or employee of any Constituent Company or any Associated Company of Unum Group for any reason other than his death or those specified in Rule 6.5; or |
(e) | the date which is six months after the date on which a resolution is passed by either or both of Unum Group or Unum European Holding Company Limited, or an order is made by an appropriate court having jurisdiction over Unum Group or Unum European Holding Company Limited, or both, as the case may be (a “Court”), for the compulsory winding up of either or both of Unum Group or Unum European Holding Company Limited; or |
(f) | the date on which the Optionholder becomes bankrupt or does or omits to do anything as a result of which he is deprived of the legal or beneficial ownership of the Option. |
EXERCISE OF OPTIONS |
7.1 | No Option may be exercised at any time when the Shares which may thereby be acquired do not satisfy the conditions specified in paragraph 18 to 22 of Schedule 3. |
7.2 | An Option may only be exercised with monies not exceeding the amount of repayment (including any Bonus or interest) made under the related Saving Contract. For this purpose, repayment under the Savings Contract shall exclude the repayment of any Monthly Contribution the due date for payment of which falls more than one month after the date on which repayment is made. |
7.3 | Save as otherwise provided in this Scheme, an Option shall be exercisable in whole or in part by notice in writing (in the form prescribed by Unum European Holding Company Limited) given by the Optionholder (or his personal representatives, as the case may be) to Unum European Holding Company Limited. The notice of exercise of the Option shall be accompanied by the relevant Option Certificate and a remittance for the aggregate of the Acquisition Prices payable. |
7.4 | Within 30 days of receipt of a notice of exercise, the Option Certificate and the appropriate remittance, the board of Unum European Holding Company Limited shall procure the allotment or procure the transfer of the Shares in respect of which the Option has been validly exercised and shall issue a definitive certificate in respect of the Shares allotted or transferred unless the board of Unum European Holding Company Limited considers that such allotment or transfer would not be lawful in the relevant jurisdiction. |
7.5 | Shares allotted under this Scheme shall rank pari passu in all respects with the Shares of the same class for the time being in issue save as regards any rights attaching to such Shares by reference to a record date prior to the date of allotment and, in the case of a transfer of existing Shares, the transferee shall not acquire any rights attaching to such Shares by reference to a record date prior to the date of such transfer. |
7.6 | When an Option is exercised only in part, it shall lapse to the extent of the unexercised balance. |
7.7 | If and so long as the Shares are listed on the New York Stock Exchange, Unum Group shall apply to the New York Stock Exchange for any Shares allotted under this Scheme to be listed on the New York Stock Exchange. |
TAKEOVERS AND LIQUIDATIONS |
8.1 | If any person obtains Control of Unum Group as a result of making: |
(a) | a general offer to acquire the whole of the issued common stock of Unum Group which is made on a condition such that it is satisfied the person making the offer will have Control of the company for which it made the general offer; or |
(b) | a general offer to acquire all the shares in Unum Group which are of the same class as the Shares, |
then any Subsisting Option may be exercised within six months of the time when the person making the offer has obtained Control of Unum Group and any condition subject to which the offer is made has been satisfied. For the purposes of this Rule 8.1 a person shall be deemed to have obtained Control of Unum Group if he and others acting in concert with him have together obtained Control of it. |
8.2 | In Rule 8.1, references to the issued common stock of Unum Group does not include any common stock already held by the person making the offer or a person connected with that person and references to shares in the Unum Group does not include any shares in the Unum Group already held by the person making the offer or a person connected with that person. It does not matter, for the purposes of Rule 8.1 if the general offer is made to different persons by different means. |
8.3 | If, under section 899 of the Companies Act 2006 or relevant equivalent legislation in the United States of America, a Court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of Unum Group or its amalgamation with any other company or companies, any Subsisting Option may be exercised upon a Court sanctioning such compromise or arrangement, or within six months of a Court sanctioning such compromise or arrangement. |
8.4 | If any person becomes bound or entitled to acquire Shares in Unum Group under sections 979 to 982 or 983 to 985 of the Companies Act 2006 or relevant equivalent legislation in the United States of America any Subsisting Option may be exercised at any time when that person remains so bound or entitled. |
8.5 | If a Foreign Company Reorganisation is effected which is applicable to or affects: |
(a) | all the issued common stock of Unum Group or all the shares of the same class as the Shares; or |
(b) | all the shares, or all the shares of that same class, which are held by a class of shareholders identified other than by reference to their employments or directorships or their participation in a Schedule 3 SAYE option scheme (as defined in Paragraph 40A of Schedule 3); |
then any Subsisting Option may be exercised within six months of the date on which the Foreign Company Reorganisation becomes binding on the shareholders or stockholders covered by it. |
8.6 | For the purposes of Rule 8.4, a Foreign Company Reorganisation is an arrangement made in relation to a company under the law of a territory outside the United Kingdom: |
(a) | which gives effect to a reorganisation of the company’s share capital by the consolidation of shares of different classes, or by the division of shares into shares of different classes or by both of these methods; and |
(b) | which is approved by a resolution of the members of the relevant company in circumstances where the members voting in favour of approving the arrangement represent more than 50% of the total voting rights of all the members having the right to vote on the issue. |
8.7 | If Unum Group passes a resolution for voluntary winding up, any Subsisting Option may be exercised within six months of the passing of the resolution. |
8.8 | If a change of Control occurs in the circumstances described in Rule 8.1 or as a result of an event specified in Rule 8.3, 8.4 or 8.5 and, as a result of the change of Control, Shares will no longer satisfy the requirements of Part 4 of Schedule 3, Options may be exercised with the period of 20 days following the change of Control. If the Option is not exercised, the Option will lapse on the expiry of 20 days following the change of Control. |
8.9 | If the board of Unum Group reasonably expects an event as described in either of Rules 8.1, 8.3, 8.4 or 8.5 to occur, it may make arrangements permitting Options to be exercised for a period of 20 days ending with that event. If an Option is exercised under this Rule, it will be treated as having been exercised in accordance with either Rule 8.1, 8.3, 8.4 or 8.5, as appropriate. If the board of Unum Group makes arrangements for the exercise of Options under this Rule 8.9 in respect of an event, then unless the board determines otherwise any Option not exercised in accordance with those arrangements will lapse on the date of the relevant event, and if the relevant event does not occur within 20 days of the date of purported exercise, the Option shall be treated as not having been exercised. |
EXCHANGE OF OPTIONS ON A TAKEOVER |
9.1 | Notwithstanding the provisions of Rule 8, if any company (“the Acquiring Company”) obtains Control of Unum Group or becomes bound or entitled to acquire shares in Unum Group within any of the sets of circumstances specified in Rules 8.1, 8.3, 8.4 and 8.5, any Optionholder may at any time within the Appropriate Period, by agreement with the Acquiring Company, release each Subsisting Option (“the Old Option”)in consideration of the grant to him of a new Option (“the New Option”) which satisfies the conditions that it: |
(a) | is over shares in the Acquiring Company or some other company falling within paragraph 39(2)(b) of Schedule 3, which satisfy the conditions specified in paragraphs 18 to 22 inclusive of Schedule 3; |
(b) | is a right to acquire such number of such shares as has on acquisition of the New Option an aggregate market value equal to the aggregate market value of the Shares subject to the Old Option immediately before its release; |
(c) | has an Acquisition Price per share such that the aggregate price payable on the complete exercise of the New Option equals the aggregate price which would have been payable on complete exercise of the Old Option; and |
(d) | is otherwise identical in terms to the Old Option. |
Where any New Options are granted pursuant to this Rule 9.1 they shall be regarded for the purposes of the subsequent application of the provisions of this Scheme as having been granted at the time when the corresponding Old Options were granted and, with effect from the date on which the New Options are granted, Rules 6, 7, 8, 9, 10, 14.2, 14.3, 14.4 and 14.5 (and, in relation to expressions used in those Rules, Rule 1) of this Scheme shall, in relation to the New Options, be construed as if references to Unum Group and to the Shares were references to the Acquiring Company and to shares in the Acquiring Company or, as the case may be, to the other company to whose shares the New Options relate and to the shares in that other company, but references to Constituent Company shall continue to be construed as defined herein. |
9.2 | For the purpose of Rule 9.1(b), the relevant market values shall be determined using a methodology agreed with HM Revenue & Customs, and without reference to any restrictions (as defined in paragraph 48(3) of Schedule 3) to which the relevant Shares may be subject. |
9.3 | As soon as practicable after having granted the New Option in accordance with the provisions of Rule 9.1 the Acquiring Company shall issue an Option Certificate in respect of such Option or shall procure that such an Option Certificate is issued. The Option Certificate shall state: |
(a) | the date on which the Old Option (which has been released in consideration of the grant of the New Option) was granted; |
(b) | the number and class of shares subject to the New Option; |
(c) | the Acquisition Price payable for each share under the New Option; |
(d) | the last date on which a notice exercising the New Option can be given, |
and subject as aforesaid shall be issued in such form and manner as the board of Unum European Holding Company Limited may from time to time prescribe. |
9.4 | Unum Group will remain the scheme organiser (as defined in paragraph 2(2) of Schedule 3) following the release of the Old Options and the grant of any New Options. |
9.5 | Where in accordance with Rule 9.1 Subsisting Options are released and New Options granted, the New Option shall not be exercisable in accordance with Rules 8.1 to 8.5 by virtue of the event by reason of which the New Options were granted. |
VARIATION OF SHARE CAPITAL |
10.1 | In the event of any capitalisation, consolidation, sub-division, reorganisation or reduction of the share capital of Unum Group and in respect of any discount element in any rights issue or any other variation in the share capital of Unum Group: |
(a) | the number and description (but not the class) of Shares or other securities comprised in an Option; |
(b) | their Acquisition Price; and |
(c) | where an Option has been exercised but no Shares have been allotted or transferred in satisfaction of such exercise, the number and description (but not the class) of Shares or other securities to be so allotted or transferred and their Acquisition Price, |
shall be varied in such manner as the board of Unum Group determines to be appropriate and (save in the event of a capitalisation) the Auditors shall confirm in writing to be in their opinion fair and reasonable, provided: |
(d) | that no variation shall be made which would result in the Acquisition Price for an allotted Share being less than its nominal value; |
(e) | that the total Market Value of Shares is subject to the Option is substantially the same immediately after the variation or variations as it was immediately before the variation or variations; |
(f) | that the total Acquisition Price immediately after the variation or variations is substantially the same as it was immediately before the variation or variations; |
(g) | the aggregate amount payable on the exercise of an Option in full is neither materially changed nor is increased beyond the expected repayment under the Savings Contract at the appropriate Bonus Date; and |
(h) | following the adjustment the Shares continue to satisfy the conditions specified in paragraphs 18 to 22 of Schedule 3. |
10.2 | The board of Unum Group may take such steps as it may consider necessary to notify Optionholders of any adjustments made under Rule 10.1 and to call in, cancel, endorse, issue or re-issue any Option Certificate consequent upon such adjustment. |
ADMINISTRATION |
11.1 | The board of Unum Group shall have power from time to time |
(a) | to make and vary such regulations (not being inconsistent with this Scheme) for the implementation and administration of this Scheme as they think fit; and |
(b) | to delegate some or all of its powers to a Committee consisting of not less than one person including a ‘direct delegate’ or an ‘indirect delegate.’ A direct delegate for these purposes is the Human Capital Committee of Unum Group and an indirect delegate for these purposes is the CEO, or the Executive Vice President, People and Communications of Unum Group. |
11.2 | The decision of the board of Unum Group shall be final and binding in all matters relating to this Scheme (other than in the case of matters to be determined or confirmed by the Auditors in accordance with this Scheme). |
11.3 | The costs of establishing and administering this Scheme shall be borne by Unum European Holding Company Limited. |
11.4 | Neither Unum Group nor Unum European Holding Company Limited shall be obliged to provide Eligible Employees or Optionholders with copies of any notices circulars or other documents sent to stockholders of Unum Group. |
DATA PROTECTION |
(a) | the collection, use and processing by Unum Group, Unum European Holding Company Limited, any other Constituent Company and any administrator of the Scheme of Personal Data relating to the Optionholder, for all purposes reasonably connected with the administration of this Scheme and the subsequent registration of the Optionholder or any other person as a holder of Shares acquired pursuant to the exercise of an Option; |
(b) | Unum Group, Unum European Holding Company Limited, any other Constituent Company and any administrator of the Scheme transferring Personal Data to or between any such persons for all purposes reasonably connected with the administration of the Scheme; |
(c) | the use of such Personal Data by any such person for such purposes in accordance with current data protection legislation; and |
(d) | the transfer to and retention of such Personal Data by any third party for such purposes. |
AMENDMENTS |
13.1 | The Rules may be amended in any respect by resolution of the board of Unum Group provided that: |
(a) | where any alteration is to the material advantage of Eligible Employees or Optionholders or would increase the limit specified in Rule 5.1, it will not be effective without the prior approval of Unum Group in general meeting; |
(b) | where any amendment would abrogate or adversely affect the subsisting rights of Optionholders it will not be effective unless such amendment is approved by the board of Unum Group; and |
(c) | where there is an amendment to a Key Feature, the board of Unum Group must comply, or procure that Unum European Holding Company Limited complies, with the requirement of |
except that any amendment or addition which the board of Unum Group considers necessary or desirable in order to: |
(d) | benefit the administration of this Scheme; or |
(e) | comply with or take account of the provisions or any proposed or existing legislation; or |
(f) | take account of any of the events mentioned in Rule 10; or |
(g) | obtain or maintain favourable tax or regulatory treatment (by, from or with respect to any taxing or revenue authority) for Unum Group, Unum European Holding Company Limited or any other Constituent Company or any Optionholder, |
may be made by resolution of the board of Unum Group, or if authorised by the board of Unum Group, of the board of Unum European Holding Company Limited, provided that such amendments or additions do not affect a Key Feature of this Scheme. In any instance in this Section 13.1 in which the consent of the Board of Directors of Unum Group is required, its Human Capital Committee, comprised of independent directors of the Board of Directors of Unum Group, shall have the authority and/or responsibility to act or refrain from any action assigned under these Rules to the Board of Directors of Unum Group in accordance with action of such Board of Directors granting such authority. |
13.2 | Written notice of any material amendments to this Scheme, meaning for purposes of this Rule 13 any amendment to a Key Feature, shall be given to all Optionholders by Unum European Holding Company Limited within a reasonable time after any such amendment is approved. |
GENERAL |
14.1 | This Scheme shall commence upon the later of the date of approval by Unum Group in a general meeting and the date of its adoption by the board of Unum Group and shall (unless previously terminated by a resolution of the board of Unum Group) terminate upon the expiry of the period of 5 years from such date. Upon termination (howsoever occurring) no further Options may be granted but such termination shall be without prejudice to any accrued rights in existence at the date thereof. |
14.2 | Unum Group will at all times keep available sufficient authorised and unissued Shares, or shall ensure that sufficient Shares will be available, to satisfy the exercise to the full extent still possible of all Subsisting Options, taking account of any other obligations of Unum Group to issue Shares. |
14.3 | Notwithstanding any other provisions of this Scheme: |
(a) | this Scheme shall not form part of any contract of employment or agreement for service or services between any Constituent Company and any employee or officer of any such company and the rights and obligations of any individual under the terms of his office or employment with any Constituent Company shall not be affected by his participation in this Scheme or any right which he may have to participate in it and this Scheme shall afford such an individual no additional rights to compensation or damages in consequence of the termination of such office or employment for any reason whatsoever; |
(b) | this Scheme shall not confer on any person any legal or equitable rights (other than those constituting the Options themselves) against any Constituent Company directly or indirectly, or give rise to any cause of action at law or in equity against any Constituent Company; and |
(c) | no Optionholder shall be entitled to any compensation or damages for any loss or potential loss which he may suffer by reason of being unable to exercise an Option in consequence of the loss or termination of his office or employment with any Constituent Company for any reason whatsoever. |
14.4 | Save as otherwise provided in this Scheme any notice or communication to be given to any Eligible Employee or Optionholder, but not including Option Certificates or share certificates, may be personally delivered, sent by electronic means, posted to a website generally accessible to such eligible Employees and Optionholders, or sent by ordinary post to his last known address. A notice delivered personally shall be deemed to have been received upon the earlier of delivery in person, acceptance or refusal to accept such communication. Where a notice or communication is sent by post it shall be deemed to have been received 48 hours after the same was put into the post properly addressed and stamped. Where a notice is sent electronically or posted to a website as described herein, the notice shall be deemed to have been received 24 hours after the same was sent or posted, as the case may be. Option Certificates or share certificates shall be delivered personally or sent by ordinary post to the last known address of the Eligible Employee or Optionholder concerned. Where a notice or communication is sent by post it shall be deemed to have been received 48 hours after the same was put into the post properly addressed and stamped. Option Certificates or share certificates and other communications sent by post will be sent at the risk of the Eligible Employee or Optionholder concerned and neither Unum Group, Unum European Holding Company Limited or any Constituent Company shall have any liability whatsoever to any such person in respect of any notification, document, Option Certificate or share certificate or other communication so given, sent to made. |
14.5 | All notices to be provided by any Eligible Employee or Optionholder or any representative thereof shall be delivered or sent to Unum European Holding Company Limited at its registered office and shall be effective upon receipt. |
14.6 | This Scheme and all Options granted under it shall be governed by and construed in accordance with English law. |
14.7 | Any dispute arising out of or in connection with this Scheme, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the London Court of International Arbitration Rules, which Rules are deemed to be incorporated by reference into this clause. |
(a) | the number of arbitrators shall be one; |
(b) | the seat, or legal place, of arbitration shall be London, England; |
(c) | the language to be used in the arbitral proceedings shall be English; and |
(d) | the governing law of the contract shall be the substantive law of England. |