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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a part other than the Registrant o
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Materials under § 240.14a-12 |
UNITED FIRE & CASUALTY COMPANY
(Name of registrant as specified in its charter)
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by Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
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UNITED
FIRE & CASUALTY COMPANY
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Dear United Fire & Casualty Company shareholder:
I cordially invite you to the Special Meeting of Shareholders of
United Fire & Casualty Company (the
Company), to be held on January 24, 2012, at
our corporate headquarters, located at 109 Second Street SE, in
Cedar Rapids, Iowa. at 10:00 A.M., local time.
At the Special Meeting, you will be asked to (i) adopt the
Agreement and Plan of Reorganization (the Reorganization
Agreement) and thereby approve the reorganization (as
defined below) and (ii) approve the adjournment of the
Special Meeting, if necessary, to solicit additional proxies.
To summarize, the Company has formed a new subsidiary, United
Fire Group, Inc. (United Fire Group) as a wholly
owned subsidiary. United Fire Group formed UFC MergeCo, Inc.
(MergeCo) as its wholly owned subsidiary. United
Fire Group and MergeCo were formed in order to effect the
reorganization. Prior to the reorganization, neither United Fire
Group nor MergeCo will have assets or operations other than
those incident to their formation. Under the terms of the
Reorganization Agreement, the Company and MergeCo would complete
a merger, pursuant to which MergeCo would be merged with and
into the Company, with the Company as the surviving entity (the
Reorganization).
In the Reorganization, each outstanding share of common stock of
the Company will be converted automatically into one share of
common stock of United Fire Group. In addition, each outstanding
option to purchase shares of the Company common stock, if not
exercised before the completion of the Reorganization, will
become an option to acquire, at the same exercise price, an
identical number of shares of United Fire Group common stock.
The Reorganization generally will be tax-free for Company
shareholders. Your rights as a shareholder of the Company will
be substantially the same as your rights as a shareholder of
United Fire Group, including rights as to voting and dividends.
We expect the shares of United Fire Group common stock to trade
under the ticker symbol UFCS on the NASDAQ Global
Select Market. Shares of the Companys common stock are
currently traded under the UFCS symbol on this
exchange. On May 24, 2011, the last trading day before the
announcement of the Reorganization Proposal, the closing price
per share of Company common stock was $18.85. On
November 29, 2011, the most recent trading day for which
prices were available, the closing price per share of Company
common stock was $17.44.
In order to implement the Reorganization, we need the
Companys shareholders to adopt and approve the
Reorganization Agreement. Our Board of Directors has carefully
considered the Reorganization Agreement, which provides for the
merger of the Company and MergeCo and the related transactions
described in this proxy statement/prospectus, and believes that
it is advisable, fair to and in the best interest of our
shareholders and recommends that you vote FOR the
Reorganization. Because adoption of the Reorganization Agreement
requires the affirmative vote of holders of at least two-thirds
of the outstanding shares entitled to vote at the Special
Meeting, your vote is important, no matter how many or how few
shares you may own.
Whether or not you plan to attend the Special Meeting, we
encourage you to sign and return your proxy card in the enclosed
postage-paid envelope or use telephone or Internet voting prior
to the meeting. This ensures that your shares of the
Companys common stock will be represented and voted at the
meeting; even if you cannot attend.
The accompanying notice of Special Meeting and proxy statement
contain additional information about the meeting and explains
the methods you can use to vote your proxy, including by
telephone and via the Internet. Please read these materials
carefully. In particular, you should consider the discussion
of risk factors beginning on page 8 before voting on the
Reorganization Agreement.
For the Board of Directors,
Jack Evans
Chairman of the Board
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the
securities to be issued under this proxy statement/prospectus or
determined if this proxy statement/prospectus is accurate or
adequate. Any representation to the contrary is a criminal
offense.
This proxy statement/prospectus is dated November 30, 2011
and is being first mailed to United Fire & Casualty
Company shareholders on or about December 5, 2011.
UNITED FIRE
& CASUALTY COMPANY
118
Second Avenue SE
Cedar Rapids, Iowa 52401
NOTICE OF SPECIAL MEETING OF SHAREHOLDER OF
UNITED FIRE & CASUALTY COMPANY
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DATE AND TIME:
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January 24, 2012, at 10:00 A.M.
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PLACE:
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United Fire & Casualty Company
First Floor Conference Room
109 Second Street SE
Cedar Rapids, Iowa
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ITEMS OF BUSINESS:
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At the meeting, we will ask shareholders to:
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1) Consider and vote upon a proposal, which we refer
to as the Reorganization Proposal, approving the
Agreement and Plan of Reorganization, dated as of May 25, 2011,
by and between United Fire & Casualty Company, United Fire
Group, Inc. and UFC MergeCo, Inc.; and
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2) To approve the adjournment of the Special Meeting,
if necessary, to solicit additional proxies, in the event that
there are not sufficient votes at the time of the Special
Meeting to approve the foregoing proposal.
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WHO CAN VOTE:
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You can vote at the Special Meeting and at any adjournments or
postponements of the Special Meeting if you were a shareholder
of record at the close of business on November 28, 2011.
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Our Board of Directors has approved and recommends that you
vote FOR each of the foregoing proposals, which are
described in more detail in this proxy statement/prospectus.
By Order of the Board of Directors,
Neal R. Scharmer
Corporate Secretary
Dated at Cedar Rapids, Iowa
November 30, 2011
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD OR
VOTE YOUR
SHARES BY TELEPHONE OR VIA THE INTERNET.
ADDITIONAL
INFORMATION
United Fire Group, Inc. has filed a registration statement on
Form S-4
to register with the SEC the shares of common stock of United
Fire Group, Inc. into which each outstanding share of common
stock of the Company will be converted automatically in the
Reorganization. This proxy statement/prospectus is part of that
registration statement and constitutes a prospectus of United
Fire Group, Inc. in addition to being a proxy statement of the
Company for the Special Meeting.
The SEC allows us to incorporate by reference
information into this proxy statement/prospectus, which means
that we can disclose important information to you by referring
you to another document filed separately by the Company with the
SEC. This proxy statement/prospectus incorporates important
business and financial information about the Company from our
Annual Report on
Form 10-K
for the year ended December 31, 2010 and from other
documents that are not included in or being delivered with this
proxy statement/prospectus. The information incorporated by
reference is deemed to be part of this proxy
statement/prospectus except for any information superseded by
information in this proxy statement/prospectus or in any
document subsequently filed with the SEC that is also
incorporated by reference. See Documents Incorporated by
Reference under Additional Information.
The incorporated information that is not included in or being
delivered with this proxy statement/ prospectus is available to
you without charge upon your written or oral request. You can
obtain any document that is incorporated by reference in this
proxy statement/prospectus, excluding all exhibits that have not
been specifically incorporated by reference, by requesting it in
writing or by telephone from us at the following address or
telephone number:
United
Fire & Casualty Company
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone:
(319) 399-5700
Attn: Investor Relations
or by visiting our website at www.unitedfiregroup.com.
Information on United Fire & Casualty Companys
website is not incorporated by reference into this proxy
statement/prospectus or made a part hereof for any purpose.
You may read and copy any of the information on file with the
SEC at the SECs public reference room, located at
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800- SEC-0330 for further information
about the public reference room. The Companys SEC filings
are also available on the SECs web site located at
http://www.sec.gov.
You should rely only on the information contained in this proxy
statement/prospectus or that to which we have referred you. We
have not authorized anyone to provide you with any additional
information. This proxy statement/prospectus is dated as of the
date listed on the cover page. You should not assume that the
information contained in this proxy statement/prospectus is
accurate as of any date other than such date and neither the
mailing of this proxy statement/prospectus to shareholders, nor
the issuance of shares of United Fire Group, Inc. common stock
in the Reorganization, shall create any implication to the
contrary.
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Annex I-1
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Annex II-1
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Annex III-1
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UNITED
FIRE & CASUALTY COMPANY
118
Second Avenue SE
Cedar Rapids, Iowa 52401
PROXY
STATEMENT/PROSPECTUS FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 24, 2012
This solicitation of proxies is made by the Board of Directors
of United Fire & Casualty Company (the
Company, we, us, or
our, as the context requires). Proxies will be used
at the Special Meeting of Shareholders of United
Fire & Casualty Company (the Special
Meeting), an Iowa corporation, to be held on
January 24, 2012 at
10:00 A.M.,
and at any adjournment or postponement thereof. The Special
Meeting will be held in the first floor conference room of our
building located at 109 Second Street SE, in Cedar Rapids, Iowa.
With respect to shares of our common stock held in the United
Fire Group Employee Stock Ownership Plan (the ESOP)
and the United Fire Group 401(k) Plan (the 401(k)
Plan), the Board of Directors is soliciting participants
on behalf of the Trustees of those plans to direct the Trustees
how to vote the shares held in those plans.
The notice of meeting, proxy statement, and form of proxy is
first being mailed to shareholders and participants in the ESOP
and 401(k) Plan on or about December 5, 2011.
We will solicit proxies principally by mail, but our directors
and employees may also solicit proxies by telephone, facsimile,
or e-mail.
Our directors and employees may also conduct personal
solicitations.
QUESTIONS
AND ANSWERS ABOUT THE REORGANIZATION
Why am
I receiving this proxy statement/prospectus?
You have received this proxy statement/prospectus and the
enclosed proxy card from us because you held shares of our
common stock on November 28, 2011.
What
will I be voting on at the special meeting?
As a shareholder, you are entitled to and requested to adopt the
Agreement and Plan of Reorganization (the Reorganization
Agreement) pursuant to which the Company will be merged
with and into UFC MergeCo, Inc. (MergeCo), a wholly
owned subsidiary of United Fire Group, Inc. (United Fire
Group), with the Company as the surviving entity. United
Fire Group is a wholly owned subsidiary of the Company. In this
transaction, each share of our common stock will be
automatically converted into one share of common stock of United
Fire Group. This transaction is referred to in this proxy
statement/prospectus as the Reorganization. The
proposal to consider and vote on the Reorganization is referred
to in this proxy statement/prospectus as the
Reorganization Proposal. In addition, you are asked
to vote to adjourn the Special Meeting, if necessary, to solicit
additional proxies in the event that there are not sufficient
votes at the time of the Special Meeting to adopt the
Reorganization Agreement.
Who is
entitled to vote?
Only holders of record of shares of our common stock on the
close of business on November 28, 2011 will be entitled to
vote at the Special Meeting. On or about December 5, 2011
we will begin mailing this proxy statement/prospectus to all
persons entitled to vote at the Special Meeting.
When
and where is the special meeting being held?
The Special Meeting will be held on January 24, 2012, at
10:00 A.M.,
and at any adjournment or postponement from such date and time.
The Special Meeting will be held in the first floor conference
room of our building located at 109 Second Street SE, in Cedar
Rapids, Iowa.
What
is the Reorganization Proposal?
Under the Reorganization Agreement, the Company will merge with
MergeCo, an Iowa corporation, with the Company surviving the
merger as a wholly owned subsidiary of United Fire Group, an
Iowa corporation. Upon completion of the Reorganization, United
Fire Group will, in effect, replace the Company as the publicly
held corporation. United Fire Group and its subsidiaries will
conduct all of the operations we currently conduct. As a result
of the Reorganization, the current shareholders of the Company
will become shareholders of United Fire Group with the same
number and percentage of shares of United Fire Group as they
hold of the Company immediately prior to the Reorganization. The
Reorganization Agreement, which sets forth the plan of
Reorganization and is the primary legal document that governs
the Reorganization, is attached as Annex I to this proxy
statement/prospectus. We encourage you to read the
Reorganization Agreement carefully.
Why
are you forming a holding company?
We are forming a holding company to provide us with greater
strategic, business, financing and regulatory flexibility. To
review the reasons for the Reorganization in greater detail, see
Reasons for the Reorganization, on page 10 of
this proxy statement/prospectus.
What
will happen to my stock?
In the Reorganization, your shares of our common stock will
automatically be converted into the same number of shares of
common stock of United Fire Group. As a result, you will become
a shareholder of United Fire Group and will own the same number
and percentage of shares of United Fire Group common stock that
you now own of our common stock. We expect that United Fire
Group common stock will be listed on the NASDAQ Global Select
Market under the symbol UFCS.
How
will being a United Fire Group shareholder be different from
being a Company shareholder?
After the Reorganization, you will own the same number and
percentage of shares of United Fire Group common stock that you
owned of our common stock immediately prior to the
Reorganization. You will own shares of an Iowa holding company
that owns our existing operating businesses. Your rights as a
shareholder of United Fire Group will be substantially the same
as your rights as a shareholder of our Company, including rights
as to voting and dividends. For more information, see
Description of United Fire Group Capital Stock,
Description of Company Capital Stock and
Comparative Rights of Holders of United Fire Group Capital
Stock and Company Capital Stock, beginning on page 15
of this proxy statement/prospectus.
Will
the management or the business of the Company change as a result
of the Reorganization?
No. The management and business of our Company will remain the
same after the Reorganization.
What
will the name of the public company be following the
Reorganization?
The name of the public company following the Reorganization will
be United Fire Group, Inc.
Will
the companys CUSIP number change as a result of the
Reorganization?
Yes. Following the Reorganization the companys CUSIP
number will be 910340 108.
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Will I
have to turn in my stock certificates?
No. Do not turn in your stock certificates. We will not
require you to exchange your stock certificates as a result of
the Reorganization. After the Reorganization, your Company
common stock certificates will represent the same number of
shares of United Fire Group common stock.
Will
the Reorganization affect my U.S. federal income
taxes?
The proposed Reorganization is intended to be a tax-free
transaction under U.S. federal income tax laws. We expect
that you will not recognize any gain or loss for
U.S. federal income tax purposes upon your receipt of
United Fire Group common stock in exchange for your shares of
Company common stock in the Reorganization; however, the tax
consequences to you will depend on your own situation. You
should consult your own tax advisors concerning the specific tax
consequences of the Reorganization to you, including any state,
local or foreign tax consequences of the Reorganization. For
further information, see Material U.S. Federal Income
Tax Consequences, on page 13 of this proxy
statement/prospectus.
How
will the Reorganization be treated for accounting
purposes?
For accounting purposes, our reorganization into a holding
company structure will be treated as a merger of entities under
common control. The accounting treatment for such events is
similar to the former pooling of interests method.
Accordingly, the consolidated financial position and
consolidated results of operations of the Company will be
included in the consolidated financial statements of United Fire
Group on the same basis as currently presented.
What
vote is required to approve the Reorganization
Proposal?
The required vote is the affirmative vote of holders of at least
two-thirds of the outstanding shares entitled to vote at the
Special Meeting.
What
percentage of the outstanding shares do directors and executive
officers hold?
On October 28, 2011, directors, executive officers and
their affiliates beneficially owned approximately 7.02 percent
of our outstanding shares of common stock.
If the
shareholders approve the Reorganization, when will it
occur?
We plan to complete the Reorganization on or about
January 31, 2012, provided that our shareholders approve
the Reorganization and all other conditions to completion of the
Reorganization are satisfied.
Do I
have dissenters (or appraisal) rights?
No. Holders of Company common stock do not have dissenters
rights under Iowa law as a result of the Reorganization.
Whom
do I contact if I have questions about the Reorganization
Proposal?
You may contact us at:
United Fire & Casualty Company
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone:
(319) 399-5700
Attn: Investor Relations
Brokerage
and Other Account Holders
If your shares are held in a brokerage account or by a bank or
other nominee, you are considered to be the beneficial owner of
shares held in street name. These proxy materials are being
forwarded to you by your
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broker or nominee, who is considered to be the holder of record
with respect to your shares. As the beneficial owner, you have
the right to direct your broker or nominee how to vote your
beneficial shares by filling out the voting instruction form
provided to you. Telephone and Internet voting options may also
be available to beneficial owners. As a beneficial owner, you
are invited to attend the Special Meeting, but you must obtain a
legal proxy from the record holder of your shares in order to
vote in person at the Special Meeting.
ESOP and
401(k) Plan Participants
If you are a participant in either our ESOP or our 401(k) Plan,
we have shown on your proxy card the number of shares of common
stock held for your benefit in the ESOP or the 401(k) Plan, plus
your other holdings. If you hold stock through either of these
plans, voting your proxy also serves as confidential voting
instructions to the Trustees of the ESOP (Timothy G. Spain and
Michael T. Wilkins)
and/or to
the Trustee of the 401(k) Plan (Charles Schwab & Co.).
Those Trustees will vote your shares in accordance with the
specific voting instructions that you indicate on your proxy
card. If you provide no specific voting instructions, the
Trustees of the ESOP will not vote your shares, and the Trustee
of the 401(k) Plan will vote your shares in proportion to the
voting instructions it receives from those plan participants who
do submit voting instructions.
How do
I vote my shares?
You may vote in the following ways:
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In person: We will distribute paper ballots to
anyone who wishes to vote in person at the Special Meeting.
However, if you hold your shares in street name, you must
request a proxy card from your broker in order to vote in person
at the Special Meeting. Holding shares in street
name means that you hold them through a brokerage firm,
bank, or other nominee in the records maintained by our transfer
agent, Computershare Investor Services, LLC, instead of in your
individual name.
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By mail: Complete and sign your proxy card and
return it to us by mail in the enclosed business reply envelope.
If you mark your voting instructions on the proxy card, your
shares will be voted as you instruct. If an additional proposal
comes up for a vote at the Special Meeting that is not on the
proxy card, your shares will be voted in the best judgment of
the authorized proxies, Jack B. Evans and Neal R. Scharmer.
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If you do not mark voting instructions on your proxy card, your
shares will be voted FOR the Reorganization Proposal and
FOR the adjournment of the Special Meeting, if necessary,
to solicit additional proxies, in the event that there are not
sufficient votes at the time of the Special Meeting to approve
the foregoing proposal.
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By telephone: Call the toll-free telephone number on
your proxy card to vote by telephone. You must have a touch-tone
telephone to use this voting method. You will need to follow the
instructions on your proxy card and the voice prompts to vote
your shares.
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Via the Internet: If you have Internet access
available to you, you may go to the website listed on your proxy
card to vote your shares via the Internet. You will need to
follow the instructions on your proxy card and the website to
vote your shares.
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Telephone and Internet voting options are available
24 hours a day, seven days a week. When prompted, you will
need to enter the control number shown on your proxy card. You
will then be able to vote your shares and confirm that your
instructions have been properly recorded. If you vote by
telephone or via the Internet, your electronic vote authorizes
the proxies in the same manner as if you had signed, dated and
returned your proxy card by mail. Telephone and Internet voting
procedures, including the use of control numbers found on the
proxy cards, are designed to authenticate shareholders
identities, to allow shareholders to vote their shares of stock
and to confirm that their instructions have been properly
recorded. If you vote by telephone or via the Internet, you do
not need to return your proxy card.
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If you hold your shares in street name, you may vote by
telephone or via the Internet only if your bank, broker or other
nominee makes those methods available to you, in which case your
broker or nominee will enclose specific instructions for using
those options along with this proxy statement.
If I
hold my shares in a brokerage account and do not return voting
instructions, will my shares be voted?
If your shares are held in a brokerage account or by a bank or
other nominee, your broker, bank or other nominee will ask you
how you want your shares to be voted. If you provide voting
instructions, your shares must be voted as you direct. Without
client voting instructions, however, brokers are not permitted
to cast votes on non-routine matters, such as the
Reorganization Proposal. If you do not provide voting
instructions, a broker non-vote will occur.
Can I
revoke my proxy or change my vote after I return my
proxy?
Yes. Even after you submit a proxy, you may revoke your proxy or
change your vote at any time before it is exercised by:
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Delivering written notice to our transfer agent, Computershare
Investor Services, LLC, at its proxy tabulation center at P. O.
Box 43126, Providence, Rhode Island
02940-5138;
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Delivering written notice to the Corporate Secretary of United
Fire & Casualty Company at 118 Second Avenue SE,
Cedar Rapids, Iowa 52401;
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Executing and delivering a later-dated proxy; or
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Appearing and voting in person at the Special
Meeting. Attendance at the Special Meeting will not by
itself revoke a previously granted proxy.
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Who
pays for this proxy solicitation?
The Company will pay the total expense of this solicitation of
proxies. The expenses may include reimbursement to brokerage
firms and others of their cost for forwarding solicitation
material to beneficial owners.
SUMMARY
OF THE REORGANIZATION PROPOSAL
This section highlights key aspects of the Reorganization
Proposal, including the Reorganization Agreement, that are
described in greater detail elsewhere in this proxy
statement/prospectus. It does not contain all of the information
that may be important to you. To better understand the
Reorganization Proposal, and for a more complete description of
the legal terms of the Reorganization Agreement, you should read
this entire document carefully, including the Annexes, and the
additional documents to which we refer you. You can find
information with respect to these additional documents in
Additional Information on page 29 of this proxy
statement/prospectus.
THE
PRINCIPAL PARTIES
United Fire & Casualty Company
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone:
(319) 399-5700
United Fire & Casualty Company (the
Company) and its consolidated subsidiaries and
affiliate are engaged in the business of writing property and
casualty insurance and life insurance and selling annuities. The
Company was incorporated in Iowa in January 1946. Our principal
executive office is located at 118 Second Avenue SE,
P.O. Box 73909, Cedar Rapids, Iowa
52407-3909.
Telephone:
319-399-5700.
We report our operations in two business segments: property and
casualty insurance and life insurance. We market our products
through our home office in Cedar Rapids, Iowa, and four regional
locations: our Denver Regional
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Office in Westminster, Colorado; our Gulf Coast Regional Office
in Galveston, Texas; our East Coast Regional Office in
Pennington, New Jersey; and our West Coast Regional Office in
Rocklin, California. We maintain other offices in New Orleans,
Louisiana and Lock Haven, Pennsylvania.
Our property and casualty insurance segment includes the Company
and the following companies (collectively, the Subsidiary
Companies), which are wholly owned by the Company,
directly or indirectly:
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Addison Insurance Company, an Iowa property and casualty insurer;
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Lafayette Insurance Company, a Louisiana property and casualty
insurer;
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United Fire & Indemnity Company, a Texas property and
casualty insurer, and its affiliate United Fire Lloyds, a Texas
property and casualty insurer;
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American Indemnity Financial Corporation, a Delaware holding
company, and its subsidiary, Texas General Indemnity Co., a
Colorado property and casualty insurer;
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Mercer Insurance Group, Inc., a Pennsylvania corporation, and
its subsidiaries, Mercer Insurance Co., a Pennsylvania property
and casualty insurer, Mercer Insurance Company of New Jersey,
Inc., a New Jersey property and casualty insurer, Franklin
Insurance Company, a Pennsylvania property and casualty insurer,
and BICUS Services Corporation, a Pennsylvania business
corporation; and
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Financial Pacific Insurance Group, Inc., a California
corporation, and its subsidiaries, Financial Pacific Insurance
Company, a California property and casualty insurer, Financial
Pacific Insurance Agency, a California corporation; and three
statutory trusts.
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We are licensed as a property and casualty insurer in
43 states plus the District of Columbia. Over 1,300
independent agencies represent us and our property and casualty
insurance subsidiaries.
Mercer Insurance Group, Inc. and its property and casualty
insurance subsidiaries participate in an inter-company
reinsurance pooling agreement. United Fire and its other
property and casualty insurance subsidiaries participate in a
separate inter-company reinsurance pooling agreement. Pooling
arrangements permit the participating companies to rely on the
capacity of the entire pools capital and surplus, rather
than being limited to policy exposures of a size commensurate
with each participants own surplus level. Under such
arrangements, the members share substantially all of the
insurance business that is written, and allocate the combined
premiums, losses and expenses based on percentages defined in
the arrangement.
Our life insurance segment consists of United Life Insurance
Company, an Iowa life insurer and wholly owned subsidiary of the
Company that is licensed in 29 states, primarily in the
Midwest and West, and is represented by more than 900
independent agencies.
Information about us is available on our website at
www.unitedfiregroup.com. The contents of our website are
not incorporated by reference herein and are not deemed to be
part of this proxy statement/prospectus.
United Fire Group, Inc.
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone:
(319) 399-5700
The Company formed United Fire Group, Inc. (United Fire
Group) as a wholly owned subsidiary in order to effect the
Reorganization. Prior to the Reorganization, United Fire Group
will have no assets or operations other than those that are
incidental to its formation.
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UFC MergeCo, Inc.
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone:
(319) 399-5700
UFC MergeCo, Inc. (MergeCo) was formed as a wholly
owned subsidiary of United Fire Group in order to effect the
Reorganization. Prior to the Reorganization, MergeCo will have
no assets or operations other than those that are incidental to
its formation.
WHAT YOU
WILL RECEIVE IN THE REORGANIZATION (See page 11)
In the Reorganization, each outstanding share of common stock of
the Company will be converted automatically into one share of
common stock of United Fire Group. In addition, each outstanding
option to purchase shares of the Company common stock, if not
exercised before the completion of the Reorganization, will
become an option to acquire, at the same exercise price, an
identical number of shares of United Fire Group common stock.
Each outstanding restricted stock award (or any performance
award payable in restricted stock) will become an award of
restricted stock (or a performance award payable in restricted
stock) in an identical number of shares of United Fire Group
common stock. Finally, participants in the Companys
Employee Stock Purchase Plan will be entitled to receive shares
of United Fire Group common stock in accordance with the terms
of the plan.
On the Record Date, there were outstanding shares of Company
common stock, unvested shares of Company restricted stock and
options to acquire shares of Company common stock.
CONDITIONS
TO COMPLETION OF THE REORGANIZATION (See page 12)
The completion of the Reorganization depends on the satisfaction
or waiver of a number of conditions, including, but not limited
to, the following:
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absence of any stop order suspending the effectiveness of the
registration statement, of which this proxy statement/prospectus
forms a part, relating to the shares of United Fire Group common
stock to be issued pursuant to the Reorganization and absence of
any similar proceeding with respect to this Proxy Statement.
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approval and adoption of the Reorganization Agreement by the
Companys shareholders;
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receipt of approval for listing on the NASDAQ Global Select
Market of shares of United Fire Group common stock to be issued
pursuant to the Reorganization
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the Company shall have made such filings, and obtained such
permits, authorizations, consents, approvals or terminations or
expirations of waiting periods required by the corporate and
insurance laws and regulations of all applicable jurisdictions;
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absence of any order or proceeding that would prohibit or make
illegal completion of the Reorganization; and
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receipt by the Company and United Fire Group of a legal opinion
of Bradley & Riley PC with respect to the material
U.S. federal income tax consequences of the Reorganization.
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TERMINATION
OF THE REORGANIZATION AGREEMENT (See page 12)
We may terminate the Reorganization Agreement, even after
adoption by our shareholders, if our Board of Directors
determines to do so for any reason.
BOARD OF
DIRECTORS AND EXECUTIVE OFFICERS OF UNITED FIRE GROUP FOLLOWING
THE REORGANIZATION (See page 14)
The Board of Directors of United Fire Group presently consists
of the same persons who constitute the Board of Directors of the
Company, and it is expected that those directors will remain the
same following the
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Reorganization. The executive officers of United Fire Group
following the Reorganization will be the same as the executive
officers of the Company immediately prior to the Reorganization.
MARKETS
AND MARKET PRICES
United Fire Group common stock is not currently traded on any
stock exchange. The Company common stock is traded under the
symbol UFCS on the NASDAQ Global Select Market, and
we expect United Fire Group common stock to trade on the NASDAQ
Global Select Market under the symbol UFCS following
the Reorganization. On May 24, 2011, the last trading day
before the announcement of the Reorganization Proposal, the
closing price per share for the Companys common stock was
$18.85. On November 29, 2011, the most recent trading day
for which prices were available, the closing price per share of
the Companys common stock was $17.44.
CERTAIN
FINANCIAL INFORMATION
We have not included pro forma financial comparative per share
information concerning the Company that gives effect to the
Reorganization because, immediately after the completion of the
Reorganization, the consolidated financial statements of United
Fire Group will be the same as the Companys consolidated
financial statements immediately prior to the Reorganization,
and the Reorganization will result in the conversion of each
share of Company common stock into one share of United Fire
Group common stock. In addition, we have not provided financial
statements of United Fire Group because, prior to the
Reorganization, it will have no assets, liabilities or
operations other than those incident to its formation. Pro Forma
Consolidated Financial Statements for the nine months ended
September 30, 2011 for the Company and Mercer Insurance
Group, Inc. is attached as Exhibit 99.2 to Amendment No. 1
to United Fire Groups Registration Statement on Form S-4
filed with the SEC on November 4, 2011.
RISK
FACTORS
In considering whether to vote in favor of the Reorganization
Proposal, you should consider all of the information we have
included in this proxy statement/prospectus, including its
Annexes, and all of the information included in the documents we
have incorporated by reference, including our Annual Report on
Form 10-K
for the year ended December 31, 2010 and the risk factors
described in the other documents incorporated by reference. In
addition, you should pay particular attention to the risks
described below.
Our Board
of Directors may choose to defer or abandon the
Reorganization.
Completion of the Reorganization may be deferred or abandoned,
at any time, by action of our Board of Directors, whether before
or after the Special Meeting. While we currently expect the
Reorganization to take place on or about January 31, 2012,
assuming that the Reorganization Proposal is approved at the
Special Meeting, the Board of Directors may defer completion or
may abandon the Reorganization because of any determination by
our directors that the Reorganization would not be in the best
interests of the Company or its shareholders or that the
Reorganization would have material adverse consequences to the
Company or its shareholders.
We may
not obtain the expected benefits of our Reorganization into a
holding company.
We believe our reorganization into a holding company structure
will provide us with benefits in the future. These expected
benefits may not be obtained if market conditions or other
circumstances prevent us from taking advantage of the strategic,
business and financing flexibility that it affords us. As a
result, we may incur the costs of creating the holding company
without realizing the possible benefits.
As a
holding company, United Fire Group will depend in large part on
dividends from its operating subsidiaries to satisfy its
obligations.
After the completion of the Reorganization, United Fire Group
will be a holding company with no business operations of its
own. Its only significant assets will be the outstanding capital
stock of its
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subsidiaries. As a result, it will rely on funds from its
current subsidiaries and any subsidiaries that it may form in
the future to meet its obligations.
The
market for United Fire Group shares may differ from the market
for Company shares.
Although it is anticipated that United Fire Group common shares
will be authorized for listing on the NASDAQ Global Select
Market, the market prices, trading volume and volatility of
United Fire Group shares could be different from those of
Company shares.
The
proposed reorganization into a holding company may result in
substantial direct and indirect costs whether or not
completed.
The Reorganization may result in substantial direct costs. These
costs and expenses are expected to consist primarily of
attorneys fees, accountants fees, filing fees and
financial printing expenses and will be substantially incurred
prior to the vote of our shareholders. The Reorganization may
also result in certain indirect costs by diverting the attention
of our management and employees from our business and by
increasing our administrative costs and expenses. These
administrative costs and expenses will include keeping separate
records and in some cases making separate regulatory filings for
United Fire Group and each of its subsidiaries.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this proxy statement/prospectus and in documents
incorporated by reference in this proxy statement/prospectus
contain various forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the
Exchange Act, that represent our managements beliefs and
assumptions concerning future events. When used in this proxy
statement/prospectus and in documents incorporated herein by
reference, forward-looking statements include, without
limitation, statements regarding financial forecasts or
projections and our expectations, beliefs, intentions or future
strategies that are signified by the words
expect(s), anticipate(s),
intend(s), plan(s),
believe(s), continue(s),
seek(s), estimate(s),
goal(s), target(s),
forecast(s), project(s),
predict(s), should, could,
may, will continue, might,
hope, can or the negative of these
terms, and other words and terms of similar meaning or
expression.
The forward-looking statements are not historical facts and
involve risks and uncertainties that could cause actual results
to differ materially from those expected
and/or
projected. Such forward-looking statements are based on current
expectations, estimates, forecasts and projections about our
company, the industry in which we operate, and beliefs and
assumptions made by management. These statements are not
guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially
from what is expressed in such forward-looking statements.
Potential factors that could affect our results include those
described in this proxy statement/prospectus under Risk
Factors, and those identified in our Annual Report on
Form 10-K
for the year ended December 31, 2010 and in the other
documents incorporated by reference. In light of these risks and
uncertainties, the forward-looking results discussed or
incorporated by reference in this proxy statement/prospectus
might not occur.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of
this proxy statement/prospectus or as of the date they are made.
Except as required under the federal securities laws and the
rules and regulations of the Securities and Exchange Commission
(the SEC), we do not have any intention or
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
PROPOSAL ONE
THE REORGANIZATION PROPOSAL
This section of the proxy statement/prospectus describes the
Reorganization Proposal. Although we believe that the
description in this section covers the material terms of the
Reorganization Proposal, this
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summary may not contain all of the information that is
important to you. The summary of the material provisions of the
Reorganization Agreement provided below is qualified in its
entirety by reference to the Reorganization Agreement, which we
have attached as Annex I to this proxy statement/prospectus
and which we incorporate by reference into this proxy
statement/prospectus. You should carefully read the entire proxy
statement/prospectus and the Reorganization Agreement for a more
complete understanding of the Reorganization Proposal. Your
approval of the Reorganization Proposal will constitute your
approval and adoption of the Reorganization Agreement, the
Reorganization, the articles of incorporation of United Fire
Group and the bylaws of United Fire Group.
REASONS
FOR THE REORGANIZATION
At a meeting of the Board of Directors of the Company held on
May 18, 2011, the Board of Directors concluded that the
Reorganization is advisable, determined that the terms of the
Reorganization Agreement are fair to and in the best interest of
the Company and its shareholders and adopted and approved the
Reorganization Agreement.
During the course of its deliberations, our Board of Directors
consulted with management and outside legal counsel and
considered a number of positive factors, including the following:
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Possible Future Strategic and Business Flexibility of the
Holding Company Structure. We believe the holding company
structure could facilitate future expansion of our business by
providing a more flexible structure for acquiring other
businesses or entering into joint ventures, while continuing to
keep the operations and risks of our other businesses separate.
Although we have no present plans or any arrangements,
understandings or agreements to make any acquisitions or enter
into any joint ventures, we may do so in the future.
Furthermore, implementing a holding company structure may
further reduce the risk that liabilities of our core businesses
and other businesses, if any, that may be operated in the future
by separate subsidiaries would be attributed to each other.
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Possible Future Financing Flexibility of the Holding Company
Structure. We believe that a holding company structure may
be beneficial to shareholders in the future because it would
permit the use of financing techniques that are not available to
the Company because the Company is a property and casualty
insurer.
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Possible Future Flexibility because United Fire Group is not
an Insurance Company. Because United Fire Group would not be
an insurance company, it will not be subject to the insurance
laws, rules and regulations of the various states in which we
now operate.
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In addition to the positive factors described above, our Board
of Directors also considered the following potential negative
factor associated with the Reorganization Proposal:
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Increased Costs and Expenses Associated with Implementing the
Reorganization Proposal and Administering a Holding Company
Structure. The Reorganization may result in substantial
direct costs. These costs and expenses are expected to consist
primarily of attorneys fees, accountants fees,
filing fees and financial printing expenses associated with the
Reorganization and will be substantially incurred prior to the
vote of our shareholders. The Reorganization may also result in
certain indirect costs by diverting the attention of our
management and employees from our business and increasing our
administrative costs and expenses. These administrative costs
and expenses will include keeping separate records and in some
cases making separate regulatory filings for each of United Fire
Group and its current and future subsidiaries.
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REORGANIZATION
PROCEDURE
The Company currently owns all of the issued and outstanding
common stock of United Fire Group. United Fire Group currently
owns all of the issued and outstanding common stock of MergeCo,
the subsidiary formed for purposes of completing the
Reorganization. The Company also directly or indirectly owns all
of the issued and outstanding common stock of the Subsidiary
Companies. Following the approval of the
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Reorganization Agreement by the Company shareholders and the
satisfaction or waiver of the other conditions specified in the
Reorganization Agreement (which are described below), the
Company will merge with MergeCo, the subsidiary of United Fire
Group. As a result of this merger:
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The Company will be the surviving corporation, and the separate
corporate existence of MergeCo will cease.
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Each outstanding share of the Company common stock will
automatically convert into one share of United Fire Group common
stock, as described below, and the current shareholders of the
Company will become the shareholders of United Fire Group.
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United Fire Group will own all of the Companys common
stock, and each share of United Fire Group common stock now held
by the Company will be cancelled.
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The result of the Reorganization will be that your current
company, United Fire & Casualty Company, will be
merged with MergeCo and United Fire & Casualty Company
will become a subsidiary of United Fire Group. United Fire
Groups articles of incorporation are included as
Annex II to this proxy statement/prospectus, and a copy of
United Fire Groups bylaws are included as Annex III
to this proxy statement/prospectus. For more information
regarding your rights as a shareholder before and after the
Reorganization, see Description of United Fire Group
Capital Stock, Description of Company Capital
Stock and Comparative Rights of Holders of United
Fire Group Capital Stock and Company Capital Stock in this
proxy statement/prospectus.
What
Company Shareholders Will Receive in the
Reorganization
Each share of Company common stock will convert into one share
of United Fire Group common stock. After the completion of the
Reorganization, you will own the same number and percentage of
shares of United Fire Group common stock as you currently own of
Company common stock.
Company
Stock Options and Other Rights to Receive Company
Stock
Each outstanding option to acquire shares of Company common
stock will become an option to acquire, on the same terms and
conditions as before the Reorganization, an identical number of
shares of United Fire Group common stock. Each outstanding
restricted stock award for Company stock (or any performance
award payable in Company restricted stock) will become an award
of restricted stock (or a performance award payable in
restricted stock) in an identical number of shares of United
Fire Group common stock. As of November 28, 2011, there
were outstanding options to acquire an aggregate of
1,205,847 shares of Company common stock and outstanding
restricted stock awards representing an aggregate of
50,206 shares of Company common stock. The Companys
existing stock-based compensation plans, which include the
Companys 2005 Nonqualified Non-Employee Director Stock
Option and Restricted Stock Plan, 2008 Stock Plan, Employee
Stock Purchase Plan, 401(k) Plan and Employee Stock Ownership
Plan, will entitle plan participants to receive shares of United
Fire Group common stock rather than shares of Company common
stock, on the same terms otherwise provided for in the
respective plans.
Corporate
Name Following the Reorganization
The name of the public company following the Reorganization will
be United Fire Group, Inc.
No
Exchange of Stock Certificates
In the Reorganization, your shares of Company common stock will
be converted automatically into shares of United Fire Group
common stock. Your certificates of Company common stock, if any,
will represent, from and after the Reorganization, an equal
number of shares of United Fire Group common stock, and no
action with regard to stock certificates will be required on
your part. We expect to send you a notice after the
Reorganization is completed specifying this and other relevant
information.
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Conditions
to Reorganization
We will complete the Reorganization only if each of the
following conditions is satisfied or waived:
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The registration statement of United Fire Group shall have been
deemed or declared effective by the SEC under the Securities Act
and no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no
proceeding for that purpose shall have been initiated or, to the
knowledge of United Fire Group or the Company, threatened by the
SEC and not concluded or withdrawn. No similar proceeding with
respect to the proxy statement shall have been initiated or, to
the knowledge of United Fire Group or the Company, threatened,
by the SEC and not concluded or withdrawn.
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The Agreement and the Merger shall have been approved by the
requisite vote of the shareholders of the Company in accordance
with the Iowa Business Corporation Act and the amended and
restated articles of incorporation of the Company.
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The United Fire Group common stock to be issued pursuant to the
Reorganization shall have been approved for listing on the
NASDAQ Global Select Market by The NASDAQ Stock Market, LLC.
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The Company shall have made such filings, and obtained such
permits, authorizations, consents, approvals or terminations or
expirations of waiting periods required by the corporate and
insurance laws and regulations of all applicable jurisdictions.
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No order, statute, rule, regulation, executive order,
injunction, stay, decree, judgment or restraining order that is
in effect shall have been enacted, entered, promulgated or
enforced by any court or governmental or regulatory authority or
instrumentality that prohibits or makes illegal the consummation
of the Reorganization.
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The Boards of Directors of the Company and United Fire Group
shall have received the legal opinion of Bradley &
Riley PC in form and substance reasonably satisfactory to them
indicating that holders of Company common stock will not
recognize gain or loss for United States federal income tax
purposes as a result of the transactions contemplated by the
Reorganization Agreement.
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Effectiveness
of Reorganization
The Reorganization will become effective on the date we file
articles of merger with the Secretary of State of the State of
Iowa or a later date that we specify therein. We will file the
articles of merger when the conditions to the Reorganization
described above have been satisfied or waived. Assuming the
conditions to the Reorganization have been satisfied, we expect
the Reorganization will be effective on or about
January 31, 2012.
Termination
of Reorganization Agreement
The Reorganization Agreement may be terminated at any time prior
to the completion of the Reorganization (even after adoption by
our shareholders) by action of the Board of Directors if it
determines that for any reason the completion of the
transactions provided for therein would be inadvisable or not in
the best interest of the Company or our shareholders.
Amendment
of Reorganization Agreement
The Reorganization Agreement may, to the extent permitted by the
Iowa Business Corporation Act (the IBCA), be
supplemented, amended or modified at any time prior to the
completion of the Reorganization (even after adoption by our
shareholders), by the mutual consent of the parties thereto.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the material
U.S. federal income tax consequences of the Reorganization
to U.S. holders of Company common stock. This discussion is
based upon current provisions of the
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Internal Revenue Code of 1986, as amended (the
Code), current and proposed Treasury regulations,
and judicial and administrative decisions and rulings as of the
date of this proxy statement/prospectus, all of which are
subject to change (possibly with retroactive effect) and all of
which are subject to differing interpretation. This discussion
does not address all aspects of U.S. federal income
taxation that may be relevant to you in light of your particular
circumstances or to persons subject to special treatment under
U.S. federal income tax laws. In particular, this
discussion deals only with shareholders that hold Company common
stock as capital assets within the meaning of the Code. In
addition, this discussion does not address the tax treatment of
special classes of shareholders, such as banks, insurance
companies, tax-exempt organizations, financial institutions,
broker-dealers, persons holding Company stock as part of a
hedge, straddle or other risk reduction, constructive sale or
conversion transaction, U.S. expatriates, persons subject
to the alternative minimum tax and persons who acquired Company
common stock in compensatory transactions. If you are not a
U.S. holder (as defined below); this discussion does not
apply to you.
As used in this summary, a U.S. holder is:
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an individual U.S. citizen or resident alien;
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a corporation, partnership or other entity created or organized
under U.S. law (federal or state);
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an estate whose worldwide income is subject to U.S. federal
income tax; or
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a trust, if a court within the United States of America is able
to exercise primary supervision over the administration of the
trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust, or certain
trusts formed prior to August 20, 1996, if such trust has a
valid election in effect to be treated as a domestic trust for
U.S. federal income tax purposes.
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If a partnership (including, for this purpose, any entity
treated as a partnership for U.S. federal income tax
purposes) is a beneficial owner of Company common stock, the
U.S. federal income tax consequences to a partner in the
partnership will generally depend on the status of the partner
and the activities of the partnership. A holder of Company
common stock that is a partnership, and the partners in such
partnership, should consult their own tax advisors regarding the
U.S. federal income tax consequences of the Reorganization.
All shareholders are urged to consult with their own tax
advisors regarding the tax consequences of the reorganization to
their particular situation, including the effects of
U.S. Federal, state, local, foreign and other tax laws.
The obligation of the Company to complete the Reorganization is
conditioned upon, among other things, the Company and United
Fire Group having received a legal opinion from
Bradley & Riley PC, dated as of the completion of the
Reorganization, that the merger will constitute an exchange of
Company common stock for United Fire Group common stock governed
by Section 351 of the Code, as well as a Reorganization
within the meaning of Section 368(a) of the Code, and,
therefore, no gain or loss will be recognized by the
shareholders of the Company upon the receipt of United Fire
Group common stock pursuant to the merger. The Company has
requested a private letter ruling from the Internal Revenue
Service as to the tax consequences of the Reorganization. The
opinion of counsel will not be binding upon the Internal Revenue
Service or any other taxing authority. Assuming the transaction
is treated as described in this paragraph, the material
U.S. federal income tax consequences of the transactions
will be as follows:
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No gain or loss will be recognized by United Fire Group or the
Company as a result of the merger;
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No gain or loss will be recognized by shareholders of Company
common stock upon receipt of United Fire Group common stock
solely in exchange for Company common stock;
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The aggregate tax basis of the shares of United Fire Group
common stock that shareholders of Company common stock receive
in exchange for Company common stock in the merger will be the
same as the aggregate tax basis of the Company common stock
exchanged; and
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The holding period for shares of United Fire Group common stock
received in the merger will include the holding period of the
Company common stock exchanged.
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The foregoing discussion is not intended to be a complete
analysis or description of all potential U.S. Federal
income tax consequences or any other consequences of the
Reorganization. In addition, the discussion does not address tax
consequences that may vary with, or are contingent on, the
circumstances of individual holders of Company common stock.
Moreover, the discussion does not address state, local, foreign
or non-income tax consequences or tax return reporting
requirements. Accordingly, you are strongly urged to consult
with your own tax advisor to determine the particular
U.S. Federal, state, local or foreign income or other tax
consequences to you of the Reorganization.
NO
COMPENSATION RELATED TO THE REORGANIZATION
There are no agreements or understandings, whether written or
unwritten, between any executive officer and the Company, United
Fire Group or MergeCo concerning any type of compensation,
whether present, deferred or contingent, that is based on or
otherwise relates to the Reorganization.
ANTICIPATED
ACCOUNTING TREATMENT
For accounting purposes, our reorganization into a holding
company structure will be treated as a merger of entities under
common control. The accounting treatment for such events is
similar to the former pooling of interests method.
Accordingly, the financial position and results of operations of
the Company will be included in the consolidated financial
statements of United Fire Group on the same basis as currently
presented.
AUTHORIZED
CAPITAL STOCK
The Companys amended and restated articles of
incorporation currently authorize the issuance of
75,000,000 shares of common stock and
10,000,000 shares of preferred stock. United Fire
Groups articles of incorporation, which would govern the
rights of our shareholders after the Reorganization, currently
authorize the issuance of 75,000,000 shares of common stock
and 10,000,000 shares of preferred stock. Upon completion
of the Reorganization, the number of shares of United Fire Group
common stock that will be outstanding will be equal to the
number of shares of Company common stock outstanding immediately
prior to the Reorganization. As of November 28, 2011, there
were 626,837 shares of common stock authorized for issuance
under the Companys equity compensation plans. No other
shares are presently reserved for any other purpose.
LISTING
OF UNITED FIRE GROUP COMMON STOCK ON THE NASDAQ GLOBAL SELECT
MARKET; DE-LISTING AND DE-REGISTRATION OF COMPANY COMMON
STOCK
The completion of the Reorganization is conditioned on the
approval for listing of the shares of United Fire Group common
stock issued in the Reorganization (and any other shares to be
reserved for issuance in connection with the Reorganization) on
the NASDAQ Global Select Market. We expect that the United Fire
Group common stock will trade under the ticker symbol
UFCS. In addition, United Fire Group will become a
reporting company under the Exchange Act. Following the
Reorganization, the Companys common stock will no longer
be listed on the NASDAQ Global Select Market and will no longer
be registered under the Exchange Act. In addition, the Company
will cease to be a reporting company under the Exchange Act.
BOARD OF
DIRECTORS AND EXECUTIVE OFFICERS OF UNITED FIRE GROUP FOLLOWING
THE REORGANIZATION
The United Fire Group Board of Directors and the Company Board
of Directors are composed of the same persons.
We expect that the executive officers of United Fire Group
following the Reorganization will be the same as those of the
Company immediately prior to the Reorganization.
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ISSUANCES
OF UNITED FIRE GROUP COMMON STOCK UNDER COMPANY PLANS
The adoption by the holders of Company common stock of the
Reorganization Agreement will also constitute approval of the
assumption by United Fire Group of the Companys existing
stock-based compensation plans, which include the Companys
2005 Nonqualified Non-Employee Director Stock Option and
Restricted Stock Plan, 2008 Stock Plan, Employee Stock Purchase
Plan, 401(k) Plan and Employee Stock Ownership Plan and, where
appropriate, the future issuance of shares of United Fire Group
common stock in lieu of shares of Company common stock under
those plans, each as amended in connection with the
Reorganization without further shareholder action.
UNITED
FIRE GROUP ARTICLES OF INCORPORATION
The adoption by the holders of Company common stock of the
Reorganization Agreement will also constitute approval of the
terms of the United Fire Group articles of incorporation in the
form attached to this proxy statement/prospectus as
Annex II.
RESTRICTIONS
ON THE SALE OF UNITED FIRE GROUP SHARES
The shares of United Fire Group common stock to be issued in the
Reorganization will be registered under the Securities Act.
These shares will be freely transferable under the Securities
Act, subject to existing restrictions on certain affiliates of
United Fire Group.
DESCRIPTION
OF UNITED FIRE GROUP CAPITAL STOCK
United Fire Group is incorporated in the State of Iowa. The
rights of shareholders of United Fire Group will generally be
governed by Iowa law and United Fire Groups articles of
incorporation and bylaws. The following is a summary of the
material provisions of United Fire Groups articles of
incorporation and bylaws. This summary is not complete and is
qualified by reference to Iowa statutory and common law and the
full texts of United Fire Groups articles of incorporation
and bylaws, which are attached as Annexes II and III
to this proxy statement/prospectus.
General
Upon the completion of the Reorganization, the authorized
capital of United Fire Group will be 85,000,000 shares,
consisting of 75,000,000 shares of common stock, par value
$0.001 per share, and 10,000,000 shares of preferred stock,
no par value per share. All of the shares issued and outstanding
upon completion of the Reorganization will be fully paid and
nonassessable.
Upon completion of the Reorganization, the number of shares of
United Fire Group common stock that will be outstanding will be
equal to the number of shares of Company common stock
outstanding immediately prior to the Reorganization.
Common
Stock
The Board of Directors of United Fire Group may, without further
shareholder approval, issue up to 75,000,000 shares of
common stock having a par value of $.001 per share.
Dividends. Subject to preferences applicable to any
shares of outstanding United Fire Group preferred stock, the
Board of Directors may declare dividends upon the capital stock
of United Fire Group, subject to the applicable provisions, if
any, of the IBCA. United Fire Group may pay dividends in cash,
in property, or in shares of the capital stock, subject to the
provisions of the IBCA. All shares of United Fire Group common
stock are entitled to participate ratably with respect to
dividends or other distributions.
Liquidation Rights. If United Fire Group is
liquidated, dissolved or wound up, voluntarily or involuntarily,
holders of United Fire Group common stock are entitled to share
ratably in all assets of United Fire Group available for
distribution to the United Fire Group shareholders after the
payment in full of any preferential amounts to which holders of
any United Fire Group preferred stock may be entitled.
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Voting Rights. Holders of United Fire Group common
stock are entitled to one vote per share on all matters to be
voted upon by shareholders. There are no cumulative voting
rights. Shareholders may vote by proxy.
Other. There are no preemption, redemption, sinking
fund or conversion rights applicable to the United Fire Group
common stock. When issued, outstanding shares of common stock
will be fully paid and non-assessable.
Preferred
Stock
The Board of Directors of United Fire Group may, without further
shareholder approval, issue up to 10,000,000 shares of
preferred stock having no par value per share. The preferred
stock may be divided into and issued in one or more series. The
Board of Directors may establish and designate such series and,
within the limitations prescribed by law, fix and determine the
designations, powers, preferences, and relative, participating,
optional or other special rights, and qualifications,
limitations and restrictions of any series. The issuance of
United Fire Group preferred stock may have the effect of
delaying, deferring or preventing a change of control of United
Fire Group without further action by the shareholders, may
discourage bids for United Fire Group common stock at a premium
over the market price of United Fire Group common stock and may
adversely affect the market price of, and the voting and other
rights of the holders of, United Fire Group common stock.
Anti-Takeover
Provisions of the Articles of Incorporation and Bylaws
United Fire Groups articles of incorporation and bylaws
include a number of provisions that may have the effect of
deterring or impeding hostile takeovers or changes in control or
management. These provisions include:
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the authority of the Board of Directors to issue up to
10,000,000 shares of undesignated preferred stock and to
determine the rights, preferences and privileges of these
shares, without shareholder approval;
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a classified board of directors having three classes of
directors, with the terms of the members of a different class of
directors expiring each year and directors for that class being
elected to three-year terms;
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elimination of cumulative voting;
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requiring the affirmative vote of holders of at least sixty
percent (60%) of the outstanding shares of voting stock to
approve any plan of merger, consolidation, or sale or exchange
of all or substantially all of the assets of United Fire Group;
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requiring the affirmative vote of holders of at least sixty
percent (60%) of the outstanding shares of voting stock to amend
United Fire Groups articles of incorporation; and
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permitting a holder or group of holders of United Fire Group
common stock who own not less than one-fifth (1/5) but less than
a majority of the outstanding shares of common stock to nominate
and elect that number of directors, ignoring fractions, which
bears the same ratio to the number of directors to be elected as
the number of shares of common stock held by such shareholders
bears to the total shares of common stock outstanding, but the
total number of directors so elected by minority stockholders
may not exceed one less than a majority of the aggregate number
of directors to be elected.
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Such provisions may have the effect of delaying or preventing a
change in control.
Limitation
of Director Liability and Indemnification
United Fire Groups articles of incorporation and bylaws
provide that a director shall not be personally liable to United
Fire Group or its shareholders for monetary damages for any
action taken, or any failure to
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take any action, as a director, except liability for any of the
following: (1) the amount of a financial benefit received
by a director to which the director is not entitled; (2) an
intentional infliction of harm on United Fire Group or its
shareholders; (3) a violation of section 490.833 of
the IBCA, which provides that a director may be liable for
certain excess distributions in excess of what may be authorized
by statute; or (4) an intentional violation of criminal
law. If the IBCA is amended to authorize the further elimination
or limitation of the personal liability of directors, then,
automatically and without any further action, the liability of a
director shall be eliminated or limited to the fullest extent
permitted by the IBCA. The articles of incorporation and bylaws
of United Fire Group further provide that United Fire Group
shall indemnify each of its directors for liability to any
person for any action taken, or any failure to take any action,
as a director, except liability for any of the items
(1) through (4), listed above.
United Fire Groups articles of incorporation and bylaws
further provide that United Fire Group shall indemnify each of
its directors for liability to any person for any action taken,
or any failure to take any action, as a director, except
liability for any of the items (1) through (4), listed
above. Furthermore, any repeal or amendment of the provisions
governing limitation of director liability and indemnification
shall not adversely affect any right of a director or former
director arising at any time with respect to events occurring
prior to such repeal or amendment.
Transfer
Agent
We expect that the transfer agent for United Fire Group common
stock will be Computershare Investor Services, LLC, 2 North
LaSalle Street, Chicago, Illinois 60602.
The
NASDAQ Global Select Market Listing
We expect that United Fire Group common stock will be listed on
the NASDAQ Global Select Market under the trading symbol
UFCS.
DESCRIPTION
OF COMPANY CAPITAL STOCK
The rights of shareholders of the Company are generally governed
by Iowa law and the Companys Fourth Restated Articles of
Incorporation, as amended, and bylaws. The following is a
summary of the material provisions of the Companys Fourth
Restated Articles of Incorporation, as amended, and bylaws. This
summary is not complete and is qualified by reference to Iowa
statutory and common law and the full texts of the
Companys Fourth Restated Articles of Incorporation, as
amended, and bylaws. The Companys Fourth Restated Articles
of Incorporation, as amended, are incorporated by reference as
Exhibits 3.2 through 3.5 to United Fire Groups
Registration Statement on
Form S-4
filed with the SEC on May 25, 2011. The Companys
bylaws are incorporated by reference as Exhibit 3.7 to
United Fire Groups Registration Statement on Form S-4
filed with the SEC on May 25, 2011.
General
The Company is authorized to issue 75,000,000 shares of
common stock,
$3.331/3
par value per share, and 10,000,000 shares of preferred
stock, $1.00 par value per share.
As of November 28, 2011, the Company had
25,502,667 shares of common stock issued and outstanding.
All outstanding shares of the Companys stock are fully
paid and nonassessable.
Common
Stock
Dividends and Distributions. Subject to preferences
applicable to any shares of outstanding preferred stock, the
Board of Directors may declare and pay dividends upon Company
common stock, share and share alike, out of any earned surplus
or net profits or other fund legally available for the
declaration of dividends after making such provision, if any, as
the Board of Directors may deem necessary for working capital.
Liquidation Rights. If the Company is liquidated,
dissolved or wound up, voluntarily or involuntarily, holders of
Company common stock are entitled to share ratably in all net
assets of the Company available for
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distribution to the Company shareholders after the payment in
full of any preferential amounts to which holders of any Company
preferred stock may be entitled.
Voting Rights. Holders of Company common stock are
entitled to one vote per share on all matters to be voted upon
by shareholders. There are no cumulative voting rights.
Shareholders may vote by proxy.
Other. There are no preemption, redemption, sinking
fund or conversion rights applicable to Company common stock.
All outstanding shares of common stock are fully paid and
non-assessable.
Preferred
Stock
The Board of Directors has authority to issue
10,000,000 shares of Company preferred stock in one or more
series and to provide for the issuance of the shares of
preferred stock in series, to establish from time to time the
number of shares to be included in each such series and to fix
the preferences, limitations and relative rights of the series.
Anti-Takeover
Provisions of the Articles of Incorporation and Bylaws
The Companys Fourth Restated Articles of Incorporation, as
amended, and bylaws include a number of provisions that may have
the effect of deterring or impeding hostile takeovers or changes
in control or management. These provisions include:
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the authority of the Board of Directors to issue up to
10,000,000 shares of undesignated preferred stock and to
determine the rights, preferences and privileges of these
shares, without shareholder approval;
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a classified board of directors having three classes of
directors, with the terms of the members of a different class of
directors expiring each year and directors for that class being
elected to three-year terms;
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elimination of cumulative voting;
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requiring the affirmative vote of holders of at least two-thirds
(2/3) of the outstanding shares of voting stock to approve any
plan of merger, consolidation, or sale or exchange of all or
substantially all of the assets of the Company;
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requiring the affirmative vote of holders of at least two-thirds
(2/3) of the outstanding shares of voting stock to amend the
Companys articles of incorporation; and
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permitting a holder or group of holders of Company common stock
who own not less than one-fifth (1/5) but less than a majority
of the outstanding shares of common stock to nominate and elect
that number of directors, ignoring fractions, which bears the
same ratio to the number of directors to be elected as the
number of shares of common stock held by such shareholders bears
to the total shares of common stock outstanding, but the total
number of directors so elected by minority stockholders may not
exceed one less than a majority of the aggregate number of
directors to be elected.
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Such provisions may have the effect of delaying or preventing a
change in control.
Limitation
of Director Liability and Indemnification
The Companys Fourth Restated Articles of Incorporation, as
amended, and bylaws provide that a director shall not be
personally liable to the Company or its shareholders for
monetary damages for any action taken, or any failure to take
any action, as a director, except liability for any of the
following: (1) the amount of a financial benefit received
by a director to which the director is not entitled; (2) an
intentional infliction of harm on the Company or its
shareholders; (3) a violation of section 490.833 of
the IBCA, which provides that a director may be liable for
certain excess distributions in excess of what may be authorized
by statute; or (4) an intentional violation of criminal
law. If the IBCA is amended to authorize the further elimination
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limitation of the personal liability of directors, then,
automatically and without any further action, the liability of a
director of shall be eliminated or limited to the fullest extent
permitted by the IBCA.
The Companys Fourth Restated Articles of Incorporation, as
amended, and bylaws further provide that the Company shall
indemnify each of its directors for liability to any person for
any action taken, or any failure to take any action, as a
director, except liability for any of the items (1) through
(4), listed above. Furthermore, any repeal or amendment of the
provisions governing limitation of director liability and
indemnification shall not adversely affect any right of a
director or former director arising at any time with respect to
events occurring prior to such repeal or amendment.
Transfer
Agent
The transfer agent for Company common stock is Computershare
Investor Services, LLC, 2 North LaSalle Street, Chicago,
Illinois 60602.
The
NASDAQ Global Select Market Listing
Company common stock is listed on the NASDAQ Global Select
Market under the trading symbol UFCS.
COMPARATIVE
RIGHTS OF HOLDERS OF UNITED FIRE GROUP CAPITAL STOCK AND COMPANY
CAPITAL STOCK
At the effective time of the merger, Company common stock will
be converted on a
one-for-one
basis into United Fire Group common stock. As a result, United
Fire Groups articles of incorporation and bylaws will
govern the rights of the former holders of Company common stock
who receive shares of United Fire Group common stock pursuant to
the Reorganization. The rights of Company shareholders are
currently governed by the IBCA and common law, the
Companys Fourth Restated Articles of Incorporation, as
amended, and the Companys bylaws. After completion of the
Reorganization, the rights of United Fire Group shareholders
(i) will continue to be governed by the IBCA and common law
and (ii) will be governed by United Fire Groups
articles of incorporation and bylaws.
The following table summarizes and compares the material rights
that Company shareholders currently have and the rights that
they will have as shareholders of United Fire Group following
the Reorganization. This summary is qualified in its entirety by
reference to the full text of United Fire Groups articles
of incorporation and bylaws, and the Companys Fourth
Restated Articles of Incorporation, as amended, and bylaws. For
detailed descriptions of the capital stock of the Company and
United Fire Group, see Description of United Fire Group
Capital Stock and Description of Company Capital
Stock on pages 15 to 19 of this proxy statement/prospectus.
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Capitalization:
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The Company is authorized to issue 75,000,000 shares of
common stock having a par value of
$3.331/3
per share and 10,000,000 shares of serial preferred stock,
having no par value per share.
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United Fire Group is authorized to issue 75,000,000 shares
of common stock having a par value of $.001 per share and
10,000,000 shares of serial preferred stock, having no par
value per share.
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Voting Rights:
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Company common shareholders are entitled to one vote for each
share. The Companys articles of incorporation, as amended,
do not provide for cumulative voting for the election of
directors.
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United Fire Group common shareholders are entitled to one vote
for each share. United Fire Groups articles of
incorporation do not provide for cumulative voting for the
election of directors.
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Proportionate
Representation:
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The holder or holders, jointly or severally, of not less than
one-fifth but less than a majority of the shares of Company
common stock shall be entitled to nominate directors for
election at the annual shareholders meeting. In the event such
nomination is made there shall be elected, to the extent that
the total number to be elected is divisible, such proportionate
number from the persons so nominated as the shares of stock held
by persons making such nominations bear to the whole number of
shares issued; provided, the holder or holders of the minority
shares of stock shall only be entitled to one-fifth
(disregarding fractions) of the total number of directors to be
elected for each one-fifth of the entire capital stock of the
Company held by them. This shall not be construed to prevent the
holders of a majority of the Company common stock from electing
the majority of the directors to be elected.
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The holder or holders, jointly or severally, of not less than
one-fifth but less than a majority of the shares of United Fire
Group common stock shall be entitled to nominate directors for
election at the annual shareholders meeting. In the event such
nomination is made there shall be elected, to the extent that
the total number to be elected is divisible, such proportionate
number from the persons so nominated as the shares of stock held
by persons making such nominations bear to the whole number of
shares issued; provided, the holder or holders of the minority
shares of stock shall only be entitled to one-fifth
(disregarding fractions) of the total number of directors to be
elected for each one-fifth of the entire capital stock of United
Fire Group held by them. This shall not be construed to prevent
the holders of a majority of the United Fire Group common stock
from electing the majority of the directors to be elected.
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Quorum:
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A majority of the Company common stock outstanding represented
in person or by written proxy shall constitute a quorum for the
transaction of business.
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A majority of the United Fire Group common stock outstanding
represented in person or by written proxy shall constitute a
quorum for the transaction of business.
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Number of Directors:
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The number of directors shall not be fewer than nine nor more
than 15 persons, and the size of the Board of Directors
shall be established within that range annually by the
shareholders at the annual meeting.
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The number of directors shall not be fewer than nine nor more
than 15 persons. Within that range, the size of the Board
of Directors is determined by the shareholders at the annual
meeting or by the Board of Directors. The Board of Directors
shall not increase the size of the Board of Directors by more
than one (1) director in any year. All director nominees must
meet the qualifications for directors set from time to time by
the Board of Directors.
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Nominations of
Directors and
Business at Annual
and Special Meetings:
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The Companys articles and bylaws do not specifically
provide a process for shareholders to nominate candidates for
director or to propose business to be considered at a meeting of
the shareholders.
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United Fire Groups bylaws provide an exclusive process for
shareholders to nominate persons for election to the Board of
Directors and to propose business to be considered by the
shareholders at an annual or special meeting of shareholders.
The bylaws require all board nominees to meet qualifications
specified by the Board of Directors.
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Removal of Directors:
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The Companys articles of incorporation and bylaws do not
include provisions limiting removal of directors.
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United Fire Groups articles of incorporation and bylaws do
not include provisions limiting removal of directors.
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Classification of
Board of Directors:
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The Companys articles of incorporation provide for
directors to be divided into three classes, as nearly equal in
the number of directors as possible, with the directors in each
class serving a three-year term.
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United Fire Groups articles of incorporation provide for
directors to be divided into three classes, as nearly equal in
the number of directors as possible, with the directors in each
class serving a three-year term.
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Filling Vacancies on
the Board of
Directors:
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Vacancies in the Board of Directors occurring between annual
meetings may be filled by the Board of Directors for the
remainder of the unexpired term of the director whose office is
vacated.
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Vacancies in the Board of Directors, whether arising through
death, resignation or removal of a director, or newly created
directorships resulting from any increase in the authorized
number of directors, shall be filled by a majority of the
directors then in office, or by a sole remaining director. A
director so chosen shall hold office for the unexpired portion
of the term of the director replaced, provided, however, that in
the case of a directorship created by the Board of Directors,
the director so chosen shall be assigned to that class of
directors the terms of which expire at the next annual meeting
of the shareholders.
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Compensation:
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The Companys bylaws provide that compensation of directors
shall be determined by the Board of Directors, with the
exception of the Chairman, whose compensation is determined by
the Compensation Committee. The basis of such compensation shall
be an annual stipend plus a fixed amount for attendance at each
directors meeting. With the exception of the annual stipend, no
compensation shall be allowed or paid to any director not in
attendance at any meeting. No director shall receive a fee for
services as such if such director draws a salary from the
Company as an officer or employee.
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United Fire Groups bylaws provide that subject to the
requirements of applicable law and NASDAQ (collectively the
Requirements), the directors may be compensated for
their service as directors and as members of committees of the
board of directors and for chairing the board of any such
committee. Such compensation may take the form of board and
committee retainer fees, attendance fees, fees for chairing the
Board of Directors or any such committees of the Board of
Directors, stock awards, stock options, stock appreciation
rights and any other lawful form of compensation.
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Record Date:
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The Companys Board of Directors may fix, in advance, a
record date, which shall not be more than 60 or less than
10 days before the date of any shareholder meeting, and not
more than 70 days prior to any other action.
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United Fire Groups Board of Directors may fix, in advance,
a record date, which shall not be more than 60 or less than
10 days before the date of any shareholder meeting, and not
more than 70 days prior to any other action.
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Notice of Meetings:
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Each Company shareholder entitled to vote must be given written
notice of each annual or special meeting, stating the place,
date, time and purpose(s) of the meeting, not less than 10 nor
more than 60 days before the date of the meeting.
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Each United Fire Group shareholder entitled to vote must be
given written notice of each annual or special meeting, stating
the place, date, time and purpose(s) of the meeting, not less
than 10 nor more than 60 days before the date of the
meeting.
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Amendments to
Articles:
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Amendments to the Companys articles of incorporation
shall require the affirmative vote of two-thirds (2/3) of
Company common stock issued and outstanding.
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Amendments to United Fire Groups articles shall require
the affirmative vote of sixty percent (60%) of United Fire Group
common stock issued and outstanding.
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Amendments to
Bylaws:
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The bylaws of the Company may be altered, amended or repealed
and new bylaws may be adopted at any meeting of the Board of
Directors by a majority vote of the directors present at the
meeting. The IBCA permits shareholders to amend the bylaws.
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United Fire Groups bylaws may be altered, amended or
repealed and new bylaws may be adopted at any meeting of the
Board of Directors by a majority vote of the directors present
at the meeting. The IBCA permits shareholders to amend the
bylaws.
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Special Shareholders
Meetings:
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The Companys articles of incorporation provide that
special meetings shall be called by the president of the Company
or 51% of the shareholders.
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United Fire Groups articles of incorporation provide that
special meetings shall be called by the Chairman, the Board of
Directors, or 30% of the shareholders.
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Approval for Business
Combinations:
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The Companys articles of incorporation require the
affirmative vote of two-thirds (2/3) of all outstanding shares
of common stock to approve any plan of merger, consolidation, or
sale or exchange of all or substantially all of the assets.
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United Fire Groups articles of incorporation require the
affirmative vote of sixty percent (60%) of all outstanding
shares of United Fire Group to approve any plan of merger,
consolidation, or sale or exchange of all or substantially all
of the assets.
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Limitation of Personal
Liability of Directors:
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The Companys articles of incorporation and bylaws provide
that a director shall not be personally liable to the Company or
its shareholders for monetary damages for any action taken, or
any failure to take any action, as a director, except liability
for any of the following: (1) the amount of a financial benefit
received by a director to which the director is not entitled;
(2) an intentional infliction of harm on the Company or its
shareholders; (3) a violation of section 490.833 of the IBCA,
which provides that a director may be liable for certain excess
distributions in excess of what may be authorized by statute; or
(4) an intentional violation of criminal law. If the IBCA is
amended to authorize further elimination or limitation of the
personal liability of directors, then, automatically and without
any further action, the liability of a director shall be
eliminated or limited to the fullest extent permitted by the
IBCA.
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United Fire Groups articles of incorporation, as amended,
and bylaws provide that a director shall not be personally
liable to United Fire Group or its shareholders for monetary
damages for any action taken, or any failure to take any action,
as a director, except liability for any of the following: (1)
the amount of a financial benefit received by a director to
which the director is not entitled; (2) an intentional
infliction of harm on United Fire Group or its shareholders; (3)
a violation of section 490.833 of the IBCA, which provides that
a director may be liable for certain excess distributions in
excess of what may be authorized by statute; or (4) an
intentional violation of criminal law. If the IBCA is amended
to authorize further elimination or limitation of the personal
liability of directors, then, automatically and without any
further action, the liability of a director shall be eliminated
or limited to the fullest extent permitted by the IBCA.
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Indemnification of
Directors and
Officers:
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The articles of incorporation of the Company provide that the
Company shall indemnify each of its directors for liability to
any person for any action taken, or any failure to take any
action, as a director, except liability for any of the items (1)
through (4), listed under Limitation of Personal Liability
of Directors, above. Furthermore, any repeal or amendment
of the provisions governing limitation of director liability and
indemnification shall not adversely affect any right of a
director or former director arising at any time with respect to
events occurring prior to such repeal or amendment.
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The articles of incorporation and bylaws of United Fire Group
provide that United Fire Group shall indemnify each of its
directors for liability to any person for any action taken, or
any failure to take any action, as a director, except liability
for any of the items (1) through (4), listed under
Limitation of Personal Liability of Directors,
above. Furthermore, any repeal or amendment of the provisions
governing limitation of director liability and indemnification
shall not adversely affect any right of a director or former
director arising at any time with respect to events occurring
prior to such repeal or amendment.
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23
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Closing Transfer
Books:
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The Companys articles of incorporation provide that for
the purpose of determining shareholders entitled to notice of,
or to vote at, any meeting of shareholders, or any adjournment
thereof, or entitled to receive payment of any dividends, or in
order to make a determination of shareholders for any other
purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period, not
exceeding sixty (60) days. If the stock transfer books shall be
closed for such purpose, such books shall be closed for at least
ten (10) days immediately preceding such meeting.
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The articles of incorporation of the United Fire Group do not
address closing of the stock transfer books. The bylaws of the
United Fire Group provide that for the purpose of determining
shareholders entitled to notice of, or to vote at, any meeting
of shareholders, or any adjournment thereof, or entitled to
receive payment of any dividends, or in order to make a
determination of shareholders for any other purpose, the Board
of Directors may provide that the stock transfer books shall be
closed for a stated period, not exceeding sixty (60) days. If
the stock transfer books shall be closed for such purpose, such
books shall be closed for at least ten (10) days immediately
preceding such meeting.
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Consideration for
stock:
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The Companys articles of incorporation provide (i) that no
stock shall be issued until the Company has received the payment
in full therefor in cash or property, provided, however, that
when stock is to be issued for anything other than money such
issue of stock must be approved by the Insurance Commissioner of
the State of Iowa and (ii) that without action by or consent of
the shareholders, the Board of Directors may issue all or so
much of the authorized common stock for such consideration as it
shall determine, but not less than par value thereof, and any
and all such stock so issued, when the consideration therefor as
so fixed by the Board of Directors has been fully paid or
delivered, shall be fully paid stock and not liable to any
further call or assessment.
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The articles of incorporation of United Fire Group do not
contain any provisions concerning consideration for stock.
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Shareholders Private
Property Exempt from
Corporate Debts:
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The Companys articles of incorporation provide that the
private property of the shareholders of the Company shall not be
liable for corporate debts.
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The articles of incorporation of United Fire Group do not
contain any provision expressly excepting a shareholders
private property from corporate debts, as the IBCA provides
these shareholder protections.
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24
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Rights of Holders of Company
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Rights of Holders of United Fire
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Common Stock
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Group, Inc. Common
Stock
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Examination of Books
by Shareholders
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The Companys bylaws do not have provisions regarding
examination of books by shareholders.
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United Fire Groups bylaws provide that the Board of
Directors shall, subject to the laws of the State of Iowa, have
power to determine from time to time, whether and to what extent
and under what conditions and regulations the accounts and books
of United Fire Group shall be open to the inspection of the
shareholders; and no shareholder shall have any right to inspect
any book or document of United Fire Group, except as conferred
by the laws of the State of Iowa, unless and until authorized so
to do by resolution of the Board of Directors or of the
shareholders of United Fire Group.
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Registered
Shareholders:
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The Companys bylaws do not have provisions regarding
recognition of registered shareholders.
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United Fire Groups bylaws provide that the United Fire
Group shall be entitled to treat the holder of record of any
shares of stock as the holder in fact of the shares and
accordingly, shall not be bound to recognize any equitable or
other claims to or interest in such shares on the part of any
other person whether or not it shall have express or other
notice thereof.
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VOTE
REQUIRED AND BOARD RECOMMENDATION
Approval of the Reorganization Proposal requires the affirmative
vote of two-thirds of the shares (represented either in person
or by proxy) entitled to vote in the election at a meeting at
which a quorum is present.
After careful consideration, our Board of Directors has
determined
that creation of a holding company offers a net benefit to our
shareholders.
Our Board of Directors has approved the Reorganization Proposal,
has determined that the terms of the Reorganization Agreement
and the Reorganization are advisable and in the best interest of
our shareholders,
and has adopted and approved the Reorganization Agreement.
Our Board of Directors unanimously recommends a vote
FOR
the Reorganization Proposal.
Your shares will be voted FOR the Reorganization Proposal
unless you specifically
direct your proxy to vote against or abstain with respect to
the Reorganization Proposal.
25
PROPOSAL TWO
ADJOURNMENT OF THE SPECIAL MEETING
APPROVAL
OF THE ADJOURNMENT OF THE SPECIAL MEETING
Our shareholders are being asked to consider and vote on a
proposal to adjourn the Special Meeting, if necessary, in the
event that there are not sufficient votes at the time of the
Special Meeting to approve the adoption of the Reorganization
Agreement. The affirmative vote of the holders of at least a
majority of Company common stock represented in person or by
proxy at the special meeting and entitled to vote thereat is
required to approve the adjournment of the Special Meeting, if
necessary, to solicit additional proxies.
Our Board of Directors recommends a vote
FOR
the approval of the adjournment of the Special Meeting, if
necessary,
to solicit additional proxies, in the event that there
are not sufficient votes at the time of the Special Meeting
to adopt the Reorganization Agreement.
Your shares will be voted FOR the adjournment of the
Special Meeting unless you specifically
direct your proxy to vote against or abstain with respect to
the Reorganization Proposal.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of
October 28, 2011, with respect to the ownership of the
Companys
$3.331/3
par value common stock by principal security holders.
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Amount and
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Nature of
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Name and Address
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Beneficial
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Title of Class
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of Beneficial Owner
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Ownership
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Percent of Class
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Common
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Dee Ann McIntyre
1218 Bishops Lodge Road
Santa Fe, New Mexico 87501-1099
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3,475,794(1
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)
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13.52
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%
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Common
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Dimensional Fund Advisors LP
1299 Ocean Avenue
Santa Monica, California 90401
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2,198,188(2
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)
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8.39
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Common
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BlackRock, Inc.
40 East 52nd Street
New York, New York 10022
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1,570204(3
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)
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5.99
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Common
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EARNEST Partners LLC
75 Fourteenth Street, Suite 2300
Atlanta, Georgia 30309
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1,411,347(4
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)
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5.39
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(1)
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The number of securities
beneficially owned by Mrs. McIntyre includes: 2,445,256 for
which Mrs. McIntyre holds sole voting and investment power;
519,863 for which Mrs. McIntyre holds shared voting and
investment power; 449,675 shares owned by the Dee Ann
McIntyre Trust of which Mrs. McIntyre is a lifetime
beneficiary; and 61,000 stock options that are exercisable by
Mrs. McIntyre on or before sixty (60) days from the
date of this proxy statement.
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(2)
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Based on Schedule 13F filed
with the SEC on August 8, 2011.
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(3)
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Based on Schedule 13F filed
with the SEC on July 27, 2011.
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(4)
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Based on Schedule 13F filed
with the SEC on August 12, 2011.
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26
The following table sets forth certain information regarding the
beneficial ownership of the Companys
$3.331/3
par value common stock as of October 28, 2011, with respect
to each of our directors, its named executive officers, and all
of its directors and executive officers as a group.
As of October 28, 2011, we had 25,502,667 shares of
$3.331/3
par value common stock outstanding. Except as otherwise
indicated, each of the shareholders listed in the following
table has sole voting and investment power over the shares
beneficially owned.
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Amount and Nature of
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Percent
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Title of Class
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Name of Beneficial Owner
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Beneficial Ownership
(1)
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of Class
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Common
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Christopher R. Drahozal
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910,513
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(2)
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3.57
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%
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Common
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Barrie W. Ernst
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36,456
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(3),
(4)
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0.14
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Common
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Jack B. Evans
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37,726
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(5)
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*
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Common
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Thomas W. Hanley
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16,481
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(6)
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*
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Common
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Douglas M. Hultquist
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6,145
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(7)
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*
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Common
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Dianne M. Lyons
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31,532
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(4),
(8)
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0.12
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Common
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Casey D. Mahon
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19,762
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(9)
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*
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Common
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George D. Milligan
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18,463
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(10)
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*
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Common
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James W. Noyce
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3,545
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(11)
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*
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Common
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Mary K. Quass
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14,478
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(12)
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*
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Common
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Randy A. Ramlo
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49,345
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(13)
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0.19
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Common
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John A. Rife
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617,846
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(14)
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2.42
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Common
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Neal R. Scharmer
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16,877
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(4),
(15)
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0.07
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Common
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Kyle D. Skogman
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24,028
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(16)
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*
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Common
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Michael T. Wilkins
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459,172
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(4),
(17)
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1.80
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Common
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Frank S. Wilkinson Jr.
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23,171
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(18)
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*
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Common
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All directors and executive officers as a group
(includes 18 persons)
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1,789,232
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(19)
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7.02
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%
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*
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Indicates directors with ownership
of less than 1% percent.
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(1)
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Except as otherwise indicated, each
person has sole voting and investment power with respect to the
number of shares indicated. The inclusion in this table of any
shares as beneficially owned does not constitute admission of
beneficial ownership for Section 16 of the Securities Exchange
Act of 1934 or for any other purpose.
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(2)
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Includes 2,674 shares owned
jointly by Mr. Drahozal and his wife; 243,086 shares
owned individually by Mr. Drahozals wife;
74,714 shares owned in accounts for the benefit of
Mr. Drahozals children; 511,863 shares owned by
the McIntyre Foundation, for which Mr. Drahozals wife
serves as one of four directors; 66,898 shares owned by the
J. Scott McIntyre Trust FBO the Kaye Drahozal Family, for
which Mr. Drahozal and his wife serve as co-trustees; and
11,278 stock options that are exercisable by Mr. Drahozal
on or before sixty (60) days from the date of this proxy
statement. None of Mr. Drahozals shares are pledged
as security.
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(3)
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Includes 5,221 shares held in
a Company 401(k) account for Mr. Ernsts benefit;
340 shares owned in an ESOP account for
Mr. Ernsts benefit; 1,027 shares held
individually by Mr. Ernsts wife; and 29,868 stock
options that are exercisable by Mr. Ernst on or before
sixty (60) days from the date of this proxy statement. None
of Mr. Ernsts shares are pledged as security.
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(4)
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The number of shares indicated as
being held in the Companys 401(k) account for the benefit
of a specific individual is the approximate number of shares of
common stock for which that individual has the right to direct
the vote under the 401(k) Plan. Such shares are not directly
allocated to the 401(k) Plan participants, but instead are held
in a unitized fund consisting primarily of stock, together with
a small percentage of short-term investments. 401(k) Plan
participants acquire units of this fund.
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(5)
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Includes 23,950 shares held
individually by Mr. Evans; 3,674 shares held in an
individual retirement account for Mr. Evans benefit;
2,024 shares held in an IRA account for the benefit of
Mr. Evans wife; and 8,078 stock options that are
exercisable by Mr. Evans on or before sixty (60) days
from the date of this proxy statement. None of
Mr. Evans shares are pledged as security.
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(6)
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Includes 203 shares owned
individually by Mr. Hanley; 5,000 shares held in an
individual retirement account for Mr. Hanleys
benefit; and 11,278 stock options that are exercisable by
Mr. Hanley on or before sixty (60) days from the date
of this proxy statement. None of Mr. Hanleys shares
are pledged as security.
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(7)
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Includes 2,200 shares owned
individually by Mr. Hultquist and 3,945 stock options that
are exercisable by Mr. Hultquist on or before sixty
(60) days from the date of this proxy statement. None of
Mr. Hultquists shares are pledged as security.
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27
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(8)
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Includes 654 shares owned
individually by Ms. Lyons; 1,914 shares held in a
Company 401(k) account for Ms. Lyons benefit;
1,241 shares held in an ESOP account for
Ms. Lyons benefit and 27,723 options that are
exercisable by Ms. Lyons on or before sixty (60) days
from the date of this proxy statement. None of
Ms. Lyons shares are pledged as security.
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(9)
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Includes 9,484 shares owned
individually by Ms. Mahon; 1,000 shares held in an
individual retirement account for Ms. Mahons benefit;
and 9,278 stock options that are exercisable by Ms. Mahon
on or before sixty (60) days from the date of this proxy
statement. None of Ms. Mahons shares are pledged as
security.
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(10)
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Includes 7,185 shares owned
individually by Mr. Milligan and 11,278 options that are
exercisable by Mr. Milligan on or before sixty
(60) days from the date of this proxy statement. None of
Mr. Milligans shares are pledged as security.
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(11)
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Includes 2,000 shares owned
individually by Mr. Noyce; 1,000 shares held in a
revocable trust account for Mr. Noyces spouse; and
545 options that are exercisable by Mr. Noyce on or before
sixty (60) days from the date of this proxy statement. None
of Mr. Noyces shares are pledged as security.
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(12)
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Includes 2,200 shares owned
individually by Ms. Quass and 12,278 options that are
exercisable by Ms. Quass on or before sixty (60) days
from the date of this proxy statement. None of
Ms. Quass shares are pledged as security.
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(13)
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Includes 2,317 shares owned
individually by Mr. Ramlo; 900 shares owned jointly by
Mr. Ramlo and his wife; 350 shares owned individually
by Mr. Ramlos wife; 1,574 shares held in an ESOP
account for Mr. Ramlos benefit; and 44,204 options
that are exercisable by Mr. Ramlo on or before sixty
(60) days from the date of this proxy statement. None of
Mr. Ramlos shares are pledged as security.
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(14)
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Includes 25,061 shares owned
jointly by Mr. Rife and his wife; 1,256 shares owned
individually by Mr. Rifes wife; 4,121 shares
held in an individual retirement account for
Mr. Rifes benefit; 511,863 shares owned by the
McIntyre Foundation, for which Mr. Rife serves as one of
four directors; and 75,545 options that are exercisable by
Mr. Rife on or before sixty (60) days from the date of
this proxy statement. None of Mr. Rifes shares are
pledged as security.
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(15)
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Includes 1,000 shares held
individually by Mr. Scharmer; 371 shares held in a
Company 401(k) account for Mr. Scharmers benefit;
723 shares held in an ESOP account for
Mr. Scharmers benefit; and 14,783 options that are
exercisable by Mr. Scharmer on or before sixty
(60) days from the date of this proxy statement. None of
Mr. Scharmers shares are pledged as security.
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(16)
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Includes 9,900 shares owned by
a trust for Mr. Skogmans benefit; 1,000 shares
owned in a trust for the benefit of Mr. Skogmans wife;
200 shares held in an individual retirement account for
Mr. Skogmans benefit; 670 shares held in a
simplified employee pension account for Mr. Skogmans
benefit; 730 shares owned jointly by Mr. Skogman and
his wife; 500 shares owned by Mr. Skogmans wife;
150 shares held in an individual retirement account for the
benefit of Mr. Skogmans wife; and 10,878 options that
are exercisable by Mr. Skogman on or before sixty
(60) days from the date of this proxy statement. None of
Mr. Skogmans shares are pledged as security.
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(17)
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|
Includes 3,373 shares owned
individually by Mr. Wilkins; 2,088 shares held in a
Company 401(k) account for Mr. Wilkins benefit;
226,375 shares held in the United Fire Group Employee Stock
Ownership Plan for which Mr. Wilkins serves as one of two
plan trustees (only 1,652 of these plan shares are held for
Mr. Wilkins benefit); 202,058 shares held in the
United Fire Group Pension Plan for which Mr. Wilkins serves
as one of two plan trustees (none of these plan shares are held
specifically for Mr. Wilkins benefit); and 25,278
options that are exercisable by Mr. Wilkins on or before
sixty (60) days from the date of this proxy statement.
Mr. Wilkins disclaims beneficial ownership of any shares
owned by either the United Fire Group Employee Stock Ownership
Plan or the United Fire Group Pension Plan that are not held
specifically for his benefit. None of Mr. Wilkins
shares are pledged as security.
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|
(18)
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|
Includes 10,893 shares owned
jointly by Mr. Wilkinson and his wife and 12,278 options
that are exercisable by Mr. Wilkinson on or before sixty
(60) days from the date of this proxy statement. None of
Mr. Wilkinsons shares are pledged as security.
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|
|
(19)
|
|
Because the 511,863 shares
owned by the McIntyre Foundation are attributed to both
Mr. Drahozals and Mr. Rifes beneficial
ownership total, we have deducted 511,863 shares from the
total number of shares owned by all officers and directors to
eliminate double counting.
|
VALIDITY
OF SHARES
Bradley & Riley PC, Cedar Rapids, Iowa, will pass upon
the validity of the shares of United Fire Group common stock
offered by this proxy statement/prospectus.
EXPERTS
Ernst & Young LLP, independent registered public
accounting firm, has audited our consolidated financial
statements and schedules included in our Annual Report on
Form 10-K
for the year ended December 31, 2010, and the effectiveness
of our internal control over financial reporting as of
December 31, 2010, as set forth in their reports, which are
incorporated by reference in our proxy statement, which is
referred to and made a part of this prospectus and registration
statement. Our consolidated financial statements and schedules
are incorporated by reference in reliance on Ernst &
Young LLPs reports, given on their authority as experts in
accounting and auditing.
28
With respect to our unaudited consolidated interim financial
information included in our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2011, June 30, 2011,
and September 30, 2011, respectively, which are
incorporated by reference in our proxy statement, which is
referred to and made a part of this prospectus and registration
statement, Ernst & Young LLP reported that they have
applied limited procedures in accordance with professional
standards for a review of such information. However, their
separate reports dated May 10, 2011, August 5, 2011,
and November 4, 2011, which are included in our Quarterly
Reports on
Form 10-Q
for the quarters ended March 31, 2011, June 30, 2011,
and September 30, 2011, respectively, and incorporated by
reference herein, states that they did not audit and they do not
express an opinion on that interim financial information.
Accordingly, the degree of reliance on their report on such
information should be restricted in light of the limited nature
of the review procedures applied. Ernst & Young LLP is
not subject to the liability provisions of Section 11 of
the Securities Act of 1933 (the Act) for their
report on the unaudited interim financial information because
that report is not a report or a part of
the registration statement prepared or certified by
Ernst & Young LLP within the meaning of
Sections 7 and 11 of the Act.
DELIVERY
OF PROXY STATEMENT AND NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIALS
SEC rules permit companies and intermediaries such as brokers to
satisfy delivery requirements for proxy statements and annual
reports to stockholders with respect to two or more stockholders
sharing the same address by delivering a single proxy statement
and annual report to stockholders addressed to those
stockholders. This process, commonly referred to as
householding, provides cost savings for companies.
We and some brokers household proxy materials and annual reports
to stockholders unless contrary instructions have been received
from the affected stockholders. Once you have received notice
from us, your broker, or other designated intermediary that they
will be householding materials to your address, householding
will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a
separate proxy statement and annual report to stockholders,
please notify your broker, or notify us by calling our transfer
agent at (800)-542-1061, or write to: Householding Department,
51 Mercedes Way, Edgewood, New York 11717, and include your
name, the name of your broker or other nominee, and your account
number(s).
Stockholders who currently receive multiple copies of the proxy
statement or annual report to stockholders at their address and
would like to request householding of their
communications should contact their broker or, if a stockholder
is a registered holder of shares of common stock, he or she
should submit a written request to or call Householding
Department, 51 Mercedes Way, Edgewood, New York 11717, telephone
number (800)-542-1061.
Upon written or oral request to us, we will provide you a copy
of the proxy statement and annual report to stockholders. If you
are currently receiving multiple copies of our proxy statement
or annual report to stockholders, and you wish to receive only a
single copy, you may make that request by contacting us. Upon
written or oral request, we will promptly deliver a separate
copy of the proxy statement and annual report to stockholders at
a shared address to which a single copy was delivered. To
contact us, you may write to or call United Fire Group, Attn:
Investor Relations, P.O. Box 73909, Cedar Rapids, Iowa
52407-3909,
telephone number
(319) 399-5700.
Electronic versions of this proxy statement/prospectus are
available to shareholders on our public website,
www.unitedfiregroup.com by selecting Investor
Relations, then Financial Information then
Annual Report and Proxy.
ADDITIONAL
INFORMATION
Registration
Statement
United Fire Group has filed a registration statement on
Form S-4
to register with the SEC the shares of common stock of United
Fire Group into which each outstanding share of common stock of
the Company will be converted automatically in the
Reorganization. This proxy statement/prospectus is part of that
registration
29
statement and constitutes a prospectus of United Fire Group, in
addition to being a proxy statement of the Company for the
Special Meeting.
Documents
Incorporated by Reference
The SEC allows us to incorporate by reference
information into this proxy statement/prospectus, which means
that we can disclose important information to you by referring
you to another document filed separately by the Company with the
SEC. The information incorporated by reference is deemed to be
part of this proxy statement/prospectus except for any
information superseded by information in this proxy
statement/prospectus or in any document subsequently filed with
the SEC that is also incorporated by reference. This proxy
statement/prospectus incorporates by reference the documents set
forth below, including the exhibits that these documents
specifically incorporate by reference, that the Company has
previously filed with the SEC. These documents contain important
information about the Company and its financial performance.
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Annual Report on
Form 10-K
for the year ended December 31, 2010
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Quarterly Reports on
Form 10-Q
for the periods ended March 31, 2011, June 30, 2011,
and September 30, 2011
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Reports on
Form 8-K
filed by the Company with the SEC on March 17, 2011,
March 28, 2011, March 30, 2011, April 15, 2011,
May 2, 2011, May 19, 2011, May 25, 2011,
May 31, 2011, June 29, 2011, August 22, 2011,
August 30, 2011, September 8, 2011, and
October 31, 2011; and the reports on
Form 8-K/A
filed by the Company with the SEC on July 5, 2011,
August 19, 2011, August 22, 2011 and October 7,
2011
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All reports and definitive proxy or information statements filed
by the Company or United Fire Group pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this proxy
statement/prospectus and before the date of the Special Meeting.
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Following the Reorganization described in this proxy
statement/prospectus, United Fire Group will become subject to
the same informational requirements as the Company is prior to
the Reorganization, and will file annual, quarterly and special
reports, proxy statements and other information with the SEC in
accordance with the Exchange Act and the NASDAQ Global Select
Market pursuant to the Exchange Act and NASDAQ Listing Rules.
The Company does not expect to be subject to such requirements
following the Reorganization.
The incorporated information that is not included in or being
delivered with this proxy statement/ prospectus is available to
you without charge upon your written or oral request. You can
obtain any document that is incorporated by reference in this
proxy statement/prospectus, excluding all exhibits that have not
been specifically incorporated by reference, by requesting it in
writing or by telephone from us at the following address or
telephone number:
United Fire & Casualty Company
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone:
(319) 399-5700
Attn: Investor Relations
or by visiting our website at www.unitedfiregroup.com.
Information on United Fire & Casualty Companys
website is not incorporated by reference into this proxy
statement/prospectus or made a part hereof for any purpose.
You may read and copy any of the information on file with the
SEC at the SECs public reference room, located at
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800- SEC-0330 for further information
on the public reference room. The Companys SEC filings are
also available on the SECs web site located at
http://www.sec.gov.
Electronic versions of this proxy statement/prospectus are
available to shareholders on our public website,
www.unitedfiregroup.com by selecting Investor
Relations, then Financial Information then
Annual Report and Proxy.
30
ANNEX I
Agreement
and Plan of Reorganization
This Agreement and Plan
of Reorganization (the Agreement)
entered into as of the 24th day of May, 2011, by and between
United Fire &
Casualty Company, an Iowa corporation
(UFC),
United Fire Group,
Inc., an Iowa corporation (HoldingCo)
and UFC MergeCo,
Inc., an Iowa corporation (MergeCo).
Recitals
A. As of the date hereof, the
authorized capital stock of UFC consists of
(i) 75,000,000 shares of common stock, par value
$3.331/3
per share (UFC Common Stock), of which
approximately 26,134,933 shares are issued and outstanding,
approximately 1,025,191 shares are reserved for issuance
under UFCs Plans (as defined below) and upon exercise of
outstanding UFC Awards (as defined below) and no shares are held
in treasury, and (ii) 10,000,000 shares of preferred
stock, no par value per share (UFC Preferred
Stock), of which none is outstanding.
B. As of the date hereof, the
authorized capital stock of HoldingCo consists of
(i) 75,000,000 shares of common stock, par value
$0.001 per share (HoldingCo Common Stock), of
which 100 shares are issued and outstanding, and
(ii) 10,000,000 shares of preferred stock, no par
value per share (HoldingCo Preferred Stock),
of which none is outstanding.
C. As of the date hereof, all of
the issued and outstanding common stock of MergeCo
(MergeCo Common Stock) is held by HoldingCo.
D. HoldingCo and MergeCo are newly
formed entities organized for the purpose of participating in
the transactions herein contemplated.
E. The Board of Directors of each
of UFC, HoldingCo and MergeCo has unanimously determined that it
is advisable and in the best interests of their respective
securityholders to reorganize to create a new holding company
structure by merging UFC with MergeCo, with UFC being the
surviving entity (sometimes hereinafter referred to as the
Surviving Company), and converting each
outstanding share of UFC Common Stock into one share of
HoldingCo Common Stock, all in accordance with the terms of this
Agreement.
F. The Boards of Directors of each
of HoldingCo, UFC and MergeCo and the sole shareholder of each
of HoldingCo and MergeCo have all approved this Agreement and
the merger of UFC with MergeCo upon the terms and subject to the
conditions set forth in this Agreement (the
Merger).
G. The Boards of Directors of each
of UFC and MergeCo have declared advisable this Agreement and
the Merger upon the terms and subject to the conditions set
forth in this Agreement, and the Boards of Directors of each of
UFC and MergeCo has unanimously determined to recommend to the
shareholders of UFC and MergeCo the adoption of this Agreement
and the approval of the Merger, subject to the terms and
conditions hereof and in accordance with the provisions of the
Iowa Business Corporation Act (the IBCA).
H. The parties intend, by executing
this Agreement, to adopt a plan of reorganization within the
meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the Code), and to cause the
Merger to qualify as a reorganization under the provisions of
Section 368(a) of the Code, as well as a transaction to
which Section 351(a) of the Code applies.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained in this Agreement, and
intending to be legally bound hereby, UFC, HoldingCo and MergeCo
hereby agree as follows:
1. The Merger.
a. The Merger. In
accordance with Section 1102 of the IBCA, and subject to
and upon the terms and conditions of this Agreement, UFC shall,
at the Effective Time (as defined below), be merged with
MergeCo, the separate corporate existence of MergeCo shall
cease, and UFC shall continue as the Surviving Company. At the
Effective Time, the effect of the Merger shall be as provided in
Section 1107 of the IBCA.
b. Effective Time. The
Merger shall become effective upon the filing of Articles of
Merger with the Secretary of State of the State of Iowa or a
later date specified therein (the Effective
Time).
c. Organizational Documents of
the Surviving Company.
(i) From and after the Effective
Time, the amended and restated articles of incorporation of UFC,
as in effect immediately prior to the Effective Time, shall
continue in full force and effect as the articles of
incorporation of the Surviving Company until thereafter amended
as provided therein or by applicable law.
(ii) From and after the Effective
Time, the amended and restated bylaws of UFC, as in effect
immediately prior to the Effective Time, shall continue in full
force and effect as the bylaws of the Surviving Company (the
Surviving Company Bylaws) until thereafter
amended as provided therein or by applicable law.
d. Directors. The
directors of UFC immediately prior to the Effective Time shall
be the initial directors of the Surviving Company and will hold
office from the Effective Time until their successors are duly
elected or appointed and qualified in the manner provided in the
Surviving Company Bylaws or as otherwise provided by law.
e. Officers The officers of
UFC immediately prior to the Effective Time shall be the initial
officers of the Surviving Company and will hold office from the
Effective Time until their successors are duly elected or
appointed and qualified in the manner provided in the Surviving
Company Bylaws or as otherwise provided by law.
f. Directors and Officers of
HoldingCo. Prior to the Effective Time, UFC in its
capacity as the sole shareholder of HoldingCo, agrees to take or
cause to be taken all such actions as are necessary to cause
those persons serving as the directors and executive officers of
UFC immediately prior to the Effective Time to be elected or
appointed as the directors and executive officers of HoldingCo,
each such person to have the same office(s) with HoldingCo (and
the same committee memberships in the case of directors) as he
or she held with UFC, with the directors serving in the same
class that they serve with UFC to serve until the earlier of the
next meeting of the HoldingCo shareholders at which an election
of directors of such class is held and until their successors
are elected or appointed (or their earlier death, disability or
retirement).
g. Additional
Actions. Subject to the terms of this Agreement, the
parties hereto shall take all such reasonable and lawful action
as may be necessary or appropriate in order to effectuate the
Merger and to comply with the requirements of the IBCA. If, at
any time after the Effective Time, the Surviving Company shall
consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm, of record or
otherwise, in the Surviving Company its right, title or interest
in, to or under any of the rights, properties or assets of
either of MergeCo or UFC acquired or to be acquired by the
Surviving Company as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers of
the Surviving Company shall be authorized to execute and
deliver, in the name and on behalf of each of MergeCo and UFC,
all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of each of MergeCo and
UFC or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights,
properties or assets in the Surviving Company or otherwise to
carry out this Agreement.
h. Conversion of
Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of HoldingCo, MergeCo,
UFC or the holder of any of the following securities:
(i) Each share of UFC Common Stock
issued and outstanding immediately prior to the Effective Time
(other than any shares held in treasury, if any, which shall be
automatically cancelled and retired without the payment of any
consideration therefor) shall be converted into one duly issued,
fully paid and nonassessable share of HoldingCo Common Stock
(the Merger Consideration).
(ii) The MergeCo common stock held
by HoldingCo will automatically be converted into, and
thereafter represent, 100% of the common stock of the Surviving
Company.
ANNEX I-2
(iii) Each share of HoldingCo
Common Stock owned by UFC immediately prior to the Merger shall
automatically be cancelled and retired and shall cease to exist.
(iv) From and after the Effective
Time, holders of certificates formerly evidencing UFC Common
Stock shall cease to have any rights as shareholders of UFC,
except as provided by law; provided, however, that such holders
shall have the rights set forth in Section 1(j), below.
(v) In accordance with
Section 490.1302(2)(a) of the IBCA, no appraisal rights
shall be available to holders of UFC Common Stock in connection
with the Merger.
i. No Surrender of Certificates;
Direct Registration of HoldingCo Common Stock. At the
Effective Time, each outstanding share of UFC Common Stock
(other than any shares of UFC Common Stock to be cancelled in
accordance with Section 1(h)(i)) shall automatically
represent the same number of shares of HoldingCo Common Stock
without any further act or deed by the shareholders of UFC or
HoldingCo, and record of such ownership shall be kept in
uncertificated, book entry form by HoldingCos transfer
agent. Until thereafter surrendered for transfer or exchange in
the ordinary course, each outstanding certificate that,
immediately prior to the Effective Time, evidenced UFC Common
Stock shall, from and after the Effective Time, be deemed and
treated for all corporate purposes to evidence the ownership of
the same number of shares of HoldingCo Common Stock.
j. Stock Transfer
Books. At the Effective Time, the stock transfer books
of UFC shall be closed and thereafter there shall be no further
registration of transfers of shares of UFC Common Stock
theretofore outstanding on the records of UFC. From and after
the Effective Time, the holders of certificates representing
shares of UFC Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to
such shares of UFC Common Stock except as otherwise provided in
this Agreement or by law. On or after the Effective Time, any
certificates presented to the exchange agent or HoldingCo for
any reason shall solely represent the right to receive the
Merger Consideration issuable in respect of the shares of UFC
Common Stock formerly represented by such certificates without
any interest thereon.
k. Plan of
Reorganization. This Agreement is intended to
constitute a plan of reorganization within the
meaning of Treasury Regulations
Section 1.368-2(g).
Each party hereto shall use its commercially reasonable efforts
to cause the Merger to qualify, and will not knowingly take any
actions or cause any actions to be taken which could reasonably
be expected to prevent the Merger from qualifying, as a
reorganization within the meaning of Section 368(a) of the
Code, as well as a transaction to which Section 351(a) of
the Code applies.
l. Successor Issuer. It
is the intent of the parties hereto that HoldingCo be deemed a
successor issuer of UFC in accordance with
Rule 12g-3
under the Securities Exchange Act of 1934, as amended, and
Rule 414 under the Securities Act of 1933, as amended. At
or after the Effective Time, HoldingCo shall file (i) an
appropriate report on
Form 8-K
describing the Merger and (ii) appropriate pre-effective
and/or
post-effective amendments, as applicable, to any Registration
Statements of UFC on
Form S-8.
2. Actions to be Taken in
Connection with the Merger.
a. Assumption of UFC
Awards. At the Effective Time, all unexercised and
unexpired options to purchase UFC Common Stock (UFC
Options) or shares of restricted stock (collectively
with UFC Options, UFC Awards) then
outstanding, including those issued under either the United
Fire & Casualty Company 2005 Nonqualified Non-Employee
Director Stock Option and Restricted Stock Plan, the United
Fire & Casualty Company 2008 Stock Plan or the other
rights to acquire UFC Common Stock under the United-Lafayette
401(K) Profit Sharing Plan or The United Fire &
Casualty Company Employees Stock Purchase Plan (collectively,
the UFC Plans), whether or not then
exercisable, will be assumed by HoldingCo. Each UFC Award so
assumed by HoldingCo under this Agreement will continue to have,
and be subject to, the same terms and conditions as set forth in
the UFC Awards and the applicable UFC Plan and any agreements
thereunder immediately prior to the Effective Time (including,
without limitation, the vesting schedule (without acceleration
thereof by virtue of the Merger and the transactions
contemplated hereby) and per share exercise price), except that
each UFC Award will be exercisable (or will become exercisable
in
ANNEX I-3
accordance with its terms) for, or shall be denominated with
reference to, that number of shares of HoldingCo Common Stock
equal to the number of shares of UFC Common Stock that were
subject to such UFC Award immediately prior to the Effective
Time. The conversion of any UFC Options that are incentive
stock options within the meaning of Section 422 of
the Code, into options to purchase HoldingCo Common Stock shall
be made in a manner consistent with Section 424(a) of the
Code so as not to constitute a modification of such
UFC Options within the meaning of Section 424 of the Code.
b. Assignment and Assumption of
Agreements. Effective as of the Effective Time, UFC
hereby assigns to HoldingCo, and HoldingCo hereby assumes and
agrees to perform, all obligations of UFC pursuant to the UFC
Awards and the UFC Plans, each stock option agreement and
restricted stock agreement, including those entered into
pursuant to UFC Plans, and each outstanding UFC Award.
c. Reservation of
Shares. On or prior to the Effective Time, HoldingCo
will reserve sufficient shares of HoldingCo Common Stock to
provide for the issuance of HoldingCo Common Stock upon exercise
of UFC Awards, including those outstanding under UFC Plans.
d. Registration Statement;
Proxy/Prospectus. As promptly as practicable after the
execution of this Agreement, UFC shall prepare and file with the
Securities and Exchange Commission (the SEC)
a proxy statement in preliminary form relating to the
Shareholders Meeting (as hereinafter defined) (together
with any amendments thereof or supplements thereto, the
Proxy Statement) and HoldingCo shall prepare
and file with the SEC a registration statement on
Form S-4
(together with all amendments thereto, the Registration
Statement and the prospectus contained in the
Registration Statement together with the Proxy Statement, the
Proxy/Prospectus), in which the Proxy
Statement shall be included, in connection with the registration
under the Securities Act of 1933, as amended (the
Securities Act) of the shares of HoldingCo
Common Stock to be issued to the shareholders of UFC as the
Merger Consideration. Each of HoldingCo and UFC shall use its
reasonable best efforts to cause the Registration Statement to
become effective and the Proxy Statement to be cleared by the
SEC as promptly as practicable, and, prior to the effective date
of Registration Statement, HoldingCo shall take all actions
reasonably required under any applicable federal securities laws
or state blue sky laws in connection with the issuance of shares
of HoldingCo Common Stock pursuant to the Merger. As promptly as
reasonably practicable after the Registration Statement shall
have become effective and the Proxy Statement shall have been
cleared by the SEC, UFC shall mail or cause to be mailed or
otherwise make available in accordance with the Securities Act
and the Securities Exchange Act of 1934, as amended (the
Exchange Act), the Proxy/Prospectus to its
shareholders; provided, however, that the parties shall consult
and cooperate with each other in determining the appropriate
time for mailing or otherwise making available to UFCs
shareholders the Proxy/Prospectus in light of the date set for
the Shareholders Meeting.
e. Meeting of UFC
Shareholders. UFC shall take all action necessary in
accordance with the IBCA and its amended and restated articles
of incorporation and amended and restated bylaws to call, hold
and convene a meeting of its shareholders to consider the
adoption of this Agreement (the Shareholders
Meeting) to be held no less than 10 nor more than
60 days following the distribution of the definitive
Proxy/Prospectus to its shareholders. UFC will use its
reasonable best efforts to solicit from its shareholders proxies
in favor of the adoption of this Agreement and approval of the
Merger. UFC may adjourn or postpone the Shareholders
Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Proxy/Prospectus is provided to
its shareholders in advance of any vote on this Agreement and
the Merger or, if as of the time for which the
Shareholders Meeting is originally scheduled (as set forth
in the Proxy/Prospectus) there are insufficient shares of UFC
Common Stock voting in favor of the adoption of this Agreement
and approval of the Merger or represented (either in person or
by proxy) to constitute a quorum necessary to conduct the
business of such Shareholders Meeting.
f. Section 16
Matters. Prior to the Effective Time, the Board of
Directors of UFC or an appropriate committee of non-employee
directors thereof (as such term is defined for purposes of
Rule 16b-3
promulgated under the Exchange Act) shall adopt a resolution
consistent with the interpretive guidance of the SEC so that the
receipt by any officer or director of UFC who is a covered
person for purposes of Section 16(a) of the Exchange Act of
shares of HoldingCo Common Stock in exchange for shares of UFC
ANNEX I-4
Common Stock or UFC Options pursuant to this Agreement and the
Merger is intended to be an exempt transaction pursuant to
Section 16b-3
of the Exchange Act. Prior to the Effective Time, the Board of
Directors of HoldingCo or an appropriate committee of
non-employee directors (as such term is defined for purposes of
Rule 16b-3
promulgated under the Exchange Act) shall adopt a resolution
consistent with the interpretive guidance of the SEC so that the
receipt by any officer or director of UFC or HoldingCo who is a
covered person for purposes of Section 16(a) of the
Exchange Act of shares of HoldingCo Common Stock or options in
exchange for shares of UFC Common Stock or UFC Options pursuant
to this Agreement and the Merger is intended to be an exempt
transaction for purposes of
Section 16b-3
of the Exchange Act.
3. Conditions of
Merger. The obligations of the parties to this
Agreement to consummate the Merger and the transactions
contemplated by this Agreement shall be subject to fulfillment
or waiver by the parties hereto at or prior to the Effective
Time of each of the following conditions:
a. The Registration Statement shall
have been deemed or declared effective by the SEC under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued by the SEC and
no proceeding for that purpose shall have been initiated or, to
the knowledge of HoldingCo or UFC, threatened by the SEC and not
concluded or withdrawn. No similar proceeding with respect to
the Proxy Statement shall have been initiated or, to the
knowledge of HoldingCo or UFC, threatened, by the SEC and not
concluded or withdrawn.
b. This Agreement and the Merger
shall have been approved by the requisite vote of the
shareholders of UFC in accordance with the IBCA and the amended
and restated articles of incorporation of UFC.
c. The HoldingCo Common Stock to be
issued pursuant to the Merger shall have been approved for
listing by The NASDAQ Stock Market, LLC (the NASDAQ).
d. UFC shall have made such
filings, and obtained such permits, authorizations, consents,
approvals or terminations or expirations of waiting periods
required by the corporate and insurance laws and regulations of
all applicable jurisdictions.
e. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment
or restraining order that is in effect shall have been enacted,
entered, promulgated or enforced by any court or governmental or
regulatory authority or instrumentality that prohibits or makes
illegal the consummation of the Merger or the transactions
contemplated hereby.
f. The Boards of Directors of UFC
and HoldingCo shall have received the legal opinion of
Bradley & Riley PC in form and substance reasonably
satisfactory to them indicating that holders of UFC Common Stock
will not recognize gain or loss for United States federal income
tax purposes as a result of the transactions contemplated by
this Agreement.
4. Covenants.
a. Listing of HoldingCo Common
Stock. HoldingCo will use its best efforts to obtain,
at or before the Effective Time, confirmation of listing on
NASDAQ of the HoldingCo Common Stock issuable pursuant to the
Merger.
b. UFC Awards. UFC and
HoldingCo will take or cause to be taken all actions necessary
or desirable in order to implement the assumption by HoldingCo
pursuant to Section 2(b), above, of the UFC Plans, the UFC
Awards, each stock option agreement or restricted stock
agreement entered into pursuant to the UFC Plans and otherwise,
and each UFC Award granted thereunder or otherwise, all to the
extent deemed appropriate by UFC and HoldingCo and permitted
under applicable law.
c. Insurance. HoldingCo
shall procure insurance or cause the execution of the insurance
policies of UFC such that, upon consummation of the Merger,
HoldingCo shall have insurance coverage that is substantially
identical to the insurance coverage held by UFC immediately
prior to the Merger.
ANNEX I-5
5. Termination and Amendment.
a. Termination. This
Agreement may be terminated and the Merger contemplated hereby
may be abandoned at any time prior to the Effective Time by
action of the Board of Directors of UFC if such Board of
Directors should determine that for any reason the completion of
the transactions provided for herein would be inadvisable or not
in the best interest of UFC or its shareholders. In the event of
such termination and abandonment, this Agreement shall become
void and UFC, HoldingCo, MergeCo, their respective shareholders,
members, directors and officers shall not have any liability
with respect to such termination and abandonment.
b. Amendment. At any
time prior to the Effective Time, this Agreement may, to the
extent permitted by the IBCA, be supplemented, amended or
modified by the mutual consent of the parties to this Agreement.
6. Miscellaneous Provisions.
a. Governing Law. This
Agreement shall be governed by and construed and enforced under
the laws of the State of Iowa.
b. Counterparts. This
Agreement may be executed in one or more counterparts, each of
which when executed shall be deemed to be an original but all of
which shall constitute one and the same agreement.
c. Entire
Agreement. This Agreement constitutes the entire
agreement and supersedes all other agreements and undertakings,
both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
d. Severability. The
provisions of this Agreement are severable, and in the event any
provision hereof is determined to be invalid or unenforceable,
such invalidity or unenforceability shall not in any way affect
the validity or enforceability of the remaining provisions
hereof.
e. No Third-Party
Beneficiaries. Nothing contained in this Agreement is
intended by the parties hereto to expand the rights and remedies
of any person or entity not party hereto against any party
hereto as compared to the rights and remedies which such person
or entity would have had against any party hereto had the
parties hereto not consummated the transactions contemplated
hereby.
f. Tax Matters. Each of
UFC and HoldingCo will comply with the recordkeeping and
information reporting requirements of the Code that are imposed
as a result of the transactions contemplated hereby, and will
provide information reporting statements to holders of UFC
Common Stock at the time and in the manner prescribed by the
Code and applicable Treasury Regulations.
In Witness
Whereof, UFC, HoldingCo and MergeCo have caused this
Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
United Fire &
Casualty Company
Randy A. Ramlo, President
United Fire Group, Inc.
Randy A. Ramlo, President
UFC MergeCo, Inc.
Randy A. Ramlo, President
ANNEX I-6
ANNEX II
Articles
of Incorporation
of
United Fire Group, Inc.
Article I
Name
The name of this corporation shall be
United Fire Group, Inc.
Article II
Principal Place of Business
The principal place of business of this corporation shall be at
Cedar Rapids, in the County of Linn, State of Iowa.
Article III
Corporate Period
The corporate existence of this corporation begins when the
Articles of Incorporation are filed with the Secretary of State.
It shall have perpetual existence from said date unless and
until dissolved by the vote of at least sixty percent (60%) of
the voting stock of the corporation then issued and outstanding
and entitled to vote at any annual meeting of the shareholders
or at any special meeting called for that purpose.
Article IV
Objects, Purposes, and General
Nature of Business
The purposes and objectives for which the corporation is
organized are the transaction of any and all lawful business for
which corporations may be organized under the Iowa Business
Corporation Act (Chapter 490, Code of Iowa 2011, and
successor statutory provisions) (the Act).
Article V
Capital Stock
Section 1. Authorized Capital Stock.
a. Classes. The authorized capital stock of this
corporation is 75,000,000 shares of common stock
(Common Stock) having a par value of $.001 per share
and 10,000,000 shares of serial preferred stock, having no
par value per share (Preferred Stock).
b. Preferred
Stock. The Board of Directors of this corporation is authorized,
subject to limitations prescribed by the Act and the provisions
of the Articles of Incorporation of this corporation, by
resolution or resolutions, from time to time and by filing
articles of amendment with the Secretary of State of the State
of Iowa in accordance with the applicable provisions of the Act,
to provide for the issuance of the shares of Preferred Stock.
The Preferred Stock may be divided into and issued in one or
more series. The Board of Directors is hereby vested with the
authority from time to time to establish and designate such
series and, within the limitations prescribed by law, to fix and
determine the designations, powers, preferences, and relative,
participating, optional or other special rights, and
qualifications, limitations and restrictions of any series so
established.
Section 2. Preemptive Rights Denied. No holder of Common
Stock shall be entitled as such, as a matter of right, to
subscribe for or purchase any part of any new or additional
issue of stock of any class whatsoever, whether now or hereafter
authorized and whether issued for cash or other consideration.
Section 3. Voting Rights. Each share of Common Stock shall
entitle the holder thereof to one vote upon all matters as to
which a vote of the shareholders is to be taken at any annual or
special meeting of shareholders.
Section 4. Dividends. The Board of Directors may declare
dividends upon the capital stock of the corporation, subject to
the applicable provisions, if any, of the Act and these Articles
of Incorporation. The corporation may pay dividends in cash, in
property, or in shares of the capital stock, subject to the
provisions of the Act and these Articles of Incorporation.
Section 5. Quorum. A majority of the issued and outstanding
Common Stock represented in person or by written proxy shall
constitute a quorum for the transaction of business.
Section 6. Transfer of Stock. All shares of stock shall be
transferable but only by assignment in writing, and such
assignment shall not be complete as against the corporation
until entered upon the records of the corporation.
Article VI
Shareholders Meetings
Section 1. Shareholders Meetings.
a. Annual Meetings. The annual meeting of the shareholders
shall be held on the third Wednesday in the month of May in each
year unless such day shall be a legal holiday, in which case
said meeting shall be held on the day following.
b. Special Meetings. The Chairman or Board of Directors may
call a special meeting of the shareholders at any time upon
giving notice as provided in the Bylaws. Special meetings shall
be called by the Chairman upon the written request of
shareholders representing at least thirty percent (30%) of the
total voting stock of the corporation then issued and
outstanding, in accordance with the Bylaws of the corporation.
In the event of the Chairmans failure or refusal to issue
a call upon such request, the shareholders representing at least
thirty percent (30%) of the voting stock of the corporation then
issued and outstanding may join in issuing a call to
shareholders for a special meeting.
c. Call and Notice of Annual and Special Meetings. All
calls or requests for annual or special shareholders
meetings shall be in writing, shall state what business is to be
presented at the meeting, and shall be made by the President of
the corporation or by the owners of at least thirty percent
(30%) of the total voting stock of the corporation then issued
and outstanding, in accordance with the Bylaws of the
Corporation. Business transacted at any annual or special
meeting of shareholders shall be limited to the purposes stated
in the notice.
Section 2. Place of Meetings. All meetings of the
shareholders shall be held at the office of the corporation in
Cedar Rapids, Iowa.
Article VII
Board Of Directors and Officers
Section 1. Election and Composition of Board of Directors.
a. Size of Board of Directors; Election of Directors. The
number of directors that shall constitute the whole board shall
be not less than nine (9) nor more than fifteen (15).
Within the specified limits, the number of directors shall be
determined by the shareholders at the annual meeting or by
resolution of the board of directors. Except as provided by
Section 1(d) of this Article, the directors shall be
elected at the annual meeting of the shareholders or at any
special meeting called for the purpose of electing directors,
and, except as provided in the Bylaws, each director elected
shall hold office until his or her successor is elected and
qualified or his or her earlier death, resignation, or removal.
ANNEX II-2
b. Classes of Directors. The Board of Directors shall be
divided into classes of directors to be designated Class A
Directors, Class B Directors and Class C Directors
respectively, each class consisting of one-third (as nearly as
possible but in no event may any one class have greater than one
more director than any other class) of the total number of
directors. At the first election to be held immediately
following the adoption of these Articles and their becoming
effective, four (4) Class A Directors shall be elected
for a term of three (3) years, four (4) Class B
Directors for a term of two (2) years, and four
(4) Class C Directors for a term of one (1) year.
In nominating directors for election at such first election, the
nominees shall be designated as to class. At each annual meeting
of shareholders, the successors to the class of directors whose
term shall then expire shall be elected to hold office for a
term expiring at the third succeeding annual meeting.
c. Number Fixed by Board of Directors. The number of
directors shall initially be twelve (12). Thereafter, subject to
the right of the shareholders to fix the number of directors at
a meeting called for the purpose of electing directors, the
Board of Directors may, within the range provided in
Section 1.a of this Article, change the number of directors
constituting the Board of Directors by resolution at any time,
provided, however, the Board of Directors shall not increase the
size of the Board of Directors by more than one
(1) director in any year.
d. Vacancies. Vacancies in the Board of Directors occurring
between annual meetings may be filled by the Board of Directors
for the remainder of the unexpired term of the director whose
office is vacated. Vacancies in the Board of Directors, whether
arising through death, resignation or removal of a director, or
newly created directorships resulting from any increase in the
authorized number of directors, shall be filled by the vote of a
majority of the directors then in office, or by the vote of a
sole remaining director, and the directors so chosen shall hold
office for the unexpired portion of the term of the directors
replaced or, in the case of a newly created directorship, the
directors so chosen shall be assigned to that class of directors
the terms of which expires at the next annual meeting of the
shareholders.
e. Proportionate Representation. The holder or holders,
jointly or severally, of not less than one-fifth but less than a
majority of the shares of the Common Stock then issued and
outstanding shall be entitled to nominate directors for election
at the annual meeting of shareholders. If such nomination is
made there shall be elected, to the extent that the total number
to be elected by the holders of Common Stock is divisible, such
proportionate number from the persons so nominated as the shares
of Common Stock held by persons making such nominations bear to
the whole number of shares then issued and outstanding;
provided, such holder or holders of the minority shares of
Common Stock shall only be entitled to one-fifth (disregarding
fractions) of the total number of directors to be elected for
each one-fifth of the entire Common Stock of this corporation so
held by them; and provided further that this Section 1.e
shall not be construed to prevent the holders of a majority of
the Common Stock of the corporation from electing the majority
of the directors to be elected by the holders of Common Stock.
Shareholders nominating directors pursuant to this
Section 1.e shall comply with the provisions of the Bylaws
governing nomination of directors.
Section 2. Term of Office of Members of Board of Directors.
Directors elected by the shareholders or directors appointed to
fill a vacancy shall serve until their successors have been
elected and qualify.
Section 3. Officers. The Board of Directors shall meet
annually immediately following the annual meeting of the
shareholders to elect officers. The Board of Directors shall
elect officers of the corporation and such other officials,
including an Executive Committee, as may be provided by the
Bylaws of the corporation. Any person may hold one or more
offices at the same time.
Section 4. Directors Qualification. Every director
shall be a shareholder.
Section 5. Special Powers of Board of Directors. The Board
of Directors may adopt, alter or repeal the Bylaws of the
corporation and may generally do any act or thing deemed
necessary for the conduct and management of the business of the
corporation, subject only to the limitations imposed by law or
by these Articles of Incorporation, including, without being
limited thereto, the power to qualify the corporation for the
transaction of business anywhere in the United States and Canada
if it shall conclude that it is to the best interests of the
corporation to do so, and shall be authorized to take whatever
action may be necessary in the
ANNEX II-3
premises, and in the event an Executive Committee is elected,
the Board of Directors may vest the Executive Committee with the
right to exercise any or all of the powers of directors when the
said Board of Directors is not in session, excepting the power
to adopt, amend or alter Bylaws or fill vacancies on the Board
of Directors or officers.
Section 6. Quorum of Board of Directors. A majority of the
Board of Directors shall constitute a quorum for the transaction
of business.
Section 7. General Powers of Officers. The officers elected
by the Board of Directors shall have such power, perform such
duties and shall be entitled to such compensation as may be
prescribed by the Board of Directors, and the Board of Directors
shall have the right to remove any officer with or without cause
and to fill vacancies in office by a majority vote at a
directors meeting.
Section 8. Personal Liability Directors. A
director of the corporation shall not be personally liable to
the corporation or its shareholders for monetary damages for any
action taken, or any failure to take any action, as a director,
except liability for any of the following: (1) the amount
of a financial benefit received by a director to which the
director is not entitled; (2) an intentional infliction of
harm on the corporation or the shareholders; (3) a
violation of section 490.833 of the Act; or (4) an
intentional violation of criminal law. If the Act is hereafter
amended to authorize the further elimination or limitation of
the personal liability of directors, then, automatically and
without any further action, the liability of a director of the
corporation, in addition to the limitation on personal liability
provided herein, shall be eliminated or limited to the fullest
extent permitted by the Iowa Business Corporation Act, as so
amended.
Section 9. Indemnification of Directors. The corporation
shall indemnify a director for liability, as defined in
section 490.850(5) of the Act, to any person for any action
taken, or any failure to take any action, as a director, except
liability for any of the following: (1) receipt of a
financial benefit to which the person is not entitled;
(2) an intentional infliction of harm on the corporation or
its shareholders; (3) a violation of section 490.833
of the Act; or (4) an intentional violation of criminal
law. Without limiting the foregoing, the corporation shall
exercise all of its permissive powers as often as necessary to
indemnify and advance expenses to its directors to the fullest
extent permitted by law.
Section 10. Effect of Repeal or Amendment of
Sections 9 and 10 of Article VII. Any repeal or
amendment of Section 9 or Section 10 by the
shareholders of the corporation shall not adversely affect any
right of a director or former director of the corporation
arising at any time with respect to events occurring prior to
such repeal or amendment.
Section 11. Amendments Changing Section 1 of
Article VII. Any amendment changing any of the provisions
of Section 1 of Article VII shall require the
affirmative vote of at least sixty percent (60%) of the voting
stock of the corporation then issued and outstanding.
Article VIII
Corporate Seal
This corporation shall have a corporate seal upon which shall be
inscribed UNITED FIRE GROUP, INC.
Article IX
Merger, Consolidation Or Sale Of All Assets
In addition to any other provisions of Iowa law, the affirmative
vote of at least sixty percent (60%) of all outstanding voting
stock of this corporation shall be required to approve any plan
of merger, consolidation, or sale or exchange of all or
substantially all of the assets of this corporation. If any
shares of this corporation are held by or for any corporation
with which this corporation is to be merged or consolidated or
to which the assets are to be sold or exchanged, or by any
person, firm, or corporation in control of or controlled by any
such corporation, then the favorable vote of at least sixty
percent (60%) of all other shares of voting stock of this
corporation shall be required to approve such plan.
ANNEX II-4
Article X
Registered Office and Initial Registered Agent
The registered office of the corporation is 118 Second Ave. SE,
Cedar Rapids, IA 52401 and its initial registered agent at that
address is Neal R. Scharmer.
Article XI
Name and Address of Incorporator
The incorporator is Randy A. Ramlo and his address is 118 Second
Ave. SE, Cedar Rapids, IA 52401.
Article XII
Amendments
Except as otherwise provided herein or by law these Articles of
Incorporation may be amended at any annual meeting of the
shareholders or special meeting of shareholders called for that
purpose by a vote of at least sixty percent (60%) of all
outstanding voting stock of this corporation.
Dated this 18th day of May, 2011
/S/
RANDY A. RAMLO, Incorporator
ANNEX II-5
ANNEX III
BYLAWS
UNITED
FIRE GROUP, INC.
ARTICLE I
SHAREHOLDERS
Section 1.
ANNUAL MEETING
The annual meeting of the shareholders of United Fire Group,
Inc. (the Corporation), for the election of
directors and for the transaction of such other business as
shall be permitted by these Bylaws, shall be held on the third
Wednesday in the month of May of each year, provided the Board
of Directors of the Corporation may fix some other date that is
within thirty (30) days before or after said date. If the
day designated above or fixed by the Board of Directors is a
legal holiday, the meeting shall be held on the following
business day. The hour of the meeting shall be fixed by the
Chairman of the Board of Directors (the
Chairman). All meetings shall be held at the
office of the Corporation in Cedar Rapids, Iowa.
Section 2.
QUORUM
At any meeting of the shareholders of the Corporation a majority
of the common stock outstanding, represented in person or by
written proxy, shall constitute a quorum for the transaction of
business.
Section 3.
ADJOURNMENT
If less than a quorum is in attendance at any meeting, the
meeting may be adjourned by a majority in interest of the
shareholders present, in person or by proxy, from time to time
without further notice other than by announcement at the
meeting, until the holders of the amount of stock necessary to
constitute a quorum attend.
Section 4.
VOTING
Each shareholder shall be entitled to one vote for each share of
stock registered in the shareholders name at any annual or
special meeting of the shareholders of the Corporation upon all
matters of business, including the election of directors, which
vote may be exercised in person or by written proxy for each
share of stock held by such shareholder. All proxies shall be
filed with the Transfer Agent at least two days prior to the
meeting for which said proxy is given.
Directors shall be elected by the vote of the holders of shares
entitling them to exercise a majority of the voting power of the
shareholders present in person or by proxy and entitled to vote;
provided, however, directors shall be elected by a plurality of
the votes cast at any meeting at which a quorum is present and
for which (i) one or more nominations of persons for
election to the Board of Directors has been properly received
pursuant to the procedures set forth in Article I,
Section 6, Section 8 and Section 9 and
(ii) such nomination or nominations have not been
withdrawn, so that, on the tenth (10th) day before the
Corporation first mails its notice for such meeting to the
shareholders, the number of nominees for director is greater
than the number of directors to be elected. An election by
plurality vote means that the nominees receiving the greatest
number of votes cast shall be elected.
Section 5.
SPECIAL MEETINGS
The Chairman or Board of Directors may call a special meeting of
the shareholders at any time upon giving notice as provided in
Article I, Section 7. Special meetings of the
shareholders shall be called by the Chairman at any time upon
the written request of shareholders representing thirty percent
(30%) of the total voting stock outstanding (such request being
referred to as a Demand) and, in the event of
the failure or refusal of the Chairman to issue a call upon such
Demand, the shareholders representing thirty percent (30%) of
the total voting stock outstanding may join in issuing a call to
the shareholders for a special meeting.
ANNEX III-1
Section 6.
NOMINATIONS AND BUSINESS AT ANNUAL AND SPECIAL
MEETINGS
Nominations of persons for election to the Board of Directors
and the proposal of business to be considered by the
shareholders at an annual or special meeting of shareholders may
be made only:
(a) by or at the direction of the Board of Directors,
including by any committee or person(s) appointed by the Board
of Directors;
(b) in the case of an annual meeting, by any shareholder or
shareholders nominating directors pursuant to Section 1.e
of Article VII of the Articles of Incorporation or by any
shareholder entitled to vote at the meeting, provided such
shareholder or shareholders comply with the procedures set forth
in Article I, Section 8 and Section 9; or
(c) in the case of a special meeting:
(i) called pursuant to a Demand for a special meeting
delivered in accordance with Article I, Section 5, as
specified in such Demand by the shareholder(s) making such
Demand who shall have complied with the notice procedures set
forth in Article I, Section 8 and by the Board of
Directors; or
(ii) called by the Corporation other than pursuant to a
Demand, if directors are to be elected pursuant to the
Corporations notice of meeting delivered pursuant to
Article I, Section 7, then nominations of persons who
have complied with the provisions of Article I,
Section 9 for election to the Board of Directors may be
made by any shareholder entitled to vote at the meeting who
complies with the notice procedures set forth in Article I,
Section 8. Any such shareholder may nominate such number of
persons for election to the Board of Directors as is less than
or equal to the number of position(s) as are specified in the
Corporations notice of meeting.
Clauses (b) and (c) of this Section 6 shall be
the exclusive means for a shareholder to make nominations of
persons for election to the Board of Directors or submit other
business before a meeting of shareholders. The notice procedures
set forth in Article I, Section 8 shall be deemed
satisfied by a shareholder who seeks to have the
shareholders proposal included in the Corporations
proxy statement and identified as a proposal in the
Corporations form of proxy pursuant to
Rule 14a-8
under the Securities Exchange Act of 1934 (the Exchange
Act) if such shareholder complies with the provisions
of that Rule.
Section 7.
NOTICE OF MEETINGS
Written notice or electronic notice in accordance with
Article VI, Section 3 of the time and place of the
meeting and, in the case of a special meeting, the purpose or
purposes for which the special meeting is called, shall be
delivered personally, mailed, or electronically transmitted
pursuant to Article VI, Section 3 not less than ten
(10) days nor more than sixty (60) days before the
date of the meeting to each shareholder of record entitled to
vote, at the address appearing upon the stock transfer books of
the Corporation or to the electronic address of each shareholder
as communicated by such shareholder to the Corporation pursuant
to Article VI, Section 3. Business transacted at any
annual or special meeting of shareholders shall be limited to
the purposes stated in the notice.
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Section 8.
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NOTICE OF
SHAREHOLDER BUSINESS TO BE CONDUCTED AT A MEETING OF
SHAREHOLDERS
|
In order for a shareholder to properly bring any nomination of a
person for election to the Board of Directors or other item of
business before a meeting of shareholders, such shareholder (the
Noticing Shareholder) must give timely notice
thereof in proper written form to the Chairman, and, in the case
of business other than nominations, such other business must
otherwise be a proper matter for shareholder action. This
Section 8 shall constitute an advance notice
provision for purposes of
Rule 14a-4(c)(1),
promulgated under the Exchange Act.
ANNEX III-2
(a) To be timely, a Noticing Shareholders notice
(which, in the case of a shareholder making a Demand for a
special meeting, shall be the Noticing Shareholders
Demand) shall be delivered to the Chairman at the principal
executive offices of the Corporation:
(i) as to an annual meeting, not earlier than the close of
business on the 150th day and not later than the close of
business on the 120th day prior to the first anniversary of
the preceding years annual meeting; provided, however,
that in the event that the date of the annual meeting is more
than 30 days before or more than 60 days after such
anniversary date, notice by the shareholder to be timely must be
so delivered not earlier than the close of business on the
150th day prior to the date of such annual meeting and not
later than the close of business on the later of the
120th day prior to the date of such annual meeting or, if
the first public announcement (as defined below) of the date of
such annual meeting is less than 100 days prior to the date
of such annual meeting, the 10th day following the day on
which public announcement of the date of such meeting is first
made by the Corporation;
(ii) as to a special meeting called pursuant to a Demand
and pursuant to Article I, Section 5, not later than
the close of business on the date of delivery of the first
shareholder demand in compliance with any requirement of
Chapter 490, Code of Iowa 2011, and successor statutory
provisions (the Act); or
(iii) as to a special meeting called by the Corporation
other than pursuant to a Demand, at which directors are to be
elected pursuant to the Corporations notice of meeting
delivered pursuant to Article I, Section 7, not later
than the earlier of the 10th day following the mailing of
definitive proxy materials with respect to the meeting or the
day on which public announcement of the date of such meeting and
of the nominees proposed by the Board of Directors to be elected
at such meeting is first made by the Corporation. In no event
shall any adjournment or postponement of an annual or special
meeting, or the public announcement thereof, commence a new time
period for the giving of a shareholders notice as
described above.
(b) To be in proper form, a Noticing Shareholders
notice to the Chairman (which, in the case of a shareholder
making a Demand for a special meeting, shall be the Noticing
Shareholders Demand) must:
(i) set forth and include the following information
and/or
documents, as applicable:
(A) the name and address of such Noticing
Shareholder(s), as they appear on the Corporations books,
and the name and address of each Beneficial Owner (as defined
below);
(B) representations that, as of the date of delivery
of such notice, such Noticing Shareholder(s) is a holder of
record of shares of the Corporation and is entitled to vote at
such meeting and intends to appear in person or by proxy at such
meeting to propose such nomination or business;
(C) (1) the name of each individual, firm,
corporation, limited liability company, partnership, trust or
other entity (including any successor thereto, a
Person) with whom the Noticing
Shareholder(s), Beneficial Owner, Shareholder Nominee (as
defined below), and their respective Affiliates and Associates
(as defined under Regulation 12B under the Exchange Act or
any successor provision thereto) (each of the foregoing, a
Shareholder Group Member) and each other
Person with whom such Shareholder Group Member is acting in
concert with respect to the Corporation (each Person described
in this clause (1), including each Shareholder Group Member, a
Covered Person) has any agreement,
arrangement or understanding (whether written or oral) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy given to such Person in response to a public
proxy solicitation made generally by such Person to all holders
of shares of the Corporation entitled to vote at the meeting
(collectively, Voting Stock)) or disposing of
any Voting Stock or to cooperate in obtaining, changing or
influencing the control of the Corporation (except independent
financial, legal and other advisors acting in the ordinary
course of their respective businesses), and a description of
each such agreement, arrangement or understanding (whether
written or oral), (2) a list of the class and number of
shares of Voting Stock that are Beneficially Owned or owned of
record by each Covered Person, together with documentary
evidence of such record or Beneficial Ownership, (3) a list
of (A) all of the derivative securities (as defined under
Rule 16a-1
under the Exchange Act) and other derivatives or similar
agreements or arrangements with an exercise or conversion
privilege or a periodic or settlement payment or payments or
mechanism at a price or in an amount or amounts related to
ANNEX III-3
any security of the Corporation or with a value derived or
calculated in whole or in part from the value of any security of
the Corporation, in each case, directly or indirectly owned of
record or Beneficially Owned by any Covered Person and
(B) each other direct or indirect opportunity of any
Covered Person to profit or share in any profit derived from any
increase or decrease in the value of any security of the
Corporation, in each case, regardless of whether (x) such
interest conveys any voting rights in such security to such
Covered Person, (y) such interest is required to be, or is
capable of being, settled through delivery of such security or
(z) such Person may have entered into other transactions
that hedge the economic effect of such interest (any such
interest described in this clause (3) being a
Derivative Interest), (4) a description
of each agreement, arrangement or understanding (whether written
or oral) with the effect or intent of increasing or decreasing
the voting power of, or that contemplates any Person voting
together with, any Covered Person with respect to any Voting
Stock, Shareholder Nominee or other proposal (Voting
Arrangements), (5) details of all other material
interests of each Covered Person in such nomination or proposal
or capital stock of the Corporation (including any rights to
dividends or performance related fees based on any increase or
decrease in the value of such capital stock or Derivative
Interests) (collectively, Other Interests),
(6) a description of all economic terms of all such
Derivative Interests, Voting Arrangements and Other Interests
and copies of all agreements and other documents (including but
not limited to master agreements, confirmations and all
ancillary documents and the names and details of the
counterparties to, and brokers involved in, all such
transactions) relating to each such Derivative Interest, Voting
Arrangement and Other Interests, (7) a list of all
transactions by each Covered Person involving any Voting Stock
or any Derivative Interests, Voting Arrangements or Other
Interests within 6 months prior to the date of the notice
and (8) a representation whether any Covered Person intends
or is part of a group which intends (a) to deliver a proxy
statement
and/or form
of proxy to holders of at least the percentage of the
Corporations outstanding capital stock required to approve
or adopt the proposal or elect any Shareholder Nominee
and/or
(b) otherwise to solicit or participate in the solicitation
of proxies from shareholders of the Corporation in support of
such nomination or proposal. A notice delivered by or on behalf
of any Noticing Shareholder under this Section 8(b) shall
be deemed to be not in compliance with this Section 8(b)
and not effective if (x) such notice does not include all
of the information and documents required under this
Section 8(b) after delivery of such notice, any information
or document required to be included in such notice changes or is
amended, modified or supplemented, as applicable, prior to the
date of the relevant meeting and such information
and/or
document is not delivered to the Corporation by way of a further
written notice as promptly as practicable following the event
causing such change in information or amendment, modification or
supplement, as applicable, and in any case where such event
occurs within 45 days of the date of the relevant meeting,
within five business days after such event; provided, however,
that the Board of Directors shall have the authority to waive
any such non-compliance if the Board of Directors determines
that such action is appropriate in the exercise of its fiduciary
duties;
(ii) if the notice relates to any business other than a
nomination of a director or directors that the shareholder
proposes to bring before the meeting, such notice must also set
forth:
(A) a brief description of the business desired to be
brought before the meeting, the reasons for conducting such
business at the meeting and any material interest of such
Noticing Shareholder in such business;
(B) the text of the proposal (including the text of
any resolutions proposed for consideration and, in the event
that such business includes a proposal to amend these Bylaws,
the text of the proposed amendment); and
(C) the reasons for conducting such business at the
meeting;
(iii) if the notice relates to the nomination of a director
or directors, such notice must also set forth, as to each person
whom the Noticing Shareholder proposes to nominate for election
or reelection to the Board of Directors (a Shareholder
Nominee):
(A) all information relating to such Shareholder
Nominee that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors in a
contested election pursuant to Section 14 of the Exchange
Act and the rules and
ANNEX III-4
regulations promulgated thereunder (including such persons
written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); and
(B) a description of all direct and indirect
compensation and other material monetary agreements,
arrangements and understandings during the past three years, and
any other material relationships, between or among, any Covered
Person, on the one hand, and each proposed Shareholder Nominee,
on the other hand, including, without limitation all information
that would be required to be disclosed pursuant to Rule 404
promulgated under
Regulation S-K
if any Covered Person, were the registrant for
purposes of such rule and the nominee were a director or
executive officer of such registrant; and
(iv) with respect to each Shareholder Nominee, the notice
must also include a completed and signed questionnaire,
representation and agreement required by Article I
Section 9.
The Corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the
Corporation to determine the eligibility of such proposed
nominee to serve as an independent director of the Corporation
or that could be material to a reasonable shareholders
understanding of the independence, or lack thereof, of such
nominee.
(c) Notwithstanding anything in Article I,
Section 8(a)(i) to the contrary, in the event that the
number of directors to be elected to the Board of Directors is
increased and there is no public announcement by the Corporation
naming all of the nominees for director or specifying the size
of the increased Board of Directors at least 100 days prior
to the first anniversary of the preceding years annual
meeting, a Noticing Shareholders notice required by this
bylaw shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it
shall be delivered to the Chairman at the principal executive
offices of the Corporation not later than the close of business
on the 10th day following the day on which such public
announcement is first made by the Corporation and such notice
otherwise complies with the requirements of this Section 8.
(d) Only such persons who are nominated in accordance with
the procedures set forth in this bylaw shall be eligible to be
elected as directors at a meeting of shareholders and only such
business shall be conducted at a meeting of shareholders as
shall have been brought before the meeting in accordance with
the procedures set forth in this bylaw. Except as otherwise
provided by law, the Articles of Incorporation or these Bylaws,
the chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this bylaw
and, if any proposed nomination or business is not in compliance
with this bylaw, to declare that such defective proposal or
nomination shall be disregarded. The Board of Directors may
adopt by resolution such rules and regulations for the conduct
of meetings of shareholders as it shall deem appropriate. Except
to the extent inconsistent with such rules and regulations as
adopted by the Board of Directors, the chairman of the meeting
shall have the right and authority to convene and adjourn the
meeting, to prescribe such rules, regulations and procedures and
to do all such acts as, in the judgment of the chairman of the
meeting, are appropriate for the proper conduct of the meeting.
Such rules, regulations or procedures, whether adopted by the
Board of Directors or prescribed by the chairman of the meeting,
may include the following: (i) the establishment of an
agenda or order of business for the meeting; (ii) rules and
procedures for maintaining order at the meeting and the safety
of those present; (iii) limitations on attendance at or
participation in the meeting to shareholders of record of the
Corporation, their duly authorized and constituted proxies or
such other persons as the Board of Directors or the chairman of
the meeting shall determine; (iv) restrictions on entry to
the meeting after the time fixed for the commencement thereof;
and (v) limitations on the time allotted to questions or
comments by participants. Unless and to the extent determined by
the Board of Directors or the chairman of the meeting, meetings
of shareholders shall not be required to be held in accordance
with the rules of parliamentary procedure. Notwithstanding the
foregoing provisions of this Section 8, unless otherwise
required by applicable law, if the Noticing Shareholder (or a
qualified representative of the Noticing Shareholder) does not
appear at the annual or special meeting of shareholders to
present a nomination or proposed business previously put forward
by or on behalf of such Noticing Shareholder or, immediately
prior to the commencement of such meeting, such Noticing
Shareholder does not provide a written certification to the
Corporation on and as of the date of the applicable meeting that
such
ANNEX III-5
Noticing Shareholder and each Covered Person, if any, is then in
compliance with this Section 8, then such nomination shall
be disregarded and such proposed business shall not be
transacted, notwithstanding that proxies in respect of such vote
may have been received by the Corporation. For purposes of this
Section 8, to be considered a qualified representative of
the Noticing Shareholder, a person must be a duly authorized
officer, manager or partner of such Noticing Shareholder or must
be authorized by a writing executed by such Noticing Shareholder
and each Covered Person, if any, or an electronic transmission
delivered by such Noticing Shareholder and each Covered Person,
if any, to act for such Noticing Shareholder and each Covered
Person, if any, as proxy at the meeting of shareholders and to
provide such certification on behalf of the Noticing Shareholder
and each Person required pursuant to this Section 8 and
such Person must produce such writing or electronic
transmission, or a reliable reproduction of the writing or
electronic transmission, at the meeting of shareholders. Nothing
in this bylaw shall be deemed to affect any rights of
(a) shareholders to request inclusion of proposals in the
Corporations proxy statement pursuant to
Rule 14a-8
under the Exchange Act or (b) holders of any series of
Preferred Stock to elect directors pursuant to any applicable
provisions of the Articles of Incorporation.
(e) For purposes of this bylaw, a Person shall be deemed
the Beneficial Owner of, shall be deemed to
Beneficially Own and shall be deemed to have
Beneficial Ownership of, any Voting Stock
(i) that such Person or any of such Persons
Affiliates or Associates (as defined under Regulation 12B
under the Exchange Act or any successor provision thereto) is
deemed to beneficially own within the meaning of
Section 13(d) of, and Regulation 13D under, the
Exchange Act or any successor provision thereto, or
(ii) that is the subject of, or the reference security for
or that underlies any Derivative Interest of such Person or any
of such Persons Affiliates or Associates (as defined under
Regulation 12B under the Exchange Act or any successor
provision thereto), with the number of shares of Voting Stock
deemed Beneficially Owned being the notional or other number of
shares of Voting Stock specified in the documentation evidencing
the Derivative Interest as being subject to be acquired upon the
exercise or settlement of the Derivative Interest or as the
basis upon which the value or settlement amount of such
Derivative Interest is to be calculated in whole or in part or,
if no such number of shares of Voting Stock is specified in such
documentation, as determined by the Board of Directors in good
faith to be the number of shares of Voting Stock to which the
Derivative Interest relates. When two or more Persons act as a
partnership, limited partnership, syndicate, or other group, or
otherwise act in concert, in each case, for the purpose of
acquiring, holding, or disposing of securities of the
Corporation or for the purpose of proposing one or more
Shareholder Nominees, putting forward any other proposal for
consideration or voting together on any matter presented at a
shareholder meeting, such syndicate or group shall be deemed a
Person for the purpose of this definition. In
addition, any Person who, directly or indirectly, creates or
uses a trust, proxy, power of attorney, pooling arrangement or
any contract, arrangement, or device with the purpose or effect
of divesting such Person of Beneficial Ownership of any Voting
Stock or preventing the vesting of such Beneficial Ownership as
part of a plan or scheme to evade the reporting requirements of
this Section 8 shall be deemed for the purposes of this
bylaw to be the Beneficial Owner of such Voting Stock.
(f) For purposes of this bylaw, public
announcement shall mean disclosure in a press release
reported by a national news service or in a document publicly
filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act and the rules and regulations promulgated
thereunder.
(g) Notwithstanding the foregoing provisions of this bylaw,
a Noticing Shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this bylaw;
provided, however, that any references in these Bylaws to the
Exchange Act or the rules promulgated thereunder are not
intended to and shall not limit the requirements applicable to
nominations or proposals as to any other business to be
considered pursuant to this Section 8.
Section 9.
SUBMISSION OF QUESTIONNAIRE, REPRESENTATION AND
AGREEMENT
To be eligible to be a nominee for election or reelection as a
director of the Corporation pursuant to a nomination of a
Noticing Shareholder, a person must deliver (in accordance with
the time periods prescribed for delivery of notice under
Article I, Section 8 of these Bylaws) to the Chairman
at the principal executive offices of the Corporation a written
questionnaire (i) that provides the background of and
establishes that such
ANNEX III-6
person meets the qualification of a person to serve as a
director, as set forth in policies adopted by the Board of
Directors, and (ii) setting forth the background of any
other person or entity on whose behalf the nomination is being
made (which questionnaire shall be provided by the Secretary
upon written request) and a written representation and agreement
(in the form provided by the Secretary upon written request)
that such person:
(a) is not and will not become a party to:
(i) any agreement, arrangement or understanding
(whether written or oral) with, and has not given any commitment
or assurance to, any person or entity as to how such person, if
elected as a director of the Corporation, will act or vote on
any issue or question (a Voting Commitment)
that has not been disclosed in writing to the
Corporation, or
(ii) any Voting Commitment that could limit or interfere
with such persons ability to comply, if elected as a
director of the Corporation, with such persons fiduciary
duties under applicable law,
(b) is not and will not become a party to any agreement,
arrangement or understanding (whether written or oral) with any
person or entity other than the Corporation with respect to any
direct or indirect compensation, reimbursement or
indemnification in connection with service or action as a
director that has not been disclosed in writing to the
Corporation, and
(c) in such persons individual capacity and on behalf
of any person or entity on whose behalf the nomination is being
made, would be in compliance, if elected as a director of the
Corporation, and will comply with all applicable publicly
disclosed corporate governance, conflict of interest,
confidentiality and stock ownership and trading policies and
guidelines of the Corporation.
Section 10.
BUSINESS
Unless otherwise determined by the Board of Directors prior to
the meeting, the chairman of the meeting shall determine in his
or her sole discretion the order of business of each shareholder
meeting and the rules of procedure thereof, and shall have the
authority to regulate the conduct of any such meeting as he or
she deems appropriate. Notwithstanding the foregoing, the order
of business fixed by the chairman of the meeting may be changed
by the vote of the holders of shares entitling them to exercise
a majority of the voting power of the shareholders present in
person or by proxy and entitled to vote. Items of business shall
not be considered and persons shall not be nominated for
election to the Board of Directors unless set forth in the
notice of meeting delivered pursuant to Article I,
Section 7.
Section 11.
CLOSING TRANSFER BOOKS RECORD DATE
For the purpose of determining the shareholders entitled to
notice of, or to vote at, any meeting of shareholders, or any
adjournment thereof, or entitled to receive payment of any
dividends, or in order to make a determination of the
shareholders of the Corporation for any other purpose, the Board
of Directors may provide that the stock transfer books shall be
closed for a stated period, not exceeding sixty (60) days.
If the stock transfer books shall be closed for such purpose,
such books shall be closed for at least ten (10) days
immediately preceding such meeting.
For the purpose of determining the shareholders entitled to
notice of, or to vote at, any meeting of shareholders, or any
adjournment thereof, or entitled to receive payment of any
dividends, or in order to make a determination of the
shareholders of the Corporation for any other purpose, the Board
of Directors may, in lieu of the closing of the stock transfer
books, fix the record date for any such determination of
shareholders, which record date shall be, in any case, not more
than sixty (60) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date
upon which the particular action requiring such determination of
shareholders is to be taken. If the stock record books are not
closed and no record date is fixed, the record date shall be the
date ten (10) days after the mailing of the notice of the
shareholders meeting or after the declaration of the dividend,
as the case may be. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as
herein provided, such determination shall apply to any
adjournment thereof.
ANNEX III-7
ARTICLE II
DIRECTORS
Section 1.
NUMBER AND CLASSES
The number of directors that shall constitute the whole board
shall be not less than nine (9) nor more than fifteen (15).
Within the specified limits, the number of directors shall be
determined the shareholders at the annual meeting or by
resolution of the board of directors. Subject to
Article II, Section 5, the directors shall be elected
at the annual meeting of the shareholders or at any special
meeting called for the purpose of electing directors, and,
except as provided in Article II, Section 5, each
director elected shall hold office until his or her successor is
elected and qualified or his or her earlier death, resignation,
or removal. The Board of Directors shall be divided into classes
to be designated Class A, Class B and Class C,
respectively. After the first election by classes, each class
shall be elected for a term of three years. Only the class whose
term expired in the year of election shall be elected at the
shareholders meeting of that year unless the Board of Directors
shall otherwise provide.
Section 2.
CHAIRMAN AND VICE CHAIRMAN
The Board of Directors shall elect a director to serve as
Chairman and a director to serve as Vice Chairman. The Chairman
and Vice Chairman shall serve at the pleasure of the Board of
Directors and be subject to removal by the Board of Directors.
The Chairman and the Vice Chairman shall have such powers,
perform such duties, and be entitled to such compensation as may
be prescribed and authorized by the Board of Directors. The
Chairman shall preside at all meetings of the shareholders and
the Board of Directors. The Vice Chairman, in the absence of the
Chairman, shall preside at all meetings of the directors and all
meetings of the shareholders.
Section 3.
MEETINGS AND NOTICE
The Board of Directors shall hold a regular meeting at the
office of the Corporation, in the City of Cedar Rapids, Iowa, on
the third Wednesday in the month of May of each year, unless
such day be a legal holiday, in which case the meeting shall be
held on the day following, immediately following the annual
meeting of the shareholders. Regular meetings of the directors
may be held without notice at such places and times as shall be
determined from time to time by resolution of the directors.
Special meetings of the Board of Directors shall be held at the
call of the Chairman, the Vice Chairman, the President in the
absence of the Chairman and Vice Chairman, or the Secretary on
the written request of any two (2) directors (a) by
giving at least two (2) days written notice thereof by
ordinary mail to the last known address of each director or
(b) by giving notice by telephone, facsimile or other
electronic transmission not less than twenty-four
(24) hours before the meeting.
Section 4.
QUORUM
A majority of the directors shall constitute a quorum at any
regular or special meeting. If at any meeting of the Board of
Directors there shall be less than a quorum present, a majority
of those present may adjourn the meeting from time to time until
a quorum is obtained and no further notice thereof need be given
other than by announcement at said meeting which shall be so
adjourned.
Section 5.
QUALIFICATIONS; VACANCIES
Every director shall be a shareholder in the Corporation. Every
director shall meet the qualifications established by the Board
of Directors. Every director shall submit his or her resignation
not later than the first day of February after the director
attains age 72, to take effect not later than the following
annual meeting. Subject to the rights of the holders of any
class or series of Preferred Stock and the requirements of law,
unless the board of directors otherwise determines, vacancies
and newly created directorships resulting from any increase in
the authorized number of directors may be filled only by a
majority of the directors then in
ANNEX III-8
office, though less than a quorum. Directors chosen to fill a
vacancy shall hold office for the unexpired portion of the term
of the director replaced and until their successors are duly
elected and qualified or their earlier resignation or removal
or, in the case of a newly created directorship, the director so
chosen shall assigned to the class, the term of which expires at
the next annual meeting of the shareholders and shall serve
until the directors successor is duly elected and
qualified or the directors earlier resignation or removal.
Section 6.
POWERS; EXECUTIVE COMMITTEE
The Board of Directors may adopt, alter or repeal these Bylaws
of the Corporation and may generally do any act or thing deemed
necessary for the conduct and management of the business of the
Corporation, subject only to the limitation imposed by law or
the Articles of Incorporation, and including the election of an
Executive Committee. The Board of Directors may vest said
Executive Committee with the right to exercise any or all of the
power to adopt, amend or alter Bylaws or fill vacancies on the
Board of Directors or Officers.
Section 7.
COMPENSATION
Subject to the requirements of applicable law and the listing
requirements of such securities market of exchange on which the
Corporations common stock may from time to time be listed
or qualified for trading (collectively the
Requirements), the directors may be
compensated for their service as directors and as members of
committees of the Board of Directors and for chairing the board
or any such committee. Such compensation may take the form of
board and committee retainer fees, attendance fees, fees for
chairing the Board of Directors or any such committees of the
Board of Directors, stock awards, stock options, stock
appreciation rights and any other lawful form of compensation or
consideration that is consistent with the Requirements. In
addition, the directors shall be entitled to be reimbursed for
their actual expenses incurred in attending all meetings of the
Board of Directors or any committee of the Board of Directors.
Subject to the Requirements, no compensation paid or provided to
directors under this section shall preclude any director from
serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE III
OFFICERS
Section 1.
NUMBER
The Board of Directors shall elect a President, a Chief
Financial Officer, one or more Vice Presidents, a Secretary, a
Treasurer, and such other officers as it may deem advisable to
appoint or elect, including, but not limited to, a Chief
Executive Officer, one or more Executive Vice Presidents, one or
more Assistant Secretaries, and one or more Assistant
Treasurers. Any person may hold one or more offices at the same
time. All officers shall hold their offices at the pleasure of
the Board of Directors and be subject to removal by the Board of
Directors at its pleasure. No officer of the Corporation need be
a shareholder of the Corporation, except pursuant to such
guidelines as the Board of Directors may establish from time to
time. The officers elected by the Board of Directors shall have
such powers, perform such duties and shall be entitled to such
compensation as may be prescribed by these Bylaws or the Board
of Directors.
Section 2.
CHIEF EXECUTIVE OFFICER
The Chief Executive Officer shall supervise the carrying out of
policies adopted or approved by the Board of Directors, exercise
a general supervision and superintendence over all the business
and affairs of the Corporation, and possess such other powers
and perform such other duties as may be assigned to him or her
by these Bylaws, as may from time to time be assigned by the
Board of Directors, and as may be incident to the office of
Chief Executive Officer. The Chief Executive Officer shall be
the principal executive officer of the Corporation.
ANNEX III-9
Section 3.
PRESIDENT
Subject to these Bylaws and the direction of the Board of
Directors, the President shall have the responsibility and the
power necessary for the general management, oversight,
supervision and control of the business and affairs of the
Corporation, and to ensure that all orders and resolutions of
the Board of Directors are carried into effect. If the Board of
Directors has elected a Chief Executive Officer of the
Corporation, (i) the Chief Executive Officer shall have all
of the powers granted by these Bylaws to the President and
(ii) the President shall, subject to the powers of
supervision and control conferred upon the Chief Executive
Officer, have such duties and powers as assigned to him or her
by the Board of Directors or the Chief Executive Officer. If the
Board of Directors has not elected a Chief Executive Officer,
the President shall be the principal executive officer of the
Corporation.
Section 4.
CHIEF FINANCIAL OFFICER
The Chief Financial Officer shall be the principal accounting
officer of the Corporation and shall have general charge and
supervision of the financial affairs of the Corporation and
shall approve payment, or designate others serving under him or
her to approve for payment, all vouchers for distribution of
funds and shall perform such other duties as may be assigned to
him or her by the Board of Directors, the Chief Executive
Officer, if one is in office, or the President.
Section 5.
VICE PRESIDENT
The Executive Vice Presidents and Vice Presidents shall perform
such duties as may from time to time be designated by the Board
of Directors, the Chairman, the Chief Executive Officer or the
President.
Section 6.
TREASURER
The Treasurer shall receive and give or cause to be given
receipts and acquittances for moneys paid in an account of the
Corporation and advise the proper officers to pay out of the
funds on hand all just debts of the Corporation of whatever
nature upon maturity of the same; shall enter or cause to be
entered in the books of the Corporation to be kept for that
purpose full and accurate accounts of all moneys received and
paid out on account of the Corporation, and, whenever required
by the Chairman or the President, the Treasurer shall render a
statement of accounts; and shall keep or cause to be kept such
other books as will show a true record of the expenses, losses,
gains, assets and liabilities of the Corporation.
Section 7.
SECRETARY
The Secretary shall, upon proper direction, give, or cause to be
given, notice of all meetings of shareholders and directors, and
all other notices required by law or by these Bylaws, and in
case of the Secretarys absence, refusal or neglect so to
do, any such notice may be given by any person thereunto
directed by the Chairman, the Vice Chairman, the President or by
the shareholders, upon whose requisition the meeting is called
as provided in the Articles of Incorporation and in these
Bylaws. The Secretary shall keep a record of all the proceedings
of the meetings of the shareholders and of the directors in a
book kept for that purpose. The Secretary shall have the custody
of the seal of the Corporation and shall affix the same to
instruments requiring it, when authorized by the directors, the
Chairman, or the President and attest to the same. The Secretary
shall perform all of the other duties incident to the office of
Secretary and any other duties as may be assigned by the
directors, the Chairman, or the President.
Section 8.
EXECUTION OF INSTRUMENTS
All deeds, mortgages, conveyances, and contracts relating to
real property of the Corporation shall be signed on behalf of
the Corporation by the President or one of its Vice Presidents
and countersigned by its Secretary or one of its Assistant
Secretaries. All stock certificates, and all notes, bonds, or
other evidences of indebtedness (not including surety bonds) and
all releases and assignments shall be signed by the President or
any one of its Vice Presidents and countersigned by its
Secretary or one of its Assistant Secretaries. Surety bonds may
be executed on behalf of the Corporation by any one of its
officers. All release of mortgage liens,
ANNEX III-10
liens, judgments, or other claims that are required by law to be
made of record, shall be executed on behalf of the Corporation
by the President, any one of its Vice Presidents or the
Secretary or Treasurer of the Corporation.
ARTICLE IV
CAPITAL STOCK
Section 1.
ISSUANCE OF STOCK
The Corporation is authorized to issue shares of stock, directly
or through its agent, in certificated form as well as
uncertificated form, including book-entry or other method of
direct registration.
Section 2.
STOCK CERTIFICATES
Every shareholder shall be entitled upon written request to have
a certificate signed in the name of the Corporation by the
President or any one of the Vice Presidents, and the Secretary
or an Assistant Secretary of the Corporation, certifying the
number of shares owned by the shareholder in the Corporation.
Any or all the signatures on a certificate, including the
signatures of the corporate officers, the transfer agent
and/or the
registrar, may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar
at the date of issue.
A new certificate of stock may be issued in the place of any
certificate theretofore issued by the Corporation, alleged to
have been lost or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issuance of a new
certificate or certificates the directors may, in their
discretion, require the owner of the lost or destroyed
certificate, or the owners legal representative, to give
the Corporation a bond in such sum as the directors may direct
to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss of any such
certificate.
The shares of stock of the Corporation shall be transferable
only upon its books by the holders thereof in person or by their
duly authorized attorneys or legal representatives, and upon
such transfer any old certificates shall be surrendered to the
Corporation by the delivery thereof to the person in charge of
the stock and transfer books and ledgers, or to such other
person as the directors may designate, by whom they shall be
canceled, and new certificates may thereupon be issued. A record
shall be made of each transfer, and whenever a transfer shall be
made for collateral security, and not absolutely, it shall be so
expressed in the entry of the transfer.
Section 3.
REGISTERED SHAREHOLDERS
Except as may otherwise be expressly provided by law, the
Corporation shall be entitled to treat the holder of record of
any shares of stock as the holder in fact thereof, and
accordingly, shall not be bound to recognize any equitable or
other claims to or interest in such shares on the part of any
other person whether or not it shall have express or other
notice thereof.
Section 5.
EXAMINATION OF BOOKS BY SHAREHOLDERS
The Board of Directors shall, subject to the laws of the State
of Iowa, have power to determine from time to time, whether and
to what extent and under what conditions and regulations the
accounts and books of the Corporation, or any of them, shall be
open to the inspection of the shareholders; and no shareholder
shall have any right to inspect any book or document of the
Corporation, except as conferred by the laws of the State of
Iowa, unless and until authorized so to do by resolution of the
Board of Directors or of the shareholders of the Corporation.
ANNEX III-11
ARTICLE V
SURETY BONDS
AND UNDERTAKINGS
Section 1.
EXECUTION BY OFFICERS OF THE CORPORATION
The President, any one of the Vice Presidents, or an Assistant
Vice President of Bonds shall have the power to bind the
Corporation upon any and all policies of insurance, bonds,
undertakings and other obligatory instruments by his or her
signature and execution thereof attested by the signature of the
Secretary or of an Assistant Secretary (which signatures, in
lieu of an actual signature, may be a facsimile thereof and may
be stamped, printed, or otherwise affixed thereto) and such
execution of any such instrument shall be deemed to be the act
of the Corporation.
Section 2.
APPOINTMENT OF ATTORNEY IN FACT
The President, any one of the Vice Presidents, an Assistant Vice
President of Bonds, or any other officer of the Corporation,
may, from time to time, appoint by written certificates
attorneys-in-fact to act in behalf of the Corporation in the
execution of policies of insurance, bonds, undertakings and
other obligatory instruments of like nature. The signature of
any officer authorized hereby, and the corporate seal, may be
affixed by facsimile to any power of attorney or special power
of attorney or certificate of either authorized hereby; such
signature and seal, when so used, being adopted by the
Corporation as the original signature of such officer and the
original seal of the Corporation, to be valid and binding upon
the Corporation with the same force and effect as though
manually affixed. Such attorneys-in-fact, subject to the
limitations set forth in their respective certificates of
authority shall have full power to bind the Corporation by their
signature and execution of any such instruments and to attach
the seal of the Corporation thereto. The President, any one of
the Vice Presidents, an Assistant Vice President of Bonds, the
Board of Directors or any other officer of the Corporation may
at any time revoke all power and authority previously given to
any attorney-in-fact.
ARTICLE VI
MISCELLANEOUS
PROVISIONS
Section 1.
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day
of January and end on the thirty-first day of December in each
and every year.
Section 2.
CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money,
notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officers or
officers agents or agents of the Corporation in such
manner as shall from time to time be determined by resolution of
the Board of Directors or as herein provided by these Bylaws.
Section 3.
NOTICE
(a) Whenever any notice is required by these Bylaws to be
given, personal notice is not meant unless expressly so stated.
Any notice required to be given under these Bylaws may be waived
by the person entitled thereto. Shareholders not entitled to
vote shall not be entitled to receive notice of any meeting
except as otherwise provided by statute.
(b) Written notice may be transmitted by mail, private
carrier, or personal delivery; or telephone, wire, or wireless
equipment that transmits a facsimile of the notice and provides
the transmitter with an electronically generated receipt.
Written notice is effective at the earliest of the following:
(a) when received; (b) five (5) days after its
deposit in the U.S. mail if mailed with first-class
postage, to the address as it appears on the current records of
the Corporation; or (c) on the date shown on the return
receipt, if sent by registered or
ANNEX III-12
certified mail, return receipt requested, and the receipt is
signed by or on behalf of the addressee. Written notice to a
shareholder is effective (a) when mailed, if mailed with
first class postage prepaid; and (b) when dispatched, if
prepaid, by air courier.
(c) Notices to directors and shareholders from the
Corporation and from directors and shareholders to the
Corporation may be provided in an electronic transmission.
Subject to contrary provisions in the Act, notice to
shareholders or directors in an electronic transmission shall be
effective only with respect to shareholders and directors that
have consented, in the form of a record, to receive
electronically transmitted notices and that have designated in
the consent the address, location, or system to which these
notices may be electronically transmitted and with respect to a
notice that otherwise complies with any other requirements of
the Act and any applicable federal law. A shareholder or
director who has consented to receipt of electronically
transmitted notices may revoke this consent by delivering a
revocation to the Corporation in the form of a record. The
consent of any shareholder or director shall be deemed to be
revoked if (a) the Corporation is unable to electronically
transmit two consecutive notices given by the Corporation in
accordance with the consent, and (b) this inability becomes
known to the Secretary, the transfer agent, or any other person
responsible for giving the notice. The inadvertent failure by
the Corporation to treat the inability to electronically
transmit two consecutive notices as a revocation does not
invalidate any meeting or other action.
Section 4.
INDEMNIFICATION
(a) The Corporation shall, to the fullest extent permitted
by law, indemnify and hold harmless each director now or
hereafter serving the Corporation or any of its subsidiaries,
and if the directors adopt a Plan of Indemnification, the
Corporations indemnification arrangement shall be as
described in that Plan. Such right of indemnification shall not
be deemed exclusive of any other right to which a director may
be entitled. In addition to any other indemnification permitted
by law, the Corporation shall indemnify and hold harmless each
director now or hereafter serving the Corporation or any of its
subsidiaries for any action taken, or any failure to take any
action, as a director, except liability for any of the
following: (1) the amount of a financial benefit received
by a director to which the director is not entitled; (2) an
intentional infliction of harm on the Corporation or the
shareholders; (3) a violation of section 490.833 of
the Act; or (4) an intentional violation of criminal law.
(b) In addition to any other indemnification permitted by
law, the Corporation shall indemnify and advance expenses to an
officer of the Corporation who is a party to the proceeding
because the person is an officer (1) to the same extent as
to a director and (2) if the person is an officer but not a
director, to such further extent as may be provided by the
Articles of Incorporation, these Bylaws, a resolution of the
Board of Directors, or contract, except for (a) liability
in connection with a proceeding by or in the right of the
Corporation other than for reasonable expenses incurred in
connection with the proceeding or (b) liability arising out
of conduct that constitutes (i) receipt by the officer of a
financial benefit to which the officer is not entitled,
(ii) an intentional infliction of harm on the Corporation
or the shareholders, or (iii) an intentional violation of
criminal law.
The provisions of the foregoing paragraph shall apply to an
officer who is also a director if the basis on which the officer
is made a party to a proceeding is an action taken or a failure
to take an action solely as an officer.
(c) The indemnification provided to a person by this
Section 4 shall not be deemed exclusive of any other rights
to which such person may be entitled by law, the Articles of
Incorporation, these Bylaws, or any agreement, vote of
shareholders or directors, or otherwise.
(d) No repeal or amendment of this Section 4 shall
impair the rights of any person arising at any time with respect
to events occurring prior to such amendment.
Section 5.
SEAL
The Corporation shall have a corporate seal upon which shall be
inscribed United Fire Group, Inc., Cedar Rapids, Iowa,
Corporate Seal.
ANNEX III-13
Section 6.
TRANSFER AGENT
The Board of Directors shall have the authority to appoint a
Transfer Agent. The Transfer Agent shall have charge of the
original stock books, transfer books and stock ledgers of the
Corporation. The Transfer Agent shall tabulate and inspect the
proxies and shall determine the eligibility of any shareholder
to make or vote upon a minority nomination, subject to the
oversight of the Corporate Secretary. If so directed by the
Board of Directors, the Secretary shall act as transfer agent
for the Corporation. In this event, a proxy committee appointed
by the Chairman shall inspect the proxies and determine the
eligibility of a shareholder to make or vote upon a minority
nomination.
Section 7.
AMENDMENT
Except as otherwise provided in the Act or as otherwise provided
by action of the shareholders of the Corporation, these Bylaws
may be altered, amended or repealed and new Bylaws may be
adopted at any meeting of the Board of Directors of the
Corporation by a majority vote of the directors present at the
meeting.
ANNEX III-14
UNITED FIRE & CASUALTY COMPANY
CEDAR RAPIDS, IOWA
IMPORTANT SPECIAL MEETING INFORMATION
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Using a black ink pen, mark your votes with an
X as shown in this example. Please do not
write outside the designated areas. |
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Electronic Voting Instructions
You can vote by Internet or telephone Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting
methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by
1:00 a.m., Central Time, on January 24, 2012.
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Vote by Internet
Log on to the Internet and go to
www.investorvote.com/UFCS
Follow the steps outlined on the secured website. |
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the USA,
US territories & Canada any time on a touch tone telephone. There is NO
CHARGE to you for the call.
Follow the instructions provided by the recorded message. |
Special Meeting Proxy Card / Voting Instruction Form
▼ IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
The Board of Directors recommends a vote FOR the following proposals:
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For
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Against
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Abstain |
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1. |
To approve the Reorganization Proposal and Reorganization
Agreement as described in the proxy statement/prospectus for
this Special Meeting of Shareholders to allow the formation
of a holding company, United Fire Group Inc.,
which would become the parent company
of United Fire & Casualty Company. |
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To adjourn the Special Meeting of Shareholders,
if necessary, in the event that
there are not sufficient votes at the time of the
Special Meeting of Shareholders
to approve the Reorganization Proposal and
the Reorganization Agreement. |
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Discretionary authority is conferred to act upon such other matters that may come
before said Special Meeting or any adjournment or postponement thereof, which
Management is not aware of a reasonable time before this solicitation is made.
Change of Address Please print new address below.
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below |
Please sign exactly as name(s) appear(s) hereon. If shares of stock are held of record in the name
of two or more persons, both or all of such persons should sign the Proxy Card / Voting Instruction
Form. Trustees, executors, administrators, etc. should include title and authority. Corporations
should provide the full name of the corporation and the title of the authorized officer signing the
Proxy.
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Date (mm/dd/yyyy) Please print date below. |
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box. |
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/ / |
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Proxy United Fire & Casualty Company January 24, 2012, 10:00 A.M.
PROXY CARD / VOTING INSTRUCTION FORM SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
With respect to any shares represented by this Proxy
Card / Voting Instruction Form that are held on behalf of the undersigned in the United Fire Group 401(k) Plan
(the 401(k) Plan), the undersigned directs Charles Schwab & Co., as Trustee of the 401(k) Plan, to
vote all such shares on the matters shown, and in the manner directed on the reverse side hereof. If you wish to vote
your shares allocated to the 401(k) Plan, you cannot do so in person. You must use this
Proxy Card / Voting Instruction Form or submit your voting instructions via the telephone or Internet.
If you do not return your signed Proxy Card / Voting Instruction Form or provide telephone or Internet voting
instructions on a timely basis for the shares allocated to the 401(k) Plan, or if you return a signed Proxy
Card / Voting Instruction Form but do not indicate how the shares should be voted on a matter, the Trustee of the 401(k)
Plan will vote the shares allocated to the 401(k) Plan in the same proportion as the instructions it receives from all
participants submitting voting instructions.
With respect to any shares represented by this Proxy
Card / Voting Instruction Form that are held on behalf of the undersigned in the United Fire Group Employee Stock
Ownership Plan (the ESOP), the undersigned directs Timothy G. Spain and Michael T. Wilkins, as
Trustees of the ESOP, to vote all such shares on the matters shown, and in the manner directed on the reverse side
hereof. If you wish to vote your shares allocated to the ESOP, you cannot do so in person. You must use this
Proxy Card / Voting Instruction Form or submit your voting
instructions via the telephone or Internet. If you do not return your signed Proxy Card/Voting Instruction Form or
provide telephone or Internet voting instructions on a timely basis for the shares allocated to the ESOP account,
or if you return a signed Proxy Card / Voting Instruction Form but do not indicate how the shares should be voted on a
matter, the Trustees of the ESOP will not vote the shares allocated to the ESOP account.
Except as described in the above paragraphs, the undersigned
hereby appoints Jack B. Evans and Neal R. Scharmer, and each of them, as proxies, with full power of substitution and with
all powers the undersigned would possess if personally present at the special meeting of shareholders, to represent and
vote, as designated on the reverse, all shares of common stock the undersigned is entitled to vote at the special meeting
of shareholders of the Company to be held at its office building located at 109 Second Street SE in Cedar Rapids,
Iowa, on Tuesday, January 24, 2012 at 10:00 A.M. (Cedar Rapids time) and at any adjournment(s) or
postponement(s) thereof:
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as specified upon the proposals listed on the reverse and as more particularly described in the Companys Notice of Special Shareholders Meeting and accompanying Proxy Statement ; and |
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in their discretion upon such other matters as may properly come before the meeting. |
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR THE PROPOSAL TO APPROVE THE REORGANIZATION PROPOSAL AND REORGANIZATION AGREEMENT; AND TO ADJOURN THE SPECIAL MEETING OF SHAREHOLDERS, IF NECESSARY, IN THE EVENT THAT THERE ARE NOT SUFFICIENT VOTES AT THE TIME OF THE SPECIAL MEETING OF SHAREHOLDERS TO APPROVE THE ADOPTION OF THE REORGANIZATION AGREEMENT.
Whether or not you plan to attend the Special Meeting of Stockholders, please mark, sign, date and return this Proxy Card / Voting Instruction Form using the
enclosed envelope.
▼ IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼