UNITED FIRE GROUP, INC.
PLAN FOR ALLOCATION OF EQUITY
COMPENSATION TO MANAGEMENT TEAM

1.Purpose. The purpose of the Plan is to provide for the systematic allocation
of Equity Interests to the Management Team in a manner that:

1.1
focuses the attention of the Management Team on the achievement of certain
Performance Measures determined from time to time by the Board.

 
1.2aligns the commitment of the Management Team with the interests of
shareholders; and

1.3rewards members of the Management Team in a manner consistent with
performance.

2.Definitions.
 
2.1“2008 Stock Plan” means the United Fire & Casualty 2008 Stock Plan.

2.2“Board” means the Board of Directors of the Company.
 
2.3“Company” means United Fire Group, Inc.

2.4“Determination Year” means the fiscal year of the Company with respect to
which Equity Compensation is to be determined pursuant to this Plan.

2.5“Equity Compensation Pool” means the value of the Equity Company that the
Company may issue pursuant to this Plan with respect to any Determination Year.

2.6“Equity Interests” means any award of an interest in the equity of the
Company that the Board may grant pursuant to the 2008 Stock Plan.

2.7“Salary” means the regular pay and paid time off paid to a member of the
Management Team for a fiscal year.

2.8“Management Team” means those executives of the Company designated from time
to time by the Board as the “Full Management Team.”

2.9“Plan” means this Plan for Allocation of Equity Compensation to Management
Team.

2.10“Prior Year” means the fiscal year immediately prior to the Determination
Year.

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2.11“ROE” means Return on Equity, defined as Company earnings for a fiscal year,
net of any unrealized gains or losses, divided by the average equity for that
year.

2.12“Total Salary” means the aggregate of all Salaries.

3.2008 Stock Plan. Equity Interests awarded pursuant to the Plan shall be
awarded pursuant to the 2008 Stock Plan.

4.Determination of the Equity Compensation Pool.

4.1In the first quarter of each year, the Board shall establish levels for
ranges of achievement of ROE and shall assign percentages to those levels. An
example of such levels, ranges, and percentages is shown in columns a, b and c
in the following table:

Section 4.1 Table
Illustration (1)
a
 
b
 
c
 
d
 
e
Level
 
ROE Range of Achievement for Prior Year
 
%
 
Total Salary in Determination Year
 
Value of Equity Compensation Pool in the Determination Year
Gold
 
Over 20%
 
80
%
 
$
2,000,000

 
$
1,600,000

A
 
Over 12% to 20%
 
65
%
 
$
2,000,000

 
$
1,300,000

B
 
Over 8% to 12%
 
50
%
 
$
2,000,000

 
$
1,000,000

C
 
4% to 8%
 
35
%
 
$
2,000,000

 
$
700,000

D
 
Below 4%
 
—
%
 
$
2,000,000

 
—

__________
(1)
All amounts shown are for illustration purposes only.

4.2The value of the Equity Compensation Pool to be awarded in the Determination
Year (column e) shall be determined by multiplying the Total Salary in the
Determination Year (column d) by the percentage (column c) for the range of ROE
achieved by the Company in the Prior Year. For example, if in the Prior Year,
Level B was achieved, the Determination Year Value of Equity Compensation would
be $1,000,000.

5.Allocation of the Equity Compensation Pool.
 
5.1In the first quarter of each year, for purposes of determining the amount of
a Management Team member's percentage of salary to be considered in determining
each Management Team member's percentage share of the Equity Compensation Pool,
the Board shall (i) assign each member of the Management Team to a tier (column
b) and (ii) assign a percentage of salary to each tier (column d). An example of
such assignments is shown in columns b and d in the following table.

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Section 5.1 Table
Illustration (1)
a
b
c
d
e
f
Title
Tier
Salary
% of Salary
Salary to be Considered in Determining Percentage
Percentage of Equity Compensation Pool
CEO
3
$
400,000

85%
$
340,000

29.8
%
CFO
2
$
275,000

70%
$
192,500

16.9
%
EVP
2
$
255,000

70%
$
178,500

15.7
%
CIO
1
$
250,000

55%
$
137,500

12.1
%
CG
1
$
175,000

55%
$
96,250

8.4
%
Others
1
$
645,000

55%
$
195,250

17.1
%
Total
 
$
2,000,000

 
$
1,140,000

100
%

__________
(1)
All amounts shown are for illustration purposes only.

5.2The portion of each Management Team member's Salary to be considered in
determining each Management Team member's percentage share of the Equity
Compensation Pool (column e) is determined by multiplying each Management Team
member's Salary by the percentage shown in column d. For example, in the case of
the CEO in the Section 5.1 Table, the portion of the CEO's Salary to be
considered is $400,000 (column c) multiplied by 85% (column d), which equals
$340,000 (column e).

The percentage of the Equity Compensation Pool that each Management Team member
is entitled to receive (column f) is determined by dividing that portion of each
member's Salary shown in column e by the total of all Management Team members'
Salaries to be considered (total - column e). For example, the CEO in the
Section 5.1 Table is entitled to receive is 29.8% of the Equity Compensation
Pool (column f), determined by dividing $340,000 (column e) by $1,140,000 (total
- column e).

6.Calculation of the Value of each Management Team Member's Equity Compensation.

6.1The value of each Management Team member's equity compensation for a
Determination Year shall be determined by multiplying each member's Percentage
of Equity Compensation Pool (column b of the Section 6.1 Table) by the Value of
Equity Compensation Pool in the Determination Year (column e of the Section 4.1
Table) for the level for ranges of achievement of ROE attained in the Prior Year
(column b of the Section 4.1 Table). Based on the amounts used for illustration
in all of the tables, the following table shows the determination of amounts of
equity compensation awarded to Management Team members if each of the levels is
attained:

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Section 6.1 Table
Illustration (1)
a
b
c
d
e
f
g
 
 
Level
Title
Percentage of Equity Compensation Pool (2)
Gold
80%
A
65%
B
50%
C
35%
D
0%
CEO
29.8
%
$
476,800

$
387,400

$
298,000

208,600

$
—

CFO
16.9
%
$
270,400

$
219,700

$
169,000

118,300

$
—

EVP
15.7
%
$
251,200

$
204,100

$
157,000

109,900

$
—

CIO
12.1
%
$
193,600

$
157,300

$
121,000

84,700

$
—

CG
8.4
%
$
134,400

$
109,200

$
84,000

58,800

$
—

Others
17.1
%
$
273,600

$
222,300

$
171,000

119,700

$
—

Total
100
%
$
1,600,000

$
1,300,000

$
1,000,000

$
700,000

$
—

-----__________
(1)
All amounts shown are for illustration purposes only. This table assumes Total
Salary is $2,000,000.

(2)
From column f of the Section 5.1 Table.

6.2For illustration purposes, assuming the level of performance for the Prior
Year was Level B - 50% (column e), the value of the CEO's equity compensation
for the Determination Year is $298,000, determined by multiplying $1,000,000
(column e of the Section 4.1 Table for achievement of level B) times 29.8%
(column b in the Section 6.1).

7.Allocation of Equity Compensation Between Options and Restricted Stock. During
the first quarter of each year, the Board shall determine the percentage of the
Equity Compensation to be allocated to stock options and restricted stock.
 
8.Discretionary Equity Awards. Nothing in this Plan shall restrict the Board
from making discretionary awards of equity interests to members of the
Management Team.