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        January 3, 2023      Julie Stephenson    Re:  Executive Employment Offer Letter    Dear Ms. Stephenson,  I am pleased to offer you (“Executive”) the position of Executive Vice President and Chief Operating Officer  of United Fire Group, Inc. (the “Company”).   The proposed terms of your employment are as follows:    1. Duties:  Executive will be employed by the Company as its Executive Vice President and Chief Operating  Officer. The employment of Executive will commence January 30, 2023. The Employment Agreement  shall be for an indefinite term, but the employment of Executive will be “at will.” Executive will report  directly to Kevin Leidwinger, CEO. Executive agrees to devote her full business time, attention, and best  efforts to the performance of Executive’s duties and to the furtherance of the Company's interests.  Notwithstanding the foregoing, nothing in this letter shall preclude Executive from devoting reasonable  periods of time to charitable and community activities, managing personal investment assets, and serving  on boards of other companies (public or private) not in competition with the Company, provided that  none of these activities interferes with the performance of Executive’s duties hereunder, or creates a  conflict of interest.    2. Location: Executive shall be a full-time remote employee in the State of Texas, subject to business travel  as needed to properly fulfill Executive’s employment duties and responsibilities. Should Executive elect  to change her principal place of residence, she agrees to provide at least one (1) month advance written  notice to the Company.     3. Base Earnings: In consideration of Executive’s services, Executive will be paid an initial base salary of  $575,000 per year, subject to review annually, payable semi-monthly in accordance with the standard  payroll practices of the Company, and subject to all withholdings and deductions, as required by law.    4. Retention Bonus: Executive will be eligible for the following retention bonus:    • If Executive remains as Chief Operating Officer through March 31, 2025, the Company shall pay  Executive a retention bonus in the gross amount of $60,400 on May 1, 2025.  • If Executive remains as Chief Operating Officer through March 31, 2026, the Company shall pay  Executive a retention bonus in the gross amount of $240,000 on May 1, 2026.    5. Annual Bonus: During Executive’s employment, Executive will be eligible to participate in the Company's  annual bonus plan on the same terms and conditions as other similarly situated executives, which are  subject to the Board’s review and approval. For 2022, the CEO will recommend a $537,000 cash bonus.  The CEO will also recommend to the Board that Executive's annual target bonus opportunity for  subsequent years be set as $632,500 (110% of base salary), with a maximum payout opportunity of  DocuSign Envelope ID: 038A6818-247C-4F0A-B9E1-F00D7E3709E9 





 






  $1,265,000 (200% of target bonus). Actual payments will be determined based on Company results  against the applicable performance goals established by the Board. Any annual bonus with respect to a  particular calendar year will be paid within 3.5 months following the end of the year. Executive must  remain continuously employed through the bonus payment date to be eligible to receive an annual bonus  payment for a particular calendar year.    6. Equity Grants: For each full calendar year of employment, Executive will be eligible to receive an annual  equity award determined by the Board, at its discretion under the United Fire Group, Inc. Stock Plan,  which shall vest as follows: (a) PSUs and RSUs—three-year cliff vest; and (b) non-qualified stock options— three-year graduated/pro rata vest. PSUs are performance stock units subject to performance goals.  Actual payments of PSUs will be determined based on Company results against the applicable  performance goals established by the Board. In February 2023, the CEO will recommend your eligibility  to the Board to participate in the Long Term Incentive Plan (LTIP), with a total award opportunity of 110%  of your base salary (up to $632,500), comprising of: (i) $158,125 stock options (25%); (ii) $158,125 RSUs  (25%); and (iii) $316,250 PSUs valued at target with a maximum payout opportunity of $474,375 (150%  of target), prorated based on Executive’s start date with the Company. The Board has discretion on the  terms and conditions of equity grants. Executive must remain continuously employed through the vesting  date for all equity awards.                 7. Initial RSU Grant/Foregone Equity Compensation: The CEO will recommend that the United Fire Group,  Inc. Board of Directors grant Executive 6,730 RSUs to vest on March 1, 2023; 3,831 RSUs to vest on March  1, 2024; the number of RSUs equivalent to chf 125,000 (based on the actual conversion of chf to USD as  of the Executive’s resignation date from her most recent employer) to vest on March 31, 2024, and the  number of RSUs equivalent to chf 500,000 (based on the actual conversion of chf to USD as of the  Executive’s resignation date from her most recent employer) to vest on March 31, 2025. The intention of  this grant is to provide Executive with stock awards equivalent to her foregone equity compensation from  Swiss Re and CNA. Executive must remain continuously employed through the anniversary vesting date  to receive shares. This equity compensation is subject to the terms and conditions of the Stock Award  Agreement and the discretion of the United Fire Group, Inc. Board of Directors.                8. Stock Options: At the discretion of our Board of Directors, Executive may be awarded additional United  Fire & Casualty company stock options. Any stock options awarded vest at 20% per year for five years  and are valid for ten years from the date of issue. They are valued at the trading price on the date of  awarding. In addition, restricted stock units may be awarded annually, based on the performance of the  Company.    9. Paid Time Off (PTO): Executive will be provided with a bank of 80 hours of PTO upon the commencement  of her employment, and will subsequently accrue paid time off at 10.34 hours semi-monthly in  accordance with Company’s practices as determined by the Company in its discretion. This is equivalent  to 31 days of PTO after a full year of service.  This PTO accrual is at the maximum rate of accrual at the  Company.    10. Benefits & Perquisites: Executive will be eligible to participate in the employee benefit plans and  programs generally available to the Company's executives, including group medical, dental, vision and  life insurance, disability benefits, 401(k), cash balance pension, and non-qualified deferred compensation  plan, subject to the terms and conditions of such plans and programs. Executive will be entitled to paid  vacation in accordance with the Company's policies in effect from time to time. Executive will also be  entitled to the fringe benefits and perquisites that are made available to other similarly situated  executives of the Company, including but not limited to a membership to a Cedar Rapids country club.  DocuSign Envelope ID: 038A6818-247C-4F0A-B9E1-F00D7E3709E9 





 






  The Company reserves the right to amend, modify or terminate any of its benefit plans or programs at  any time and for any reason.    11. Withholding: All forms of compensation paid to Executive as an employee of the Company shall be less  all applicable withholdings.    12. Stock Ownership Requirements: As Chief Operating Officer of the Company, Executive will be required  to comply with the Company's Stock Ownership Requirements applicable to executive officers. The  targeted value for the Executive is one and a half times (1.5x) annual base salary within a time frame of  five years from the employment start date, subject to increase or decrease by the Board.     13. At-Will Employment: Executive’s employment with the Company will be for no specific period. Rather,  Executive’s employment will be at-will, meaning that Executive or the Company may terminate the  employment relationship at any time, with or without cause, and with or without notice and for any  reason or no particular reason. Although Executive’s compensation and benefits may change from time  to time, the at-will nature of Executive’s employment may only be changed by an express written  agreement signed by an authorized officer of the Company.    14. Change in Control: The Company will enter into a Change in Control Severance Agreement (the “CIC  Agreement”) with Executive on the same terms on which it has entered into such agreements with  certain other senior executives. The Company will also enter into a separate Severance Benefit  Agreement providing for agreed upon severance payments to Executive if the employment of Executive  is terminated without “Cause” (as defined in the CIC Agreement) prior to January 30, 2025.    15. Non-Compete, Non-Solicitation, Non-Disclosure, and Assignment of Work Product: The Employment  Agreement will include normal and customary provisions relating to (i) competition with the Company  and solicitation of the Company’s agents, customers and employees during the term of employment and  for a period of one year thereafter, (ii) disclosure of confidential information, and (iii) assignment of work  product.    16. 409A: Notwithstanding anything herein the contrary, in the event that the Company determines that any  amounts payable hereunder may be subject to Section 409A of the Internal Revenue Code of 1986, as  amended, and the regulations and other interpretive guidance issued with respect thereto (“Section  409A”), the Company may take such actions that the Company determines are necessary or appropriate  to: (i) exempt such payments from Section 409A and/or preserve the intended tax treatment of the  benefits provided with respect to such payments or (ii) comply with the requirements of Section 409A  and thereby avoid the application of penalty taxes under Section 409A.    17. Company Policies: During Executive’s employment, Executive shall comply with all of the Company’s  rules, regulations, policies, and practices may be designated by the Company from time to time in its  discretion.    18. Execution and Delivery. This Term Sheet may be executed in two (2) or more counterparts, each of which  shall be deemed an original, but all of which together shall constitute one and the same instrument.  Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying  with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any  counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and  effective for all purposes      DocuSign Envelope ID: 038A6818-247C-4F0A-B9E1-F00D7E3709E9 





 






  SIGNATURE PAGE FOR OFFER LETTER    Executed as of the date first set forth above.  UNITED FIRE GROUP, INC.  By: ______________________________  Kevin Leidwinger, CEO      Acknowledged and accepted effective the date first set forth above:  ________________________________  Julie Stephenson          DocuSign Envelope ID: 038A6818-247C-4F0A-B9E1-F00D7E3709E9