DEF 14A of American Coastal Insurance Corp, Apr 2, 2025

DEF 14A of American Coastal Insurance Corp

Filed Apr 2, 2025 · FY20240001401521-25-000043

Open on EDGAR

  1. R. DANIEL PEED

    R. DANIEL PEED EXECUTIVE CHAIRMAN OF THE BOARD AGE: 62 DIRECTOR SINCE: 2017 R. Daniel Peed has served as a Chairman of the Board since July 2020 and was appointed Executive Chairman in February 2025. Mr. Peed also served as our Chief Executive Officer ("CEO") from July 2020 to February 2025. Mr. Peed has served as a member of our Board since April 2017. Mr. Peed served on the board of American Coastal Insurance Company ("AmCosatal"), our wholly-owned subsidiary which we acquired as part of our acquisition of AmCo Holdings Company ("AmCo"), from 2007 to 2024. Mr. Peed served as Non-Executive Vice Chairman of AmRisc, LLC (formerly known as "CRC Insurance Services, Inc.") ("AmRisc"), the managing general agent of AmCoastal, from December 2018 until December 2019. Previously, Mr. Peed served as the President and Chief Executive Officer of AmRisc from December 2000 to December 2018. From 1991 to 2000, Mr. Peed served as a senior vice president of SOREMA North America Reinsurance Company, Fulcrum Insurance. In addition, from 1985 to 1991, Mr. Peed was a supervisor at Factory Mutual Engineering Association. Mr. Peed has a B.S. in petroleum engineering from Texas A&M University and an MBA with a concentration in insurance from the University of North Texas. In addition, Mr. Peed has the Chartered Property & Casualty Underwriter and Associate in Reinsurance designations and a Professional Engineering designation in Fire Protection. Mr. Peed brings to our Board his significant experience in management and the insurance industry.

  2. GREGORY C. BRANCH

    GREGORY C. BRANCH CHAIRMAN EMERITUS AGE: 77 DIRECTOR SINCE: 2008 Gregory C. Branch has served as the Chairman Emeritus of the Board since July 2020. Previously, Mr. Branch served as the Chairman of the Board from September 2008 to June 2020 and, prior to that, served as the Chairman and Chief Executive Officer of our predecessor company, United Insurance Holdings, L.C. ("UIH"), from its inception in 1999 to 2008. Mr. Branch has served as the Chairman, President and owner of Branch Properties, Inc., a manufacturer and distributor of equine feed, since 1986. From 1994 to 1998, Mr. Branch served as Chairman of Summit Holding Southeast, Inc., an insurance holding company that completed its initial public offering in 1997 and was acquired by Liberty Mutual in 1998. Mr. Branch has served as a director of Prime Holdings, Inc. since 2001 and of Raffles Insurance Company since 2003. Mr. Branch was the founding Chairman of Sunz Insurance Holding, a Florida workers compensation company that was sold in 2008. Mr. Branch was a founding member and former Chairman of, and remains a director of, American Feed Industry Insurance Company RRG. Mr. Branch operated as an underwriting member of Lloyd’s of London from 1986 to 2004. Mr. Branch graduated from the University of Florida with a B.S. in Agriculture Economics and served at the rank of Captain in the U.S. Army. Our Board selected Mr. Branch to serve on our Board based upon his substantial experience in the insurance industry and his broad entrepreneurial skills obtained by owning his own business.

  3. MICHAEL R. HOGAN

    MICHAEL R. HOGAN DIRECTOR SINCE: 2017 Michael R. Hogan has served as a member of our Board since April 2017. Mr. Hogan served on the board of directors of AmCoastal from 2015 to 2024. From 1994 to 1999, Mr. Hogan served on the national agency advisory board of The Travelers Insurance Company. In addition, from 2003 to 2008, Mr. Hogan served on the board of directors of The South Financial Corporation. Mr. Hogan has over 45 years of experience as an independent insurance agent, specializing in wind, flood and earthquake insurance as the President and owner of Puckett, Sheets, and Hogan Insurance, which received a national Best Practices Award in 2006. Mr. Hogan graduated from Furman University in 1972 with a B.A. in business and economics. Mr. Hogan brings to our Board his significant experience in management and the insurance industry.

  4. KENT G. WHITTEMORE

    KENT G. WHITTEMORE DIRECTOR AGE: 77 DIRECTOR SINCE: 2008 Kent G. Whittemore has served as a member of our Board since September 2008 and, prior to that, served as a director of our predecessor company, UIH, from 2001 to 2008. Mr. Whittemore has served as the President of, and is a shareholder of, The Whittemore Law Group, P.A., a law firm located in St. Petersburg, Florida that he co-founded in 1987. On January 1, 2023, he became Senior Counsel at the St. Petersburg law firm of Englander Fischer. His legal practice primarily focuses on personal injury, insurance litigation, and business and real estate litigation. Mr. Whittemore served as President of the St. Petersburg Bar Association from 1996 to 1997, and served as President of the Tampa Bay Trial Lawyers Association from 2003 to 2004. Mr. Whittemore formerly served as a director of the Southern Trial Lawyers Association and formerly served as a director of the Academy of Florida Trial Lawyers. He also served on St. Petersburg’s Charter Review Commission. Mr. Whittemore received a B.S. in Business Administration from the University of Florida and a J.D. from Stetson College of Law. Our Board selected Mr. Whittemore to serve on our Board based upon his insurance industry experience and his legal expertise. CLASS B DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2026 ANNUAL MEETING

  5. ALEC L. POITEVINT, II

    ALEC L. POITEVINT, II LEAD DIRECTOR AGE: 77 DIRECTOR SINCE: 2008 Alec L. Poitevint, II has served as a member of our Board since September 2008, and prior to that served as a director of our predecessor company, UIH, from 2001 to 2008. Mr. Poitevint has served as Chairman and President of Southeastern Minerals, Inc. ("Southeastern Minerals") and its affiliated companies, headquartered in Bainbridge, Georgia, since 1981. Southeastern Minerals manufactures and distributes mineral ingredients. He joined Southeastern Minerals in 1970. Mr. Poitevint previously served as a director (from 1989 to 2010), Vice Chairman (from 1994 to 2010), and President (2006) of First Port City Bank of Bainbridge. Mr. Poitevint served as a director of Agri-Nutrition/Virbac Corporation from 1996 to 2006, and at various times during his tenure he held the positions of Chairman of the Board and Chairman of the Audit Committee. Mr. Poitevint has also served as the Chairman of American Feed Industry Insurance Company since 2002 and is the former Chairman of the American Feed Industry Association and National Feed Ingredients Association. Mr. Poitevint served on the Republican National Committee ("RNC") as Committeeman or Chairman for Georgia from 1989 to 2012 and served as RNC Treasurer from 1997 to 2001. Mr. Poitevint graduated from the University of Georgia, with a B.A. in Economics. Our Board selected Mr. Poitevint to serve on our Board based upon his experience in the insurance industry and his diverse management experience.

  6. KERN M. DAVIS, M.D., NACD.DC

    KERN M. DAVIS, M.D., NACD.DC DIRECTOR SINCE: 2012 Kern M. Davis, M.D., NACD.DC, is National Association of Corporate Directors (NACD) Directorship CertifiedTM and has served as a member of our Board since March 2012. Dr. Davis is an original investor of our predecessor company, UIH, and served as a director of UIH from 2006 to 2008. Dr. Davis earned a B.A. in Chemistry from the University of Florida in 1976, and a medical degree from the University of South Florida in 1980. He completed his medical residency at the University of Florida in 1985. In 1985, Dr. Davis joined Pathology Associates, P.A., an anatomic and clinical pathology professional services firm, and has served as its President since 1992. In 1993, Dr. Davis became a medical director for St. Anthony’s Hospital Laboratory, and currently holds this position. Dr. Davis received an MBA from the University of South Florida in 1993. Our Board selected Dr. Davis to serve on our Board based upon his prior experience with UIH and his educational and professional business experience.

  7. WILLIAM H. HOOD, III

    WILLIAM H. HOOD, III DIRECTOR AGE: 64 DIRECTOR SINCE: 2012 William H. Hood, III has served as a member of our Board since March 2012 and, prior to that, served as a director of our predecessor company, UIH, from 2000 to 2008. Mr. Hood has over 30 years of business experience in numerous industries, including company start-ups, operations, sales/marketing and problem solving. In 1984, Mr. Hood formed Special Data Processing Corporation, a national partnership marketing company, and served as its Chief Executive Officer and Chairman from 1984 to 2006. Mr. Hood sold the company in 1999 to a private equity firm, and he continued to manage the company until he retired in 2006. Mr. Hood is Manager of Hall Capital Holdings LLC which manages his investments and entrepreneurial interests. Our Board selected Mr. Hood to serve on our Board based upon his prior experience with UIH and his entrepreneurial experience in building and forming a national marketing company.

  8. SHERRILL W. HUDSON

    SHERRILL W. HUDSON DIRECTOR AGE: 82 DIRECTOR SINCE: 2013 Sherrill W. Hudson has served as a member of our Board since May 2013. Mr. Hudson served on the Board for TECO Energy, an energy-related holding company, from January 2003 to July 2016. Mr. Hudson served as TECO’s Chairman and CEO from July 2004 to August 2010, Executive Chairman from August 2010 to December 2012 and non-Executive Chairman from January 2013 to July 2016. Prior to his employment with TECO, Mr. Hudson worked for Deloitte & Touche LLP, an audit, financial advisory, tax and consulting firm. In August 2002, Mr. Hudson retired from Deloitte after having worked for the firm for over 37 years. Mr. Hudson currently serves on the board of directors of Lennar Corporation. He served as a Board member and Chairman of the Florida Chapter of the NACD until June 2020 when he became Chairman Emeritus. He also served on the board of directors of Publix Super Markets from January 2003 to April 2015, and CBIZ, Inc. from February 2015 to May 2023. Mr. Hudson is a member of the Florida Institute of Certified Public Accountants, which recognized him as the 2006 Outstanding CPA in Business and Industry. He received his B.A. and graduated cum laude from Ashland University in Ashland, Ohio in 1965. Our Board selected Mr. Hudson to serve on our Board based upon his professional background in auditing and financial reporting and diverse business experience. Mr. Hudson serves as our Audit Committee's financial expert.

  9. PATRICK F. MARONEY

    PATRICK F. MARONEY DIRECTOR SINCE: 2017 Patrick F. Maroney has served as a member of our Board since April 2017. Mr. Maroney has served on the board of directors of AmCoastal since October 2015, and on the Board of the Academy of the National Alliance for Insurance Education and Research from 2013 to February 2019. Mr. Maroney was a professor in the Department of Risk Management and Insurance at Florida State University from 1981 to 2013. Upon retirement in 2013, he was awarded the title of Professor Emeritus at Florida State University College of Business, a title he continues to hold. He previously served as the Director of the Florida Catastrophic Storm Risk Management Center at the College of Business from 2008 through 2013. Mr. Maroney has a B.S. in risk management and insurance from Florida State University and a J.D. from the University of Florida. Mr. Maroney brings to our Board his significant experience as an insurance attorney as well as his significant experience in management and the insurance industry. As previously disclosed, our subsidiary, United Property & Casualty Insurance Company ("UPC"), was placed into receivership on February 27, 2023, as a result of losses incurred from Hurricane Ian. All of our directors were directors of UPC. DIRECTOR INDEPENDENCE The following table shows the directors who are considered independent in accordance with Nasdaq rules as well as their committee assignments:

  10. PATRICK F. MARONEY

    | | COMMITTEES | | | | | INDEPENDENT DIRECTORS | AUDIT | COMPENSATION AND BENEFITS | NOMINATING AND CORPORATE GOVERNANCE | INVESTMENT | | Branch | | | | | | Davis | ✓ | | ✓* | | | Hogan | | | ✓ | | | Hood | | | | ✓ | | Hudson | ✓* | ✓ | | | | Maroney | ✓ | | | ✓ | | Poitevint | | ✓ | | ✓* | | Whittemore | | ✓* | ✓ | |

  11. PATRICK F. MARONEY

    *Committee Chair The Board considered all relevant facts and circumstances in assessing director independence. As described below, our Board has an Audit Committee, a Compensation and Benefits Committee, a Nominating and Corporate Governance Committee and an Investment Committee. All of the members of all of these committees qualify as independent directors. In addition, all of the committee members qualify as independent directors under the independence standards specific to their committees. BOARD LEADERSHIP STRUCTURE Our Board has an Executive Chairman. The Executive Chairman, R. Daniel Peed, sets the agendas for and presides over the Board meetings. Our Board also has a Lead Director, Alec L. Poitevint II, who was appointed by the independent directors. The Lead Director provides additional leadership and organization in meetings of independent directors separate and apart from management and non-independent directors, including leading the executive sessions of independent directors. In the event of Mr. Poitevint's incapacity, unavailability or absence, the chair of the Nominating and Corporate Governance Committee would serve as the Lead Director until the independent directors selected a new Lead Director. The Board believes that this leadership structure is appropriate for our Company at this time because it allows for non-executive oversight of management, increases management accountability and encourages an objective evaluation of management's performance. BOARD'S ROLE IN RISK MANAGEMENT AND OVERSIGHT The Board reviews and approves the Company's strategic plan as presented by management and monitors our performance throughout the year against the plan. The Board regularly devotes time during its meetings to review and discuss the most significant risks we face and management’s processes for identifying, prioritizing, and responding to those risks. During these discussions, our President and CEO and our Chief Financial Officer ("CFO") present management’s processes for the assessment of risks, a description of the most significant risks we face and any mitigating factors, plans or policies in place to address those risks, and also reviews and approves the Company's cybersecurity program. The Board receives an assessment of cybersecurity risks and the status of procedures to address these risks. The Board also delegates certain of its risk oversight responsibilities to its committees. The Audit Committee bears responsibility for oversight of our policies with respect to risk assessment and risk management. The Audit Committee members analyze major financial risk exposures which we face and the steps we have taken to monitor and control such exposures. The Audit Committee also oversees our compliance with legal and regulatory requirements, areas which generate many of the most significant risks we face. The Compensation and Benefits Committee reviews our compensation structure, policies and practices to determine whether incentive compensation arrangements would be reasonably likely to have a material adverse effect on the Company and considers safeguards against incentives to take excessive risks. The Compensation and Benefits Committee reports these risks to the Board. The Nominating and Corporate Governance Committee is responsible for considering and addressing risks relating to CEO succession planning and the director nomination and appointment process. The Investment Committee bears responsibility for oversight of policy decisions about risk aggregation and minimization, including credit risk. The Investment Committee is also responsible for oversight of the capital structure and financing arrangements in support of our plans to ensure consistency with our risk tolerances and oversight of management's investment of our assets. MEETINGS AND MEETING ATTENDANCE Our Board held five meetings during 2024. Each of our directors attended all meetings of the Board and Board committees on which they served for the periods in which they served during 2024. We do not have a formal policy with respect to director attendance at annual meetings of stockholders; however, we encourage all of our directors to attend such meetings. Two of our Board members attended our 2024 annual meeting of stockholders. COMMUNICATION WITH DIRECTORS Stockholders may contact an individual director, our Board as a group, our independent directors as a group or a specified Board committee by sending correspondence addressed to our Corporate Secretary to the address listed in the subsection entitled Contacting the Company or to InvestorRelations@amcoastal.com. Each communication should specify the applicable addressee or addressees to which the communication is directed, as well as the general topic of the communication. We will initially receive and process communications before forwarding them to the addressee. We also may refer communications to other departments as applicable. We generally will not forward to our directors a communication that is primarily commercial in nature, relates to an improper or irrelevant topic or is a request for general information. BOARD COMMITTEES AUDIT COMMITTEE. Our Audit Committee consists of Mr. Hudson (Chair), Dr. Davis and Mr. Maroney. Our Board has determined that Mr. Hudson is an audit committee financial expert. All members of our Audit Committee are “independent” under both the general independence standards and the audit committee independence standards set forth in the Nasdaq rules. Our Audit Committee operates under a formal written charter adopted by our Board that governs its duties and conduct. The committee reviews its charter annually for appropriate revisions. Interested parties can obtain a copy of the charter free of charge on our website at investors.amcoastal.com, under the "Governance Documents" tab. Our Audit Committee assists our Board in its oversight of the quality and integrity of our accounting, auditing, and reporting practices. Our Audit Committee’s role includes overseeing: •our accounting and financial reporting processes and the audit of financial statements, •the integrity of our financial statements, •our compliance with legal and regulatory requirements, •the independent auditor’s qualifications and independence, •the performance of our independent auditors, •our business practices and ethical standards and •our risk assessment and risk management policies. Our Audit Committee met eleven times during 2024. COMPENSATION AND BENEFITS COMMITTEE. Our Compensation and Benefits Committee consists of Mr. Whittemore (Chair), Mr. Hudson and Mr. Poitevint. All members of our Compensation and Benefits Committee are "independent" under both the general independence standards and the compensation committee independence standards set forth in the Nasdaq rules. Our Compensation and Benefits Committee operates under a formal written charter adopted by our Board that governs its duties and conduct. The committee reviews its charter annually for appropriate revisions. Interested parties can obtain a copy of the charter free of charge on our website at investors.amcoastal.com under the "Governance Documents" tab. Our Compensation and Benefits Committee assists our Board in its oversight of employee compensation, benefit plans and employee stock programs and the compensation of our senior management. Our Compensation and Benefits Committee’s responsibilities include the following: •oversee our overall compensation structure, policies and programs, •review and administer our Company’s equity and incentive-based compensation plans that require approval from our Board, •review and approve (i) compensation programs and (ii) corporate goals and objectives relevant to the compensation of our senior management, •oversee the evaluation of the other executive officers and set the compensation of other executive officers after considering the recommendation of the CEO and President,

  12. PATRICK F. MARONEY

    •review and recommend employment agreements and severance and change of control arrangements for our executive officers, •assist the Board in reviewing and preparing the Compensation Discussion and Analysis, •assist the Board in reviewing the outcome of stockholder votes on say on pay and the frequency of say on pay, •review and approve compensation for members of the Board, and •periodically assess the risks associated with our compensation policies and practices. As it deems appropriate, our Compensation and Benefits Committee may establish and delegate authority to subcommittees. The Compensation and Benefits Committee, to the extent permitted by applicable law, may also delegate to one or more executives of ACIC the authority, within guidelines set by the Compensation and Benefits Committee, to approve equity compensation awards under established equity plans of the Company to employees other than those subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Compensation and Benefits Committee may also delegate non-discretionary administrative authority under Company compensation and benefit plans consistent with any limitations specified in the applicable plans. Our Compensation and Benefits Committee met four times during 2024. NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. Our Nominating and Corporate Governance Committee consists of Dr. Davis (Chair), Mr. Hogan and Mr. Whittemore. All members of our Nominating and Corporate Governance Committee are "independent" under the general independence standards set forth in the Nasdaq rules. Our Nominating and Corporate Governance Committee operates under a formal written charter that governs its duties and conduct. The committee reviews its charter annually for appropriate revisions. Interested parties can obtain a copy of the charter free of charge on our website at investors.amcoastal.com under the "Governance Documents" tab. Our Nominating and Corporate Governance Committee assists our Board by, among other things: •identifying and recommending to the Board qualified individuals to become directors, •reviewing the independence of our Board members, •determining membership of Board committees, •recommending changes to our Corporate Governance Guidelines and other governing instruments, •overseeing annual self-evaluations by our Board and committees, •reporting annually to our Board regarding the CEO succession plan, and •overseeing risk management related to corporate governance and CEO succession. As noted above, the Nominating and Corporate Governance Committee oversees the annual self-evaluation process for the Board and each of its committees. These self-evaluations are designed to assess whether the Board or the respective committee is functioning effectively and also to provide a mechanism for the Board or the respective committee to identify potential areas for improvement. Once completed, the results of the self-evaluations and any appropriate recommendations or action plans are discussed among the members of the Board and each of its committees. Our Nominating and Corporate Governance Committee met four times during 2024. INVESTMENT COMMITTEE. Our Investment Committee consists of Mr. Poitevint (Chair), Mr. Hood and Mr. Maroney. All members of our Investment Committee are "independent" under the general independence standards set forth in the Nasdaq rules. Our Investment Committee operates under a formal written charter that governs its duties and conduct. The committee reviews its charter annually for appropriate revisions. Interested parties can obtain a copy of the charter free of charge on our website at investors.amcoastal.com under the "Governance Documents" tab. Our Investment Committee assists our Board with the oversight of the Company’s investment policies and guidelines through the following activities: •reviewing and approving policies and guidelines governing the Company’s investment portfolio and monitoring compliance with those policies, •reviewing and approving periodically any investment benchmarks or other measurement devices employed by the Company to monitor the performance of our investment portfolio, •monitoring the performance of our investment advisers and retaining and terminating such advisers as it deems appropriate, and •overseeing investment risk management exposure and guidelines. Our Investment Committee met eleven times during 2024. SELECTION OF DIRECTOR NOMINEES Our Board selects the director nominees to stand for election at our annual stockholder meetings and to fill vacancies occurring on our Board based on the recommendations of the Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee selects nominees for director on the basis of experience, integrity, skills, the ability to make independent analytical inquiries, an understanding of our business environment and the willingness to devote adequate time to Board duties, all within the context of an assessment of the perceived needs of the Board at a given point in time. In addition to the individual attributes of our directors discussed above, we highly value the collective business experience and qualifications of the directors. We believe that the collective experiences, viewpoints and perspectives of our directors result in a Board with the commitment and energy to advance the interests of our stockholders. Our Nominating and Corporate Governance Committee may consider current members of our Board for re-election unless they have notified our Board that they do not wish to stand for re-election. There is no mandatory retirement age for our directors. Our Nominating and Corporate Governance Committee may also consider candidates for our Board recommended by current members of our Board or members of management. In addition, our Nominating and Corporate Governance Committee will consider director candidates recommended by our stockholders in the same manner as it would consider any other recommended nominees. Our Nominating and Corporate Governance Committee considers diversity in identifying nominees for director to ensure a broad range of perspectives and expertise are represented on our Board. If our Nominating and Corporate Governance Committee determines that a stockholder-recommended candidate is suitable for Board membership, it will include the candidate in the pool of candidates under consideration for nomination upon the occurrence of the next Board vacancy or in connection with the next annual meeting of our stockholders. Pursuant to the above procedures, once our Nominating and Corporate Governance Committee identifies prospective nominees, it will solicit background information on the candidates, then interview and evaluate the candidates. The Nominating and Corporate Governance Committee will then report its recommendations to the Board. Our Nominating and Corporate Governance Committee recommended the four incumbent director nominees for election at our Annual Meeting, and our Board approved the recommendation. DIRECTOR COMPENSATION The following table describes the compensation received by each of our directors during the fiscal year ended December 31, 2024. Mr. Peed only received compensation for his services as a director. His compensation is also disclosed under the subsection entitled Executive Compensation.

  13. PATRICK F. MARONEY

    | | FEES EARNED OR PAID IN CASH | STOCK AWARDS(1) | TOTAL COMPENSATION | | R. Daniel Peed(2) | $150,000 | $61,150 | $211,150 | | Gregory C. Branch(3) | 125,000 | 61,150 | 186,150 | | Sherrill W. Hudson(4) | 95,000 | 61,150 | 156,150 | | Kent G. Whittemore(5) | 87,500 | 61,150 | 148,650 | | Alec L. Poitevint, II(6) | 85,000 | 61,150 | 146,150 | | Kern M. Davis, M.D.(6) | 85,000 | 61,150 | 146,150 | | Michael R. Hogan | 75,000 | 61,150 | 136,150 | | William H. Hood, III | 75,000 | 61,150 | 136,150 | | Patrick F. Maroney | 75,000 | 61,150 | 136,150 |

  14. PATRICK F. MARONEY

    See the sections titled RESULTS OF OPERATIONS, GEOGRAPHIC MARKETS and ANALYSIS OF FINANCIAL CONDITION as well as the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, for additional information about the financial highlights included herein. STRATEGIC HIGHLIGHTS. During 2024, we achieved several goals which were consistent with our strategy to become a specialty commercial lines underwriter and are optimistic about future performance for the following reasons: •Improvements in results: We increased net revenues from continuing operations year over year by $32.3 million. •Focus on risk selection: During 2024, we continued to refine our underwriting guidelines to optimize risk selection and ensure adequate coverage, but opened new business writings during the second half of the year. •Portfolio Realignment: During 2023, we identified a buyer for Interboro Insurance Company ("IIC") to complete our exit from the personal lines business. We entered into a non-binding term sheet on October 6, 2023, for the sale of IIC whereby the buyer will acquire 100% of the issued and outstanding common stock of IIC in exchange for a cash purchase price equal to the generally accepted accounting principles ("GAAP") book value of IIC at the time of closing, subject to negotiating and entering into definitive documents containing customary terms and conditions and obtaining regulatory approval(s). On February 13, 2025, the buyer's application to acquire IIC was approved by the New York Department of Financial Services, and on April 1, 2025, the sale of IIC closed. Role of the Compensation and Benefits Committee and Management in the Compensation-Setting Process. Our Committee’s role in reviewing and approving executive compensation includes the annual review and approval of goals, risks and objectives relevant to senior management compensation and approval of equity-based awards for the CEO and other senior management. The Committee's duties and responsibilities are further set forth in the Committee’s charter as described under the section entitled Board Committees above. The Committee's charter can also be found at the following url: https://investors.amcoastal.com/overview/documents/. Compensation for our CEO is reviewed and approved by the Committee following consultation and input from its independent compensation consultant, Pay Governance LLC. During 2024 (like 2020 through 2023), Mr. Peed declined all base salary and incentive compensation beyond what he would receive as Chairman of the Board. For our other executives, our CEO makes recommendations to the Committee for base salaries and Annual Incentive Plan targets. The Committee considers those recommendations and other relevant factors in making its final compensation decisions. The incentive compensation plans are described in more detail under the Incentive Compensation subsection of the section titled Elements of Executive Compensation. The Chairs of the Audit and Investment Committees serve on the Committee. These directors bring information and perspective from the work of other committees to provide insight to assist the Committee in executing its role, including its role in risk management oversight and fulfilling its obligations under the Committee charter. The Committee has the authority to engage consultants and advisors pursuant to its charter. For fiscal 2024, the Committee continued to rely on Pay Governance LLC, which provided assistance to the Committee in competitive trends in executive compensation, marketplace data on executive pay levels and on the implementation of the Company’s incentive plans. Pursuant to regulatory requirements, the Committee assessed Pay Governance LLC's independence in 2024 and concluded that Pay Governance LLC's work did not raise any conflicts of interest. Summary of 2024 Compensation Actions. In 2024, our Committee continued its focus on managing our compensation program consistent with our compensation philosophy, which is described below under Overview of our Executive Compensation Philosophy and Objectives. Actions taken or approved by our Committee relative to the compensation programs for our executive officers for 2024 included the following: •Reviewed the performance of our executive officers, including our NEOs but excluding our CEO, with assistance from our CEO and determined the structure and amount of base salary and bonus compensation for our executive officers for 2024 as seen in the Elements of Executive Compensation and Executive Compensation subsections, respectively. •Reviewed the Annual Incentive Plan, which includes both quantitative corporate financial performance targets and an individual qualitative executive performance metric, with seventy percent (70%) of the annual target weighted toward corporate financial performance. The composition and design of our Annual Incentive Plan program is described in more detail in the Elements of Executive Compensation section. •Reviewed our Long-Term Incentive Plan grants, which include performance units, as well as time-vested restricted stock units and stock options for senior management and restricted stock awards for our CEO in his capacity as Chairman of the Board. The design of our Long-term Incentive Plan is described in more detail in the Elements of Executive Compensation section. •Reaffirmed our group of peer companies pursuant to which executive compensation can be measured, both for base salary and incentive-based compensation. Overview of our Executive Compensation Philosophy and Objectives. We believe that a skilled, experienced and dedicated senior management team is essential to the future success of our Company and to building stockholder value. In order to attract and retain talented executives with these qualities as well as to motivate management to maximize performance while building stockholders' value, we have sought to establish compensation programs that we believe are competitive in the marketplace. We also have a “pay-for-performance” philosophy, meaning that our compensation program is intended to pay above market compensation to our NEOs other than our CEO if the performance of the Company delivers higher value to the stockholders, and below-market compensation if the Company's financial performance delivers below market-median value to its stockholders. Three long-term objectives drive the Committee’s decisions regarding the executive compensation elements, including incentive plan design and award levels. These objectives are as follows: Build long-term stockholder value - We provide a significant portion of executive compensation through long-term incentive compensation and stock-based opportunities to emphasize compensation programs that we believe are linked to maximizing stockholder value over the long term; Drive sustained, strong business and financial results - We provide a significant portion of executive compensation through incentive compensation programs that are linked to our Company achieving targeted increases in earnings per share, return on equity and gross premiums earned; and Attract, motivate, and retain a highly qualified and effective executive team - The attraction, motivation, and retention of top executive talent is critical to our continued success. Therefore, the Committee considers broad-based surveys that reveal executive compensation levels in the industry to gain a general understanding of compensation practices.

  15. PATRICK F. MARONEY

    Pay Mix. The key components of our compensation program for our NEOs for 2024 were base salary, annual cash incentive awards under our Annual Incentive Plan, time-vesting restricted stock awards, performance stock units and stock options under our Long-Term Incentive Plan, Retention Payments, and other compensation consisting primarily of matching 401(k) contributions and health and welfare benefits (excluding our CEO who declined all compensation other than his compensation for services as Chairman of the Board). Each component of our compensation program has an important role in creating compensation arrangements that motivate and reward strong performance and in retaining the NEOs who deliver robust results. The Committee prioritizes incentive-based "pay-for-performance" compensation programs when developing annual total compensation for our NEOs. As shown in the chart below, 61.6% of the total target compensation was linked to annual and long-term performance-based incentives for all NEOs (excluding the CEO) who were eligible for the AIP and LTIP compensation. Peer Group. To ensure that our NEO compensation program is competitive and will allow us to meet our objective of attracting and retaining talented executives, the Committee, with the assistance of Pay Governance LLC, established a group of peer companies on which to compare compensation for the executives with compensation received by the executives of our competitors. In fiscal 2024, the Committee updated our designated comparison group of nine publicly-listed companies of varying sizes within the insurance industry which primarily was used to compare Return on Average Equity under our Long-Term Incentive Plan grants, but which was also used for benchmarking executive compensation. The designated comparison group for 2024 consisted of the following companies:

  16. PATRICK F. MARONEY

    (1) R. Daniel Peed, our CEO, has declined any compensation other than what he receives for serving as Chairman of the Board and thus will not receive a base salary in fiscal 2025. (2) B. Bradford Martz was promoted to CEO effective February 11, 2025, at which time his base salary increased with the same effective date. INCENTIVE COMPENSATION. The award of incentive compensation for our NEOs under our Annual Incentive Plan and performance-based compensation under our long-term incentive plan is based on achieving certain annual corporate performance goals included in our 2020 Omnibus Incentive Plan (our "Long-Term Incentive Plan"). As to each performance goal, the relevant measurement of performance will be computed in accordance with GAAP to the extent applicable, but, unless otherwise determined by the Committee, will exclude the effect of various items set forth in the "Performance Goals" section in the 2020 Omnibus Incentive Plan. Annual Incentive Plan - Our NEOs as well as certain other management employees, participate in the Annual Incentive Plan, which provides participants an opportunity to earn a cash bonus upon achievement of key financial performance objectives approved by the Committee. Within the overall context of our compensation philosophy and culture, the Annual Incentive Plan: •provides competitive levels of total cash compensation; •aligns pay with organization and individual performance; and •focuses executive attention on key business metrics. In setting the performance goals under the Annual Incentive Plan, our intention is to provide for challenging and ambitious targets to further our overall goal of increasing stockholder value. Though challenging, we believe the goals are attainable through a collaborative effort by our NEOs. The Committee reviews and approves payouts made under the Annual Incentive Plan. The 2024 Annual Incentive Plan was designed with three metrics: •Financial Goals: Represent 70% of target award value equally weighted between the combined ratio and core income after-tax return on equity; •Individual Qualitative Performance: Represents 30% of target award value. Core income is a non-GAAP measure reported by ACIC that excludes from net income the effect of income (loss) from discontinued operations, non-cash amortization of intangible assets, unrealized gains and losses on the Company's equity security investments and realized gains and losses on the Company's investment portfolio. For the purposes of incentive compensation goal calculations, the core income after tax return on equity shall be further adjusted to remove the after-tax effect of losses from named or numbered tropical windstorms as designated by the National Hurricane Center and earthquakes. The range of potential payouts under the Fiscal 2024 Annual Incentive Plan is described in the table below:

  17. PATRICK F. MARONEY

    Fiscal 2024 combined ratio was approximately 67.5%, 7.5% below target. Fiscal 2024 core income after-tax return on equity was 37.4% above target. The Committee also determined, in consultation with Pay Governance LLC, that each of the NEO's individual performance warranted 100% of the target payment of the qualitative metric. Taking into consideration these outcomes, as well as the NEO's respective contributions to our strategic goals, the Committee approved payment under the Annual Incentive Plan to our NEOs for 2024 described below and as further detailed in the 2024 Summary Compensation Table under the column titled Non-Equity Incentive Plan Compensation. R. Daniel Peed, our CEO, has declined any compensation other than what he receives for serving as Chairman of the Board. The following table sets forth the calculation of annual incentive award payments to each of our NEOs for fiscal 2024 after applying the performance metrics and individual performance objectives evaluations:

  18. PATRICK F. MARONEY

    | NEO | Target Award | Weighted Average (combined ratio and core return on equity) | Weighted Qualitative Performance | AIP Payout % of Target | AIP Payout | | R. Daniel Peed | $0 | —% | —% | —% | $0 | | Svetlana Castle | $200,000 | 100.5% | 30.0% | 130.5% | $261,095 | | B. Bradford Martz | $360,000 | 100.5% | 30.0% | 130.5% | $469,971 | | Christopher Griffith | $265,000 | 100.5% | 30.0% | 130.5% | $345,951 | | Brooke Adler | $250,000 | 100.5% | 30.0% | 130.5% | $326,369 |

  19. PATRICK F. MARONEY

    Long-Term Incentive Plan - The Committee implemented our Long-Term Incentive Plan because it believes that long-term incentives are an essential part of our total compensation package, which is intended to promote ownership, higher performance and ultimately higher stockholder return. Additionally, the Committee intends for the Long-Term Incentive Plan to further the following four key objectives that fit within the overall context of our compensation philosophy and culture: •Pay for Performance: Emphasize variable compensation that is linked to our performance to generate and reward superior corporate performance; •Alignment of Interests: Incorporate performance metrics that link executives' incentive goals with the interests of our stockholders; •Long-Term Success: Support and reward executives for consistent performance over time and achievement of our long-term strategic goals; and •Retention: Attract and retain highly qualified executives whose abilities are critical to our success and competitive advantage. Under our long-term incentive program, we historically made annual grants of time-vesting restricted stock to our executive officers if predetermined corporate performance targets were achieved. Restricted stock awards for our NEOs vested ratably over the three years following the grant date, contingent on continued employment, unless the executive was terminated by us other than for cause. The number of shares of time-vesting restricted stock granted was based on the target dollar value of the award divided by the closing price of our stock on the date of grant. Since fiscal 2018, on the advice of Pay Governance LLC, the Committee has incorporated both performance and time-based awards in our long-term incentive program. The Committee believes this plan design remains consistent with the goal of attracting and retaining highly qualified executives, while rewarding company performance aligned with the interests of our stakeholders. In fiscal 2024, we granted restricted stock units, performance stock units and stock options to our NEOs (other than our CEO) which vest ratably over the three years following the grant date. The program design is described below:

  20. PATRICK F. MARONEY

    | Vehicle | Percentage of Target Award | Key Metrics | | Options | 25% | Granted at fair value under the Black-Scholes Model Vest ratably over three years Exercise price set at fair market value on the date of grant | | Restricted Stock Units ("RSUs") | 25% | Granted at fair market value on the date of grant Vest ratably over three years | | Performance Stock Units ("PSUs") | 50% | Granted at fair value on the date of grant One third of award will vest each year subject to performance against the peer group Allows for vesting between 50% Threshold and 150% of target award (Maximum) |

  21. PATRICK F. MARONEY

    Each PSU grant consists of three annual tranches that individually are eligible to vest based on the applicable year's performance against target. For the fiscal 2024 PSUs, the Committee utilized the Company's GAAP Return on Average Equity ("GAAP ROAE") versus that of its peers as the performance metric. The Committee set a target goal for PSUs that is challenging, but capable of being achieved with strong performance. Failure to achieve threshold performance of 750 basis points below the peer group median in any fiscal year will result in failure of vesting of that tranche of the award. The award of each tranche of PSUs is capped at 150% of target if the Company's performance is 750 basis points above the peer group median. Based on fiscal 2024 financial results, the Company's GAAP ROAE was above the peer group median and above the maximum threshold, resulting in the maximum vesting of 150% of the third tranche of the fiscal 2022 PSUs, the second tranche of the fiscal 2023 PSUs and the first tranche of the fiscal 2024 PSUs.

  22. PATRICK F. MARONEY

    | NEO | Fiscal 2024 PSU Grant | PSUs Eligible for Vesting in 2025 | First Tranche Earned PSUs | | R. Daniel Peed | — | — | — | | Svetlana Castle | 13,259 | 4,420 | 6,630 | | B. Bradford Martz | 34,957 | 11,652 | 17,478 | | Christopher Griffith | 19,286 | 6,429 | 9,644 | | Brooke Adler | 16,876 | 5,625 | 8,438 |

  23. PATRICK F. MARONEY

    | NEO | Fiscal 2023 PSU Grant | PSUs Eligible for Vesting in 2025 | First Tranche Earned PSUs | Second Tranche Earned PSUs | | R. Daniel Peed | — | — | — | — | | Svetlana Castle | — | — | — | — | | B. Bradford Martz | 76,212 | 25,404 | 38,106 | 38,106 | | Christopher Griffith | 41,917 | 13,972 | 20,958 | 20,958 | | Brooke Adler | 31,755 | 10,585 | 15,878 | 15,878 |

  24. PATRICK F. MARONEY

    | NEO | Fiscal 2022 PSU Grant | PSUs Eligible for Vesting in 2025 | First Tranche Earned PSUs | Second Tranche Earned PSUs | Third Tranche Earned PSUs | | R. Daniel Peed | — | — | — | — | — | | Svetlana Castle | — | — | — | — | — | | B. Bradford Martz | 117,647 | 39,215 | — | 58,824 | 58,823 | | Christopher Griffith | 64,706 | 21,568 | — | 32,354 | 32,352 | | Brooke Adler | 49,019 | 16,339 | — | 24,510 | 24,509 |

  25. PATRICK F. MARONEY

    OTHER COMPENSATION. We have a 401(k) plan that generally covers all of our employees who have completed 90 days of service. Pursuant to our 401(k) plan, participants may elect to make pre-tax contributions up to the statutorily prescribed annual limits. Our NEOs who participate in the 401(k) plan receive matching contributions under our 401(k) plan in the same manner as all of our employees who participate in the plan. During 2024, we matched 100% of each participant's pre-tax contributions up to the first 5% of such participant's base salary up to the maximum allowed by the plan. Our CEO does not participate in the 401(k) plan. Our executive officers receive health and welfare benefits, such as group medical, group life, group dental and short-term and long-term disability coverage. We believe that our executives should be able to provide for their retirement needs from the total annual compensation they earn based on our Company's performance. Accordingly, other than employer matching contributions to the accounts of our NEOs (other than our CEO) under our 401(k) Plan (at the same matching contribution rate that we provide to all eligible full-time employees), we do not offer executives participation in any qualified or non-qualified pension plans, supplemental executive retirement plans, deferred compensation plans or other forms of compensation for retirement. Other Highlights of Our Compensation Programs. We periodically review best practices in the area of executive compensation and update our compensation policies and practices to reflect those that we believe are appropriate for our company. In addition to the short- and long-term performance compensation described in the Elements of Executive Compensation section above, our program also includes the following: •We pay for performance, offering our NEOs the opportunity to earn a substantial amount of variable compensation based on our Company achieving certain performance targets. •We encourage long-term decision making, as our annual Long-Term Incentive Plan awards span a three-year time period, and the ultimate value of the options granted, restricted stock units granted and performance stock units earned are determined by our performance over the three years (due to three-year vesting periods, with PSUs eligible to vest in three ratable tranches). •We do not provide heightened change of control severance benefits for any NEOs under their employment agreements. •Our equity compensation plan does not permit repricing of stock options without stockholder approval. •We do not guarantee salary increases or bonuses for our executive officers. Stock Ownership Guidelines. In 2019, the Board adopted stock ownership guidelines ("Ownership Guidelines") for our CEO, CFO, other Section 16 officers and members of our Board. The Ownership Guidelines were adopted to demonstrate the Company’s commitment to stockholders and employees, customers and vendors. The following ownership target amount categories will remain in place until changed by the Compensation and Benefits Committee: