Howard Halderman

About F. Howard Halderman

Independent director at First Merchants Corporation (FRME), age 58, serving since 2013. President & CEO of Halderman Farm Management Service, Inc. (HFMS) and Halderman Real Estate Services, Inc. (HRES); Executive Chair of US Agriculture, LLC (SEC-registered RIA). Accredited Farm Manager; licensed real estate broker in IN, OH, GA, IL, MI, KY. Chairs FRME’s Risk and Credit Policy Committee. The Board has affirmatively determined his independence under Nasdaq rules.

Past Roles

External Roles

Board Governance

• Committee leadership: Chair, Risk and Credit Policy Committee (R&CPC); members include Halderman (Chair), Chiang, Fehring, Rechin, Sondhi. The R&CPC met eight times in 2024 and leads enterprise risk oversight, including trust oversight and risk appetite/thresholds.
• Independence: Board determined Halderman is independent under Nasdaq Listing Rule 5605(a)(2). Board considered services provided by HFMS/HRES to FRME affiliates and FMPWA trust accounts; amounts below Item 404(a) thresholds, procured via bidding, no agreements in place, no access to sensitive information or involvement in strategic decisions.
• Attendance: Board held six meetings in 2024, including a two‑day retreat; no director attended fewer than 75% of the aggregate Board and committee meetings; all directors attended the 2024 Annual Meeting.
• Cybersecurity governance: Board’s cybersecurity oversight runs through the R&CPC and Audit Committee; quarterly cyber metrics to the R&CPC; updated policies consistent with SEC cybersecurity disclosure rule.
• Shareholder engagement: Directors and management engaged shareholders representing >25% of outstanding shares; 2024 governance enhancements (bylaw amendment ability, phased declassification, majority voting) approved by shareholders.

Fixed Compensation

• Policy highlights (Non‑Employee Directors):

  • Annual cash retainer: $140,000.
  • Chair fees: Board Chair $50,000; Board Vice Chair $10,000; Audit Chair $15,000; Risk & Credit Policy Chair $10,000; Nominating & Governance Chair $5,000; Compensation & HR Chair $5,000.
  • Additional member fees due to time demands: $5,000 for R&CPC members; $5,000 for Audit Committee members.
  • No meeting fees; paid quarterly in arrears.
  • Equity Compensation Plan for Non‑Employee Directors (ECPND): at least 62.5% of director compensation (retainers and chair/member fees) paid in restricted shares; restrictions generally lapse after 3 years or earlier upon retirement, death, disability, or change in control; beneficial ownership rights (vote/dividends) while restricted; forfeiture if service ends before lapse. Hedging and pledging by directors prohibited. Stock ownership guideline: minimum 3x total annual director compensation; all current directors have met or are on course within six years.

• 2024 compensation for Halderman (actual): | Component | Amount ($) | Notes | |---|---:|---| | Fees earned or paid in cash | 63,794 | Includes retainer and chair/member fees; also received $7,500 from First Merchants Bank (FMB) as regional advisory bank director, included in total. | | Stock awards (restricted shares) | 93,705 | Quarterly restricted share grants under ECPND. | | Dividends on restricted shares | 10,069 | Reported under “All Other Compensation.” | | Total | 167,569 | 2024 director compensation total. |

• 2024 quarterly grant pricing (all directors): | Grant Date | Fair Value per Share | |---|---:| | Mar 31, 2024 | $34.90 | | Jun 30, 2024 | $33.29 | | Sep 30, 2024 | $37.20 | | Dec 31, 2024 | $39.89 |

Performance Compensation

• Director equity is time‑based restricted stock under ECPND; no performance metrics attached to director equity; stock option awards to directors were eliminated beginning 2015 (non‑employee director options last awarded July 1, 2014). Hedging/pledging prohibited. | Performance Metric | Applies to Director Equity? | Notes | |---|---|---| | Financial/TSR/ESG metrics | No | Director awards are time‑based restricted shares; no performance conditions disclosed. |

Other Directorships & Interlocks

• Public company boards: None disclosed for Halderman in FRME’s proxy biography.
• Related‑party exposure: HFMS provided farm management/consulting to FRME affiliates and FMPWA trust accounts; HRES provided farm appraisals/real estate services to FMB/FMPWA trust accounts. Amounts below Item 404(a) threshold; services procured via bidding; no agreements in place and no access to sensitive information.
• Additional FRME‑related roles: Received $7,500 from FMB for service as regional advisory bank director in 2024 (included in total compensation).

Expertise & Qualifications

• Only FRME director with specialized agricultural real estate and lending expertise; extensive industry network across Indiana and nationally. Accredited Farm Manager; licensed real estate broker in multiple states; operates three farm‑related businesses in FRME’s rural markets.
• Board qualification statement emphasizes his value to FRME’s agricultural lending segment and market contacts.

Equity Ownership

Insider Trades

Governance Assessment

• Strengths
  • Independent director with domain expertise in agricultural lending; Chairs the R&CPC, which met eight times in 2024 and leads enterprise‑wide risk oversight (including trust risk), supporting board effectiveness.
  • Equity‑heavy director pay structure via ECPND (≥62.5% in restricted shares), long‑term vesting, and a rigorous 3× compensation ownership guideline; hedging/pledging prohibited—strong alignment signals.
  • Board attendance and engagement strong (no director <75%; all attended 2024 Annual Meeting); active shareholder engagement and governance reforms approved in 2024.
• Watch items / potential conflicts
  • Ongoing transactional ties: HFMS/HRES services to FRME/FMPWA trust accounts; Board deemed amounts immaterial and safeguarded via competitive bidding and controls, but continued monitoring advisable given chair role over risk.
  • Late Section 16 filing for family transactions (Form 4), a minor compliance lapse; monitor for repeat occurrences.
  • Additional FMB advisory compensation ($7,500) adds another nexus to bank operations—small but worth tracking for perceived conflicts.
• Company context signals
  • Strong say‑on‑pay support (92.65% approval in 2024) suggests shareholders broadly support compensation governance; positive backdrop for director governance confidence.