Document:

Exhibit

Exhibit 10.1

  KINGSWAY ANNOUNCES CHANGE IN CHIEF EXECUTIVE OFFICER

Toronto, Ontario (September 5, 2018) - (TSX: KFS, NYSE: KFS) Kingsway Financial Services Inc. (“Kingsway” or the “Company”) is pleased to announce that Mr. John T. (“JT“) Fitzgerald, formerly the Company's President and Chief Operating Officer, has been appointed to the role of Chief Executive Officer and President effective today.

Mr. Larry G. Swets, Jr., former Chief Executive Officer, will transition to a role as Senior Advisor to the Company and will remain on the Company’s Board of Directors.

“JT's appointment and the orderly transition announced today are the culmination of a careful and deliberate process overseen by the Board of Directors,” said Terence Kavanagh, Chairman of Kingsway’s Board of Directors.  “The Board believes this is the appropriate time for a transition given the anticipated completion of the Mendota sale and the shift in focus away from merchant banking activities towards executing our Extended Warranty Segment strategy.  We have been impressed by JT's contributions to the Company in his role as President and COO and are confident that he is the right leader to guide Kingsway through the next phase of its evolution.  We are also pleased that Larry will continue as a Senior Advisor and Director and will focus on maximizing the value of our portfolio of passive investments and our NOL utilization strategy via our Leased Real Estate segment.”

Mr. Fitzgerald stated, “I am honored to lead this great company and eager to begin expanding upon the foundation built by Larry.  I believe Kingsway's portfolio of operating companies has excellent organic growth opportunities and margin improvement potential.  I also believe that we will have opportunities to grow our portfolio via strategic acquisitions.  I look forward to working with our talented and dedicated team to help Kingsway grow and prosper.”

Mr. Kavanagh continued, “Over the last decade at Kingsway, Larry accomplished much, and we are thankful for his outstanding leadership during his entire tenure.  As CEO, Larry significantly improved Kingsway, restructuring its balance sheet, delivering strong returns in its portfolio, and building a great team.  Under Larry's leadership, Kingsway became a stronger and more focused company, and now consists of businesses with talented leadership and strong market positions. The Board looks forward to its ongoing involvement with Larry as both an Advisor to and Director of the Company.”

Mr. Swets said, “It has been a privilege to lead Kingsway for the past eight years.  I am proud of all that the team has accomplished, and I’m very pleased that JT Fitzgerald has been appointed to succeed me.  This transition represents the natural evolution of the collaborative relationship JT and I have developed since he joined the Company.  I look forward to my ongoing involvement and specific focus on NOL utilization and investment value maximization, and I share the Board's confidence that Kingsway will flourish under JT’s leadership.”

As CEO, Mr. Fitzgerald will continue to serve on Kingsway’s Board of Directors, which he joined in April 2016.

About the Company
Kingsway is a holding company that owns or controls subsidiaries primarily in the insurance, extended warranty, asset management and real estate industries. The common shares of Kingsway are listed on the Toronto Stock Exchange and the New York Stock Exchange under the trading symbol “KFS.”
 

Exhibit 10.1

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. Words such as “expects,” “believes,” “anticipates,” “intends,” “estimates,” “seeks” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect Kingsway management’s current beliefs, based on information currently available and include statements relating to the proposed sale of our insurance subsidiaries.  A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including the failure to consummate the proposed sale of our insurance subsidiaries, the failure to obtain necessary regulatory approvals and the diversion of management time on transaction-related matters.  For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the section entitled “Risk Factors” in the Company’s 2017 Annual Report on Form 10-K.  Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Additional Information
Additional information about Kingsway, including a copy of its 2017 Annual Report and filings on Forms 10-Q and 8-K, can be accessed on the Canadian Securities Administrators’ website at www.sedar.com, on the EDGAR section of the U.S. Securities and Exchange Commission’s website at www.sec.gov or through the Company’s website at www.kingsway-financial.com.Exhibit

    Kingsway Financial Services Inc.                    Exhibit 10.2

September 5, 2018

John T. Fitzgerald
888 E. Deerpath Rd.
Lake Forest, IL 60045

Dear JT:

We are pleased to offer you the role of President and CEO of Kingsway. The following is a summary of the principal terms of the offer we agreed to in our conversations in New York: 

Position: President and CEO, Director
Base Salary: $500,000 annually
Annual Cash Bonus: 2018 and 2019 cash bonus will be 10% of Warranty segment EBITDA minus Holding Company general expenses.   Holding Company general expenses will exclude intercompany interest income/expense, interest on external debt, gain/loss on disposal of subsidiaries, fair value of debt, and other mutually agreeable non-recurring or restructuring expenses.  The Bonus will be paid no later than April 30th of the year following the bonus period.  
Existing Equity Grant: Existing 500,000 share grant to include provisions for pro rata time vesting for termination without ‘cause’ or resignation for ‘good reason’.
New Equity Grant: An additional restricted stock grant – subject to shareholder approval -- of 1,000,000 shares of KFS stock with 100,000 shares vesting annually on each anniversary of the acceptance of the position of CEO.
Severance Agreement: 12months of base salary and other terms consistent with the current severance agreements of other executive managers.
If you agree that the terms set forth above represent our mutual understanding, please sign this letter in the space provided below and return a copy to me. 

We look forward to working with you! 

Best, 

Terence Kavanagh
Chairman of the Board of Directors
Kingsway Financial Services Inc. 

I accept these terms: _______________________________________ 
John T. FitzgeraldExhibit

Exhibit 10.3 

KINGSWAY FINANCIAL SERVICES INC.
45 Saint Clair Avenue West, Suite 400, Toronto, Ontario M4V1K9  (416) 848-1171  Fax: (416) 850-5439

	
	
	 

September 5, 2018

John T. Fitzgerald
888 East Deerpath Road
Lake Forest, IL  60045

Dear John,

In connection with your employment with Kingsway America Inc. ("Company" or we), this letter shall constitute our sole agreement relating to amounts owing to you in connection with any termination of your employment.  For the avoidance of doubt, the severance payment contemplated herein supersedes and replaces any other severance payment offered by the Company, such as under the Kingsway America Inc. Severance Plan, but does not affect your rights with respect to COBRA or any other state statutes, if any.

In the event that we terminate your employment without Cause (as hereinafter defined), or you terminate your employment for Constructive Termination (as hereinafter defined), we will pay you as severance an amount equal to twelve (12) months base salary at the rate being paid on the date your employment is terminated, less applicable withholdings, in one (1) lump-sum payment no later than fourteen (14) days after your separation date.

For purposes of this agreement, “Cause” shall mean the Participant’s involuntary termination of employment by the Corporation upon the occurrence of any of the following by the Participant:  (i) an intentional act of fraud, embezzlement, theft, or any other illegal act against the Corporation, any of which would constitute a felony; (ii) the Participant’s improper disclosure or use of the Corporation’s confidential information but only where the Corporation has established that such disclosure or use has financially and materially injured the Corporation;  or (iii) a material breach of the Participant’s duty of loyalty to the Corporation but only where the Corporation has established that such breach has financially and materially injured the Corporation.

For purposes of this agreement, “Constructive Termination” shall mean the voluntary termination of employment by a Participant within forty-five (45) days following written notice to each independent member of the Board of Directors setting forth in reasonable detail the occurrence of any of the following events without the Participant’s written consent that is not cured by the Corporation within thirty (30) days after such notice: (i) any material diminution in job duties and responsibilities or the imposition of job requirements materially inconsistent with Participant’s position with the Corporation;  (ii) a reduction in Participant’s then-current base salary, other than an across-the-board reduction of no more than ten percent (10%) in the base salary of all executive level employees, (iii) a material reduction in the Participant’s annual incentive compensation opportunities; or (iv) the Participant has established that he has been subject to a hostile work environment.

No severance payment whatsoever shall be payable upon your voluntary resignation without    Constructive Termination or upon termination of your employment for Cause.

As consideration for the severance and benefits to be provided to you pursuant to this letter and as a condition to your receipt of any payments  hereunder, you agree to execute a separation and release agreement in which you will agree to release any and all claims against the Company, other than (1) claims for unemployment  compensation; (2) indemnification rights existing at law, pursuant to the bylaws of Employer or any of its parents, subsidiaries, or affiliates, or under any separate written agreement; (3) coverage rights under directors and officers policies of insurance; and (4) vested employee benefits, if any.

Exhibit 10.3 

Sincerely,

KINGSWAY AMERICA INC.

By: ________________________________
Terence M. Kavanagh
Chairman, Kingsway Financial Services Inc.

By: ________________________________
  William A. Hickey, Jr.
  Vice President and Chief Operating Officer
  Kingsway America Inc.

Acknowledgment:

By: _________________________________
John T. Fitzgerald

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