Document:

exhibit41

Exhibit 4.1        DESCRIPTION OF THE REGISTRANT’S SECURITIES  REGISTERED PURSUANT TO SECTION 12 OF THE  SECURITIES EXCHANGE ACT OF 1934    The following description of capital stock of FedNat Holding Company (the  “Company,” “we,” “us,” or "our") is a summary and does not purport to be complete. It is subject  to and qualified in its entirety by reference to the Company’s Restated Articles of Incorporation  (the “Articles of Incorporation”) and Second Amended and Restated Bylaws (the “Bylaws”),  each of which are incorporated by reference as exhibits to the Annual Report on Form 10-K as to  which this Exhibit 4.1 is also an exhibit. This description is qualified in its entirety by, and  should be read in conjunction with, the Articles of Incorporation and Bylaws.  Authorized Capital Stock  The Company’s authorized capital stock consists of 25,000,000 shares of common  stock, par value $0.01 per share (“Common Stock”), and 1,000,000 shares of preferred stock, par  value $0.01 per share (“Preferred Stock”), the rights and preferences of which may be  established from time to time by the Board of Directors.    Common Stock   Our Common Stock is listed for trading on the NASDAQ Global Market under the  symbol “FNHC” and, accordingly, is registered under Section 12(b) of the Exchange Act.  Dividends. Subject to the rights of the holders of our Preferred Stock, holders of shares of  our Common Stock are entitled to receive dividends that may be declared by our Board of  Directors out of legally available funds.   Voting Rights. Except as otherwise required by law or as may be provided in the  resolutions of the Board of Directors authorizing the issuance of any class or series of Preferred  Stock, the holders of our Common Stock are entitled to one vote for each share held on all  matters submitted to a vote of our shareholders and do not have cumulative voting rights.   Liquidation Rights. Upon our liquidation, dissolution or winding-up, whether voluntary  or involuntary, and after the holders of our Preferred Stock have been paid in full the amounts to  which they are entitled, if any, the holders of our Common Stock are entitled to share ratably in  all assets available for distribution after payment in full to our creditors and holders of our  Preferred Stock, if any.   Other Provisions. The holders of our Common Stock are not entitled to preemptive or  similar rights. The outstanding shares of our Common Stock are fully paid and nonassessable.  The rights, preferences and privileges of holders of our Common Stock are subject to, and may  be adversely affected by, the rights of holders of shares of any series of Preferred Stock that our  Board of Directors may designate and we may issue in the future.      

 

    Preferred Stock   We are currently authorized to issue up to 1,000,000 shares of Preferred Stock, none of  which are issued and outstanding. Our Board of Directors, in its sole discretion, may designate  and issue one or more classes or series of Preferred Stock from our authorized and unissued  shares of Preferred Stock, which generally will have rights and preferences senior to our  Common Stock. Subject to limitations imposed by law or our Articles of Incorporation, our  Board of Directors is empowered to determine:   • the voting rights, whether special or conditional, full or limited, of each class or series of  Preferred Stock,    • the designation of and the number of shares comprising the class or series of Preferred  Stock,     • the preferences and relative, participating, optional or other special rights, if any, and the  qualifications, limitations or restrictions thereof, if any, with respect to any class or  series,     • the redemption prices and terms applicable, if any, to any class or series of Preferred  Stock,     • whether or not the shares of a class or series will be subject to a retirement or sinking  fund and the terms applicable thereto,     • the dividend rights and dividend rate, if any, for any class or series of Preferred Stock,     • the amounts payable on the series upon our liquidation, dissolution or winding-up,     • the terms and conditions of any conversion rights for the class or series of Preferred  Stock, if any, and     • the terms and conditions of any other special rights and protective provisions that the  Board of Directors deems advisable.     Florida Statutory Anti-Takeover Provisions   General. The Florida Business Corporation Act, as amended, or the FBCA, contains  provisions that apply to us and that are designed to enhance the ability of our Board to respond to  and potentially defer attempts to acquire control of the Company. These provisions may  discourage altogether takeover attempts which have not been approved by our Board of  Directors. This could include takeover attempts that our non-affiliate shareholders deem to be in  their best interest and which may represent a current premium for their shares in relation to  prevailing market prices of our Common Stock on the NASDAQ Global Market. These  provisions may also adversely affect the price that a potential purchaser would be willing to pay  for our Common Stock and, therefore, deprive you of the opportunity to obtain a takeover  

 

    premium for your shares. These provisions could make the removal of our incumbent directors  and management more difficult. These provisions may enable a minority of our directors and the  holders of a minority of our outstanding voting stock or the holders of an existing control block  to prevent, delay, discourage or make more difficult a merger, tender offer or proxy contest, even  though the transaction may be favorable to the interests of a majority of our non-affiliate  shareholders. These provisions could also potentially adversely affect the market price of our  Common Stock.   The following summarizes the anti-takeover provisions contained in the FBCA.   Authorized but Unissued Stock. Our authorized but unissued shares of Common Stock  and Preferred Stock will be available for future issuance without shareholder approval. These  additional shares may be used for a variety of corporate purposes, including future public  offerings to raise additional capital, corporate acquisitions and employee benefit plans. The  existence of authorized but unissued shares of stock may enable our Board of Directors to issue  shares of stock to persons friendly to existing management. This may have the effect of  discouraging attempts to obtain control of the Company. The perception in the market of a large  number of authorized but unissued shares of our Common and Preferred stock could have a  negative impact on the price of our Common Stock.   Evaluation of Impact of Acquisition Proposals on Non-Shareholder Constituencies.  The FBCA expressly permits our Board of Directors, when evaluating any proposed tender or  exchange offer, any merger, consolidation or sale of substantially all of our assets, or any similar  extraordinary transaction, to consider in addition to shareholder interests all relevant factors,  including, without limitation, the social, legal, and economic effects on our employees,  customers and suppliers and our subsidiaries, on the communities and geographical areas in  which they operate. Our board may also consider the amount of consideration being offered in  relation to the then current market price for outstanding shares of capital stock and our then  current value in a freely negotiated transaction. Our Board of Directors believes that these  provisions are in our long-term best interests and those of our shareholders.   Control Share Acquisitions. We are subject to the Florida control share acquisitions  statute. This statute is designed to afford shareholders of public corporations in Florida  protection against acquisitions in which a person, entity or group seeks to gain voting control.  With enumerated exceptions, the statute provides that shares acquired within specified putative  voting ranges will not possess voting rights in the election of our directors unless the voting  rights associated with the shares are approved by a majority vote of our disinterested  shareholders. The control share statute does not directly prevent the acquiring person’s  acquisition of shares. Instead, the statute deters or delays takeovers by denying voting rights to  “control shares.” Control shares are shares owned by the acquiring person that (but for the  operation of the statute) would raise the acquiring person’s voting power to or above certain  threshold levels (20%, 33.3%, or 50.1%). Voting rights may be restored only if the acquiring  person files an acquiring person statement and requests a shareholder meeting to vote on whether  the acquiring person’s shares should be accorded voting rights. Voting rights are restored only to  the extent approved by the disinterested shareholders. Disinterested shares are shares other than  those owned by the acquiring person or by a member of a group with respect to a control share  acquisition, or by any of our officers or employees who is also a director. The practical effect of  

 

    the control share statute is to prevent bidders from assuming immediate control of the tendered  shares, thereby allowing management time to mobilize its defenses.  These provisions do not apply to shares acquired under, among other things, an  agreement or plan of merger or share exchange approved by our Board of Directors and carried  out in compliance with the relevant provisions of Florida law and to which we are a party, or an  acquisition of shares otherwise approved by our Board of Directors.   Affiliated Transactions with Interested Shareholders. We are subject to the Florida  affiliated transactions statute, which generally requires the approval of the holders of 66-2/3% of  our outstanding voting shares, other than the shares owned by an “interested shareholder”— generally, any person who is the beneficial owner of more than 10% of the outstanding voting  stock of the Company—to effectuate an affiliated transaction. An “affiliated transaction” is a  transaction that involves the Company and an interested shareholder or an affiliate of an  interested shareholder, including, among others, a merger, a sale of assets, a sale of shares, a  liquidation, or a reclassification of securities and loans. The special voting requirement does not  apply in certain specified circumstances. These provisions could prohibit or delay the  announcement or consummation of mergers or other takeover or change-in-control attempts of  the Company. Accordingly, these provisions may discourage attempts to acquire the Company.   Anti-Takeover Provisions of Our Articles of Incorporation and Bylaws   Our Articles of Incorporation and Bylaws currently contain certain provisions that may  make it more difficult and time-consuming for shareholders or third parties to influence our  management, policies or affairs, and may discourage, delay or prevent a transaction involving a  change-in-control of the Company offering a premium over the current market price of our  Common Stock. These provisions include those that:   • prohibit cumulative voting in the election of our directors,     • establish a classified board of directors with staggered three-year terms,    • provide that the written request of holders of record who hold, in the aggregate, a net long  position, as defined in our Bylaws, in shares representing at least 25% of the outstanding  shares of the Company is required to call special meetings of our shareholders,    • provide for 25,000,000 shares of authorized Common Stock,     • provide for 1,000,000 shares of authorized Preferred Stock,     • eliminate the ability of shareholders to take action by written consent in lieu of a  shareholder meeting,     • establish advance notice and disclosure procedures for shareholders to bring matters  before a meeting of our shareholders,     

 

    • provide that directors may only be removed from office prior to the expiration of his or  her term for cause and upon the affirmative vote of at least two-thirds of the outstanding  capital stock entitled to vote for the election of directors,     • establish advance notice and disclosure requirements for shareholder nomination of  directors, and     • establish majority voting requirements to amend the antitakeover provisions included in  the Articles of Incorporation and Bylaws.   These provisions could also discourage proxy contests and make it more difficult for our  shareholders to elect directors and cause us to take extraordinary corporate actions. In addition,  the existence of these provisions, together with Florida law, might hinder or delay an attempted  takeover other than through negotiations with our board. As a result, we may be less likely to  receive unsolicited offers to acquire us that some of our shareholders might consider beneficial.exhibit1032a

     Addendum 1    to the    Non-Florida Property Quota Share  Reinsurance Contract  Effective: July 1, 2020    entered into by    FedNat Insurance Company  Sunrise, Florida        It Is Hereby Agreed, effective December 1, 2020, with respect to losses occurring on or after  that date, that Article 5 - Retention and Limit - shall be amended to read as follows:    "Article 5 - Retention and Limit    As respects business subject to this Contract, the Company shall cede to the Reinsurer  and the Reinsurer agrees to accept 100% of the Company's Ultimate Net Liability.   However, in no event will the Reinsurer's liability hereunder for Ultimate Net Liability for  Contract Year exceed the greater of [***]% of the Premium Earned for the term of this  Contract or $[***] million of Net Loss."    All other terms and conditions of the captioned Contract shall remain unchanged.    In Witness Whereof, the Company and Subscribing Reinsurer by its duly authorized  representative has executed this Addendum as of the date specified below:    This      Third                    day of     November                                    in the year        2020        .    FedNat Insurance Company         /s/ Michael Braun             This      Third                    day of     November                                    in the year        2020        .    SageSure Anchor Re, Inc.         /s/ Terrence McLean                   _______________________    Certain identified information has been omitted from this exhibit because it is not material and  would be competitively harmful if publicly disclosed.  Redactions are indicated by [***].

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