ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Financial Officer Transition.
On February 28, 2020, Mr. William A. Hickey, Jr., the Company’s Chief Financial Officer and principal accounting officer, submitted his resignation to the Company’s Board of Directors (the “Board”). Following the Board’s acceptance of such resignation, the Board appointed Mr. Kent A. Hansen to succeed Mr. Hickey as Chief Financial Officer and principal accounting officer.
Mr. Hansen, 48, joined the Company’s indirect, wholly-owned subsidiary, Kingsway America Inc. (“KAI”), as its Chief Financial Officer in December 2019. Prior to joining KAI, Mr. Hansen worked for LSC Communications, Inc. (“LSC”), most recently as its Chief Accounting Officer and Controller, from September 2016. Before LSC, Mr. Hansen served as Vice President, Assistant Controller, of Baxalta, Incorporated from 2015 to 2016, after serving in various finance and accounting roles (including Director of Accounting and SEC Reporting, Assistant Controller, and Group Chief Financial Officer) with Scientific Games Corporation (formerly WMS Industries, Inc.) from 2006 to 2015. Mr. Hansen’s previous experience includes roles in accounting and financial reporting at Accenture and as an auditor at Ernst and Young LLP. Mr. Hansen holds a BBA from University of Michigan - Ann Arbor and an MBA from Northwestern University’s Kellogg School of Business. A copy of the press release announcing such transition is attached as Exhibit 10.1 to this Current Report on Form 8-K.
There are no relationships, transactions, arrangements or understandings involving Mr. Hansen or any of his immediate family members that would be required to be disclosed pursuant to Items 401(b), (d), or (e) or Item 404(a) of Regulation S-K.
Offer Letter. On February 28, 2020, in connection with his promotion, the Board reaffirmed the terms of Mr. Hansen’s prior Employment Offer Letter (the “Offer Letter”). Pursuant to the Offer Letter, Mr. Hansen: (a) will receive an annual base salary of $360,000; (b) will be eligible to receive an annual discretionary bonus of up to 40% of his base salary; (c) will receive, in lieu of other bonus payment for such year, a one-time bonus of $50,000 in 2020; (d) will be eligible to receive equity incentives, subject to approval of an equity incentive plan by the Company’s stockholders; and (e) will be eligible to receive enhanced severance benefits if his employment is terminated under certain circumstances after the one (1) year anniversary of his employment by KAI.
Agreements with William A. Hickey, Jr. KAI entered into an Employment Separation Agreement and Release (the “Separation Agreement”) with Mr. Hickey on February 28, 2020, pursuant to which KAI will pay Mr. Hickey a one-time, lump sum severance of $360,000 and will vest 135,787 restricted shares of the Company’s Common Stock, $0.01 per share, held by Mr. Hickey, with the balance of Mr. Hickey’s restricted shares being forfeited. Mr. Hickey will provide consulting and transition support pursuant to the terms of a Consulting Agreement (the “Consulting Agreement”) through at least April 30, 2020, subject to renewal thereafter by agreement of the parties. In accordance with the Consulting Agreement, Mr. Hickey will receive a monthly payment of $30,000 for the months of March and April 2020 and an hourly consulting fee of $165 for time worked in subsequent months.
The foregoing descriptions of the Offer Letter, Separation Agreement and Consulting Agreement are qualified in their entirety by reference to the full text of such agreements, which are attached as Exhibits 10.2 through 10.4, respectively, to this Current Report on Form 8-K.