Proxy Statement (Form DEF 14A)
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☐
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
(
(
Payment of Filing Fee (Check the appropriate box):
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
PROXY STATEMENT
FOR THE MEETING TO BE HELD ON
DATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN THAT an annual meeting (the "Meeting") of the shareholders of
| 1) | To elect eight (8) directors of the Corporation to hold office for a term of one (1) year or until their successors are duly appointed and qualified; |
| 2) | To ratify the appointment of |
| 3) | To approve, on a non-binding and advisory basis, the compensation of the named executive officers of the Corporation (say-on-pay) for fiscal year 2024. |
We may also transact such other business as may properly come before the Meeting and any postponements or adjournments thereof.
The accompanying proxy statement provides additional information relating to the matters to be dealt with at the Meeting and is deemed to form part of this Notice of Annual Meeting of Shareholders (the "Notice of Meeting").
Only shareholders of record at the close of business on
SHAREHOLDERS WHO ARE UNABLE TO ATTEND THE MEETING SHOULD COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT IN THE ENVELOPE PROVIDED FOR THAT PURPOSE, OR VOTE BY TELEPHONE OR OVER THE INTERNET.
Proxies to be used at the Meeting must be deposited with
| By Order of the Board of Directors | |
| Chairman of the Board of Directors | |
| 10 |
|
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON
The proxy statement and our 2024 Annual Report on Form 10-K, including all amendments thereto, are available on our website, www.kingsway-financial.com.
TABLE OF CONTENTS
| LETTER TO SHAREHOLDERS | 1 | |
| GENERAL PROXY INFORMATION | 2 | |
| Solicitation of Proxies | 2 | |
| Quorum | 2 | |
| Voting Securities and Principal Holders Thereof | 2 | |
| Security Ownership of Certain Beneficial Owners and Management | 4 | |
| Q&A on Proxy Voting | 6 | |
| PARTICULARS OF MATTERS TO BE ACTED UPON | 10 | |
| Proposal 1 - Election of Directors | 10 | |
| Proposal 2 - Appointment of Auditors | 15 | |
| Proposal 3 - Advisory Vote to Approve the Compensation of the Named Executive Officers | 16 | |
| CORPORATE GOVERNANCE MATTERS | 17 | |
| Corporate Governance Guidelines and Code of Business Conduct & Ethics | 17 | |
| Securities Trading Policy | 17 | |
| Board Committees | 18 | |
| Communications with the Board | 21 | |
| Board Leadership Structure and Role in Risk Oversight | 21 | |
| COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS | 22 | |
| Named Executive Officers for 2024 | 22 | |
| 2024 Summary Compensation Table | 23 | |
| 2024 Outstanding Equity Awards at Fiscal Year-End | 23 | |
| Potential Payments Upon Termination or Change in Control | 23 | |
| 2024 Pay Versus Performance Table | 24 | |
| Director Compensation | 25 | |
| Equity Compensation Plan Information | 26 | |
| CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS | 26 | |
| OTHER MATTERS | 26 | |
| HOUSEHOLDING OF PROXY MATERIALS | 27 | |
| ANNUAL REPORT | 27 | |
| SHAREHOLDER PROPOSALS FOR 2026 ANNUAL MEETING | 27 | |
| ADDITIONAL INFORMATION | 28 | |
LETTER TO SHAREHOLDERS
Dear Shareholder,
I would like to invite you to join the board of directors and senior management of
The Meeting will be held in person at the
At the Meeting, you will be asked to elect eight (8) directors, ratify the appointment of
Whether or not you plan to attend the Meeting, please complete, date, sign, and return, as promptly as possible, the enclosed form of proxy in the accompanying reply envelope or vote by telephone or the Internet. If you attend the Meeting, vote electronically at that time and/or complete a new form of proxy bearing a later date and properly submit it before the deadline, your vote will revoke any proxy previously submitted.
I appreciate your participation.
Sincerely,
Chairman of the Board of Directors
Page 1
GENERAL PROXY INFORMATION
SOLICITATION OF PROXIES
This proxy statement (the "Proxy Statement") is furnished in connection with the solicitation of proxies by or on behalf of the management and the board of directors (the "Board") of
The solicitations will be made primarily by mail, but proxies may also be solicited personally or by telephone by directors, officers, and regular employees of the Corporation, none of whom will receive additional compensation for assisting with the solicitation, and the estimated cost of which will be nominal. Banks, brokers, custodians, nominees and fiduciaries will be requested to forward the proxy soliciting materials to beneficial owners, and the Corporation will reimburse such persons for such reasonable out-of-pocket expenses incurred by them. The expenses of soliciting proxies, including the cost of preparing, assembling and mailing the Proxy Statement to shareholders, will be borne by the Corporation.
QUORUM
A quorum is required in order for the Meeting to be properly constituted. Holders of record, either personally present or represented by proxy, of not less than a majority of the voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote thereat shall constitute a quorum for the transaction of business at the Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The authorized capital of the Corporation consists of 50,000,000 shares of common stock, par value
As of the Record Date, there were 570,000
Mr.
Page 2
Restriction Period (as defined below) shall lapse. During the period between the date of grant and the date upon which any 2021 Fitzgerald Restricted Common Shares vest (the "2021 Fitzgerald Restriction Period"),
Mr.
Mr.
Mr.
Page 3
Agreement"). The original grant of 20,728 2024 Hansen Restricted Common Shares shall equally vest in 6,909 tranches every
Security Ownership of Certain Beneficial Owners and Management
In accordance with
| Number of Common Shares, Including Restricted Common Shares |
Percent of Common Shares, Including Restricted Common Shares, Outstanding (1) |
|
| 1,600,000 | 5.81% |
Notes:
| (1) | All percentages in this column are calculated based upon: (i) (a) the total number of Common Shares, including Restricted Common Shares, held by the beneficial owner plus (b) the number of options and |
| (2) | As reported in a Schedule 13G filed with the |
In accordance with
Page 4
| Beneficial Owner | Number of Common Shares, Including Restricted Common Shares |
Percent of Common Shares, Including Restricted Common Shares, Outstanding (1) |
| 2,886,120 (2) | 10.36% | |
| 1,609,529(3) | 5.84% | |
| 1,863,524 (5) | 6.76% | |
| 2,886,120 (6) | 10.36% | |
| 1,760,015 (7) | 6.32% | |
| 2,886,120 (8) | 10.36% | |
| 0 | * | |
| 5,968,290 (9) | 21.59% | |
| 125,000 (10) | * | |
| 1,232,000 (11) | 4.47% | |
| 134,893 (12) | * | |
| All Directors and Executive Officers as a Group (10 persons) | 15,579,371 | 53.83% |
* Indicates less than 1%.
Notes:
| (1) | All percentages in this column are calculated based upon: (i) (a) the total number of Common Shares, including Restricted Common Shares, held by the beneficial owner (or all directors and executive officers as a group) plus (b) the number of options and |
| (2) |
| (3) | Reflects the holdings of Common Shares reported by |
| (4) |
| (5) | Reflects the holdings of Common Shares reported by |
| (6) |
| (7) |
Page 5
| (8) | Oakmont has sole voting power and sole dispositive power with respect to (i) 2,487,830 Common Shares, (ii) 80,000 Series B Preferred Stock, and (iii) 40,000 Series C Preferred Stock that it owns directly. Oakmont may be deemed to be a beneficial owner of the balance of the 2,487,830 Common Shares, 80,000 Series B Preferred Stock, and 40,000 Series C Preferred Stock beneficially owned by the |
| (9) | Number of Common Shares is reported as described in a Schedule 13D/A filed with the |
| (10) | The number of common shares consists of (i) 10,000 shares held individually by |
| (11) |
| (12) | Reflects the holdings of Common Shares reported by |
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who beneficially own more than 10% of a registered class of our equity securities to file with the
Q&A ON PROXY VOTING
| Q: | What am I voting on? |
| A: | Shareholders are voting on the following: (i) the election of directors of the Corporation; (ii) the ratification of the appointment of the independent auditors of the Corporation for the 2025 fiscal year; and (iii) the approval of an advisory, non-binding resolution approving the 2024 compensation of the named executive officers. |
| Q: | Who is entitled to vote? |
| A: | Shareholders as of the close of business on the Record Date are entitled to vote. Each Common Share as of the Record Date is entitled to one (1) vote on those items of business identified in the Notice of Meeting. Holders of the outstanding |
| Q: | How can I attend the In-Person Meeting? |
| A: | The in-person Meeting of shareholders will be held at the |
Page 6
photo ID and should enter through the security tent at
You are entitled to attend the Meeting only if you were a shareholder of the Corporation as of the close of business on the Record Date, or if you hold a valid proxy for the Meeting.
The in-person Meeting will begin promptly at
| Q: | How do I vote? |
| A: | If you are a shareholder there are a number of ways you can vote your Shares: |
| • | By Mail: You may sign the enclosed form of proxy appointing the named persons or some other person you choose, who need not be a shareholder, to represent you as proxyholder and vote your Shares at the Meeting. Retuthe form of proxy by mail to: |
PO Box 43101
| • | By Telephone: Shareholders located in |
| • | By Internet: You may vote over the Internet by going to www.investorvote.com/KFS . You will need to enter the 15-digit control number provided on the form of proxy to vote your Shares over the Internet. |
| • | Voting in Person: If you are a registered shareholder, you may bring your proxy card and vote at the meeting. |
| • | Voting by telephone or on the Internet is fast, convenient and your vote is immediately confirmed and tabulated. If you choose to vote by telephone or on the Internet, instructions to do so are set forth on the form of proxy. The telephone and Internet voting procedures are designed to authenticate votes cast by use of a control number, which appears on the form of proxy. These procedures allow shareholders to appoint a proxy to vote their Shares and to confirm that their instructions have been properly recorded. If you vote by telephone, you will not be able to appoint a proxyholder. If you vote by telephone or on the Internet, your vote must be received by |
If you are a beneficial shareholder, the intermediary (usually a bank, trust company, broker, securities dealer or other financial institution) through which you hold your Shares will send you instructions on how to vote your Shares. Please follow the instructions on your voting instruction form.
| Q: | Who is soliciting my proxy? |
| A: | Your proxy is being solicited by or on behalf of management and the Board. The associated costs will be borne by the Corporation. The solicitations will be made primarily by mail, but proxies may also be solicited personally or by telephone by directors, officers, and regular employees of the Corporation, none of whom will receive additional compensation for assisting with the solicitation, and the estimated cost of which will be nominal. |
| Q: | What happens if I sign the form of proxy enclosed with the Proxy Statement? |
| A: | Signing the enclosed form of proxy gives authority to |
| Q: | Can I appoint someone other than these representatives to vote my Shares? |
| A: | No. If you choose to sign the form of proxy enclosed with the Proxy Statement, you are giving authority to |
Page 7
| Q: | What do I do with my completed proxy? |
| A: | Retuit to |
| Q: | How will my Shares be voted if I give my proxy? |
| A: | On the form of proxy, you can indicate how you want your proxyholder to vote your Shares. Your proxyholder must vote or withhold from voting in accordance with your instructions on any ballot that may be called for, and if you have specified on the form of proxy how you want your Shares to be voted on any matter to be acted upon, your Shares will be voted accordingly. |
If you have signed the form of proxy but have not specified on the form of proxy how you want your Shares to be voted on a particular issue, then your proxyholder will vote your Shares in favor of: (i) the election of each of the eight (8) director nominees set forth in the form of proxy; (ii) the ratification of the appointment of
| Q: | If I change my mind, can I revoke or change my proxy once I have given it? |
| A: | Yes. You may revoke your proxy and change your vote at any time before the Meeting in one of four ways: |
| (i) | Send a written notice that is received by the deadline specified below stating that you revoke your proxy to Kingsway's Chief Financial Officer at the following address: |
| (ii) | If you returned a proxy by mail, complete a new form of proxy bearing a later date and properly submit it so that it is received before the deadline set forth below; |
| (iii) | Log onto the Internet website specified on the form of proxy in the same manner you would to submit your proxy electronically or call the toll-free number specified on the form of proxy prior to the Meeting, in each case if you are eligible to do so, and follow the instructions on the form of proxy; or |
| (iv) | Attend the Meeting in person, declare your prior proxy to be revoked and then vote in person at the Meeting (although merely attending the Meeting will not revoke your proxy). |
Any revocation of a proxy must be delivered either to the principal executive office of the Corporation at any time up to and including the last business day preceding the day of the Meeting or any adjournment or postponement of the Meeting, or to the Chairman of the Board on the day of the Meeting,
| Q: | What happens if other business not discussed in this Proxy Statement comes before the Meeting? |
| A: | The Corporation does not know of any business to be presented at the Meeting other than the proposals listed in this Proxy Statement. If other business comes before the Meeting and is proper under |
Page 8
| Q: | How many Shares are entitled to vote? |
| A: | As of the Record Date, there were 27,537,151 Common Shares entitled to be voted at the Meeting. Each registered shareholder has one (1) vote for each Common Share held at the close of business on the Record Date. |
| Q: | How will the votes be counted? |
| A: | Abstentions from voting and broker non-votes will not be counted "for" or "against" a proposal but are counted in determining the number of Shares present or represented on a proposal for purposes of establishing a quorum. However, since approval of Proposals 2 and 3 require the affirmative vote of a majority of the Common Shares present or represented at the Meeting and entitled to vote, abstentions and broker non-votes will have the same effect as a vote "against" those Proposals. A "broker non-vote" occurs when a broker does not vote on some matter on the form of proxy because the broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. No holders of any Shares are entitled to cumulative voting rights. |
| Q: | Who counts the votes? |
| A: | The Corporation's transfer agent, |
| Q: | If I need to contact the transfer agent, how do I reach them? |
| A: | You can contact the transfer agent as follows: |
| by mail: | by telephone: |
| within all other countries at 1-781-575-3100 |
|
| or by email: | |
| [email protected] |
| Q: | If my Shares are not registered in my name but are held in the name of a nominee (a bank, trust company, securities broker, trustee or other), how do I vote my Shares? |
| A: | Generally, your Shares may be voted in one of two ways: |
| (i) | Unless you have previously informed your nominee that you do not wish to receive material relating to the Meeting, you will have received the Proxy Statement from your nominee, together with a request for voting instructions for the number of Shares you hold. If you do not plan on attending the Meeting, or do not otherwise wish to vote in person at the Meeting, please follow the voting instructions provided by your nominee. |
| (ii) | If you wish to attend and vote your Shares at the Meeting, the Corporation will have no record of your shareholdings or of your entitlement to vote unless your nominee has appointed you as proxyholder. Therefore, if you wish to vote in person at the Meeting, you will need to contact your nominee and obtain a proxy in accordance with your nominee's instructions. |
Notwithstanding the foregoing, shareholders must explicitly follow any instructions provided by their nominee.
Page 9
| Q: | How many votes does each item of business require for approval? |
| A: | Provided that a quorum is present, the nominees for director receiving a plurality of the votes cast at the meeting in person or by proxy will be elected. However, as discussed further in "Election of Directors," we have implemented a "Majority Election of Directors Policy" in uncontested director elections which requires that any incumbent director who does not receive a majority (50% +1) of "FOR" votes cast at the Meeting in favor of his/her election is required to immediately submit his/her resignation to the Audit Committee and the resignation will be effective if/when accepted by the Board. Provided that a quorum is present, Proposals 2 and 3 each require the affirmative vote of a majority of voting power present or represented by proxy and entitled to vote at the Meeting. |
| Q: | Are the votes on the say-on-pay proposal binding on the Board? |
| A: | No. Because your vote is advisory with respect to Proposals 3, it will not be binding upon the Board; however, the Board values the opinions of our shareholders and will take into account the outcome of the vote for Proposals 3 when considering future executive compensation arrangements. |
| Q: | How can I obtain additional information about Kingsway? |
| A: | Our Annual Report on Form 10-K for the year ended |
PARTICULARS OF MATTERS TO BE ACTED UPON
PROPOSAL 1 - ELECTION OF DIRECTORS
Our Certificate of Incorporation (our "Charter") provides that the Board shall consist of a total number of directors as determined from time to time exclusively by resolution adopted by the Board. The Board has determined that the number of directors constituting the Board currently be set at eight.
All director nominees are currently members of the Board and have been since the dates indicated in their respective profiles set forth below. It is contemplated that all of the nominees will be able to serve as directors; however, if a nominee should be unable to so serve for any reason prior to the Meeting, the persons named in the enclosed form of proxy reserve the right to vote for another nominee in their discretion. Each director elected will hold office until the next annual meeting of shareholders or until his/her successor is appointed and qualifies, unless his/her office is earlier vacated in accordance with the by-laws of the Corporation.
In order to be elected, a director nominee must receive a plurality of votes cast.
However, we have adopted a "Majority Election of Directors Policy" that provides that a director nominee who does not receive a majority (50% +1) of "FOR" votes cast at the Meeting in favor of his/her election in an uncontested election will be required to immediately submit his/her resignation to the Audit Committee and the resignation will be effective if/when accepted by the Board. The Audit Committee must make a recommendation to the Board to accept or reject the resignation, and the Board must act on the Audit Committee's recommendation within 90 days of the
Page 10
Meeting. The Board shall accept the resignation absent extenuating circumstances. The Corporation will promptly issue a news release with the Board's decision, and if the Board determines not to accept a resignation, the news release will state in full the reasons for that decision. A director who tenders a resignation pursuant to this policy will not participate in any meeting of the Board or any sub-committee of the Board at which the resignation is considered. A contested election is defined as a meeting at which the number of directors nominated for election is greater than the number of seats available on the Board.
Management and the Board unanimously recommend that shareholders vote FOR the election of all of the nominees whose names are set forth on the following pages. In the absence of contrary instructions, the persons designated by management of the Corporation in the enclosed form of proxy intend to vote FOR the election of all of the nominees whose names are set forth on the following pages.
Information set out below is as of
Board of Directors and Director Nominees(1)
|
Terence M. Age:70 Residence: Director Since: Independent(2) |
|
|
| Board Committee Membership: | Public Board Membership: | |
| Board | None | |
|
Investment Committee |
||
Page 11
|
John T. Age:53 Residence: Director Since: Not independent |
|
|
| Board Committee Membership: | Public Board Membership: | |
|
Board |
None | |
|
Gregory P. Age:70 Residence: Director Since: Independent(2) |
|
|
| Board Committee Membership: | Public Board Membership: | |
| Board | None | |
| Audit Committee | ||
|
Nominating and Corporate Governance Committee |
||
Page 12
|
Age:47 Residence: New Director Since: Independent(2) |
|
|
| Board Committee Membership: | Public Board Membership: | |
|
Board |
|
|
|
Age:66 Residence: Director Since: Independent(2) |
||
| Board Committee Membership: | Public Board Membership: | |
|
Board |
None | |
|
Investment Committee |
||
|
Age:40 Residence: Director Since: Independent(2) |
|
|
| Board Committee Membership: | Public Board Membership: | |
|
Board |
None | |
Page 13
|
Corissa B. Age:38 Residence: Director Since: Independent(2) |
||
| Board Committee Membership: | Public Board Membership: | |
| Board | ||
|
Audit Committee |
||
|
Joseph D. Age:63 Residence: Director Since: Independent(2) |
Since 2019, |
|
| Board Committee Membership: | Public Board Membership: | |
| Board | Director, |
|
| Nominating and Corporate Governance Committee | ||
| Compensation & Management Resources Committee |
||
Notes:
| (1) | All of the directors attended the 2024 annual meeting of shareholders except for Messrs. Levine and Stilwell. |
| (2) | "Independent" refers to the standards of independence established under section 301 of the Sarbanes-Oxley Act of 2002 ("SOX") and the criteria for independence established by the NYSE and |
Page 14
Executive Officers who are not Directors
Involvement in Certain Legal Proceedings
PROPOSAL 2 - APPOINTMENT OF AUDITORS
The Board recommends ratifying the appointment of
In approving the selection of Plante as the Corporation's independent registered public accounting firm for the year ended
Audit Fees
The aggregate fees billed by Plante for professional services rendered for the audit of the consolidated financial statements of the Corporation and its subsidiaries, including expenses reimbursed, were
Page 15
Audit-Related Fees
The aggregate audit-related fees, including expenses reimbursed, billed by Plante for services rendered to the Corporation and its subsidiaries pertaining to the audit of the 401(k) plan were
Tax Fees
The aggregate fees, including expenses reimbursed, billed by Plante for tax compliance, tax advice and tax planning services were zero in fiscal years 2024 and 2023.
All Other Fees
The aggregate fees, including expenses reimbursed, billed by Plante for services other than the services reported above under "Audit Fees," "Audit-Related Fees" and "Taxes" were
The Audit Committee Charter provides for the Audit Committee to establish the auditors' fees. Such fees have been based upon the complexity of the matters in question and the time incurred by the auditors. Management believes that the fees negotiated in the past with the auditors of the Corporation were reasonable in the circumstances and would be comparable to fees charged by other auditors providing similar services.
As discussed in the "Report of the Audit Committee" in the Proxy Statement, the Audit Committee has reviewed and considered whether the provision of services other than audit services is compatible with maintaining the auditors' independence. The Audit Committee has considered and pre-approved expenditure limits for the Corporation's auditors and established a system to review and pre-approve the provision of audit and non-audit services by the Corporation's auditors to ensure they are consistent with maintaining the auditors' independence. In each of the Corporation's last two completed fiscal years and during the 2025 fiscal year to date, all audit and non-audit services were pre-approved by the Audit Committee.
Management and the Board unanimously recommend that shareholders vote FOR the ratification of the appointment of Plante as auditors of the Corporation for the fiscal year ending
PROPOSAL 3 - ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
The Corporation is providing shareholders the opportunity to vote on a non-binding, advisory basis to approve the compensation of the named executive officers, commonly known as a "say-on-pay" vote, as required by Section 14A of the Exchange Act.
Resolution
The advisory vote on executive compensation is a non-binding vote on the compensation of the Corporation's named executive officers, as described in "Compensation of Executive Officers and Directors" below. Shareholders may abstain from voting, if they so choose. Accordingly, the Corporation is asking its shareholders to approve the following resolution at the Meeting:
Page 16
RESOLVED that the compensation paid to the Corporation's named executive officers, including the compensation tables contained in the Proxy Statement dated
As an advisory vote, the result of the say-on-pay vote is non-binding on the Corporation and the Board; however, the Board and the
Management and the Board unanimously recommend that shareholders vote FORthe approval of the advisory resolution approving the 2024 compensation of the named executive officers, as disclosed in the Proxy Statement. In the absence of contrary instructions, the persons designated by management of the Corporation in the enclosed form of proxy intend to vote FORthe approval of the advisory resolution approving the 2024 compensation of the named executive officers.
CORPORATE GOVERNANCE MATTERS
Corporate Governance Guidelines and Code of Business Conduct & Ethics
Except for
During 2024, the Board met eight (8) times, including in-person and telephonic meetings. Each director attended at least 75% of the total meetings of the Board and committees of the Board on which he or she served. Additionally, the directors often communicate with one another and with management informally to discuss our affairs.
The Corporation has adopted Corporate Governance Guidelines which comply with the NYSE listing standards and corporate governance requirements of applicable law. The Corporate Governance Guidelines were amended and adopted by the Board on
The Corporation has also adopted a written code of ethics, which was amended and adopted by the
Securities Trading Policy
The Corporation has adopted a securities trading policy that prohibits directors, officers, employees and certain other covered persons from engaging in insider trading and from entering into hedging or monetization transactions or similar arrangements with respect to the Corporation's securities that the Corporation believes are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Corporation. It is also the policy of the Company to comply with all applicable securities laws when transacting in its own securities. The Disclosure, Securities Trading and Confidentiality Policy is posted on the Corporation's website at www.kingsway-financial.com/corporate-governance and a copy of this policy was filed as Exhibit 19 to our Annual Report on Form 10-K for the year ended 2024.
Page 17
Board Committees
The board has four (4) standing committees: the Audit Committee, the
Audit Committee
The Board has a standing Audit Committee which operates pursuant to a written charter adopted by the Board. The Audit Committee consists of three or more directors, each of whom is an outside director who is unrelated to the Corporation, free from any relationship that would interfere with the exercise of his or her independent judgment and each of whom is "independent" under the listing rules of the NYSE. Audit Committee members meet the requirements of all applicable securities laws and the NYSE. All members of the Audit Committee are financially literate, being defined as able to read and understand basic financial statements, and the Chair of the Audit Committee has accounting or related financial management expertise. At least one member of the Audit Committee is an "audit committee financial expert" as defined in the rules and regulations of the
The primary purpose of the Audit Committee is to:
| (i) | Identify and monitor the management of the principal risks that could impact the financial reporting of the Corporation; |
| (ii) | Monitor the integrity of the Corporation's financial reporting process and system of internal controls regarding financial reporting and accounting appropriateness and compliance; |
| (iii) | Appoint, replace and monitor the independence and performance of the Corporation's external auditors; |
| (iv) | Provide an avenue of communication among the external auditors, management and the Board; and |
| (v) | Review the annual audited and quarterly unaudited financial statements with management and the external auditors. |
As of
The Audit Committee held four (4) meetings, including telephonic meetings, in the fiscal year ended
Page 18
Report of the Audit Committee
The Audit Committee has met and held discussions with management and the independent auditors. Management represented to the Audit Committee that the Corporation's consolidated financial statements were prepared in accordance with accounting principles generally accepted in
The Corporation's independent auditors also provided to the Audit Committee the written disclosures required by applicable requirements of the PCAOB regarding the independent auditors' communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent auditors that firm's independence. The Audit Committee also considered whether the provision of non-audit services by the independent auditors is compatible with their independence.
Based upon the Audit Committee's discussion with management and the Corporation's independent auditors and the Audit Committee's review of the representation of management and the report of the independent auditors to the Audit Committee, the Audit Committee recommended that the Board include the audited consolidated financial statements in the Corporation's Annual Report on Form 10-K for the fiscal year ended
Members of the Audit Committee
The Board has a standing
The Compensation Committee held one (1) telephonic meetings in the fiscal year ended
The primary purpose of the Compensation Committee is to:
| (i) | Assist the Board in discharging its responsibilities in respect of compensation of the Corporation's executive officers and subsidiary Presidents; |
| (ii) | Provide recommendations to the Board in connection with directors' compensation; and |
| (iii) | Provide recommendations to the Board in connection with succession planning for senior management of the Corporation. |
In making its compensation decisions and recommendations, the Compensation Committee may take into account the
Page 19
recommendations of the Chief Executive Officer with respect to the other senior officers of the Corporation and the President of each of the Corporation's subsidiaries. Other than giving such recommendations, however, the Chief Executive Officer has no formal role and no authority to determine the amount or form of executive and director compensation.
The Compensation Committee has the sole authority to retain and terminate (or obtain the advice of) any adviser to assist it in the performance of its duties, but only after taking into consideration all factors relevant to the adviser's independence from management, including those specified in Section 303A.05(c)(iv) of the New York Stock Exchange Listed Company Manual. The Compensation Committee shall evaluate and determine whether any compensation consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K under the rules and regulations of the
As of
Nominating and Corporate Governance Committee
The Board has a standing
The primary purpose of the
| (i) | Identify, evaluate and recommend individuals qualified to become members of the Board, consistent with criteria approved by the Board, and select or recommend that the Board select the director nominees to stand for election at each annual or special meeting of shareholders of the Corporation in which directors will be elected or to fill vacancies on the Board; |
| (ii) | Develop and recommend to the Board a set of corporate governance guidelines applicable to the Corporation; |
| (iii) | Oversee the annual performance evaluation of the Board and its committees and management; and |
| (iv) | Otherwise take a leadership role in shaping and providing oversight of the corporate governance of the Corporation, including recommending directors eligible to serve on all committees of the Board. |
The Corporation believes that the current Board has the mix of industry knowledge, experience and financial expertise required to provide strong oversight of the Corporation. The Corporation does not have a diversity policy. In considering a candidate for nomination as a member of the Board, the
Page 20
Corporate Governance Committee does not take into account race, sex or creed in its evaluation of any director or nominee.
As of
Investment Committee
The Board has a standing Investment Committee which operates pursuant to a written charter adopted by the Board. The Investment Committee consists of two or more directors, the majority of whom must satisfy the applicable independence requirements of the applicable regulatory authorities. The Board has determined that each member of the Investment Committee in the fiscal year ended
The Investment Committee held one (1) telephonic meeting in the fiscal year ended
The primary purpose of the Investment Committee is to:
| (i) | Assist the Board and management in respect of the management of the invested assets of the Corporation and its subsidiary companies; |
| (ii) | Develop and monitor investment policies and guidelines for the Corporation; |
| (iii) | Select and retain external investment managers; and |
| (iv) | Monitor the performance of external investment managers, if any. |
As of
Communications with the Board
It is the Corporation's policy to forward to the directors any correspondence it receives that is addressed to them. Shareholders, or other interested parties, who wish to communicate with the directors may do so by sending their correspondence addressed to the director or directors as follows:
Our directors' attendance at annual meetings can provide shareholders with an opportunity to communicate with directors about issues affecting the Corporation. Our Corporate Governance Guidelines encourage our directors to attend the annual meeting of shareholders. All of the directors then in office attended the 2024 annual meeting of shareholders.
Board Leadership Structure and Role in Risk Oversight
Our President and Chief Executive Officer,
Page 21
focuses on the overall strategy of the business and leadership of the Board, including: presiding at all Board meetings, at all executive sessions of the Board held without management and at the annual meeting of shareholders; establishing Board meeting agendas in consultation with the Chairs of the Board committees; acting as a liaison between the directors and the Corporation's management; advising the Chief Executive Officer of the quality, quantity and timeliness of the flow of information from management to enable the directors to effectively and responsibly perform their duties; facilitating communication among directors; and maintaining frequent contact with the Chief Executive Officer.
The Board believes that its optimal leadership structure may vary as circumstances warrant and views its current structure as appropriate to supervise the business and affairs of the Corporation.
The Corporation's management is primarily responsible for managing risk and informing the Board of the material risks confronting the Corporation. The Board has oversight responsibility of the processes established to monitor and manage such risks. The Board believes that such oversight function is the responsibility of the entire Board through frequent reports and discussions at regularly scheduled Board meetings. In addition, the Board has delegated specific risk management oversight responsibility to the Audit Committee and to the independent members of the Board. In particular, the Audit Committee oversees the management of risks related to accounting, auditing and financial reporting and maintaining effective internal controls for financial reporting. The independent members of the Board oversee risk management related to the Corporation's corporate governance practices and the Corporation's executive compensation plans and arrangements. These specific risk categories and the Corporation's risk management practices are regularly reviewed by the entire Board in the ordinary course of regular Board meetings.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Named Executive Officers for 2024
The following individuals are the Corporation's named executive officers for 2024. Each of the following individuals held the position(s) set forth opposite his name as of
| Title | |
| President & Chief Executive Officer(1) | |
| Executive Vice President & Chief Financial Officer(2) |
Notes:
| (1) |
| (2) |
Page 22
2024 Summary Compensation Table
The following table provides information regarding the compensation of our named executive officers for the last two completed fiscal years.
Principal Position |
Year | Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
All Other Compensation(2) ($) |
Total ($) |
President & Chief Executive Officer |
2024 | 600,000 | (3) | - | - | - | ||
| 2023 | 574,231 | - | - | - | - | 35,961 | 610,192 | |
EVP & Chief Financial Officer |
2024 | 375,000 | (3) | 361,786 | - | - | ||
| 2023 | 371,250 | 70,000 | - | - | - | 25,813 | 467,063 |
Notes:
| (1) | The amounts reported in these columns are valued based on the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation ("FASB ASC Topic 718") and do not correspond to the actual value that might be realized by the NEOs. See Note 17 to the Financial Statements included in our Annual Report on Form 10-K for the year ended |
| (2) | For each named executive officer, amounts reported in this column include employer contributions to the Corporation's 401(k) retirement plan and Employee Share Purchase Plan. |
| (3) | The bonus amounts for fiscal year 2024 have not been determined as of the date of the filing of this proxy statement. |
2024 Outstanding Equity Awards at Fiscal Year-End
| Option Awards | Stock Awards | |||||
| Number of Securities Underlying Unexercised Options Exercisable (#) |
Number of Securities Underlying Unexercised Options Unexercisable (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Unearned Shares or Units That Have Not Vested (#)(1) |
Market Value of Shares or Units That Have Not Vested ($)(2) |
|
| - | - | - | - | 400,000 | ||
| - | - | - | - | 43,302 | ||
Notes:
| (1) | Refer to" Voting Securities and Principal Holders" section on Page 2 for full vesting information. |
| (2) | The value of the Common Shares is based on the closing price of the Common Shares on the NYSE of |
Potential Payments Upon Termination or Change in Control
The Corporation maintains a severance policy (the "Severance Policy") for the payment of certain benefits to certain eligible employees of the Corporation, but not our named executive officers. Benefits are paid under the Severance Policy following a termination of employment in connection with a reduction in work force. Under the Severance Policy, upon a qualifying termination of employment, the eligible participants are entitled to two weeks of severance pay for each full year of service with the Corporation, with a minimum of 12 weeks of severance pay and a maximum of 39
Page 23
weeks of severance pay. Participants are also entitled to receive subsidized benefits as provided under the Consolidated Omnibus Budget Reconciliation Act during the severance period.
In lieu of benefits under the Severance Policy,
In lieu of any severance benefits under the Severance Policy,
2024 Pay Versus Performance
The following table sets forth information concerning: (1) the compensation of our Chief Executive Officer and President,
| Year | Summary Compensation Table Total for PEO |
Compensation Actually Paid to PEO |
Average Summary Compensation Table Total for Non-PEO NEO |
Average Compensation Actually Paid to Non- |
Value of Initial Fixed On Total Shareholder Return |
Net Income (thousands) |
| 2024 | 637,250 | 592,250 | 762,161 | 766,751 | -8,295 | |
| 2023 | ||||||
| 2022 |
(1)
(2)
Officer compensation is determined by the Compensation Committee. In terms of base salary the Compensation Committee considers the market for similarly situated employees at peer companies and the employee's overall performance both individually and as it relates to the overall results. Variable compensation considers profitability during the year. Compensation actually paid to the PEO and Non-
Page 24
2023 and 2022 financial results, as well as the achievement of strategic objectives. The Compensation Committee also considered shareholder retuas a factor in compensation, given the steady increase in our share price over the past few years.
Director Compensation
Narrative Description
The Corporation's director compensation program is designed to provide reasonable compensation for the risks and responsibilities of being a director. Only non-employee directors of the Board are remunerated for serving as directors of the Corporation. Non-employee directors received a single retainer fee, payable in quarterly installments in advance, in the amount of
2024 Director Compensation
The following table provides information regarding the compensation of our non-employee directors for 2024.
| Fees Earned or Paid in Cash ($)(1) |
All Other Compensation ($) |
Total ($) |
|
| 120,000 | - | 120,000 | |
| 80,000 | - | 80,000 | |
| 120,000 | - | 120,000 | |
| - | - | - | |
| 80,000 | - | 80,000 | |
| - | - | - | |
| 80,000 | - | 80,000 | |
| 80,000 | - | 80,000 |
Notes:
| (1) | Amounts reported in this column include the annual retainer paid to each non-employee director, plus an additional fee paid to each of Messrs. Kavanagh and Hannon for serving as Chairman of the Board and Chairman of the Audit Committee, respectively. |
| (2) | Messrs. Horowitz and Patinkin were appointed to the Board on |
Page 25
Equity Compensation Plan Information
The following table sets forth information regarding the securities authorized for issuance under our equity compensation plans as of
| Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|
| Equity compensation plans approved by security holders |
- | N/A | 440,101(1) |
| Equity compensation plans not approved by security holders |
- | N/A | - |
| Total | - | N/A | 440,101 |
| (1) | Represents securities available for issuance pursuant to the 2020 Equity Incentive Plan. |
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS
Other than as set forth below, no director, executive officer or person who is a proposed nominee for election as a director of the Corporation, and no associate or affiliate of any such director, executive officer or proposed nominee, nor, to the best knowledge of the directors and executive officers of the Corporation after having made reasonable inquiry, any person or company who beneficially owns, controls or directs, directly or indirectly, voting securities of the Corporation carrying more than five (5%) percent of the voting rights attached to all outstanding voting securities of the Corporation at the date hereof, or any associate or affiliate thereof, has any material interest, direct or indirect, in any transaction since the commencement of the Corporation's most recently completed fiscal year or in any proposed transaction which has materially affected or would materially affect the Corporation or any of its subsidiaries which is in excess of the lesser of
As previously disclosed, the Corporation acquired
OTHER MATTERS
As of the date of the Proxy Statement, management and the Board know of no amendment, variation or other matter expected to come before the Meeting other than the matters referred to in the Notice of Meeting; however, if any other matter properly comes before the Meeting, the persons named in the accompanying form of proxy will vote on such matter in accordance with their best judgment.
Page 26
HOUSEHOLDING OF PROXY MATERIALS
The
This year, a number of brokers with account holders who are our shareholders will be "householding" our proxy materials. A single set of annual meeting materials will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be "householding" communications to your address, "householding" will continue until you are notified otherwise or until you revoke your consent. We will deliver promptly upon written or oral request a separate set of annual meeting materials to any shareholder who received these materials at a shared address. If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate set of annual meeting materials, please notify your broker or us. Direct your written request to
ANNUAL REPORT
Copies of the Annual Report on Form 10-K and all amendments thereto (including financial statements and financial statement schedules) may be obtained without charge by writing to
SHAREHOLDER PROPOSALS FOR 2026 ANNUAL MEETING
Pursuant to Rule 14a-8 under the Exchange Act ("Rule 14a-8") all proposals of shareholders intended to be included in the Proxy Statement relating to the 2025 annual meeting must be received by the Corporation at our principal executive office not less than 120 calendar days before the first anniversary of the date of the Corporation's proxy statement released to shareholders in connection with the 2025 annual meeting (which would be
Page 27
Under our by-laws and applicable
The persons named in the Corporation's form of proxy for the 2026 annual meeting will have discretionary authority to vote the shares represented by such proxies on the shareholder proposal, without including information about the proposal in the Corporation's proxy materials.
With respect to business to be brought before the Meeting, we have not received any notices from shareholders that we were required to include in the Proxy Statement.
ADDITIONAL INFORMATION
Financial information about the Corporation is contained in its consolidated financial statements and Management's Discussion and Analysis for the fiscal year ended
| 1) | the Annual Report on Form 10-K for the fiscal year ended |
| 2) | the consolidated financial statements of the Corporation for the fiscal year ended |
| 3) | the Proxy Statement, |
please send your request to:
Attention: Investor Relations
The Board has approved the contents of the Proxy Statement and the sending of it to the directors, the shareholders, and the auditors of the Corporation.
DATED this
| By Order of the Board of Directors | |
| Chairman of the Board of Directors |
Page 28
The Sample Company Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Your vote matters - here's how to vote! You may vote online or by phone instead of mailing this card. Online Go to www.investorvote.com/KFS or scan the QR code - login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the
2025 Annual Meeting of
Attachments
Disclaimer
Federal Reserve could be in 'difficult' spot with higher prices, slower hiring
Additional Proxy Soliciting Materials (Form DEFA14A)
Advisor News
- The modern advisor: Merging income, insurance, and investments
- Financial shocks, caregiving gaps and inflation pressures persist
- Americans unprepared for increased longevity
- More investors will seek comprehensive financial planning
- Midlife planning for women: why it matters and how advisors should adapt
More Advisor NewsAnnuity News
- LIMRA: Annuity sales notch 10th consecutive $100B+ quarter
- AIG to sell remaining shares in Corebridge Financial
- Corebridge Financial, Equitable Holdings post Q1 earnings as merger looms
- AM Best Assigns Credit Ratings to Calix Re Limited
- Transamerica introduces new RILA with optional income features
More Annuity NewsHealth/Employee Benefits News
- SENATE APPROVES BILL TO LIMIT PREMIUM INCREASES, PROTECT ACCESS TO HEALTHCARE
- All about AHCCCS: Navigating Arizona Medicaid’s changing landscape
- GOVERNOR SIGNS BIOMARKER TESTING COVERAGE BILL
- REGULATION OF AI IN PRIOR AUTHORIZATION AND CLAIMS REVIEW: A LOOK AT FEDERAL AND STATE CONSUMER PROTECTIONS
- LEADING HEALTH ORGANIZATIONS URGE NC LAWMAKERS TO RECONSIDER PROPOSAL IMPLEMENTING MEDICAID CUTS
More Health/Employee Benefits NewsLife Insurance News
- 2025 Insurance Abstracts
- AM Best Assigns Credit Ratings to Tokio Marine Newa Insurance Co., Ltd.
- Earnings roundup: Prudential works to save ‘unique’ Japanese market
- How life insurance became a living-benefits strategy
- Financial Focus : Keep your beneficiary choices up to date
More Life Insurance News