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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report: October 16,
2018
(Date
of earliest event reported)
KINGSTONE COMPANIES, INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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0-1665
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36-2476480
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File No.)
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(IRS
Employer Identification
Number)
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15 Joys
Lane, Kingston, NY
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12401
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (845) 802-7900
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of
Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
October 16, 2018, Kingstone Companies, Inc. (the
“Company”) announced that Barry B. Goldstein, 65, will
step down as Chief Executive Officer, effective January 1, 2019,
and that Dale A. Thatcher, 57, the Company’s current Chief
Operating Officer, will be promoted at such time to succeed Mr.
Goldstein as Chief Executive Officer. Additionally, the Company
announced that Mr. Goldstein, current Chairman of the Board of
Directors of the Company, has been named Executive Chairman and Mr.
Thatcher will continue to serve on the Board of Directors and
remain President of Kingstone Insurance Company.
Mr.
Thatcher was elected Chief Operating Officer of the Company and
President of Kingstone Insurance Company in March 2018. Previously,
Mr. Thatcher founded Atherstone Partners in 2016, a consulting
practice in insurance and investments. Prior to Atherstone, Mr.
Thatcher served as Executive Vice President and Chief Financial
Officer for Selective Insurance Group, Inc. from 2000 to 2016 and
held various positions for the Ohio Casualty Group from 1989 to
2000, most recently, Chief Accounting Officer. Mr. Thatcher is a
certified public accountant (inactive), a chartered property and
casualty underwriter, and a chartered life underwriter. Mr.
Thatcher has served as a director of the Company since August
2017. There are no
arrangements or understandings between Mr. Thatcher and any other
persons pursuant to which he was selected as Chief Executive
Officer. There are also no family relationships between Mr.
Thatcher and any director or executive officer of the Company, and
the Company has not entered into any transactions with Mr. Thatcher
that are reportable pursuant to Item 404(a) of Regulation
S-K.
On
October 16, 2018, the Company and Mr. Goldstein entered into an
Amended and Restated Employment Agreement to be dated and effective
as of January 1, 2019 and expiring on December 31, 2021 (the
“Amended Employment Agreement”). Pursuant to the
Amended Employment Agreement, Mr. Goldstein is entitled to receive
an annual base salary of $636,500 for the calendar year 2019 and
$500,000 for each of the calendar years 2020 and 2021. In addition,
Mr. Goldstein is eligible to receive an annual performance bonus
equal to 3% of the Company’s consolidated income from
operations before taxes, exclusive of the Company’s
consolidated net investment income (loss) and net realized gains
(losses) on investments. In addition, pursuant to the Amended
Employment Agreement, Mr. Goldstein is entitled to receive a
long-term compensation award (“LTC”) of between
$945,000 and $2,835,000 based on a specified minimum increase in
the Company’s adjusted book value per share (as defined in
the Amended Employment Agreement) as of December 31, 2019 as
compared to December 31, 2016 (with the maximum LTC payment being
due if the average per annum increase is at least 14%). Further,
pursuant to the Amended Employment Agreement, in the event that Mr.
Goldstein’s employment is terminated by the Company without
cause or he resigns for good reason (each as defined in the Amended
Employment Agreement), Mr. Goldstein would be entitled to receive
separation payments equal to his then applicable base salary, the
3% bonus and the LTC payment for the remainder of the term. Mr.
Goldstein would be entitled, under certain circumstances, to a
payment equal to three times his then annual salary and the target
LTC payment in the event of the termination of his employment
following a change of control of the Company. Pursuant to the
Amended Employment Agreement, Mr. Goldstein will be entitled to
receive a grant, under the terms of the Kingstone Companies, Inc. 2014 Equity
Participation Plan (the “Equity Plan”) during
the first 30 days of January, 2020, with respect to a number of
shares of restricted stock determined by dividing $436,500 by the fair market value of the Company
stock on the date of grant. The January 2020 grant will
become vested with respect to fifty percent (50%) of the award on
each of December 31, 2020 and December 31, 2021 based on continued
provision of services on each vesting date. Also pursuant to the
Amended Employment Agreement, Mr. Goldstein will be entitled to
receive a grant, under the Equity Plan during the first 30 days of
2021, with respect to a number of shares of restricted stock
determined by dividing $236,500 by the
fair market value of the Company stock on the date of grant. The
January 2021 grant will become vested as of December 31,
2021 based on continued provision of services on the vesting
date.
On
October 16, 2018, the Company and Mr. Thatcher entered into an
Employment Agreement to be dated and effective as of January 1,
2019 and expiring on December 31, 2021 (the “Employment
Agreement”). Pursuant to the Employment Agreement, Mr.
Thatcher is entitled to receive an annual base salary of $500,000
for 2019, $630,000 for 2020 and $630,000 for 2021. In addition, Mr.
Thatcher is eligible to receive an annual performance bonus equal
to 3% of the Company’s consolidated income from operations
before taxes, exclusive of the Company’s consolidated net
investment income (loss) and net realized gains (losses) on
investments. Pursuant to the Employment Agreement, in the event
that Mr. Thatcher’s employment is terminated by the Company
without cause or he resigns for good reason (each as defined in the
Employment Agreement), Mr. Thatcher would be entitled to receive
separation payments equal to his then applicable base salary and
the 3% bonus for the remainder of the term. Pursuant to the
Employment Agreement, Mr. Thatcher will be entitled to receive a
grant, under the terms of the Equity
Plan, with respect to a number of shares of restricted stock
in each of 2019, 2020 and 2021 determined by dividing $750,000, $1,250,000 and $1,500,000, respectively,
by the fair market value of the Company stock on the date of
grant. Each grant
vests ratably over a three year period from the date of
grant.
The
foregoing description of the Amended Employment Agreement and
Employment Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Amended Employment Agreement filed as Exhibit 10.1 and the
Employment Agreement filed as Exhibit 10.2 to this Current Report
on Form 8-K, which are incorporated by reference
herein.
Item 9.01. Financial
Statements and Exhibits.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KINGSTONE
COMPANIES, INC.
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Company Name
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Date: October
22, 2018
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By:
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/s/ Victor
Brodsky
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Name: Victor
Brodsky
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Title:
Chief Financial Officer
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