Blog: FEDNAT HOLDING CO : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 5.02.          Departure of Directors or Certain Officers; Election of Directors;
                    Appointment of Certain Officers


(b) As further described below in Item 5.02(c), effective July 24, 2022,
Michael H. Braun (“Braun”) resigned as Chief Executive Officer and as a member
of the board of directors (the “Board”) of FedNat Holding Company (the
“Company”).

(c) Effective July 24, 2022, David K. Patterson was named the Company’s interim
Chief Executive Officer. Mr. Patterson first joined the Board in August 2019 as
a Board observer pending completion of regulatory reviews and was elected to the
Board at the 2019 Annual Meeting. Mr. Patterson brings to the Board his more
than 40 years of operational and executive leadership experience in the property
and casualty insurance industry. Most recently he was Chairman and President of
ESIS, Inc. (“ESIS”), the risk management services subsidiary of Ace Limited (now
Chubb Limited), which he joined in 2004 and for which he served as President and
Chairman from 2005 to 2015. Prior to joining ESIS, Mr. Patterson was the
President and Chief Executive Officer of Kemper National Services, Inc., a
claims service organization serving the property and casualty insurance
operations of Kemper National, from 1994 to 2003. While at Kemper, Mr. Patterson
served in a variety of regional and home office senior leadership roles in
claims, systems and operations. For his service as interim Chief Executive
Officer, Mr. Patterson will receive a fee of $50,000 per month. Mr. Patterson’s
appointment as Chief Executive Officer and director of the Company’s wholly
owned insurance subsidiaries, FedNat Insurance Company and Maison Insurance
Company, is subject to compliance with applicable regulatory requirements.

On July 24, 2022, Braun and the Company entered into a Consulting Agreement (the
“Consulting Agreement”) that is filed as Exhibit 99.1 to this Current Report on
Form 8-K. The Consulting Agreement (and accompanying release) provides for:


•Confirmation of Braun's resignation as an officer and director of the Company
and each of its subsidiaries and affiliates;
•A general release by Braun of all claims that he might have had as a result of
his employment with the Company or the termination of his employment with the
Company;
•Braun to provide, at the request of the Board, limited consultation through
December 31, 2022;
•In lieu of the $2,000,000 lump sum payment to which Braun would have been
entitled in the event of a termination of his employment other than for "cause,"
consulting payments totaling $1,200,000, consisting of one lump sum payment of
$800,000, payable within ten business days and, thereafter, six monthly payments
of $66,666.67, commencing August 1, 2022;
•Vesting of all currently unvested restricted stock awards, which Braun is
entitled to under the terms of his employment agreement;
•Immediate payment of paid-time-off and accrued vacation pay of 10 weeks;
•A release of the non-competition agreement currently set forth in Braun's
employment agreement; and
•Standard confidentiality; non-solicitation and mutual non-disparagement
provisions.

The foregoing description of the material terms and conditions of the Consulting
Agreement is qualified in its entirety by reference to the Consulting Agreement,
which is filed as Exhibit 99.1 to this Current Report on Form 8-K.

(e) The compensation arrangements entered into in connection with the matters
disclosed in Items 5.02(b) and 5.02(c) are described above.


Item 7.01.     Regulation FD Disclosures


Pending approval of Florida’s Office of Insurance Regulation, David Lockhart
will be named President, Chief Financial Officer and Treasurer of Monarch
National Insurance Company (“Monarch”). As previously reported, Monarch is owned
60% by a group of investors managed by Hale Partnership Capital Management LLC
and 40% by the Company.

Mr. Lockhart brings more than 15 years of insurance experience, having most
recently served as Chief Financial Officer and Director of Security First
Insurance, a Florida-domiciled personal lines carrier. Prior to joining Security
First, Mr. Lockhart was the Chief Financial Officer and Director of Cabrillo
Holdings, and its subsidiary insurance companies, US Coastal Insurance Company
and US Coastal Property & Casualty Insurance Company. Prior to Cabrillo, Mr.
Lockhart was an audit staff member with Thomas, Howell, Ferguson P.A., where he
served a variety of insurance clients. Mr. Lockhart received his Bachelor’s and
Master’s in Accounting from Florida State University.

——————————————————————————–


                Item 9.01.     Financial Statements and Exhibits.


          Exhibits. The following exhibit index lists the exhibits that are either filed or
(d)       furnished with this Current Report on Form 8-K.
            Consulting Agreement dated July 24, 2022 between FedNat Holding Company and
99.1      Michael H. Braun
          Cover Page Interactive File (the cover page tags are embedded within the Inline
104       XBRL document).



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