CUSIP No. 496904202
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SCHEDULE 13D
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Page 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of
1934
(Amendment No. 30)
KINGSWAY
FINANCIAL SERVICES Inc.
(Name of Issuer)
Common Shares, no par value
(Title of Class of Securities)
496904202
(CUSIP Number)
Mr. Joseph Stilwell
111 Broadway, 12th Floor
New York, New York 10006
Telephone: (212) 269-1551
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 13, 2020
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed
a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because
of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
The information required on the remainder
of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of
1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions
of the Act (however, see the Notes).
CUSIP No. 496904202
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SCHEDULE 13D
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Page 2
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1.
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Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
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Stilwell Activist Fund, L.P.
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2.
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) x
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(b)
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3.
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SEC Use Only
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4.
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Source of Funds (See Instructions) WC, OO
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5.
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6.
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Citizenship or Place of Organization:
Delaware
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7. Sole Voting Power: 0
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8. Shared Voting Power: 5,679,539
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9. Sole Dispositive Power: 0
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10. Shared Dispositive Power: 5,679,539
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: 5,679,539
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12.
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13.
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Percent of Class Represented by Amount in Row (11): 24.9%
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14.
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Type of Reporting Person (See Instructions)
PN
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CUSIP No. 496904202
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SCHEDULE 13D
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Page 3
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1.
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Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
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Stilwell Activist Investments, L.P.
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2.
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) x
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(b)
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3.
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SEC Use Only
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4.
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Source of Funds (See Instructions) WC, OO
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5.
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6.
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Citizenship or Place of Organization:
Delaware
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7. Sole Voting Power: 0
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8. Shared Voting Power: 5,679,539
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9. Sole Dispositive Power: 0
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10. Shared Dispositive Power: 5,679,539
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: 5,679,539
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12.
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13.
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Percent of Class Represented by Amount in Row (11): 24.9%
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14.
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Type of Reporting Person (See Instructions)
PN
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CUSIP No. 496904202
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SCHEDULE 13D
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Page 4
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1.
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Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
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Stilwell Associates, L.P.
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2.
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) x
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(b)
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3.
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SEC Use Only
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4.
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Source of Funds (See Instructions) WC, OO
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5.
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6.
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Citizenship or Place of Organization:
Delaware
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7. Sole Voting Power: 0
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8. Shared Voting Power: 5,679,539
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9. Sole Dispositive Power: 0
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10. Shared Dispositive Power: 5,679,539
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: 5,679,539
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12.
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13.
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Percent of Class Represented by Amount in Row (11): 24.9%
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14.
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Type of Reporting Person (See Instructions)
PN
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CUSIP No. 496904202
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SCHEDULE 13D
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Page 5
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1.
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Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
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Stilwell Value Partners VII, L.P.
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2.
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) x
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(b)
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3.
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SEC Use Only
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4.
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Source of Funds (See Instructions) WC, OO
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5.
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6.
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Citizenship or Place of Organization:
Delaware
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7. Sole Voting Power: 0
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8. Shared Voting Power: 5,679,539
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9. Sole Dispositive Power: 0
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10. Shared Dispositive Power: 5,679,539
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: 5,679,539
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12.
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13.
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Percent of Class Represented by Amount in Row (11): 24.9%
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14.
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Type of Reporting Person (See Instructions)
PN
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CUSIP No. 496904202
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SCHEDULE 13D
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Page 6
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1.
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Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
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Stilwell Value LLC
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2.
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) x
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(b)
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3.
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SEC Use Only
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4.
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Source of Funds (See Instructions) N/A
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5.
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6.
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Citizenship or Place of Organization:
Delaware
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7. Sole Voting Power: 0
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8. Shared Voting Power: 5,679,539
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9. Sole Dispositive Power: 0
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10. Shared Dispositive Power: 5,679,539
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: 5,679,539
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13.
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Percent of Class Represented by Amount in Row (11): 24.9%
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14.
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Type of Reporting Person (See Instructions)
OO
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CUSIP No. 496904202
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SCHEDULE 13D
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Page 7
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1.
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Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
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Joseph Stilwell
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2.
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Check the Appropriate Box if a Member of a Group (See Instructions)
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(a) x
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(b)
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3.
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SEC Use Only
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4.
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Source of Funds (See Instructions) PF,OO
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5.
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6.
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Citizenship or Place of Organization:
United States
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With
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7. Sole Voting Power: 0
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8. Shared Voting Power: 5,679,539
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9. Sole Dispositive Power: 0
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10. Shared Dispositive Power: 5,679,539
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|
11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: 5,679,539
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12.
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13.
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Percent of Class Represented by Amount in Row (11): 24.9%
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14.
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Type of Reporting Person (See Instructions)
IN
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CUSIP No. 496904202
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SCHEDULE 13D
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Page 8
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Item 1. Security and Issuer
This is the thirtieth
amendment (this "Thirtieth Amendment") to the original Schedule 13D, which was filed on November 7, 2008 (the "Original
Schedule 13D"), and amended on November 14, 2008 (the "First Amendment"), on November 17, 2008 (the "Second
Amendment"), on November 24, 2008 (the "Third Amendment"), on December 29, 2008 (the "Fourth Amendment"),
on January 12, 2009 (the "Fifth Amendment"), on February 2, 2009 (the "Sixth Amendment"), on February 17, 2009
(the "Seventh Amendment"), on February 18, 2009 (the "Eighth Amendment"), on April 9, 2009 (the "Ninth
Amendment"), on April 28, 2009 (the "Tenth Amendment"), on August 4, 2009 (the "Eleventh Amendment"),
on November 16, 2009 (the "Twelfth Amendment"), on April 8, 2010 (the "Thirteenth Amendment"), on April 20,
2010 (the "Fourteenth Amendment"), on June 7, 2010 (the "Fifteenth Amendment"), on June 29, 2010 (the "Sixteenth
Amendment"), on September 24, 2012 (the "Seventeenth Amendment"), on November 30, 2012 (the "Eighteenth Amendment"),
on June 11, 2013 (the "Nineteenth Amendment"), on September 20, 2013 (the "Twentieth Amendment"), on December
27, 2013 (the "Twenty-First Amendment"), on February 12, 2014 (the "Twenty-Second Amendment"), on September
22, 2014 (the “Twenty-Third Amendment”), on September 30, 2016 (the “Twenty-Fourth Amendment”), on December
15, 2017 (the “Twenty-Fifth Amendment”), on May 24, 2018 (the “Twenty-Sixth Amendment”), on July 19, 2018
(the “Twenty-Seventh Amendment”), on January 3, 2019 (the “Twenty-Eighth Amendment”), and on March 29,
2019 (the “Twenty-Ninth Amendment”). This Thirtieth Amendment is being filed jointly by Stilwell Activist Fund, L.P.,
a Delaware limited partnership ("Stilwell Activist Fund"); Stilwell Activist Investments, L.P., a Delaware limited partnership
("Stilwell Activist Investments"); Stilwell Associates, L.P., a Delaware limited partnership ("Stilwell Associates");
Stilwell Value Partners VII, L.P., a Delaware limited partnership (“Stilwell Value Partners VII”); Stilwell Value LLC,
a Delaware limited liability company ("Stilwell Value LLC") and the general partner of Stilwell Activist Fund, Stilwell
Activist Investments, Stilwell Associates, and Stilwell Value Partners VII; and Joseph Stilwell, the managing member and owner
of Stilwell Value LLC. All the filers of this statement are collectively referred to herein as the "Group." The amended
joint filing agreement of the members of the Group was filed as Exhibit 31 to the Twenty-Eighth Amendment. Joseph Stilwell, a member
of the Group, was appointed to the board of directors of the Issuer on April 23, 2009, and since that date he has continuously
served as a director.
This statement relates
to the common stock, no par value (“Common Stock”), of Kingsway Financial Services Inc. ("KFS" or the “Issuer”).
The address of the principal executive offices of the Issuer is 150 Pierce Road, 6th Floor, Itasca, Illinois 60143.
Item 2. Identity and Background
(a)-(c) This statement
is filed by Joseph Stilwell with respect to the shares of Common Stock beneficially owned by Joseph Stilwell, including shares
of Common Stock held in the names of Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, and Stilwell Value
Partners VII, in Joseph Stilwell's capacities as the managing member and owner of Stilwell Value LLC, which is the general partner
of Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, and Stilwell Value Partners VII.
The business address
of Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, Stilwell Value Partners VII, Stilwell Value LLC,
and Joseph Stilwell is 111 Broadway, 12th Floor, New York, New York 10006.
The principal employment
of Joseph Stilwell is investment management. Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, and Stilwell
Value Partners VII are private investment partnerships engaged in the purchase and sale of securities for their own accounts. Stilwell
Value LLC serves as the general partner of Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, Stilwell
Value Partners VII, and related partnerships.
(d) During the past
five years, no member of the Group has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past
five years, no member of the Group has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction
and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such
laws, except as indicated in Schedule A attached hereto.
(f) Joseph Stilwell
is a citizen of the United States.
CUSIP No. 496904202
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SCHEDULE 13D
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Page 9
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Item 3. Source and Amount of Funds or
Other Consideration
All purchases of shares
of Common Stock or warrants to purchase shares of Common Stock made by the Group using funds borrowed from subsidiaries of Fidelity
Brokerage Services LLC, JP Morgan Chase & Co., Jefferies LLC or Morgan Stanley, if any, were made in margin transactions on
their usual terms and conditions. All or part of the shares of Common Stock or warrants to purchase shares of Common Stock owned
by members of the Group may from time to time be pledged with one or more banking institutions or brokerage firms as collateral
for loans made by such entities to members of the Group. Such loans generally bear interest at a rate based on the broker’s
call rate from time to time in effect. Such indebtedness, if any, may be refinanced with other banks or broker-dealers.
Item 4. Purpose of Transaction
We are filing this
Thirtieth Amendment to report that we, through a letter agreement dated July 13, 2020, have further extended the duration of our
Undertaking with the Issuer originally filed as Exhibit 26 to the Twenty-Fourth Amendment, as extended by a letter agreement dated
June 1, 2018, the details of which are set forth below in Item 6.
Our purpose in acquiring
shares of Common Stock of the Issuer is to profit from the appreciation in the market price of the shares of Common Stock through
asserting shareholder rights.
Since 2000, members
or affiliates of the Group have taken an ‘activist position’ in 69 other publicly-traded companies. Currently, members
or affiliates of the Group file Schedule 13Ds to disclose greater than 5% positions only in SEC-reporting companies. For simplicity,
these affiliates are referred to below as the “Group,” “we,” “us,” or “our.” In
each instance, our purpose has been to profit from the appreciation in the market price of the shares we held by asserting shareholder
rights. In addition, we believed that the values of the companies’ assets were not adequately reflected in the market prices
of their shares. Our actions are described below. We have categorized the descriptions of our actions with regard to the issuers
based upon certain outcomes (whether or not, directly or indirectly, such outcomes resulted from the actions of the Group). Within
categories I through III below, the descriptions are listed in chronological order based upon the completion date of the investment;
within categories IV through VIII below, the descriptions are listed in chronological order based upon the respective filing dates
of the originally-filed Schedule 13Ds, or, in limited instances, the acquisition date of the 5% position of a non-reporting company.
I. After we asserted shareholder rights,
the following issuers were sold or merged:
Security of Pennsylvania
Financial Corp. (“SPN”) - We filed our original Schedule 13D to report our position on May 1, 2000. We scheduled
a meeting with senior management to discuss ways to maximize the value of SPN’s assets. On June 2, 2000, prior to the scheduled
meeting, SPN and Northeast Pennsylvania Financial Corp. announced SPN’s acquisition.
Cameron Financial
Corporation (“Cameron”) - We filed our original Schedule 13D to report our position on July 7, 2000. We exercised
our shareholder rights by, among other things, requesting that Cameron management hire an investment banker, demanding Cameron’s
list of shareholders, meeting with Cameron’s management, demanding that Cameron invite our representatives to join the board,
writing to other shareholders to express our dismay with management’s inability to maximize shareholder value and publishing
that letter in the local press. On October 6, 2000, Cameron announced its sale to Dickinson Financial Corp.
Community
Financial Corp. (“CFIC”) - We filed our original Schedule 13D to report our position on January 4, 2001,
following CFIC’s announcement of the sale of two of its four subsidiary banks and its intention to sell one or more of
its remaining subsidiaries. We reported that we acquired CFIC stock for investment purposes. On January 25, 2001, CFIC
announced the sale of one of its remaining subsidiaries. We then announced our intention to run an alternate slate of
directors at the 2001 annual meeting if CFIC did not sell the remaining subsidiary by then. On March 27, 2001, we wrote to
CFIC confirming that CFIC’s management had agreed to meet with one of our proposed nominees to the board. On March 30,
2001, before our meeting took place, CFIC announced its merger with First Financial Corporation.
CUSIP No. 496904202
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SCHEDULE 13D
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Page 10
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Montgomery Financial
Corporation (“Montgomery”) - We filed our original Schedule 13D to report our position on February 23, 2001. On
April 20, 2001, we met with Montgomery’s management and suggested that they maximize shareholder value by selling the institution.
We also informed management that we would run an alternate slate of directors at the 2001 annual meeting unless Montgomery was
sold. Eleven days after we filed our Schedule 13D, however, Montgomery’s board amended its bylaws to limit the pool of potential
nominees to local persons with a banking relation and to shorten the deadline to nominate an alternate slate. We located qualified
nominees under the restrictive bylaw provisions and noticed our slate within the deadline. On June 5, 2001, Montgomery announced
that it had hired an investment banker to explore a sale. On July 24, 2001, Montgomery announced its merger with Union Community
Bancorp.
Community Bancshares,
Inc. (“COMB”) - We filed our original Schedule 13D reporting our position on March 29, 2004. We disclosed that
we intended to meet with COMB’s management and evaluate management’s progress in resolving its regulatory issues, lawsuits,
problem loans, and non-performing assets, and that we would likely support management if it effectively addressed COMB’s
challenges. On November 21, 2005, we amended our Schedule 13D and stated that although we believed that COMB’s management
had made progress, COMB’s return on equity would likely remain below average for the foreseeable future, and it should therefore
be sold. We also stated that if COMB did not announce a sale before our deadline to solicit proxies for the next annual meeting,
we would solicit proxies to elect our own slate. On January 6, 2006, we disclosed the names of our three board nominees. On May
1, 2006, COMB announced its sale to The Banc Corporation.
Jefferson Bancshares,
Inc. (“JFBI”) - We filed our original Schedule 13D reporting our position on April 8, 2013. Our shareholder proposal
requesting the board seek outside assistance to maximize shareholder value through actions such as a sale or merger was defeated
at JFBI’s 2013 annual meeting. We met with management and the board of directors and told them that we would seek board representation
at JFBI’s 2014 annual meeting if JFBI did not announce its sale. JFBI’s sale to HomeTrust Bancshares, Inc. was announced
on January 23, 2014.
FedFirst Financial
Corporation (“FFCO”) - We filed our original Schedule 13D reporting our position on September 24, 2010. After several
meetings with management, FFCO completed a meaningful number of share repurchases, and on April 14, 2014, FFCO announced its sale
to CB Financial Services, Inc.
SP Bancorp, Inc.
(“SPBC”) - We filed our original Schedule 13D reporting our position on February 28, 2011. On August 9, 2013, we
met with management and the chairman to assess the best way to maximize shareholder value. SPBC completed a meaningful number of
share repurchases, and on May 5, 2014, SPBC announced its sale to Green Bancorp Inc.
TF Financial Corporation
(“THRD”) - We filed our original Schedule 13D reporting our position on November 29, 2012. We met with the CEO
and the chairman, encouraging them to focus only on accretive acquisitions and to repurchase shares up to book value. They subsequently
did both. On June 4, 2014, THRD announced its sale to National Penn Bancshares, Inc.
Fairmount Bancorp,
Inc. (“FMTB”) - We filed our original Schedule 13D reporting our position on September 21, 2012. On February 25,
2014, we reported our intention to seek board representation at FMTB’s 2015 annual meeting if FMTB did not announce its sale.
However, due to the appointment of our representative to another board in the local area, we were unable to nominate our representative
at the 2015 election of FMTB directors. We reiterated our intent to seek board representation at the earliest possible time if
FMTB was not sold. FMTB’s sale was announced on April 16, 2015.
Harvard
Illinois Bancorp, Inc. (“HARI”) - We filed our original Schedule 13D reporting our position on April 1, 2011.
In 2012, we nominated a director for election at HARI’s 2012 annual meeting and communicated our belief that HARI
should merge with a stronger community bank. Our nominee was not elected, so we nominated a director at HARI’s 2013
annual meeting and stated our position that HARI should be sold. We communicated to stockholders our intent to run a nominee
every year until elected, and we nominated a director at HARI’s 2014 annual meeting. Our nominee was not elected, so in
April 2015, we began soliciting stockholder votes for our nominee for HARI’s 2015 annual meeting. On May 21, 2015, HARI
announced the sale of its subsidiary bank to State Bank in Wonder Lake, IL. We subsequently withdrew our solicitation of
proxies for the election of our nominee at HARI’s 2015 annual meeting. The sale of HARI’s subsidiary bank was
completed on August 1, 2016. On August 10, 2016, we entered into a settlement agreement with HARI whereby two legacy board
members stepped down, and we agreed not to seek board representation through 2017. HARI implemented a plan of voluntary
dissolution.
Eureka Financial
Corp. (“EKFC”) - We filed our original Schedule 13D reporting our position on March 28, 2011. We encouraged EKFC
to pay special dividends to shareholders and repurchase shares. Management and the board did both, and on September 3, 2015, EKFC
announced its sale to NexTier, Inc.
CUSIP No. 496904202
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SCHEDULE 13D
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Page 11
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United-American
Savings Bank (“UASB”) - We filed our original Schedule 13D with the Federal Deposit Insurance Corporation reporting
our position on May 20, 2013. We believe management and the board acted in good faith to position UASB to maximize shareholder
value. After we encouraged them to sell, UASB announced its sale to Emclaire Financial Corp on December 30, 2015.
Polonia Bancorp,
Inc. (“PBCP”) - We filed our original Schedule 13D reporting our position on November 23, 2012. After several conversations
with the Chairman and CEO, we publicly called for PBCP’s sale. On June 2, 2016, PBCP’s sale to Prudential Bancorp,
Inc. was announced.
Georgetown Bancorp,
Inc. (“GTWN”) - We filed our original Schedule 13D reporting our position on July 23, 2012. We encouraged GTWN
to maximize shareholder value through share repurchases, and we supported management and the board’s consistent efforts to
do so. On October 6, 2016, GTWN announced its sale to Salem Five Bancorp.
Wolverine Bancorp,
Inc. (“WBKC”) - We filed our original Schedule 13D reporting our position on February 7, 2011. We encouraged WBKC
to maximize shareholder value through share repurchases and payments of special dividends, and we supported management and the
board’s consistent efforts to do so. On June 14, 2017, WBKC’s sale to Horizon Bancorp was announced.
First Federal of
Northern Michigan Bancorp, Inc. (“FFNM”) - We filed our original Schedule 13D reporting our position on March 10,
2016. We believed FFNM was positioned to repurchase shares, and we urged management and the board to do so. FFNM deregistered its
shares of common stock effective in 2016. On January 16, 2018, FFNM’s sale to Mackinac Financial Corporation was announced.
Jacksonville Bancorp,
Inc. (“JXSB”) - We filed our original Schedule 13D reporting our position on July 5, 2011. We supported JXSB’s
consistent efforts to maximize shareholder value through share repurchases and payments of special dividends. On January 18, 2018,
JXSB’s sale to CNB Bank Shares, Inc. was announced.
Anchor Bancorp (“ANCB”)
- We filed our original Schedule 13D reporting our position on May 7, 2012. We previously urged ANCB to maximize shareholder value
by increasing share repurchases or selling the bank. We called for ANCB’s sale to the highest bidder on July 7, 2016. On
August 29, 2016, we agreed not to seek board representation at the 2016 annual meeting in consideration of ANCB appointing Gordon
Stephenson as a director. We believe the board acted in good faith to maximize shareholder value through ANCB’s announced
sale to Washington Federal, Inc. on April 11, 2017. That acquisition was delayed due to regulatory issues at Washington Federal,
Inc. On July 17, 2018, ANCB’s sale to FS Bancorp, Inc. at a higher price was announced.
Hamilton Bancorp,
Inc. (“HBK”) - We filed our original Schedule 13D reporting our position on October 22, 2012. Having met with management
over the years, we believe management and the board acted in good faith to maximize shareholder value through HBK’s announced
sale to Orrstown Financial Services, Inc. on October 23, 2018.
Ben Franklin Financial,
Inc. (“BFFI”) - We filed our original Schedule 13D reporting our position
on February 9, 2015. We urged management and the board to repurchase shares as soon as BFFI was permitted. We subsequently believed
BFFI should be sold, and on December 3, 2018, announced our intent to seek board representation at BFFI’s 2019 annual meeting.
On February 22, 2019, we served our notice of intent to nominate Ralph Sesso for election as a director on BFFI’s board.
On July 16, 2019, BFFI’s sale to Corporate America Family Credit Union was announced. BFFI deregistered its shares of common
stock effective in 2018.
Alcentra Capital
Corp (“ABDC”) - We filed our original Schedule 13D reporting our position on December 28, 2017. We informed management
at a meeting on January 5, 2018, and reiterated several times throughout the year, that if ABDC did not repurchase 10% of its shares
in 2018, we would aggressively seek board representation. They
did not do so. On January 25, 2019, we
announced our nominees and alternate nominee for ABDC’s 2019 election of directors. On
August 13, 2019, ABDC’s sale to Crescent Capital BDC, Inc. was announced.
First Advantage
Bancorp (“FABK”) - We filed our original Schedule 13D reporting our position
on March 20, 2017. We believe management and the board acted in good faith to maximize shareholder value over the long term. On
October 23, 2019, FABK’s sale to Reliant Bancorp, Inc. was announced. FABK deregistered its shares of common stock effective
in 2013.
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Central Federal
Bancshares, Inc. (“CFDB”) - We filed our original Schedule 13D reporting our position on January 25, 2016. We urged
management and the board of CFDB to repurchase shares as soon as CFDB was permitted. On May 21, 2019, we met with management, the
board and its attorney at CFDB’s annual meeting, and followed up with a letter to the board calling for CFDB’s sale
if it did not repurchase a meaningful number of shares. On January 17, 2020, CFDB’s
sale to Southern Missouri Bancorp, Inc. was announced. CFDB deregistered its shares of common stock effective in 2019.
Carroll Bancorp,
Inc. (“CROL”) - We filed our original Schedule 13D reporting our position on March 17, 2014. On March 6, 2020,
CROL’s sale to Farmers and Merchants Bancshares, Inc. was announced. CROL deregistered its shares of common stock effective
in 2017.
II. After we seated directors on the
boards of the following issuers, the issuers were sold or merged:
Oregon Trail Financial
Corp. (“OTFC”) - We filed our original Schedule 13D reporting our position on December 15, 2000. In January 2001,
we met with the management of OTFC to discuss our concerns that management was not maximizing shareholder value, and we proposed
that OTFC voluntarily place our representative on the board. OTFC rejected our proposal, and we announced our intention to solicit
proxies to elect a board nominee. We demanded OTFC’s shareholder list, but OTFC refused to give it to us. We sued OTFC in
Baker County, Oregon, and the court ruled in our favor and sanctioned OTFC. We also sued two OTFC directors alleging that one had
violated OTFC’s residency requirement and that the other had committed perjury. Both suits were dismissed pre-trial but we
filed an appeal in one suit and were permitted to re-file the other suit in state court. On August 16, 2001, we started soliciting
proxies to elect Kevin D. Padrick, Esq. to the board. We argued in our proxy materials that OTFC should have repurchased its shares
at prices below book value. OTFC announced the hiring of an investment banker. Then, the day after the 9/11 attacks, OTFC sued
us in Portland, Oregon and moved to invalidate our proxies; the court denied the motion and the election proceeded.
On October 12, 2001,
OTFC’s shareholders elected our candidate by a two-to-one margin. In the five months after the filing of our first proxy
statement (i.e., from August 1 through December 31, 2001), OTFC repurchased approximately 15% of its shares. On March 12, 2002,
we entered into a standstill agreement with OTFC. OTFC agreed to: (a) achieve annual targets for return on equity, (b) reduce its
current capital ratio, (c) obtain advice from an investment banker regarding annual 10% stock repurchases, (d) re-elect our director
to the board, (e) reimburse a portion of our expenses, and (f) withdraw its lawsuit. On February 26, 2003, OTFC and FirstBank NW
Corp. announced their merger, and the merger was completed on October 31, 2003.
HCB Bancshares,
Inc. (“HCBB”) - We filed our original Schedule 13D reporting our position on June 14, 2001. On September 4, 2001,
we reported that we had entered into a standstill agreement with HCBB, under which HCBB agreed to: (a) add a director selected
by us, (b) consider conducting a Dutch tender auction, (c) institute annual financial targets, and (d) retain an investment banker
to explore alternatives if it did not achieve its financial targets. On October 22, 2001, our nominee, John G. Rich, Esq., was
named to the board. On January 31, 2002, HCBB announced a modified Dutch tender auction to repurchase 20% of its shares. Although
HCBB’s outstanding share count decreased by 33% between the filing of our original Schedule 13D and August 2003, HCBB did
not achieve the financial target. On August 12, 2003, HCBB announced it had hired an investment banker to assist in exploring alternatives
for maximizing shareholder value, including a sale. On January 14, 2004, HCBB announced its sale to Rock Bancshares, Inc.
SCPIE Holdings
Inc. (“SKP”) - We filed our original Schedule 13D reporting our position on January 19, 2006. We announced we
would run our slate of directors at the 2006 annual meeting and demanded SKP’s shareholder list. SKP initially refused
to timely produce the list, but did so after we sued it in Delaware Chancery Court. We engaged in a proxy contest at the 2006
annual meeting, but SKP’s directors were elected. Subsequently on December 14, 2006, SKP agreed to place Joseph
Stilwell on its board. On October 16, 2007, Mr. Stilwell resigned from SKP’s board after it approved a sale of SKP that
Mr. Stilwell believed was an inferior offer. We solicited shareholder proxies in opposition to the proposed sale; however,
the sale was approved, and our shares were converted in a cash deal.
American Physicians
Capital, Inc. (“ACAP”) - We filed our original Schedule 13D reporting our position on November 25, 2002. The Schedule
13D disclosed that on January 18, 2002, Michigan’s Insurance Department had approved our request to solicit proxies to elect
two directors to ACAP’s board. On January 29, 2002, we noticed our intention to nominate two directors at the 2002 annual
meeting. On February 20, 2002, we entered into a three-year standstill agreement with ACAP, providing for ACAP to add our nominee
to its board. ACAP also agreed to consider using a portion of its excess capital to repurchase ACAP’s shares in each of the
fiscal years 2002 and 2003 so that its outstanding share count would decrease by 15% for each of those years. In its 2002 fiscal
year, ACAP repurchased 15% of its outstanding shares; these repurchases were highly accretive to per share book value. On November
6, 2003, ACAP announced a reserve charge and that it would explore options to maximize shareholder value. It also announced that
it would exit the healthcare and workers’ compensation insurance businesses. ACAP then announced that it had retained Sandler
O’Neill & Partners, L.P., to assist the board. On December 2, 2003, ACAP announced the early retirement of its president
and CEO. On December 23, 2003, ACAP named R. Kevin Clinton its new president and CEO.
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On June 24, 2004, ACAP
announced that it had decided that the best means to maximize shareholder value would be to shed non-core businesses and focus
on its core business line in its core markets. We increased our holdings in ACAP, and we announced that we intended to seek additional
board representation. On November 10, 2004, ACAP invited Joseph Stilwell to sit on the board, and we entered into a new standstill
agreement. This agreement was terminated in November 2007, with our representatives remaining on ACAP’s board. On May 8,
2008, our representatives were re-elected to three-year terms expiring in 2011. Upon the passage of federal healthcare legislation
in 2010, ACAP became concerned about the fundamentals of its business and promptly acted to assess its strategic alternatives.
On October 22, 2010, ACAP was acquired by The Doctors Company, and our shares were converted in a cash deal.
Colonial Financial
Services, Inc. (“COBK”) - We filed our original Schedule 13D reporting our position on August 24, 2011. On December
18, 2013, we reached an agreement with COBK to have a director of our choice appointed to its board of directors. Our representative,
Corissa B. Porcelli (formerly Corissa J. Briglia), joined COBK’s board of directors on March 25, 2014. On September 10, 2014,
COBK announced its sale to Cape Bancorp, Inc., and the cash/stock deal was completed on April 1, 2015.
Naugatuck Valley
Financial Corporation (“NVSL”) - We filed our original Schedule 13D reporting our position on July 11, 2011. On
February 13, 2014, we reported our intention to seek board representation. On March 12, 2014, we reached an agreement with NVSL
for our representative to join NVSL’s board of directors and for NVSL not to seek approval for stock benefit plans. On June
4, 2015, NVSL announced its sale to Liberty Bank in Middletown, CT, and the cash deal was completed on January 15, 2016.
Fraternity Community
Bancorp, Inc. (“FRTR”) - We filed our original Schedule 13D reporting our position on April 11, 2011. We reached
an agreement with FRTR, and on November 18, 2014, our representative, Corissa B. Porcelli (formerly Corissa J. Briglia), was appointed
to the board of directors. On October 13, 2015, FRTR’s sale was announced, and the cash deal was completed on May 13, 2016.
Sunshine Financial,
Inc. (“SSNF”) - We filed our original Schedule 13D reporting our position on April 18, 2011. We reached an agreement
with SSNF, and on February 5, 2016, our representative, Corissa B. Porcelli (formerly Corissa J. Briglia), was appointed to the
board of directors. On December 6, 2017, SSNF’s sale to The First Bancshares, Inc. was announced, and the cash/stock deal
was completed on April 2, 2018.
Delanco Bancorp,
Inc. (“DLNO”) - We filed our original Schedule 13D reporting our position on October 28, 2013. We reached an agreement
with DLNO, and in May 2017, our representative, Corissa B. Porcelli (formerly Corissa J. Briglia), was appointed to the board of
directors. On October 18, 2017, DLNO’s sale to First Bank was announced, and the stock deal was completed on April 30, 2018.
Poage Bankshares,
Inc. (“PBSK”) - We filed our original Schedule 13D reporting our position on September 23, 2011. We believed PBSK’s
board was not focused on maximizing shareholder value and nominated a director for election at PBSK’s 2014 annual meeting.
Our nominee was not elected, so we nominated a director at PBSK’s 2015 annual meeting. On July 21, 2015, our nominee, Stephen
S. Burchett, was elected as a director with a mandate to maximize shareholder value. Subsequently, the CEO left the company. We
publicly called for PBSK’s sale, and on July 11, 2018, PBSK’s sale to City Holding Company was announced. The stock
deal was completed on December 7, 2018.
HopFed Bancorp,
Inc. (“HFBC”) - We filed our original Schedule 13D reporting our position on February 25, 2013. At HFBC’s
May 2013 annual meeting, we nominated a director for the board of directors and strongly opposed HFBC’s agreement to purchase
Sumner Bank & Trust. Our nominee won by a two to one margin, and the proposed Sumner deal was subsequently terminated in August
2013.
On May 1, 2017, we
sent a letter to stockholders (filed as Exhibit 13 to the Twelfth Amendment to our Schedule 13D) detailing the extensive real estate
holdings of HFBC’s CEO, John Peck, as well as numerous other conflicts of interest of both Mr. Peck and HFBC’s counsel,
George M. (“Greg”) Carter, of which HFBC board members were apparently unaware. Subsequently, HFBC formed a “Special
Litigation Committee” to investigate. On February 23, 2018, HFBC filed a Form 8-K reporting that although the Special Litigation
Committee did not dispute the facts in the May 1 letter, it declined to recommend HFBC bring a lawsuit or remedial action against
John Peck.
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On May 4, 2017, we
filed a complaint in the Delaware Court of Chancery against HFBC, the then current members of the board of directors and one former
board member, asking the Court to declare that HFBC’s prejudicial bylaw was invalid and that the directors breached their
fiduciary duties. On October 4, 2017, HFBC announced it had amended the bylaw thus mooting that case. Subsequently, we filed a
motion to recover our attorneys’ fees and expenses, which Vice Chancellor J. Travis Laster granted in its entirety on February
7, 2018, awarding us $610,312. In his ruling on the motion, the Judge excoriated the conduct of HFBC’s board; the full court
transcript is filed as Exhibit 14 to the Fourteenth Amendment to our Schedule 13D.
On February 23, 2018,
we formally demanded that HFBC’s board of directors take action against the Issuer’s attorneys, Edward B. Crosland,
Jr., of Jones Walker LLP and Greg Carter of Carter & Carter Law Firm, for legal malpractice and seek damages in excess of $1
million to HFBC; our demand letter is attached as Exhibit 15 to the Fifteenth Amendment to our Schedule 13D.
Following our nomination
of Mark D. Alcott in March of 2018 for election to HFBC’s board of directors to replace John Peck, we entered into a Standstill
Agreement with HFBC dated April 10, 2018, whereby Mr. Alcott would be appointed to the HFBC board. The board also adopted revised
compensation policies requiring HFBC to reach at least average annual performance relative to that of its peer group, or its executive
officers would not receive salary raises, bonuses or perquisites.
Mr. Alcott’s
appointment to the HFBC board became effective on April 18, 2018. On January 7, 2019, HFBC’s sale to First Financial Corporation
was announced, and the cash/stock deal was completed on July 27, 2019.
MB Bancorp, Inc.
(“MBCQ”) - We filed our original Schedule 13D reporting our position on January
9, 2015. We urged management and the board to repurchase shares, and on March 30, 2016, MBCQ announced and subsequently completed
its plan to repurchase an initial 10% of its shares outstanding. We urged management and the board to complete the existing 5%
share repurchase plan and put MBCQ up for sale when permitted in January 2018. On February 20, 2018, we reached an agreement with
MBCQ, and our representative, Corissa B. Porcelli (formerly Corissa J. Briglia), was appointed to the board of directors. On September
5, 2019, MBCQ’s sale to BV Financial, Inc. was announced, and the all-cash deal was completed on February 29, 2020. MBCQ
deregistered its shares of common stock effective in 2019.
III. After we asserted shareholder rights,
we believe the following issuers took steps to maximize shareholder value, and we subsequently exited our activist positions:
FPIC Insurance Group,
Inc. (“FPIC”) - We filed our original Schedule 13D reporting our position on June 30, 2003. On August 12, 2003,
Florida’s Insurance Department approved our request to hold more than 5% of FPIC’s shares, to solicit proxies to hold
board seats, and to exercise shareholder rights. On November 10, 2003, FPIC invited our nominee, John G. Rich, Esq., to join the
board, and we signed a confidentiality agreement. On June 7, 2004, we disclosed that because FPIC had taken steps to increase shareholder
value, such as multiple share repurchases, and because its market price increased and reflected fair value in our estimation, we
sold our shares in the open market, decreasing our holdings below 5%. Our nominee was invited to remain on the board.
Roma Financial Corp.
(“ROMA”) - We filed our original Schedule 13D reporting our position on July 27, 2006. Prior to its acquisition
by Investors Bancorp, Inc., in December 2013, nearly 70% of ROMA’s shares were held by a mutual holding company controlled
by ROMA’s board. In April 2007, we engaged in a proxy solicitation at ROMA’s first annual meeting, urging shareholders
to withhold their vote from management’s slate. ROMA did not put their stock benefit plans up for a vote at that meeting.
We then met with ROMA management. In the four months after ROMA became eligible to repurchase its shares, it announced and substantially
completed repurchases of 15% of its publicly held shares, which were accretive to shareholder value. In our judgment, management
came to understand the importance of proper capital allocation. Based on ROMA management’s prompt implementation of shareholder-friendly
capital allocation plans, we supported management’s adoption of stock benefit plans at the 2008
shareholder meeting. In our estimation,
ROMA’s market price increased and reflected fair value, and we sold our shares in the open market.
First Savings Financial
Group, Inc. (“FSFG”) - We filed our original Schedule 13D reporting our position on December 29, 2008. We met with
management, after which FSFG announced a stock repurchase plan and began repurchasing its shares. In December 2009, we reported
that our beneficial ownership in the outstanding FSFG common stock had fallen below 5%.
Prudential Bancorp,
Inc. of Pennsylvania (“PBIP”) - We filed our original Schedule 13D reporting our position on June 20, 2005. Most
of PBIP’s shares were held by the Prudential Mutual Holding Company (the “MHC”), which was controlled by PBIP’s
board. The MHC controlled most corporate decisions requiring a shareholder vote, such as the election of directors. However, regulations
promulgated by the FDIC previously barred the MHC from voting on PBIP’s management stock benefit plans, and PBIP’s
IPO prospectus indicated that the MHC would not vote on the plans. We announced in August 2005 that we would solicit proxies to
oppose adoption of the plans as a referendum to place Joseph Stilwell on PBIP’s board. PBIP decided not to put the plans
up for a vote at the 2006 annual meeting.
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In December 2005, we
solicited proxies to withhold votes on the election of directors as a referendum to place Mr. Stilwell on the board. At the 2006
annual meeting, 71% of PBIP’s voting public shares were withheld from voting on management’s nominees.
On April 6, 2006, PBIP
announced that just after we had filed our Schedule 13D, it had secretly solicited a letter from an FDIC staffer (which it concealed
from the public) that the MHC would be allowed to vote in favor of the management stock benefit plans. PBIP also announced a special
meeting to vote on the plans. We alerted the Board of Governors of the Federal Reserve System (the “Fed”) about this
announcement, and PBIP was directed to seek Fed approval before adopting the plans. On April 19, 2006, PBIP postponed the special
meeting. The Fed subsequently followed the FDIC’s position in September 2006. In December 2006, we solicited proxies to withhold
votes on the election of PBIP’s directors at the 2007 annual meeting. At the meeting, 75% of PBIP’s voting public shares
were withheld. Also during the annual meeting, PBIP’s President and Chief Executive Officer was unable to state the meaning
of per share return on equity despite Mr. Stilwell’s holding up a $10,000 check for the charity of the CEO’s choice
if he could promptly answer the question. On March 7, 2007, we disclosed that we were publicizing the results of PBIP’s elections
and its directors’ unwillingness to hold a democratic vote on the stock plans by placing billboard advertisements throughout
Philadelphia.
In December 2007, we
filed proxy materials for the solicitation of proxies to withhold votes on the election of PBIP’s directors at the 2008 annual
meeting. At the 2008 annual meeting, an average of 77% of PBIP’s voting public shares withheld their votes. Excluding shares
held in PBIP’s ESOP, an average of 88% of the voting public shares withheld their votes in this election.
On October 4, 2006,
we sued PBIP, the MHC, and the directors of PBIP and the MHC in federal court in Philadelphia seeking an order to prevent the MHC
from voting in favor of the management stock benefit plans. On August 15, 2007, the court dismissed some claims, but sustained
our cause of action against the MHC as majority shareholder of PBIP for breach of fiduciary duties. Discovery proceeded and all
the directors were deposed. Both sides moved for summary judgment, but the court ordered the case to trial, which was scheduled
for June 2008. On May 22, 2008, we voluntarily discontinued the lawsuit after determining that it would be more effective and appropriate
to pursue the directors on a personal basis in a derivative action. On June 11, 2008, we filed a notice to appeal certain portions
of the lower court’s August 15, 2007, order dismissing portions of the lawsuit.
We entered into a settlement
agreement and an expense agreement with PBIP in November 2008 under which we agreed to support PBIP’s management stock benefit
plans, drop our litigation and withdraw our shareholder demand, and generally support management; and in exchange, PBIP agreed,
subject to certain conditions, to repurchase up to three million of its shares (including shares previously purchased), reimburse
a portion of our expenses, and either adopt a second step conversion or add our nominee who meets certain qualification requirements
to its board if the repurchases were not completed by a specified time. On March 5, 2010, we reported that our ownership in PBIP
had dropped below 5% as a result of open market sales and sales of common stock to PBIP.
United Insurance
Holdings Corp. (“UIHC”) - We filed our original Schedule 13D reporting our position on September 29, 2011. On December
17, 2012, we disclosed that we sold shares in the open market, decreasing our holdings below 5%.
Home Federal Bancorp,
Inc. of Louisiana (“HFBL”) - We filed our original Schedule 13D reporting our position on January 3, 2011. We believe
management and the board acted in good faith and took steps to increase shareholder value, such as multiple share repurchases.
In our estimation, HFBL’s market price increased and reflected fair value; on February 7, 2013, we disclosed that we sold
shares in the open market, decreasing our holdings below 5%.
Standard
Financial Corp. (“STND”) - We filed our original Schedule 13D reporting our position on October 18, 2010. We
believe management and the board acted in good faith and took steps to increase shareholder value, such as multiple share
repurchases. In our estimation, STND’s market price increased and reflected fair value; on March 19, 2013, we disclosed
that we sold our shares in the open market, decreasing our holdings below 5%.
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Alliance Bancorp,
Inc. of Pennsylvania (“ALLB”) - We filed our original Schedule 13D reporting our position on March 12, 2009. When
we announced our reporting position, a majority of ALLB’s shares were held by a mutual holding company controlled by ALLB’s
board. However, on August 11, 2010, ALLB announced its intention to undertake a second step offering, selling all shares to the
public. The plan of conversion and reorganization was approved by depositors at a special meeting held December 29, 2010. We strongly
supported ALLB’s action. Following completion of the conversion of Alliance Bank from the mutual holding company structure
to the stock holding company structure, we increased our stake with the belief that shareholders and ALLB would do well if management
focused on profitability. We believe management and the board acted in good faith and took steps to increase shareholder value,
such as multiple share repurchases. In our estimation, ALLB’s market price increased and reflected fair value; on November
21, 2013, we disclosed that we sold shares in the open market, decreasing our holdings below 5%.
ASB Bancorp, Inc.
(“ASBB”) - We filed our original Schedule 13D reporting our position on October 24, 2011. On August 23, 2013, we
met with management to assess the best way to maximize shareholder value. We believe management and the board acted in good faith
by cleaning up non-performing assets and repurchasing shares, and ASBB’s market price increased to reflect fair value. On
July 18, 2014, we disclosed that we sold our shares to ASBB.
United Community
Bancorp (“UCBA”) - We filed our original Schedule 13D reporting our position on January 22, 2013. We believe management
and the board acted in good faith and took steps to increase shareholder value, such as multiple share repurchases. In our estimation,
UCBA’s market price increased to reflect fair value; on November 9, 2015, we disclosed that we sold shares to UCBA, decreasing
our holdings below 5%.
West End Indiana
Bancshares, Inc. (“WEIN”) - We filed our original Schedule 13D reporting our position on January 19, 2012. We believe
management and the board acted in good faith and took steps to increase shareholder value, such as multiple share repurchases.
In our estimation, WEIN’s market price increased to reflect fair value; on November 12, 2015, we disclosed that we sold our
shares in the open market.
William Penn Bancorp,
Inc. (“WMPN”) - We filed our original Schedule 13D reporting our position on May 23, 2008. A majority of WMPN’s
shares are held by a mutual holding company controlled by WMPN’s board. We met with management and the board to explain our
views on proper capital allocation and following the financial crisis, we continued to urge WMPN to take the steps necessary to
maximize shareholder value. On December 3, 2014, WMPN announced and subsequently completed its plan to repurchase 10% of its shares
outstanding and further completed several additional share repurchases. We believe management and the board acted in good faith
to maximize shareholder value through shareholder-friendly capital allocation; on April 11, 2016, we disclosed that we sold shares
in the open market, decreasing our holdings below 5%.
First Financial
Northwest, Inc. (“FFNW”) – We filed our original Schedule 13D reporting our position on September 12, 2011.
At the Company’s 2012 annual meeting, we solicited an overwhelming majority of shareholder votes for our nominee based on
our position that Victor Karpiak (then Chairman and CEO) should be removed from the Company and board. After the Company pushed
to have our votes invalidated, we sued to enforce our rights. In 2013, we settled with the Company. Our nominee, Kevin Padrick,
was seated on the board, and Mr. Karpiak resigned as Chairman. The board later replaced Mr. Karpiak as CEO. We filed two additional
lawsuits arising from the invalidation of our votes at the 2012 election, both of which we settled.
Since 2013, we believed
management and the board acted in good faith by cleaning up non-performing assets and reaching a moderate level of profitability,
and they maximized shareholder value by repurchasing in excess of 40% of FFNW’s shares. In our estimation, FFNW’s market
price increased to reflect fair value; on October 11, 2016, we disclosed that we sold our shares in the open market. Kevin Padrick
continued to serve on the board.
Alamogordo Financial
Corp. (“ALMG”) - We filed our original Schedule 13D reporting our position on May 11, 2015. We urged management
and the board to provide meaningful returns to shareholders either through a second-step conversion or by effectuating a shareholder-friendly
capital allocation program. On March 7, 2016, ALMG announced and later completed a second-step conversion which we believe maximized
shareholder value. On October 14, 2016, we disclosed that we sold shares of the converted Company, Bancorp 34, Inc., in the open
market, decreasing our holdings below 5%.
Malvern Bancorp,
Inc. (“MLVF”) - We filed our original Schedule 13D reporting our position on May 30, 2008. When we announced our
reporting position, a majority of MLVF’s shares were held by a mutual holding company controlled by MLVF’s board. On
October 26, 2010, we demanded that MLVF pursue a derivative action against its directors for breach of their fiduciary duties.
MLVF failed to pursue the action and, on June 3, 2011, we sued MLVF’s directors in Chester County, Pennsylvania, demanding
that the court, among other things, order the directors to properly consider pursuing a second step conversion. On November 9,
2011, Judge Howard F. Riley Jr. overruled the director defendants’ preliminary objections to the derivative lawsuit.
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On January 17, 2012,
MLVF announced its intention to undertake a second step conversion and we withdrew the lawsuit. The conversion and stock offering
were completed on October 11, 2012, and our shares were converted into shares of Malvern Bancorp, Inc. On September 5, 2013, we
notified MLVF of our intention to nominate John P. O’Grady for election as a director at its 2014 annual meeting, but we
later reached an agreement with MLVF for Mr. O’Grady to join its board of directors and executed a standstill agreement.
Subsequently, MLVF’s long-standing CEO resigned, its chairman of the board stepped down and several directors resigned from
the board of directors. On November 25, 2014, we terminated our standstill agreement with MLVF, including the agreement’s
performance targets. John P. O’Grady continued to serve as an independent director on the board but no longer as our nominee.
After meeting with
the new CEO and the new chairman of the board, we believed that management and the board of directors were focused on maximizing
shareholder value and were successful in doing so. On December 7, 2016, we disclosed that we sold shares in the open market, decreasing
our holdings below 5%.
FSB Community Bankshares,
Inc. (“FSBC”) - We filed our original Schedule 13D reporting our position on October 26, 2015. We urged management
and the board to provide meaningful returns to shareholders either through a second-step conversion or by effectuating a shareholder-friendly
capital allocation program. On March 3, 2016, FSBC announced and later completed a second-step conversion which we believe maximized
shareholder value. On December 9, 2016, we disclosed that we sold shares of the converted Company, FSB Bancorp, Inc., in the open
market, decreasing our holdings below 5%.
Pinnacle Bancshares,
Inc. (“PCLB”) - We filed our original Schedule 13D reporting our position on September 23, 2014. On November 14,
2014, PCLB announced the continuation of its share repurchase plan and announced a new repurchase plan on May 25, 2016. We believe
management and the board acted in good faith to maximize shareholder value through multiple share repurchases. On December 13,
2016, we disclosed that we sold our shares in the open market.
Sugar Creek Financial
Corp. (“SUGR”) - We filed our original Schedule 13D reporting our position on April 21, 2014. We believe management
and the board acted in good faith to maximize shareholder value through share repurchases. In our estimation, SUGR’s market
price increased to reflect fair value; on July 28, 2017, we disclosed that we sold our shares in the open market.
Provident Financial
Holdings, Inc. (“PROV”) - We filed our original Schedule 13D reporting our position on October 7, 2011. We supported
PROV’s consistent efforts to maximize shareholder value through a meaningful number of share repurchases. In our estimation,
PROV’s market price increased and reflected fair value; on September 25, 2017, we disclosed that we sold shares in the open
market, decreasing our holdings below 5%.
West Town Bancorp,
Inc. (“WTWB”) – We believe management and the board acted in good faith to maximize shareholder value, and
on July 18, 2019, we sold our shares to WTWB. WTWB deregistered its shares of common stock effective in 2003.
IF Bancorp, Inc.
(“IROQ”) - We filed our original Schedule 13D reporting our position on March
5, 2012. We urged management and the board to maximize shareholder value through share repurchases. We believe IROQ acted
in good faith to do so and, in our estimation, IROQ’s market price increased to reflect fair value. On September 24, 2019,
we disclosed that we sold shares in the open market, decreasing our holdings below 5%.
IV. We exited the following activist
position without maximizing shareholder value:
Garrison Capital,
Inc. (“GARS”) – We filed our original Schedule 13D reporting our position on January 21, 2020. In April 2020,
we sold our stake with the belief that the pandemic had made activism in a business development company problematic for the next
couple of years.
V. After successfully seeking board
representation, we seated directors who currently serve on the boards of the following issuer:
Wheeler Real
Estate Investment Trust, Inc. (“WHLR”) - We filed our original Schedule 13D reporting our position on July
3, 2017. On December 4, 2017, we announced our nominees and alternate nominee for WHLR’s 2018 election of directors. On January
17, 2018, we called for Jon Wheeler’s removal from WHLR, and he was fired by the board on January 29, 2018.
We ran three nominees
for election as directors at WHLR's 2018 annual meeting. They lost. On October 24, 2019, we announced our nominees, Joseph D. Stilwell,
Paula J. Poskon and Kerry G. Campbell, for election as directors at WHLR’s annual meeting. Several of WHLR’s legacy
directors did not stand for reelection. On December 19, 2019, we defeated the three legacy directors that stood for reelection
by more than a 7 to 1 margin and our three nominees were elected to WHLR’s board. Later that day, WHLR announced that its
CFO had resigned, and twelve days later, the only remaining legacy director resigned. The CEO was fired on April 13, 2020.
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VI. We hope to work with management
and the boards of the following issuers:
Wayne Savings Bancshares,
Inc. (“WAYN”) - We filed our original Schedule 13D reporting our position on October 8, 2010. In 2014, we supported
H. Stewart Fitz Gibbon III’s appointment as CEO and as a director on the board. We believed management and the board were
acting in good faith to position WAYN to maximize shareholder value. When the board announced Mr. Fitz Gibbon’s unexplained
resignation on December 20, 2016, we nominated a director for election at WAYN’s 2017 annual meeting. We lost by a narrow
margin.
We nominated a director
for election at WAYN’s 2018 annual meeting with the belief that there have been multiple suitors interested in acquiring
WAYN, and that the board has a duty to evaluate strategic alternatives to maximize shareholder value. Our nominee was not elected.
Due to projected and
achieved Return on Equity (ROE) targets since WAYN’s 2018 annual meeting, we did not seek board representation in 2019.
Sound Financial,
Inc. (“SFBC”) – We filed our original Schedule 13D reporting our position on November 21, 2011. We urged
management and the board to pursue a second step conversion. On August 22, 2012, Sound Financial Bancorp, Inc. (“SFBC”)
announced completion of its second step conversion and our shares of SNFL were converted into shares of SFBC. We support SFBC’s
consistent efforts to maximize shareholder value.
CIB Marine Bancshares,
Inc. (“CIBH”) – We believe management and the board are acting in good faith to maximize shareholder value.
CIBH deregistered its shares of common stock effective in 2012.
U & I Financial
Corp. (“UNIF”) – We have met with management and believe we can work
with management and the board to maximize shareholder value. Although UNIF’s common stock trades publicly on the OTCQX U.S.,
UNIF does not file reports with the SEC.
Cincinnati Bancorp,
Inc. (“CNNB”) – We filed our original Schedule 13D reporting our position on May 7, 2020.
Parkway Acquisition Corp. (“PKKW”)
– We filed our original Schedule 13D reporting our position on May 27, 2020. We believe PKKW should repurchase at least 10%
of its shares annually while the stock is trading below book value and have communicated our belief to management.
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 19
|
VII. We intend to gain board representation
and work to maximize shareholder value at the following issuer:
Brunswick Bancorp
(“BRBW”) – We met with the President, CFO and Chairman of the Board to express our views on BRBW’s
capital allocation, and they have indicated that they would rather grow than repurchase shares below book value. Therefore, we
intend to nominate at BRBW’s 2021 annual meeting. BRBW deregistered its shares of common stock effective in 2007.
VIII. We believe the following issuers
should complete a second-step conversion or be sold:
NorthEast Community
Bancorp, Inc. (“NECB”) - We filed our original Schedule 13D reporting our position on November 5, 2007. A majority
of NECB’s shares are held by a mutual holding company controlled by NECB’s board. We opposed the grant of an equity
incentive plan for the NECB board, and to this day, the board and management have not received such a plan. In July of 2010, we
delivered a written demand to NECB demanding to inspect its shareholder list, but NECB refused to supply us with the list. We sued
NECB in federal court in New York seeking an order compelling compliance. In August of 2010, NECB produced the list of shareholders
to us. In the fall of 2011, we sent a letter to NECB’s board of directors demanding that NECB expand the board with disinterested
directors to consider a second step conversion. In October of 2011, we filed a lawsuit in New York state court against NECB, the
mutual holding company, and their boards of directors, personally and derivatively, for breach of fiduciary duty arising out of
failure to fairly consider a second step conversion and alleging conflict of interest. During the course of a protracted litigation,
we deposed every named director including a former director. Although the New York trial court judge agreed with us in partially
granting our motion for summary judgment and finding that upon trial the defendants would bear the burden of the entire fairness
standard, the First Department reversed on other grounds; the New York Court of Appeals declined to hear our appeal. NECB deregistered
its shares of common stock effective in 2016.
Seneca-Cayuga Bancorp,
Inc. (“SCAY”) - We filed our original Schedule 13D reporting our position on September 15, 2014. We believed SCAY
was positioned to provide meaningful returns to its shareholders either through a second-step conversion or a shareholder-friendly
capital allocation program. We encouraged management and the board to choose the path that would maximize shareholder value, but
they refused. On January 29, 2018, we served a letter to the board demanding that SCAY undertake a second-step conversion. Instead,
SCAY announced its merger with a smaller mutual. We re-served a demand for a second-step conversion on June 12, 2019, and in furtherance
to that, we served a demand for inspection of SCAY’s books and records on September 4, 2019. When SCAY refused to permit
the inspection of its books and records, we filed, on November 11, 2019, a motion to compel the production of those books and records
in U.S. District Court for the Western District of New York. SCAY filed a motion to dismiss, which the Judge denied on April
7, 2020. The Judge ordered SCAY to begin the production of board materials for our inspection by June 1. SCAY announced its intention
to second-step on May 6, 2020, and we discontinued our lawsuit. SCAY deregistered its shares of common stock effective in
2009.
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 20
|
Item 5. Interest in Securities of the Issuer
The members of the
Group beneficially own an aggregate of 5,679,539 shares of Common Stock, consisting of (i) 5,597,396 shares of Common Stock owned
of record, and (ii) 82,143 shares of Common Stock which are issuable upon the conversion of 13,143 shares of Class A Preferred
Shares Series 1 (“Series 1 Shares”). The members of the Group also hold Series B Warrants to purchase 708,347 shares
of Common Stock issuable upon exercise of such Series B Warrants. However, such shares are not included in the beneficial ownership
calculation due to the existence of the Statement of Undertaking described in Item 6 below. The percentages used in this filing
are calculated based on 22,793,212 outstanding shares of Common Stock, reflecting 22,711,069 outstanding shares of Common Stock
as reported as of July 10, 2020 in the in the Issuer’s Form 10-K filed with the Securities and Exchange Commission on July
10, 2020, plus 82,143 shares of Common Stock issuable upon conversion of the Series 1 Shares. The purchases and sales of Common
Stock reported in this item, if any, were made in open-market transactions.
(A) Stilwell
Activist Fund
|
(a)
|
Aggregate number of shares beneficially owned: 5,679,539
|
Percentage: 24.9%
|
(b)
|
Sole power to vote or to direct vote: 0
|
Shared power to vote or to direct vote: 5,679,539
Sole power to dispose
or to direct the disposition: 0
Shared power to dispose
or to direct disposition: 5,679,539
|
(c)
|
Stilwell Activist Fund has not purchased or sold any shares of Common Stock in the past 60 days.
|
(d) Because he is the managing
member and owner of Stilwell Value LLC, which is the general partner of Stilwell Activist Fund, Joseph Stilwell has the power to
direct the affairs of Stilwell Activist Fund, including the voting and disposition of shares of Common Stock held in the name of
Stilwell Activist Fund. Therefore, Joseph Stilwell is deemed to share voting and disposition power with Stilwell Activist Fund
with regard to those shares of Common Stock.
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 21
|
(B) Stilwell Activist Investments
|
(a)
|
Aggregate number of shares beneficially owned: 5,679,539
|
Percentage: 24.9%
|
(b)
|
Sole power to vote or to direct vote: 0
|
Shared power to vote
or to direct vote: 5,679,539
Sole power to dispose
or to direct the disposition: 0
Shared power to dispose
or to direct disposition: 5,679,539
(c) Stilwell Activist Investments
has not purchased or sold any shares of Common Stock in the past 60 days.
(d) Because he is the managing
member and owner of Stilwell Value LLC, which is the general partner of Stilwell Activist Investments, Joseph Stilwell has the
power to direct the affairs of Stilwell Activist Investments, including the voting and disposition of shares of Common Stock held
in the name of Stilwell Activist Investments. Therefore, Joseph Stilwell is deemed to share voting and disposition power with Stilwell
Activist Investments with regard to those shares of Common Stock.
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 22
|
(C) Stilwell Associates
|
(a)
|
Aggregate number of shares beneficially owned: 5,679,539
|
Percentage: 24.9%
|
(b)
|
Sole power to vote or to direct vote: 0
|
Shared power to vote
or to direct vote: 5,679,539
Sole power
to dispose or to direct the disposition: 0
Shared power to dispose or to direct disposition:
5,679,539
(c) Stilwell Associates has not
purchased or sold any shares of Common Stock in the past 60 days.
(d) Because he is the managing
member and owner of Stilwell Value LLC, which is the general partner of Stilwell Associates, Joseph Stilwell has the power to direct
the affairs of Stilwell Associates, including the voting and disposition of shares of Common Stock held in the name of Stilwell
Associates. Therefore, Joseph Stilwell is deemed to share voting and disposition power with Stilwell Associates with regard to
those shares of Common Stock.
(D) Stilwell Value Partners VII
|
(a)
|
Aggregate number of shares beneficially owned: 5,679,539
|
Percentage: 24.9%
|
(b)
|
Sole power to vote or to direct vote: 0
|
Shared power to vote
or to direct vote: 5,679,539
Sole power
to dispose or to direct the disposition: 0
Shared power to dispose or to direct disposition:
5,679,539
(c) Stilwell Value Partners
VII has not purchased or sold any shares of Common Stock in the past 60 days.
(d) Because he is the
managing member and owner of Stilwell Value LLC, which is the general partner of Stilwell Value Partners VII, Joseph Stilwell has
the power to direct the affairs of Stilwell Value Partners VII, including the voting and disposition of shares of Common Stock
held in the name of Stilwell Value Partners VII. Therefore, Joseph Stilwell is deemed to share voting and disposition power with
Stilwell Value Partners VII with regard to those shares of Common Stock.
(E) Stilwell
Value LLC
|
(a)
|
Aggregate number of shares beneficially owned: 5,679,539
|
Percentage: 24.9%
|
(b)
|
Sole power to vote or to direct vote: 0
|
Shared power
to vote or to direct vote: 5,679,539
Sole power to dispose
or to direct the disposition: 0
Shared power to dispose
or to direct disposition: 5,679,539
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 23
|
(c) Stilwell Value LLC has not
purchased or sold any shares of Common Stock.
(d) Because he is the managing
member and owner of Stilwell Value LLC, Joseph Stilwell has the power to direct the affairs of Stilwell Value LLC. Stilwell Value
LLC is the general partner of Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, and Stilwell Value Partners
VII. Therefore, Stilwell Value LLC may be deemed to share with Joseph Stilwell voting and disposition power with regard to the
shares of Common Stock held by Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Associates, and Stilwell Value Partners
VII.
(F) Joseph
Stilwell
|
(a)
|
Aggregate number of shares beneficially owned: 5,679,539
|
Percentage: 24.9%
|
(b)
|
Sole power to vote or to direct vote: 0
|
Shared power
to vote or to direct vote: 5,679,539
Sole power to dispose
or to direct the disposition: 0
Shared power to dispose
or to direct disposition: 5,679,539
(c) Joseph Stilwell has not purchased
or sold any shares of Common Stock in the past 60 days.
Item 6. Contracts, Arrangements, Understandings
or Relationships With Respect to Securities of the Issuer
As previously reported,
members of the Group purchased Units of the Issuer in a rights offering on September 16, 2013 (the “Rights Offering”),
in which Units were sold entitling the purchasers to one share of Common Stock, one Series A Warrant and one Series B Warrant for
each Unit. The terms and conditions of the Series B Warrants are summarized below. The Series A Warrants held by members of the
Group have been fully exercised, and the Issuer announced on September 19, 2014, that all unexercised Series A Warrants had been
redeemed.
As previously reported,
members of the Group purchased Units of the Issuer in a private placement of securities consummated on February 3, 2014 (the "Private
Placement"), in which the Issuer sold Units entitling the purchasers to one Class A Preferred Share, Series 1 (a "Series
1 Share"), and 6.25 Series C Warrants for each Unit purchased. In July 2014, the Series C Warrants were exchanged for Series
B Warrants under a mandatory exchange procedure. Additional terms and conditions of the Series 1 Shares and Series B Warrants are
summarized below.
Each Series 1 Share
is convertible at the holder's election into 6.25 shares of Common Stock at a conversion price of $4.00 per share until April 1,
2021. The Issuer will redeem all Series 1 Shares outstanding on April 1, 2021, for $25.00 per Series 1 Share, plus accrued but
unpaid dividends. Beginning February 3, 2016, the Issuer may redeem all or any part of the then outstanding Series 1 Shares for
$28.75 per Series 1 Share, plus accrued but unpaid dividends. For additional terms and conditions of the Series 1 Shares, see Exhibit
22, which is incorporated herein by reference.
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 24
|
Each Series B Warrant
entitles the holder to purchase one share of Common Stock. The exercise of the Series B Warrants is subject to the terms of a Warrant
Agreement filed as Exhibit 4.1 to the Issuer’s Report on Form 8-K filed with the Securities and Exchange Commission on July
10, 2014. The Series B Warrants have an exercise price of $5.00 per share and are non-redeemable. The Series B Warrants may be
exercised from September 16, 2016 through September 15, 2023, provided, however, that exercise is subject to the limits set forth
in the Undertaking (as defined below) effective as of July 15, 2016, by and between members of the Group and the Issuer, filed
as Exhibit 26 and described more fully below. For additional terms and conditions of the Series A, Series B, and Series C Warrants,
see Exhibits 18, 19, and 23, which are incorporated herein by reference.
The Issuer entered
into a Registration Rights Agreement with the Private Placement purchasers providing for both demand and piggyback registration
rights with respect to the Series 1 Shares, the Series B Warrants, and the Common Stock issuable upon the exercise or conversion
thereof. For additional terms and conditions of the Registration Rights Agreement, see Exhibit 21, which is incorporated herein
by reference (the “Registration Rights Agreement”).
Effective as of July
15, 2016, members of the Group entered into a Statement of Undertaking with the Issuer, which was filed as Exhibit 26 to the Twenty-Fourth
Amendment (the “Undertaking”), pursuant to which each of the members of the Group holding Series B Warrants undertook
not to exercise the Series B Warrants held by it, and the Issuer acknowledged that, for so long as such Undertaking exists, it
shall not give effect to any such exercise of such Series B Warrants, if and to the extent that, after giving effect to such exercise,
such member of the Group (individually or together with the other members of the Group) would in the aggregate beneficially own
that number of shares of Common Stock which is in excess of 19.95% of the total number of issued and outstanding shares of Common
Stock or voting power of the Issuer. The Undertaking, as amended by a letter agreement, dated June 1, 2018, which was filed as
Exhibit 30 to the Twenty-Seventh Amendment (the “First Extension”), and then further amended by a letter agreement,
dated July 13, 2020, between the Issuer and members of the Group, which is filed as Exhibit 32 to this Thirtieth Amendment (together
with the First Extension, the “Extensions”), will terminate immediately upon the earlier of: (i) that date that is
six (6) years after the effective date of the Undertaking; or (ii) the execution by all of the members of the Group holding Series
B Warrants and the Issuer of a written instrument that terminates the Undertaking. For additional terms and conditions of the Undertaking
and the Extensions, see Exhibits 26, 30, and 32, which are incorporated herein by reference.
Other than the Series
1 Shares, the Series B Warrants, the Registration Rights Agreement, the Undertaking, the Extensions, and the Amended Joint Filing
Agreement filed as Exhibit 31 to the Twenty-Eighth Amendment, there are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Issuer,
including but not limited to transfer or voting of any of the securities, finders' fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, divisions of profits or losses, or the giving or withholding of proxies, except for sharing
of profits.
See Items 1 and 2 above regarding disclosure
of the relationships between members of the Group, which disclosure is incorporated herein by reference.
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 25
|
Item 7. Material to be Filed as Exhibits
Exhibit No.
|
|
Description
|
1
|
|
Joint Filing Agreement, dated November 7, 2008, filed with the Original Schedule 13D
|
2
|
|
Amended Joint Filing Agreement, dated November 14, 2008, filed with the First Amendment
|
3
|
|
Requisition Notice, dated November 11, 2008, filed with the First Amendment
|
4
|
|
Press Release, dated November 11, 2008, filed with the First Amendment
|
5
|
|
Letter to Joseph Stilwell from W. Shaun Jackson, President and Chief Executive Officer of the Issuer, dated November 17, 2008, filed with the Second Amendment
|
6
|
|
Letter to W. Shaun Jackson from Joseph Stilwell dated November 17, 2008, filed with the Second Amendment
|
7
|
|
Settlement Agreement, dated January 7, 2009, between the Issuer and members of the Group, filed with the Fifth Amendment
|
8
|
|
Press Release, dated January 30, 2009, filed with the Sixth Amendment
|
9
|
|
Requisition Notice, dated January 29, 2009, filed with the Sixth Amendment
|
10
|
|
Stock Option Agreement dated as of January 7, 2009 among Spencer L. Schneider, Stilwell Value Partners III, L.P. and Stilwell Associates, filed with the Eighth Amendment
|
11
|
|
Reserved
|
12
|
|
Amended Joint Filing Agreement, dated April 8, 2009, filed with the Ninth Amendment
|
13
|
|
Amended Joint Filing Agreement, dated April 28, 2009, filed with the Tenth Amendment
|
14
|
|
Amended Joint Filing Agreement, dated August 4, 2009, filed with the Eleventh Amendment
|
15
|
|
Amended Joint Filing Agreement, dated November 16, 2009, filed with the Twelfth Amendment
|
16
|
|
Amended Joint Filing Agreement, dated September 21, 2012, filed with the Seventeenth Amendment
|
17
|
|
Amended Joint Filing Agreement, dated June 11, 2013, filed with the Nineteenth Amendment
|
18
|
|
Form of Series A Warrant Certificate, incorporated by reference to Schedule A to Exhibit 10.1 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 19, 2013
|
19
|
|
Form of Series B Warrant Certificate, incorporated by reference to Schedule A to Exhibit 10.2 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 19, 2013
|
20
|
|
Amended Joint Filing Agreement, dated February 12, 2014
|
21
|
|
Registration Rights Agreement, incorporated by reference to Exhibit 10.2 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 4, 2014
|
22
|
|
Kingsway Financial Services Inc. Class A Preferred Shares, Series 1 Rights, Privileges Restrictions and Conditions, incorporated by reference to Exhibit 4.1 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 27, 2013
|
23
|
|
Form of Series C Warrant Agreement, incorporated by reference to Exhibit 4.2 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 27, 2013 (terminated and exchanged for Series B Warrants)
|
24
|
|
Amended Joint Filing Agreement, dated February 12, 2014, filed with the Twenty-Second Amendment
|
25
|
|
Notice of Redemption of Series A Warrants of Kingsway Financial Services Inc., dated August 18, 2014, filed with the Twenty-Third Amendment
|
26
|
|
Statement of Undertaking, effective as of July 15, 2016, between the Issuer and members of the Group, filed with the Twenty-Fourth Amendment
|
27
|
|
Amended Joint Filing Agreement, dated October 7, 2016, filed with the Twenty-Fourth Amendment
|
28
|
|
Amended Joint Filing Agreement, dated December 15, 2017, filed with the Twenty-Fifth Amendment
|
29
|
|
Amended Joint Filing Agreement, dated May 24, 2018, filed with the Twenty-Sixth Amendment
|
30
|
|
Letter Agreement Amending the Undertaking, dated June 1, 2018, filed with the Twenty-Seventh Amendment
|
31
|
|
Amended Joint Filing Agreement, dated January 3, 2019, filed with the Twenty-Eighth Amendment
|
32
|
|
Letter Agreement Amending the Undertaking, dated July 13, 2020
|
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 26
|
SIGNATURES
After reasonable inquiry
and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and
correct.
|
STILWELL ACTIVIST FUND, L.P.
|
|
|
|
|
|
By:
|
STILWELL VALUE LLC
|
|
|
General Partner
|
|
|
|
|
|
/s/ Megan Parisi
|
|
|
By:
|
Megan Parisi
|
|
|
|
Member
|
|
|
|
|
|
STILWELL ACTIVIST INVESTMENTS, L.P.
|
|
|
|
|
|
By:
|
STILWELL VALUE LLC
|
|
|
General Partner
|
|
|
|
|
|
/s/ Megan Parisi
|
|
|
By:
|
Megan Parisi
|
|
|
|
Member
|
|
|
|
|
|
STILWELL ASSOCIATES, L.P.
|
|
By:
|
STILWELL VALUE LLC
|
|
|
General Partner
|
|
|
|
|
|
/s/ Megan Parisi
|
|
|
By:
|
Megan Parisi
|
|
|
|
Member
|
|
STILWELL VALUE PARTNERS VII, L.P.
|
|
By:
|
STILWELL VALUE LLC
|
|
|
General Partner
|
|
|
|
|
|
/s/ Megan Parisi
|
|
|
By:
|
Megan Parisi
|
|
|
|
Member
|
|
|
|
|
|
STILWELL VALUE LLC
|
|
|
|
/s/ Megan Parisi
|
|
By:
|
Megan Parisi
|
|
|
Member
|
|
|
|
|
|
JOSEPH STILWELL
|
|
|
|
|
|
|
|
/s/ Joseph Stilwell*
|
|
|
|
Joseph Stilwell
|
*/s/ Megan Parisi
|
|
Megan Parisi
|
|
Attorney-In-Fact
|
|
CUSIP No. 496904202
|
SCHEDULE 13D
|
Page 27
|
SCHEDULE A
On March 16, 2015,
Stilwell Value LLC (“Value”) and Joseph Stilwell consented to the entry of a civil administrative SEC order (the “Order”)
that, among other things, alleged violations of sections of the Investment Advisers Act of 1940 and certain rules promulgated thereunder
for failing to adequately disclose conflicts of interest presented by inter-fund loans. No investor suffered monetary loss from
the alleged conduct. The Order, among other things, (1) suspended Mr. Stilwell from March 2015 to March 2016 from association with
any investment adviser, broker, dealer, or certain regulated organizations, and imposed upon him a $100,000 civil money penalty;
and (2) censured Value, imposed upon it a $250,000 civil money penalty (as well as the repayment obligation of $239,157 in fees),
and required it to retain an independent monitor for three years, which monitorship concluded on April 9, 2018. All obligations
set forth in the Order have been fully satisfied; there are no remaining obligations or restrictions pursuant to the Order.
Exhibit 32
THE
STILWELL GROUP
111
BROADWAY
Ÿ 12TH
FLOOR
NEW
YORK, NY
10006
____
(212) 269-2005
July 13, 2020
Kingsway Financial Services Inc.
Attention: Paul Hogan, Esq., General
Counsel
150 Pierce Road, 6th Floor
Itasca, IL 60143
Dear Paul,
Reference is hereby made to that certain
Statement of Undertaking, dated as of July 15, 2016 (the “Original Undertaking”), and extended by letter agreement
dated June 1, 2018 (the “Extension,” and together with the Original Undertaking, the “Undertaking”), by
and among, on the one hand, Stilwell Value Partners IV, L.P.,1 Stilwell Activist
Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Associates, L.P., and Joseph Stilwell, and, on the other hand, Kingsway
Financial Services Inc. (the “Company”). Defined terms used but not defined herein are as defined in the Undertaking.
For good and valuable consideration
received, the parties do hereby mutually agree to amend the Undertaking as follows:
|
1.
|
The final sentence of the third paragraph (i.e., addressing
termination) is amended and restated in its entirety such that it shall now read as follows:
|
“This Undertaking
will be of no force and effect and will terminate immediately upon the earlier of: (i) that date that is six (6) years after
the Effective Date; or (ii) the execution by all of the Warrantholders and the Company of a written instrument that terminates
this Undertaking.”
Except as provided in the immediately
preceding paragraph above, the terms of this letter agreement shall not alter or otherwise modify the terms of the Undertaking
with all such terms remaining in full force and effect.
If you are in agreement with the foregoing,
please so indicate by signing and returning one copy of this letter agreement, which will constitute our agreement with respect
to the matters set forth herein.
[Remainder
of page intentionally blank.]
1
Stilwell Value Partners IV, L.P. was removed from the definition of “Warrantholders” in the Extension.
STILWELL ACTIVIST FUND, L.P.
|
|
STILWELL ASSOCIATES, L.P.
|
By:
|
STILWELL VALUE LLC
|
|
By:
|
STILWELL VALUE LLC
|
|
General Partner
|
|
|
General Partner
|
|
|
|
|
|
By:
|
/s/
Megan Parisi
|
|
By:
|
/s/
Megan Parisi
|
|
Megan Parisi
|
|
|
Megan Parisi
|
|
Member
|
|
|
Member
|
|
|
|
|
|
STILWELL ACTIVIST INVESTMENTS, L.P.
|
|
JOSEPH STILWELL
|
By:
|
STILWELL VALUE LLC
|
|
|
|
|
General Partner
|
|
|
|
|
|
|
|
|
By:
|
/s/
Megan Parisi
|
|
|
/s/ Joseph Stilwell
|
|
Megan Parisi
|
|
|
|
|
Member
|
|
|
|
|
|
|
|
|
Accepted and agreed on July 13,
2020:
|
|
|
|
KINGSWAY FINANCIAL SERVICES INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John T. Fitzgerald
|
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Name:
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John T. Fitzgerald
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Title:
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President
and CEO
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