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13. Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

13. Subsequent Events

The Company has evaluated events that occurred subsequent to June 30, 2019 through the date these condensed consolidated financial statements were issued for matters that required disclosure or adjustment in these condensed consolidated financial statements.

Reinsurance

KICO eliminated its personal lines and commercial umbrella quota share treaties, and entered into new annual excess of loss and catastrophe reinsurance treaties effective July 1, 2019 (see Note 6, Property and Casualty Insurance Activity – Reinsurance).

Office Lease

On July 8, 2019, the Company entered into a lease agreement for an additional office facility for Cosi located in Valley Stream, NY under a non-cancelable operating lease. In addition to the base rental costs, occupancy lease agreements generally provide for rent escalations resulting from increased assessments from real estate taxes and other charges.

The lease commencement date will be determined upon the completion of landlord provided construction, which the Company expects to be on or about October 1, 2019. The lease has a term of seven years and two months.

This lease will be accounted for as an operating lease, whereby lease expense is recognized on a straight-line basis over the term of the lease. See Note 2 - Accounting Policies for additional information regarding the accounting for leases.

The following table presents the contractual maturities of the Company’s lease liabilities under this lease:

For the Year
Ending
December 31,		Total
Remainder of 2019		$	6,652
2020			80,517
2021			83,335
2022			86,252
2023			89,270
Thereafter			261,610
Total undiscounted lease payments			607,636
Less: present value adjustment			104,112
Operating lease liability		$	503,524

Employment Agreements

Dale A. Thatcher, Chief Executive Officer and President of the Company and KICO, retired and resigned his positions effective July 19, 2019 (the “Separation Date”). At such time, he also resigned his positions on the Board of Directors of each of the Company and KICO. Effective upon Mr. Thatcher’s separation from employment, the Board appointed Barry B. Goldstein, Former Chief Executive Officer and Executive Chairman of the Board of Directors to the position of Chief Executive Officer and President of each of the Company and KICO. Mr. Goldstein previously served as Chief Executive Officer and President of the Company from March 2001 through December 31, 2018, and as Chief Executive Officer and President of KICO from January 2012 through December 31, 2018.

In connection with his separation from employment, each of the Company and KICO entered into an Agreement and General Release (the “Separation Agreement”) with Mr. Thatcher. Pursuant to the Separation Agreement, the Company and KICO shall collectively provide the following payments and benefits to Mr. Thatcher in full satisfaction of all payments and benefits and other amounts due to him under the terms of the existing employment agreements upon his separation from employment: (i) an amount equal to $381,111 (representing the amount of base salary he would have received had he remained employed through March 31, 2020), (ii) an amount equal to $5,000 in full satisfaction for any bonus payments payable under the existing employment agreements, (iii) continuing group health coverage commencing on the Separation Date and ending on March 31, 2020, and (iv) continued vesting of all previously granted but unvested stock awards as of the Separation Date (Mr. Thatcher shall not be entitled to any further grants of stock awards after the Separation Date). In addition, the Company and KICO agreed to provide Mr. Thatcher with a severance payment of $20,000 in consideration for a release. As required by the employment agreements, Mr. Thatcher covenanted that, for a period of three years following the Separation Date, he shall not accept any operating executive role with another property and casualty insurance company.

Commercial Lines of Business

On July 23, 2019, the Company made the decision that it will no longer underwrite Commercial Lines risks (see Note 6 Property and Casualty Insurance Activity – Commercial Lines of Business).

Dividends Declared

On August 7, 2019, the Company’s Board of Directors approved a quarterly dividend of $0.0625 per share payable in cash on September 13, 2019 to stockholders of record as of the close of business on August 30, 2019 (see Note 8).