AMENDMENT NO. 2, dated as of March 24, 2010, to EMPLOYMENT AGREEMENT, dated as
of October 16, 2007 (the “Amendment”), by and between KINGSTONE COMPANIES, INC.
(formerly DCAP Group, Inc.), a Delaware corporation (the “Company”), and BARRY
GOLDSTEIN (the “Employee”).
 
RECITALS
 
WHEREAS, the Company and the Employee are parties to an Employment Agreement,
dated as of October 16, 2007, as amended by Amendment No. 1 thereto, dated as of
August 25, 2008 (the “Employment Agreement”), which sets forth the terms and
conditions upon which the Employee is employed by the Company and upon which the
Company compensates the Employee.
 
WHEREAS, the Company and the Employee desire to amend the Employment Agreement
to give extend the term thereof and modify certain provisions thereof.
 
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
 
1. Paragraph 1.1 of the Employment Agreement is amended to read as follows:
 
“1.1           The Company will employ the Employee in its business, and the
Employee will work for the Company therein, as its President, Chairman of the
Board and Chief Executive Officer for a term commencing as of the date hereof
(the “Effective Date”) and terminating on December 31, 2014 (the “Expiration
Date”), subject to earlier termination as hereinafter provided (the employment
period, as earlier terminated or as extended as provided for herein, being
referred to as the “Term”).”
 
2. Paragraph 1.2 of the Employment Agreement is hereby deleted and of no further
force or effect.
 
3. Paragraph 4.2 of the Employment Agreement is amended to provided that,
effective as of January 1, 2010 and continuing in effect for the remainder of
the Term, Mr. Goldstein’s Base Salary is increased to three hundred seventy-five
thousand dollars ($375,000) per annum, subject to reduction as provided for in
Amendment No.1 to the Employment Agreement.
 
4. Paragraph 4.3(a) of the Employment Agreement is amended to include the
following sentence at the end thereof:
 
“Effective with the fiscal year ending December 31, 2010, in no event shall the
Bonus amount for any fiscal year be less than ten thousand dollars ($10,000);
provided, however, that the Bonus amount payable to the Employee for any fiscal
year (whether in the minimum amount or greater) pursuant to Paragraph 4.3(a)
(the “Company Bonus”) shall be reduced on a dollar-for-dollar basis to the
extent of any bonus payable by Kingstone Insurance Company (formerly Commercial
Mutual Insurance Company) to the Employee for such year (the “KICO Bonus”), it
being understood and agreed that, in the event the amount of the KICO Bonus is
greater than the amount of the Company Bonus, the excess of the KICO Bonus over
the Company Bonus shall not be an offset against the Base Salary payable to the
Employee hereunder.”
 
 
 

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5. Paragraph 4.3(b) of the Employment Agreement is amended to read as follows:
 
“(b)           For purposes hereof, the term “Net Income” for any particular
fiscal year, commencing with the fiscal year ending December 31, 2009, shall
mean the Company's consolidated comprehensive income for such year determined in
accordance with generally accepted accounting principles consistently applied,
as audited and reported upon by the independent auditors of the Company,
adjusted as follows:  (i) the after-tax effect of any extraordinary, exceptional
or nonrecurring gain or loss, or any gain or loss arising from the sale of
capital assets, including from the sale of stores, or arising out of any
transaction in capital stock of the Company or any of its subsidiaries shall be
excluded; (ii) the Bonus (and any other bonus) paid, or accrued with the regard,
to the Employee, but only the Employee, shall be excluded;  (iii) any after-tax
charges to net income relating to the conversion of Commercial Mutual Insurance
Company (“CMIC”) from an advance premium cooperative to a stock property and
casualty insurance company (the “Conversion”), including amortization of
intangibles recorded as a result of the gain recognized by the Company in
connection with the Conversion, shall be excluded; (iv) any additional
depreciation expenses incurred as a result of a write-up in the value of office
buildings relating to the Conversion shall be excluded; (v) any other items of
gain or loss, or revenue or expense, relating to the Conversion shall be
excluded; (vi) in determining “net realized gains and losses on investments” for
instruments owned by CMIC as of the date of the Conversion, the original cost
basis of CMIC in each portfolio item, and not the fair market value of the
portfolio items as of the date of the Conversion, shall be used as the basis for
such portfolio items; and (viii) the tax benefit of the utilization of the
Company’s net operating loss carryforward shall be added.
 
6. Paragraph 6.4 of the Employment Agreement is amended to read as follows:
 
“6.4           The Company agrees to obtain a disability insurance policy on
behalf of the Employee (subject to the Employee’s satisfying any requirements
therefor) and maintain such policy in effect during the Term, or reimburse the
Employee for a disability insurance policy obtained by him.  In no event shall
the Company be liable for premiums in excess of $6,500 per annum with respect
thereto.”
 
7. A new Paragraph 9.3 of the Employment Agreement is added as follows:
 
“9.3           Currently with the execution of Amendment No. 2 to this
Agreement, (a) pursuant to the Company’s 2005 Equity Participation Plan and a
Stock Option Agreement in, or substantially in, the form attached hereto as
Exhibit A, the Company is granting to the Employee the right and option to
purchase up to one hundred eighty-eight thousand eight hundred sixty-five
(188,865) shares of common stock of the Company upon the terms set forth in the
Stock Option Agreement and (b) the Company is issuing to the Employee fifty
thousand (50,000) shares of common stock of the Company, which shares shall be
considered fully vested and not subject to forfeiture.”  
 
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8. Paragraph 7.1(a)(i) of the Employment Agreement is amended to read as
follows:
 
“(i)           within any state in which the Company has a license to operate at
the Cessation Date, engage or participate in a business which, as of the
Cessation Date, is similar to or competitive with, directly or indirectly, a
business in which the Company is then engaged, and shall not make any
investments in any such similar or competitive entity, except that the foregoing
shall not restrict the Employee from acquiring up to one percent (1%) of the
outstanding voting stock of any entity whose securities are listed on a stock
exchange or Nasdaq;”
 
9. Promptly following the execution of this Amendment, the Company shall assign
to the Employee or his designee all of its right, title and interest in and to a
certain three million dollar ($3,000,000) term insurance policy on the life of
the Employee.
 
10. Except as amended hereby, the Employment Agreement shall continue in full
force and effect in accordance with its terms.  This Amendment shall be governed
by, and interpreted and construed in accordance with, the laws of the State of
New York, excluding choice of law principles thereof.  In the event any clause,
section or part of this Amendment shall be held or declared to be void, illegal
or invalid for any reason, all other clauses, sections or parts of this
Amendment which can be effected without such void, illegal or invalid clause,
section or part shall nevertheless continue in full force and effect.
 
11. This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which taken together shall constitute
one and the same instrument.
 
12. Signatures hereon which are transmitted via facsimile shall be deemed
original signatures.
 
13. The Employee acknowledges that he has been represented by counsel or has
been afforded an opportunity to be represented by counsel in connection with
this Amendment.  Accordingly, any rule or law or any legal decision that would
require the interpretation of any claimed ambiguities in this Amendment against
the party that drafted it has no application and is expressly waived by the
Employee.  The provisions of this Amendment shall be interpreted in a reasonable
manner to give effect to the intent of the parties hereto.
 

 
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IN WITNESS WHEREOF, the Company and the Employee have executed this Amendment as
of the date first above written.
 

  KINGSTONE COMPANIES, INC.          
 
By:
/s/ Victor Brodsky       Victor Brodsky        Chief Financial Officer         
 

             
 
 
/s/ Barry Goldstein       Barry Goldstein