Document:

Blueprint

 

 Exhibit 10(d)

 

EMPLOYMENT AGREEMENT, dated April 28,
2017, by and between KINGSTONE
INSURANCE COMPANY, a New York stock property and casualty
insurance company (the “Company”), and BARRY B. GOLDSTEIN (the
“Employee”).

 

RECITALS

 

WHEREAS, the Company and the Employee
are parties to an Employment Agreement, dated as of May 10, 2011,
as amended (the “Existing Employment Agreement”), which
sets forth the terms and conditions upon which the Employee is
employed by the Company and upon which the Company will compensate
the Employee for his services through December 31,
2016.

 

WHEREAS, the Company and the Employee
desire to enter into a new employment agreement which will set
forth the terms and conditions upon which the Employee shall be
employed by the Company and upon which the Company shall compensate
the Employee for his services effective as of January 1,
2017.

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants hereinafter set forth, the
parties hereto hereby agree as follows:

 

1. EMPLOYMENT;
TERM

 

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, Chief
Executive Officer and Chief Investment Officer for a term
commencing as of January 1, 2017 (the “Effective Date”)
and terminating on December 31, 2019 (the “Expiration
Date”), subject to earlier termination as hereinafter
provided (the employment period, as earlier terminated as provided
for herein, being referred to as the
“Term”).

 

1.2 Upon the expiration
of the Term or the termination of the Employee’s employment
with the Company for any reason whatsoever, whether during or
following the Term, he shall be deemed to have resigned all of his
positions as an employee, officer and director of the Company and
of each and every subsidiary thereof.

 

2. DUTIES

 

2.1 During the Term,
the Employee shall serve as the Company’s President, Chairman
of the Board, Chief Executive Officer and Chief Investment Officer
and shall perform duties of an executive character consisting of
administrative and managerial responsibilities on behalf of the
Company of the type and nature heretofore assigned to the Employee
and such further duties of an executive character as shall, from
time to time, be delegated or assigned to him by the Board of
Directors of the Company (the “Board”) consistent with
the Employee’s position.

 

3. DEVOTION
OF TIME

 

3.1 During the Term,
the Employee shall expend all of his working time for the Company,
shall devote his best efforts, energy and skill to the services of
the Company and the promotion of its interests and shall not take
part in activities detrimental to the best interests of the
Company.  Notwithstanding the foregoing, during the term of
the Employment Agreement between Kingstone Companies, Inc.
(“KINS”) and the Employee, dated as of January 20, 2017
(the “KINS Employment Agreement”), the Employee shall
be entitled to devote such time as is necessary to the fulfillment
of his duties and responsibilities as President, Chief Executive
Officer and Chairman of the Board of KINS.

 

3.2 The Employee shall
be permitted to engage in the following activities: (a) charity,
social or civic work, (b) tend to personal financial and legal
affairs, (c) engage in any other business or business-related
activity, and (d) subject to the prior written consent of the
Company (following Board approval), serve on the Board of Directors
of, or advisor to, other business organizations, in each case
(i.e., (a) through (d) above), provided that such activities do not
interfere or conflict with his full-time services to the
Company.  

 

4. COMPENSATION

 

4.1 For all services to
be rendered by the Employee during the Term, and in consideration
of the Employee’s representations and covenants set forth in
this Agreement, the Employee shall be entitled to receive from the
Company compensation as set forth in Sections 4.2 and 4.3
below.

 

4.2 During the Term,
the Employee shall be entitled to receive a salary at the following
rates (the “Base Salary”): (a) through June 30, 2017,
the Employee’s Base Salary shall continue to be four hundred
five thousand one hundred sixty-eight dollars and ninety-two cents
($405,168.92) per annum; and (b) effective as of each of July 1,
2017, 2018 and 2019, the Employee’s Base Salary per annum
shall be increased by five percent (5%). The Employee shall be
entitled to increases in the Base Salary and other potential
additional compensation as may be determined from time to time by
the Board in its sole discretion. All amounts due hereunder shall
be payable in accordance with the Company’s standard payroll
practices.

 

4.3 For each fiscal
year during the Term, the Employee shall also be entitled to
receive from the Company a bonus (the “Bonus”) pursuant
to and in accordance with the terms and conditions of the
Company’s employee profit sharing plan.

 

 

1

 

 

5. REIMBURSEMENT
OF EXPENSES

 

5.1 The Company shall
pay directly, or reimburse the Employee for, all reasonable and
necessary expenses and disbursements incurred by the Employee for
and on behalf of the Company in the performance of his duties
during the Term.

 

5.2 The Employee shall
submit to the Company, not less than once in each calendar month,
reports of such expenses and disbursements in a form normally used
by the Company, and receipts with respect thereto, and the
Company’s obligations under Section 5.1 hereof shall be
subject to compliance therewith. The Company acknowledges that the
Employee has complied with his obligations under this Section 5.2
through December 31, 2016.

 

6. DISABILITY;
INSURANCE

 

6.1 If, during the
Term, the Employee, in the opinion of a majority of all of the
members of the Board (excluding the Employee if he is a member), as
confirmed by competent medical evidence, shall become physically or
mentally incapacitated to perform his duties for the Company
hereunder (“Disabled”) for a continuous period, then
for the first twelve (12) months of such period he shall receive
his full salary (subject to the following sentence, the
“Salary Continuation Period”). In no event, however,
shall the Employee be entitled to receive any payments under this
Section 6.1 beyond the expiration or termination date of this
Agreement. Effective with the date of his resumption of full
employment, the Employee shall be re-entitled to receive his full
salary. If such illness or other incapacity shall endure for a
continuous period of at least twelve (12) months or for at least
two hundred fifty (250) business days during any eighteen (18)
month period, the Company shall have the right, by written notice,
to terminate the Employee’s employment hereunder as of a date
(not less than thirty (30) days after the date of the sending of
such notice) to be specified in such notice. The Employee agrees to
submit himself for appropriate medical examination to a physician
of the Company’s designation as necessary for purposes of
this Section 6.1.

 

6.2 The obligations of
the Company under this Article 6 may be satisfied, in whole or in
part, by payments to the Employee under a disability insurance
policy provided by the Company and/or KINS.

 

6.3 Notwithstanding the
foregoing, in the event that, at the time of any apparent
incapacity, the Company has in effect a disability policy with
respect to the Employee, the Employee shall be considered Disabled
for purposes of Section 6.1 only if he is considered disabled for
purposes of the policy.

 

6.4 In the event of the
termination of the Employee’s employment based upon him
becoming Disabled, as liquidated damages, the Employee shall be
entitled to receive the Bonus compensation to which he is entitled
until the expiration of the Salary Continuation Period pursuant to
Section 4.3 hereof (i.e., the Termination Date shall be considered
the last day of the Salary Continuation Period). The amount to be
paid to the Employee pursuant to this Section 6.4 shall constitute
the sole and exclusive remedy of the Employee, and the Employee
shall not be entitled to any other or further compensation, rights
or benefits hereunder or otherwise, including pursuant to Article
11.

 

7. RESTRICTIVE
COVENANTS

 

7.1 (a)            The
services of the Employee are unique and extraordinary and essential
to the business of the Company, especially since the Employee shall
have access to the Company’s customer lists, producer lists,
trade secrets and other privileged and confidential information
essential to the Company’s business. Therefore, the Employee
agrees that, if the term of his employment hereunder shall expire
or his employment shall at any time terminate for any reason
whatsoever, with or without Cause (as hereinafter defined) and with
or without Good Reason (as hereinafter defined), the Employee will
not at any time during the Restrictive Covenant Period (as
hereinafter defined), without the prior written consent of the
Company, directly or indirectly, whether individually or as a
principal, officer, employee, partner, shareholder, member,
manager, director, agent of, or consultant or independent
contractor to, any person, corporation, limited liability company,
partnership, limited partnership or other entity (collectively,
“Person”):

 

(i) within any state in
which the Company has a license to operate on the date on which the
Employee ceases to be employed by the Company (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
(“Competitive Business”), and shall not make any
investments in any such Competitive Business, except that the
foregoing shall not restrict the Employee from acquiring up to one
percent (1%) of the outstanding voting stock of any Competitive
Business whose securities are listed on a stock exchange or
Nasdaq;

 

(ii) cause
or seek to persuade any director, officer, employee, customer,
client, account, agent, producer, reinsurer or supplier of, or
consultant or independent contractor to, the Company, or others
with whom the Company has a business relationship (collectively,
“Business Associates”), to discontinue or materially
modify the status, employment or relationship of such Person with
the Company, or to become employed in any activity similar to or
competitive with the activities of the Company; provided, however,
that nothing in this section shall restrict the Employee's ability
to cause or seek to persuade his daughter, Amanda Goldstein, to
alter her relationship with the Company;

 

(iii) cause
or seek to persuade any prospective customer, client, account or
other Business Associate of the Company (which at or about the
Cessation Date was then actively being solicited by the Company) to
determine not to enter into a business relationship with the
Company or to materially modify its contemplated business
relationship;

 

(iv) hire,
retain or associate in a business relationship with, directly or
indirectly, any director, officer or employee of the
Company;

 

 

2

 

 

(v) solicit or cause or
authorize to be solicited, or accept, for or on behalf of him or
any third party, any business from, or the entering into of a
business relationship with, (A) others who are, or were within one
(l) year prior to the Cessation Date, a customer, client, account
or other Business Associate of the Company, or (B) any prospective
customer, client, account or other Business Associate of the
Company which at or about the Cessation Date was then actively
being solicited by the Company; or

 

The
foregoing restrictions set forth in this Section 7.1(a) shall apply
likewise during the Term.

 

(vi) For
purposes hereof, the term “Restrictive Covenant Period”
shall mean the eighteen (18) month period commencing with the
Cessation Date; provided, however, that, in the event that the
Employee’s employment is terminated by the Company without
Cause or by the Employee for Good Reason, the term
“Restrictive Covenant Period” shall mean the shorter of
(i) the twelve (12) month period commencing with the Cessation Date
and (ii) the period commencing with the Cessation Date and ending
on the Expiration Date.

 

7.2 The Employee agrees
to disclose promptly in writing to the Board all ideas, processes,
methods, devices, business concepts, inventions, improvements,
discoveries, know-how and other creative achievements (hereinafter
referred to collectively as “discoveries”), whether or
not the same or any part thereof is capable of being patented,
trademarked, copyrighted, or otherwise protected, which the
Employee, while employed by the Company, conceives, makes,
develops, acquires or reduces to practice, whether acting alone or
with others and whether during or after usual working hours, and
which are related to the Company’s business or interests, or
are used or usable by the Company, or arise out of or in connection
with the duties performed by the Employee. The Employee hereby
transfers and assigns to the Company all right, title and interest
in and to such discoveries (whether conceived, made, developed,
acquired or reduced to practice on or prior to the Effective Date
or during his employment with the Company), including any and all
domestic and foreign copyrights and patent and trademark rights
therein and any renewals thereof. On request of the Company, the
Employee will, without any additional compensation, from time to
time during, and after the expiration or termination of, the Term,
execute such further instruments (including, without limitation,
applications for copyrights, patents, trademarks and assignments
thereof) and do all such other acts and things as may be deemed
necessary or desirable by the Company to protect and/or enforce its
right in respect of such discoveries. All expenses of filing or
prosecuting any patent, trademark or copyright application shall be
borne by the Company, but the Employee shall cooperate, at the
Company’s expense, in filing and/or prosecuting any such
application.

 

7.3 (a)            The
Employee represents that he has been informed that it is the policy
of the Company to maintain as secret all confidential information
relating to the Company, including, without limitation, any and all
knowledge or information with respect to secret or confidential
methods, processes, plans, materials, customer, producer and
reinsurer lists or data, or with respect to any other confidential
or secret aspect of the Company’s activities, and further
acknowledges that such confidential information is of great value
to the Company. The Employee recognizes that, by reason of his
employment with the Company, he has acquired and will acquire
confidential information as aforesaid. The Employee confirms that
it is reasonably necessary to protect the Company’s goodwill,
and, accordingly, hereby agrees that he will not, directly or
indirectly (except where authorized by the Board), at any time
during the Term or thereafter divulge to any Person, or use, or
cause or authorize any Person to use, any such confidential
information.

 

(b) The Employee agrees
that he will not, at any time, remove from the Company’s
premises any drawings, notebooks, software, data or other
confidential information relating to the business and procedures
heretofore or hereafter acquired, developed and/or used by the
Company, except where necessary in the fulfillment of his duties
hereunder.

 

(c) The Employee agrees
that, upon the expiration or termination of this Agreement or the
termination of his employment with the Company for any reason
whatsoever, he shall promptly deliver to the Company any and all
drawings, notebooks, software, data and other documents and
material, including all copies thereof, in his possession or under
his control relating to any confidential information or
discoveries, or which is otherwise the property of the
Company.

 

(d) For purposes
hereof, the term “confidential information” shall mean
all information given to the Employee, directly or indirectly, by
the Company and all other information relating to the Company
otherwise acquired by the Employee during the course of his
employment with the Company (whether on or prior to the Effective
Date or hereafter), other than information which (i) was in the
public domain at the time furnished to, or acquired by, the
Employee, or (ii) thereafter enters the public domain other than
through disclosure, directly or indirectly, by the Employee or
others in violation of an agreement of confidentiality or
nondisclosure.

 

7.1 For purposes of
this Article 7, the term “Company” shall mean and
include the Company and any and all subsidiaries and affiliated
entities of the Company in existence from time to
time.

 

7.2 In connection with
his agreement to the restrictions set forth in this Article 7, the
Employee acknowledges the benefits accorded to him pursuant to the
provisions of this Agreement, including, without limitation, the
agreement on the part of the Company to employ the Employee during
the Term (subject to the terms and conditions hereof). The Employee
also acknowledges and agrees that the covenants set forth in this
Article 7 are reasonable and necessary in order to protect and
maintain the proprietary and other legitimate business interests of
the Company and that the enforcement thereof would not prevent the
Employee from earning a livelihood.

 

 

3

 

 

8. VACATIONS;
LEAVE

 

8.1 The Employee shall
be entitled to an aggregate of four (4) weeks vacation time for
each twelve (12) month period during the Term, the time and
duration thereof to be determined by mutual agreement between the
Employee and the Board. Any vacation time not used by the end of
the Term shall be forfeited without compensation. In addition, the
Employee shall not be entitled to carry over or use any vacation
time that is unused as of the end of any twelve (12) month period
during the Term. Further, the Employee shall be entitled to the
number of sick, personal, family and other days off during each
twelve (12) month period of the Term as set forth in the
Company’s employee handbook. The Employee understands and
agrees that the vacation time and sick, personal, family and other
days off for him are not in addition to these provided for in the
KINS Employment Agreement and shall be reduced by any such time and
days taken as an employee of KINS The Company acknowledges that the
Employee has complied with his obligations under this Section 8.1
through December 31, 2016.

 

9. PARTICIPATION
IN EMPLOYEE BENEFIT PLANS; STOCK OPTIONS

 

9.1 The Employee shall
be accorded the right to participate in and receive benefits under
and in accordance with the provisions of any pension, profit
sharing, insurance, medical and dental insurance or reimbursement
(with spousal coverage) or other plan or program of the Company or
KICO, either in existence as of the Effective Date or thereafter
adopted for the benefit generally of its executive employees.
Additionally, in the event of termination of the Employee's
employment by the Company without Cause, or by the Employee for
Good Reason, the Company or KINS shall continue to provide to the
Employee health, dental, and vision insurance coverage at no cost
to the Employee (with spousal coverage) until the Expiration Date
or such time as the Employee becomes eligible for similar coverage,
whichever is sooner.

 

9.2 In the event the
Company elects to discontinue any existing life insurance policy
maintained on the Employee, or any other term life insurance policy
purchased by it during the Term, prior to any such discontinuance
and/or in the event the Employee’s employment with the
Company ceases for any reason, the Employee shall be offered the
opportunity to have such policy transferred to him without cost, it
being understood that the Employee shall be responsible for the
payment of any and all premiums thereafter due.

 

10. SERVICE
AS OFFICER AND DIRECTOR

 

10.1 During
the Term, the Employee shall, if elected or appointed, serve as (a)
an officer of the Company and/or any subsidiaries of the Company in
existence or hereafter created or acquired and (b) a director of
the Company and/or any such subsidiaries of the Company in
existence or hereafter created or acquired, in each case without
any additional compensation for such services, except that the
Employee is entitled to receive a fee for serving as a director of
the Company in the amount of $6,500 per annum. In the event the
Company has in effect during the Term a director and officer
liability insurance policy, the Company will include the Employee
therein as a named insured.

 

11. EARLIER
TERMINATION

 

11.1 The
Employee’s employment hereunder (a) shall automatically
terminate upon his death, (b) may terminate at any time during the
Term at the option of the Company upon written notice to the
Employee for Cause or without Cause, (c) may terminate at any time
during the Term at the option of the Employee upon written notice
to the Company for Good Reason or without Good Reason and (d) may
terminate at the option of the Company in the event the Employee
becomes Disabled, as provided for in Article 6.

 

11.2 As
used in this Agreement, “Cause” shall mean (a) the
Employee’s commission of any act in the performance of his
duties constituting common law fraud, a felony or other gross
malfeasance of duty, (b) the Employee’s commission of any act
involving moral turpitude which reasonably may have a material
adverse effect on the Company and its subsidiaries taken as a whole
(“Material Adverse Effect”), (c) any misrepresentation
by the Employee (including, without limitation, a breach of any
representation set forth in Section 13.1 hereof) which reasonably
may have a Material Adverse Effect, (d) any breach of any material
covenant on the Employee’s part herein set forth (which
breach, if curable, is not cured by the Employee within thirty (30)
days of the Employee’s receipt of written notice thereof from
the Company), or (e) the Employee’s engagement in other
intentional or grossly negligent misconduct which may reasonably
have a Material Adverse Effect. The parties agree that the term
“Material Adverse Effect” includes the loss or
suspension of any license for the Company or KINS to operate or any
disqualification or suspension for the Employee to serve as an
officer or director thereof under applicable law.

 

11.3 As
used in this Agreement, “Good Reason” shall mean (a)
any breach of any material covenant on the Company’s part
(which breach, if curable, is not cured by the Company within
thirty (30) days of the Company’s receipt of written notice
thereof from the Employee), (b) a material diminution in the
Employee’s duties and responsibilities (other than following
an event constituting Cause) in his capacity as President, Chairman
of the Board, Chief Executive Officer and Chief Investment Officer
of the Company, (c) a change in the Employee's current reporting
structure (other than following an event constituting Cause), (d) a
decrease in the compensation payable to the Employee from the
compensation payable pursuant to this Agreement, or (e) the
relocation of the location of the Company’s principal offices
at which the Employee is to provide his services to a location that
is more than thirty (30) miles from Valley Stream, New York (it
being understood and agreed, however, that the Employee shall be
required to travel to Kingston, New York as often as is reasonably
required for him to perform his duties as President, Chief
Executive Officer, Chairman of the Board and Chief Investment
Officer of the Company).

 

 

4

 

 

11.4 In
the event of the termination of the Employee’s employment by
the Company for Cause or by the Employee without Good Reason, the
Company shall have no further obligations to the Employee, and the
Employee shall be entitled to no further compensation from the
Company, except for any pro-rata amounts due to the Employee at
such date of termination, as provided for in Section 4.2 hereof,
and except, in the case of a termination of employment by the
Employee without Good Reason, for any Bonus amount for the
completed fiscal year immediately preceding the date of
termination, as provided in Section 4.3 hereof. As an illustration
of the foregoing, in the event of a termination of employment by
the Employee without Good Reason on March 1, the Employee would be
entitled to receive the amount payable to him pursuant to Section
4.2 hereof to March 1 and the amount, if any, payable to him
pursuant to Section 4.3 hereof for the immediately preceding fiscal
year ended December 31. In the event of the termination of the
Employee’s employment by the Company for Cause or by the
Employee without Good Reason, the amount to be paid to the Employee
pursuant to this Section 11.4 shall constitute the sole and
exclusive remedy of the Employee, and the Employee shall not be
entitled to any other or further compensation, rights or benefits
hereunder or otherwise.

 

11.5 In
the event of the termination of the Employee’s employment by
the Company without Cause or by the Employee for Good Reason, as
liquidated damages, the Employee shall be entitled to receive (a)
the compensation to which he would have been entitled until the
expiration of the Term pursuant to Section 4.2 hereof and (b) the
Bonus compensation to which he is entitled to receive through the
expiration of the Term pursuant to Section 4.3 hereof. The
compensation payable pursuant to (a) above shall be payable to the
Employee in accordance with the Company’s standard payroll
practices as if his employment had continued. The amount to be paid
to the Employee pursuant to this Section 11.5 shall constitute the
sole and exclusive remedy of the Employee, and the Employee shall
not be entitled to any other or further compensation, rights or
benefits hereunder or otherwise.

 

11.6 In
order to protect the Employee against the possible consequences and
uncertainties of a Change of Control of the Company and thereby
induce the Employee to remain in the employ of the Company, the
Company agrees that:

 

(a) If, during the
Term, the Employee’s employment is terminated within eighteen
(18) months subsequent to a Change of Control by the Company other
than for Cause or by the Employee for Good Reason, the Company
shall pay to the Employee an amount in cash equal to one and
one-half (1.5) times the Base Salary (the “Change of Control
Payment”). The Change of Control Payment shall be payable in
one lump sum payment within ten (10) days following the date of
termination of employment. In addition, in such event, the Company
(or KINS) shall continue to pay for the Employee's health insurance
premiums, including spousal coverage, for the remainder of the
Term. The Change of Control Payment shall be in lieu of the amount
payable to the Employee pursuant to Section 11.5 hereof; provided,
however, that the Employee may elect to receive the amount payable
pursuant to Section 11.5 hereof in lieu of the amount payable
pursuant to this Section 11.6. The amount to be paid to the
Employee pursuant to this Section 11.6 shall constitute the sole
and exclusive remedy of the Employee, and the Employee shall not be
entitled to any other or further compensation, rights or benefits
hereunder or otherwise.

 

(b) As used in this
Section 11.6, a “Change of Control” shall be deemed to
have occurred if:

 

(i) any
“person” or “group of persons” (as such
terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)
(other than the Employee or any “group of persons” that
includes the Employee), becomes the “beneficial owner”
(as defined in Rule 13d-3 promulgated under the 1934 Act), directly
or indirectly, of securities of KINS representing more than
thirty-three and one-third percent (33-1/3%) of the then
outstanding securities of KINS having the right to vote on the
election of directors (“Voting Securities”), except
that there shall be excluded from the calculation any Voting
Securities acquired from KINS with respect to which the Employee
gave his approval as a member of the Board of Directors of KINS
(the “KINS Board”); or

 

(ii) any
person or group of persons (other than persons whose Voting
Securities of KINS would be excluded under clause (i) above)
becomes the beneficial owner, directly or indirectly, of securities
representing a majority of the then outstanding securities of the
Company having the right to vote on the election of directors;
or

 

(iii) when
individuals who, as of the date hereof, constitute the KINS Board
(the “Incumbent KINS Board”) cease for any reason to
constitute at least a majority of the KINS Board; provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the
stockholders of KINS, was approved by a vote of at least a majority
of the directors then comprising the Incumbent KINS Board shall be
considered as though such individual were a member of the Incumbent
KINS Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the KINS
Board; or

 

(iv) KINS
consummates (A) a reorganization, merger or consolidation of KINS,
with respect to which in each case all or substantially all of the
Persons who were the beneficial owners of the Voting Securities of
KINS immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly and indirectly, more than
50% of the then combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of the corporation or other Person resulting from such
reorganization, merger of consolidation; or

 

(v) the
Company consummates a reorganization, merger or consolidation of
the Company, with respect to which in each case KINS does not,
following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of the then
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the
corporation or other Person resulting from such reorganization,
merger or consolidation; or

 

 

5

 

 

(vi) the
Company or KINS consummates the sale or other disposition of all or
substantially all of the assets of the Company or
KINS.

 

Notwithstanding
the foregoing, no transaction or event shall constitute a Change of
Control hereunder unless such transaction or event also constitutes
a change in ownership or effective control of the Company or KINS
within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(v)
or (vi)(A)(2).

 

11.1 In
the event of the death of the Employee during the Term, as
liquidated damages, the Employee’s estate (the
“Estate”) shall be entitled to receive (a) the Base
Salary to which the Employee is entitled until the date of death of
the Employee pursuant to Section 4.2; and (b) the Bonus
compensation to which the Employee is entitled through the date of
death (i.e., the Termination Date shall be considered the date of
death). The amount to be paid to the Estate pursuant to this
Section 11.7 shall constitute the sole and exclusive remedy of the
Estate and any beneficiaries thereof, and neither the Estate nor
any beneficiaries thereof shall be entitled to any other or further
compensation, rights or benefits hereunder or otherwise, including
pursuant this to Article 11.

 

11.2 The
termination or expiration of this Agreement shall not affect the
continuing operation and effect of Article 7 hereof, which shall
continue in full force and effect according to its terms. In
addition, the termination or expiration of this Agreement will not
result in a termination or waiver of any rights and remedies that
the Company may have under this Agreement and applicable
law.

 

12. INJUNCTIVE
RELIEF; REMEDIES

 

12.1 The
Employee acknowledges and agrees that, in the event he shall
violate or threaten to violate any of the restrictions of Article 3
or 7 hereof, the Company will be without an adequate remedy at law
and will therefore be entitled to enforce such restrictions by
temporary or permanent injunctive or mandatory relief in any court
of competent jurisdiction without the necessity of proving monetary
damages.

 

12.2 The
Employee agrees further that the Company shall have the following
additional rights and remedies:

 

(i) the right and
remedy to require the Employee to account for and pay over to the
Company all monies and other consideration derived or received by
him as the result of any transactions determined by an arbitrator
or a court of competent jurisdiction to be a breach of any of the
provisions of Section 7.1, and the Employee hereby agrees to
account for and pay over such monies and other consideration to the
Company; and

 

(ii) the
right to recover attorneys’ fees incurred in any action or
proceeding in which it seeks to enforce its rights under Article 7
hereof and is successful on any grounds; provided, however, that,
in the event the Employee is the prevailing party in any such
action or proceeding, the Company will pay to the Employee all
reasonable attorneys’ fees and costs incurred by the Employee
in defending such action or proceeding.

 

12.3 Each
of the rights and remedies enumerated above shall be independent of
the other, and shall be severally enforceable, and all of such
rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or
in equity.

 

12.4 The
parties hereto intend to and hereby confer jurisdiction to enforce
the covenants contained in Section 7.1 upon the courts of any
jurisdiction within the geographical scope of such covenants (a
“Jurisdiction”). In the event that the courts of any
one or more of such Jurisdictions shall hold such covenants
unenforceable by reason of the breadth of their scope or otherwise,
it is the intention of the parties hereto that such determination
not bar or in any way affect the Company’s right to the
relief provided above in the courts of any other Jurisdiction, as
to breaches of such covenants in such other respective
Jurisdictions, the above covenants as they relate to each
Jurisdiction being, for this purpose, severable into diverse and
independent covenants.

 

 

6

 

 

13. NO
RESTRICTIONS

 

13.1 The
Employee hereby represents that neither the execution of this
Agreement nor his performance hereunder will (a) violate, conflict
with or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under the terms, conditions or
provisions of any contract, agreement or other instrument or
obligation to which the Employee is a party, or by which he may be
bound, or (b) violate any order, judgment, writ, injunction or
decree applicable to the Employee. In the event of a breach hereof,
in addition to the Company’s right to terminate this
Agreement, the Employee shall indemnify the Company and hold it
harmless from and against any and all claims, losses, liabilities,
costs and expenses (including reasonable attorneys’ fees)
incurred or suffered in connection with or as a result of the
Company’s entering into this Agreement or employing the
Employee hereunder.

 

14. ARBITRATION

 

14.1 Except
with regard to Section 12.1 hereof and any other matters that are
not a proper subject of arbitration, all disputes between the
parties hereto concerning the performance, breach, construction or
interpretation of this Agreement or any portion thereof, or in any
manner arising out of this Agreement or the performance thereof,
shall be submitted to binding arbitration, in accordance with the
rules of the American Arbitration Association. The arbitration
proceeding shall take place at a mutually agreeable location in
Nassau County, New York or such other location as agreed to by the
parties.

 

14.2 The
award rendered by the arbitrator shall be final, binding and
conclusive, shall be specifically enforceable, and judgment may be
entered upon it in accordance with applicable law in an appropriate
court in the State of New York, with no right of appeal
therefrom.

 

14.3 Each
party shall pay its or his own expenses of arbitration, and the
expenses of the arbitrator and the arbitration proceeding shall be
equally shared; provided, however, that, if, in the opinion of the
arbitrator (or a majority of the arbitrators if more than one), any
claim or defense was unreasonable, the arbitrator(s) may assess, as
part of their award, all or any part of the arbitration expenses of
the other party (including reasonable attorneys’ fees) and of
the arbitrator(s) and the arbitration proceeding against the party
raising such unreasonable claim or defense; provided, further,
that, if the arbitration proceeding relates to the issue of Cause
for termination of employment, (a) if, in the opinion of the
arbitrator (or a majority of the arbitrators if more than one),
Cause existed, the arbitrator(s) shall assess, as part of their
award, all of the arbitration expenses of the Company (including
reasonable attorneys’ fees) and of the arbitrator(s) and the
arbitration proceeding against the Employee or (b) if, in the
opinion of the arbitrator (or a majority of the arbitrators if more
than one), Cause did not exist, the arbitrator(s) shall assess, as
part of their award, all of the arbitration expenses of the
Employee (including reasonable attorneys’ fees) and of the
arbitrator(s) and the arbitration proceeding against the
Company.

 

15. CODE SECTIONS 409A,
280G AND 4999.

 

15.1 The
intent of the parties is that payments and benefits under this
Agreement comply with Section 409A of the Code (together with the
regulations and guidance promulgated thereunder, “Code
Section 409A”), and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance
therewith. To the extent that any provision hereof is modified in
order to comply with Code Section 409A, such modification shall be
made in good faith and shall, to the maximum extent reasonably
possible, maintain the original intent and economic benefit to the
parties hereto of the applicable provision without violating the
provisions of Code Section 409A. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that
may be imposed on the Employee by Code Section 409A as a result of
the Company’s compliance with the terms of this
Agreement.

 

15.2 A
termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the
payment of any amounts or benefits constituting deferred
compensation under Code Section 409A upon or following a
termination of employment unless such termination of employment is
also a “separation from service” within the meaning of
Code Section 409A and, for purposes of any such provision of this
Agreement, references to a termination of employment or like terms
shall mean “separation from service.” If the Employee
is deemed on the date of termination to be a “specified
employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment or the provision of
any benefit that is considered deferred compensation under Code
Section 409A payable on account of a “separation from
service,” such payment or benefit shall be made or provided
at the date which is the earlier of (i) the expiration of the six
(6) month period measured from the date of such “separation
from service” of the Employee, and (ii) the date of the
Employee’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments and benefits delayed
pursuant to this Section 15.2 (whether they would have
otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Employee
in a lump sum, and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the
normal payment dates specified herein.

 

15.3 All
expenses or other reimbursements under this Agreement shall be made
on or prior to the last day of the taxable year following the
taxable year in which such expenses were incurred by the Employee
(provided that if any such reimbursements constitute taxable income
to the Employee, such reimbursements shall be paid no later than
March 15th of the calendar year following the calendar year in
which the expenses to be reimbursed were incurred), and no such
reimbursement or expenses eligible for reimbursement in any taxable
year shall in any way affect the expenses eligible for
reimbursement in any other taxable year.

 

15.4 For
purposes of Code Section 409A, the Employee’s right to
receive any installment payments pursuant to this Agreement shall
be treated as a right to receive a series of separate and distinct
payments. Whenever a payment under this Agreement specifies a
payment period with reference to a number of days (e.g.,
“payment shall be made within sixty (60) days”),
the actual date of payment within the specified period shall be
within the sole discretion of the Company.

 

 

7

 

 

15.5 In
no event shall any payment under this Agreement that constitutes
“deferred compensation” for purposes of Code Section
409A be offset by any other payment pursuant to this Agreement or
otherwise.

 

15.6 Notwithstanding
any other provisions of this Agreement to the contrary, in the
event that any payments or benefits received or to be received by
the Employee in connection with the Employee’s employment
with the Company (or termination thereof) would subject the
Employee to the excise tax imposed under Section 280G or 4999 of
the Code (the “Excise Tax”), and, if the net-after tax
amount (taking into account all applicable taxes payable by the
Employee, including any Excise Tax) that the Employee would receive
with respect to such payments or benefits does not exceed the
net-after tax amount the Employee would receive if the amount of
such payment and benefits were reduced to the maximum amount which
could otherwise be payable to the Employee without the imposition
of the Excise Tax, then, to the extent necessary to eliminate the
imposition of the Excise Tax, (i) such cash payments and benefits
shall first be reduced (if necessary, to zero) and (ii) all other
non-cash payments and benefits shall next be reduced. The
determination of whether any reduction in such payments or benefits
to be provided under this Agreement or otherwise is required
pursuant to the preceding sentence will be made at the expense of
the Company by independent accountants or benefits consultants
selected by the Company, and the Employee shall have the right to
review such determination.

 

16. ASSIGNMENT

 

16.1 This
Agreement, as it relates to the employment of the Employee, is a
personal contract and the rights and interests of the Employee
hereunder may not be sold, transferred, assigned, pledged or
hypothecated.

 

17. NOTICES

 

17.1 Any
notice required or permitted to be given pursuant to this Agreement
shall be deemed to have been duly given when delivered by hand or
sent by certified or registered mail, return receipt requested and
postage prepaid, overnight mail or courier, e-mail, or fax as
follows:

 

If to
the Employee:

 

P.O.
Box 450

Hewlett, New York
11557

bgoldstein@kingstonecompanies.com

Fax
Number: (516) 374-4484

 

with a
copy to:

 

Dentons
US LLP

1201
Avenue of the Americas

New
York, New York 10020-1089

Attention: Brian S.
Cousin, Esq.

Brian.Cousin@Dentons.com

Fax
Number: (212) 768-6800

 

 

8

 

 

If to
the Company:

 

c/o
Victor Brodsky

Chairman,
Compensation Committee

15 Joys
Lane

Kingston, New York
12401

vbrodsky@kingstonecompanies.com

Fax
Number: (845) 853-1890

 

with a
copy to:

 

Certilman Balin
Adler & Hyman, LLP

90
Merrick Avenue

East
Meadow, New York 11554

Attention: Fred
Skolnik, Esq.

fskolnik@certilmanbalin.com

Fax
Number: (516) 296-7111

 

or at
such other address as any party shall designate by notice to the
other party given in accordance with this Section
17.1.

 

18. GOVERNING
LAW

 

18.1 This
Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely in New York without
regard to conflicts of laws principles.

 

19. WAIVER
OF BREACH; PARTIAL INVALIDITY

 

19.1 The
waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach. If any provision, or part thereof, of this
Agreement shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision
and not in any way affect or render invalid or unenforceable any
other provisions of this Agreement, and this Agreement shall be
carried out as if such invalid or unenforceable provision, or part
thereof, had been reformed, and any court of competent jurisdiction
or arbitrators, as the case may be, are authorized to so reform
such invalid or unenforceable provision, or part thereof, so that
it would be valid, legal and enforceable to the fullest extent
permitted by applicable law.

 

20. ENTIRE
AGREEMENT; AMENDMENT

 

20.1 This
Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and there are no
representations, warranties or commitments except as set forth
herein. This Agreement supersedes all prior agreements,
understandings, negotiations and discussions, whether written or
oral, of the parties hereto relating to the subject matter hereof,
including the Existing Employment Agreement, with regard to the
Employee’s employment with the Company effective as of
January 1, 2017. This Agreement may be amended, and any provision
hereof waived, only by a writing executed by the party sought to be
charged. No amendment or waiver on the part of the Company shall be
valid unless approved by its Board.

 

 

9

 

 

21. COUNTERPARTS

 

21.1 This
Agreement 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.

 

22. FACSIMILE
AND EMAIL SIGNATURES

 

22.1 Signatures
hereon which are transmitted via facsimile or email shall be deemed
original signatures.

 

23. EXPENSES

 

23.1 In
addition to the right to indemnification conferred in Article X of
the By-Laws of the Company, as amended (the “By-Laws”),
the Employee shall have the right to have his expenses (including
reasonable attorneys’ fees) incurred in defending any action
or proceeding as to which the Employee is entitled to be
indemnified in advance of its final disposition advanced and paid
promptly as set forth below upon incurring such expenses; provided,
however, that an advancement of expenses incurred by the Employee
shall be made only upon delivery to the Company of an undertaking
by the Employee to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which
there is no further right to appeal that the Employee is not
entitled to be indemnified for such expenses under the By-Laws. The
Company shall make advance payments of such expenses (including
reasonable attorneys' fees) incurred within thirty (30) days of the
Employee’s presentation of an invoice for such
expenses.

 

24. CONSTRUCTION

 

24.1 All
references in this Agreement to “includes” and
“including” shall be construed to include the words
“without limitation.

 

25. REPRESENTATION
BY COUNSEL; INTERPRETATION

 

25.1 The
Employee acknowledges that he has been represented by counsel, or
has been afforded the opportunity to be represented by counsel, in
connection with this Agreement. Accordingly, any rule of law or any
legal decision that would require the interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has
no application and is expressly waived by the Employee. The
provisions of this Agreement shall be interpreted in a reasonable
manner to give effect to the intent of the parties
hereto.

 

26. HEADINGS

 

26.1 The
headings and captions under articles and sections of this Agreement
are for convenience of reference only and do not in any way modify,
interpret or construe the intent of the parties or affect any of
the provisions of this Agreement.

 

[Remainder
of page intentionally left blank. Signature page
follows.]

 

10

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year above written.

 

KINGSTONE INSURANCE
COMPANY

 

 

By:                                                                 

      Victor
J. Brodsky

       Chief
Financial Officer

 

 

 

Barry
B. Goldstein

 

 

11Blueprint

 

Exhibit 10(j)

 

EMPLOYMENT
AGREEMENT, dated March 14,
2018, by and between KINGSTONE COMPANIES,
INC., a Delaware corporation
(the “Company”), and DALE A. THATCHER
(the “Employee” or the
“Executive”).

 

RECITALS

 

WHEREAS, the Company and the Employee desire to enter
into an employment agreement which will set forth the terms and conditions upon which the
Employee shall be employed by the Company and upon which the
Company shall compensate the Employee for his
services.

 

NOW,
THEREFORE, in consideration of
the foregoing and the mutual covenants hereinafter set forth, the
parties hereto hereby agree as follows:

 

1.            

EMPLOYMENT; TERM

 

1.1.           The
Company will employ the Employee in its business, and the Employee
will work for the Company therein, as its Chief Operating Officer
for a term commencing as of March 15, 2018 (the “Effective
Date”) and terminating on December 31, 2018 (the
“Expiration Date”), subject to earlier termination as
hereinafter provided (the employment period, as earlier terminated
as provided for herein, being referred to as the
“Term”).

 

1.2.           Upon
the expiration of the Term or the termination of the
Employee’s employment with the Company for any reason
whatsoever, whether during or following the Term, he shall be
deemed to have resigned all of his positions as an employee,
officer and director of the Company and of each and every
subsidiary thereof.

 

2.            

DUTIES

 

2.1.           During
the Term, the Employee shall serve as the Company’s Chief
Operating Officer and shall have and perform executive,
administrative, and managerial duties customary for such a
position, and such further duties of an executive character as
shall, from time to time, be delegated or assigned to him by the
Board of Directors of the Company (the “Board”) or the
Chief Executive Officer of the Company (the “CEO”)
consistent with the Employee’s position.

 

3.            

DEVOTION OF TIME

 

3.1.           During
the Term, the Employee shall expend substantially all of his
working time for the Company, shall devote his best efforts, energy
and skill to the services of the Company and the promotion of its
interests and shall not take part in activities detrimental to the
best interests of the Company.  Notwithstanding the foregoing,
during the term of the Employment Agreement between Kingstone
Insurance Company (“KICO”) and the Employee of even
date (the “KICO Employment Agreement”), the Employee
shall be entitled to devote such time as is necessary to the
fulfillment of his duties and responsibilities as President of
KICO, it being understood and agreed that such permitted activity
is subject to the reduction in Base Salary (as hereinafter defined)
provided for in Section 4.2 hereof.

 

3.2.           The
Employee shall be permitted to engage in the following activities:
(a) charity, social or civic work, (b) tend to personal financial
and legal affairs, (c) serve on the Board of Directors of Service
King, Inc., and (d) subject to the prior written consent of the
Company (following Board approval), serve on the Board of Directors
of, or advisor to, other business organizations, in each case
(i.e., (a) through (d) above), provided that such activities do not
interfere or conflict with his full-time services to the
Company.  

 

4.            

COMPENSATION

 

4.1.           For
all services to be rendered by the Employee during the Term, and in
consideration of the Employee’s representations and covenants
set forth in this Agreement, the Employee shall be entitled to
receive from the Company compensation as set forth in Section 4.2
below.

 

4.2.           During
the Term, the Employee shall be entitled to receive a salary at the
rate of five hundred thousand dollars ($500,000) per annum (the
“Base Salary”); provided, however, the Base Salary
shall be reduced on a dollar-for-dollar basis to the extent of the
salary payable by KICO to the Employee pursuant to the KICO
Employment Agreement.

 

1

 

 

 

5.            

REIMBURSEMENT OF EXPENSES

 

5.1.           Subject
to Section 5.3 hereof, the Company shall pay directly, or reimburse
the Employee for, all reasonable and necessary expenses and
disbursements incurred by the Employee for and on behalf of the
Company in the performance of his duties during the
Term.

 

5.2.           The
Employee shall periodically submit to the Company reports of such
expenses and disbursements in a form and at a frequency normally
used by the Company, and receipts with respect thereto, and the
Company’s obligations under Section 5.1 hereof shall be
subject to compliance therewith

 

5.3.           During
the Term, the Employee shall be entitled to receive a monthly
automobile allowance of one thousand dollars ($1,000) for any and
all expenses related to the Employee’s automobile (i.e.,
lease payments, insurance, gas, tolls, parking and the like).
Except for reimbursement of directly related automobile expenses
(i.e., parking and tolls) incurred by the Employee while fulfilling
his duties and responsibilities to the Company, but which are
outside of the Employee’s normal day to day commuting usage
of his automobile, the Employee will not be entitled to any
additional or alternative reimbursement for any other automobile
related expenses.

 

6.            

DISABILITY; INSURANCE

 

6.1.           If,
during the Term, the Employee, in the opinion of a majority of all
of the members of the Board (excluding the Employee if he is a
member), as confirmed by competent medical evidence, shall become
physically or mentally incapacitated to perform his duties for the
Company hereunder (“Disabled”) for a continuous period,
then for the first three (3) months of such period he shall receive
his full salary (subject to the following sentence, the
“Salary Continuation Period”). In no event, however,
shall the Employee be entitled to receive any payments under this
Section 6.1 beyond the expiration or termination date of this
Agreement. Effective with the date of his resumption of full
employment, the Employee shall be re-entitled to receive his full
salary. If such illness or other incapacity shall endure for a
continuous period of at least three (3) months or for at least
sixty (60) business days during any six (6) month period, the
Company shall have the right, by written notice, to terminate the
Employee’s employment hereunder as of a date (not less than
thirty (30) days after the date of the sending of such notice) to
be specified in such notice. The Employee agrees to submit himself
for appropriate medical examination to a physician of the
Company’s designation as necessary for purposes of this
Section 6.1.

 

6.2.           The
obligations of the Company under this Article 6 may be satisfied,
in whole or in part, by payments to the Employee under a disability
insurance policy provided by the Company and/or
KICO.

 

6.3.           Notwithstanding
the foregoing, in the event that, at the time of any apparent
incapacity, the Company has in effect a disability policy with
respect to the Employee, the Employee shall be considered Disabled
for purposes of Section 6.1 only if he is considered disabled for
purposes of the policy.

 

7.            

RESTRICTIVE COVENANTS

 

7.1.           (a)           The
services of the Employee are unique and extraordinary and essential
to the business of the Company, especially since the Employee shall
have access to the Company’s customer lists, producer lists,
trade secrets and other privileged and confidential information
essential to the Company’s business. Therefore, the Employee
agrees that, if the term of his employment hereunder shall expire
or his employment shall at any time terminate for any reason
whatsoever, with or without Cause (as hereinafter defined) and with
or without Good Reason (as hereinafter defined), the Employee will
not at any time during the Restrictive Covenant Period (as
hereinafter defined), without the prior written consent of the
Company, directly or indirectly, whether individually or as a
principal, officer, employee, partner, shareholder, member,
manager, director, agent of, or consultant or independent
contractor to, any person, corporation, limited liability company,
partnership, limited partnership or other entity (collectively,
“Person”):

 

(i)           cause
or seek to persuade any director, officer, employee, customer,
client, account, agent, producer, reinsurer or supplier of, or
consultant or independent contractor to, the Company, or others
with whom the Company has a business relationship (collectively,
“Business Associates”), to discontinue or materially
modify the status, employment or relationship of such Person with
the Company;

 

(ii)           cause
or seek to persuade any prospective customer, client, account or
other Business Associate of the Company (which at or about the
Cessation Date was then actively being solicited by the Company) to
determine not to enter into a business relationship with the
Company or to materially modify its contemplated business
relationship; or

 

(iii)           hire,
retain or associate in a business relationship with, directly or
indirectly, any director, officer or employee of the
Company.

 

The
foregoing restrictions set forth in this Section 7.1(a) shall apply
likewise during the Term.

 

(b)           For
purposes hereof, the term “Restrictive Covenant Period”
shall mean the eighteen (18) month period commencing with the
Cessation Date; provided, however, that, except with respect to
clause (iii) of paragraph (a) hereof, in the event that the
Employee’s employment is terminated by the Company without
Cause or by the Employee for Good Reason, the term
“Restrictive Covenant Period” shall mean the period
commencing with the Cessation Date and ending on the Expiration
Date.

 

 

2

 

 

7.2.           The
Employee agrees to timely disclose to the Board and the CEO all
material ideas, processes, methods, devices, business concepts,
inventions, improvements, discoveries, know-how and other creative
achievements, whether or not the same or any part thereof is
capable of being patented, trademarked, copyrighted, or otherwise
protected, which the Employee, while employed by the Company,
conceives, makes, develops, acquires or reduces to practice,
whether acting alone or with others and whether during or after
usual working hours, and which are related to the Company’s
business or interests, or are used or usable by the Company, or
arise out of or in connection with the duties performed by the
Employee (hereinafter referred to collectively as
“Discoveries”). The Employee hereby transfers and
assigns to the Company all right, title and interest in and to such
Discoveries, including any and all domestic and foreign copyrights
and patent and trademark rights therein and any renewals thereof.
On request of the Company, the Employee will, without any
additional compensation, from time to time during, and after the
expiration or termination of, the Term, execute such further
instruments (including, without limitation, applications for
copyrights, patents, trademarks and assignments thereof) and do all
such other acts and things as may be deemed necessary or desirable
by the Company to protect and/or enforce its right in respect of
such Discoveries. All expenses of filing or prosecuting any patent,
trademark or copyright application shall be borne by the Company,
but the Employee shall cooperate, at the Company’s expense,
in filing and/or prosecuting any such
application.

 

7.3.           (a)           The
Employee represents that he has been informed that it is the policy
of the Company to maintain as confidential all confidential and/or
proprietary information relating to the Company, including, without
limitation, any and all knowledge or information with respect to
confidential methods, processes, plans, materials, customer,
producer and reinsurer lists or data, or with respect to any other
confidential or secret aspect of the Company’s activities,
and further acknowledges that such confidential information is of
great value to the Company. The Employee recognizes that, by reason
of his employment with the Company, he has acquired and will
acquire confidential information as aforesaid. The Employee
confirms that it is reasonably necessary to protect the
Company’s goodwill, and, accordingly, hereby agrees that he
will not, directly or indirectly (except where authorized by the
Board), at any time during the Term or thereafter divulge to any
Person, or use, or cause or authorize any Person to use, any such
confidential information.

 

(b)           The
Employee agrees that he will not, at any time, remove from the
Company’s premises any drawings, notebooks, software, data or
other confidential information relating to the business and
procedures heretofore or hereafter acquired, developed and/or used
by the Company, except where necessary in the fulfillment of his
duties hereunder.

 

(c)           The
Employee agrees that, upon the expiration or termination of this
Agreement or the termination of his employment with the Company for
any reason whatsoever, he shall promptly deliver to the Company any
and all drawings, notebooks, software, data and other documents and
material, including all copies thereof, in his possession or under
his control relating to any confidential information or
discoveries, or which is otherwise the property of the
Company.

 

(d)           For
purposes hereof, the term “confidential information”
shall mean all information given to the Employee, directly or
indirectly, by the Company and all other information relating to
the Company otherwise acquired by the Employee during the course of
his employment with the Company (whether on or prior to the
Effective Date or hereafter), other than information which (i) was
in the public domain at the time furnished to, or acquired by, the
Employee, or (ii) thereafter enters the public domain other than
through disclosure, directly or indirectly, by the Employee or
others in violation of an agreement of confidentiality or
nondisclosure.

 

7.4.           For
purposes of this Article 7, the term “Company” shall
mean and include the Company and any and all subsidiaries and
affiliated entities of the Company in existence from time to
time.

 

7.5.           In
connection with his agreement to the restrictions set forth in this
Article 7, the Employee acknowledges the benefits accorded to him
pursuant to the provisions of this Agreement, including, without
limitation, the agreement on the part of the Company to employ the
Employee during the Term (subject to the terms and conditions
hereof). The Employee also acknowledges and agrees that the
covenants set forth in this Article 7 are reasonable and necessary
in order to protect and maintain the proprietary and other
legitimate business interests of the Company and that the
enforcement thereof would not prevent the Employee from earning a
livelihood.

 

7.6.           Notwithstanding
any other provision of this Article 7 to the contrary, the
Executive may disclose confidential or proprietary information of
the Company and its subsidiaries as follows: (a) disclosures to
directors, officers, key employees, independent accountants and
counsel of the Company and its subsidiaries as may be necessary or
appropriate in the performance of the Executive’s duties
hereunder, (b) disclosures that do not have a material adverse
effect on the business or operations of the Company and its
subsidiaries taken as a whole, (c) disclosures that the Executive
is required to make by law or by any court, arbitrator or
administrative or legislative body (including any committee
thereof) with apparent jurisdiction to order the Executive to
disclose or make accessible any information, (d) disclosures with
respect to any other litigation, arbitration or mediation involving
this Agreement, and (e) disclosures of any such confidential or
proprietary information that is, at the time of such disclosure,
generally known to and available for use by the public and not by
the Executive’s wrongful act or omission.

 

7.7.           If
Executive believes that he may be required to disclose any such
confidential or proprietary information pursuant to applicable law,
court order or subpoena, he shall immediately notify the Company in
writing by overnight delivery, directed to the CEO, of any such
perceived requirement so that the Company may seek an appropriate
protective order or other appropriate remedy or waive compliance
with this confidentiality requirement. Executive shall also
reasonably cooperate with the Company to obtain such a protective
order or other remedy.

 

7.8.           Notwithstanding
any other provision of this Article 7 to the contrary, the
Executive upon leaving the employ of the Company shall be entitled
to retain (i) papers and other materials of a personal nature,
including but not limited to, photographs, correspondence, personal
diaries, personal contact lists, calendars and personal files,
except to the extent business-related information is set forth
therein, (ii) information showing his compensation or relating to
his reimbursement of expenses, (iii) information that he reasonably
believes may be needed for tax purposes, and (iv) copies of plans,
programs and agreements relating to his employment, or termination
thereof, with the Company.

 

7.9.           This
Agreement does not prohibit Executive from making any disclosure
required by law, communicating with, making a report to, or
otherwise participating in any investigation or proceeding that may
be conducted by the Company’s designated legal, compliance or
human resources personnel, the Securities and Exchange Commission
(“SEC”) and/or its Office of the Whistleblower, the
Equal Employment Opportunity Commission (“EEOC”), the
Occupational Safety and Health Administration (“OSHA”),
the National Labor Relations Board (“NLRB”), or other
federal, state or local government agencies or entities. Executive
is not prohibited from disclosing this Agreement or its contents,
or from providing documents or other information, to the SEC and/or
the Office of the Whistleblower, EEOC, OSHA, NLRB or any other such
federal, state or local governmental entity. Executive does not
need to provide notice to or obtain the prior authorization of
Company’s CEO or General Counsel to make any such report or
disclosure and Executive is not required to notify the Company that
Executive has made such reports or disclosures.

 

 

3

 

 

7.10.                      Notice
Under Defend Trade Secrets Act:
Notwithstanding the requirements contained in this Agreement, in
accordance with the Defend Trade Secrets Act, Executive will not be
held criminally or civilly liable under any federal or state trade
secret law if Executive discloses a Trade Secret in confidence to
federal, state or local government officials, to Executive’s
attorney solely for the purpose of reporting or investigating a
suspected violation of law, or in a sealed complaint or other
document filed in a lawsuit or other proceeding. Further, if
Executive files a lawsuit alleging retaliation by the Company for
reporting a suspected violation of law, Executive may disclose the
Trade Secret to his attorney and use the Trade Secret information
in the court proceeding if Executive: (i) files the document
containing the Trade Secret in a sealed court document; and (ii)
does not disclose the Trade Secret, except pursuant to court order.
However, if Executive engages in conduct otherwise prohibited by
law, such as, but not limited to, accessing Trade Secrets
unlawfully or by unauthorized means, no immunity shall apply and
the Company reserves the right to pursue all available
remedies.

 

7.11.                      Notwithstanding
anything to the contrary in this Agreement, Executive has the right
to:

 

(a)           Report,
respond to or cooperate with an investigation into possible
violations of state or federal laws or regulations involving a
governmental agency or entity including the Congress, the
Department of Justice, the SEC and/or its Office of the
Whistleblower (www.sec.gov/whistleblower); Office of the
Whistleblower Hotline (202) 551-4790, the EEOC, the OSHA, the NLRB,
and any other such federal, state or local agency. This includes
reporting violations of the federal securities laws or
regulations;

 

(b)           Make
disclosures that are protected by federal, state or local
whistleblower laws;

 

(c)           Cooperate
in an investigation, respond to an inquiry, or provide testimony
before the SEC or any other federal, state or local regulatory or
law enforcement authority; and

 

(d)           Make
reports or disclosures to law enforcement or regulatory authorities
without authorization from the Company, without notifying the
Company that a report or disclosure will be or was made, and
without revealing the substance of the report or disclosure to the
Company.

 

Executive
will not be retaliated against for reporting to the Company or to
any governmental agency or entity, including the SEC, information
that Executive reasonably believes relates to a possible violation
of securities laws or for reporting misconduct. Retaliation under
such circumstances is prohibited by law.

 

7.12           This
Agreement does not prevent, interfere with or limit
Executive’s ability to file a charge or complaint with,
report conduct to, provide information to or participate in any
investigation or proceeding conducted by the Equal Employment
Opportunity Commission, the National Labor Relations Board, the
Occupational Safety and Health Administrative, the Securities and
Exchange Commission or any other federal, state or local government
agency or commission. Executive agrees that, if such a charge or
complaint is made, or investigation or proceeding is initiated
against the Company, Executive will not accept, be entitled to,
receive, or recover any monetary damages or any other form of
relief or remedy to the fullest extent permitted by law EXCEPT THAT
THIS AGREEMENT DOES NOT WAIVE OR LIMIT EXECUTIVE’S RIGHT TO
RECEIVE A MONETARY AWARD FOR INFORMATION PROVIDED TO THE SEC AS AN
SEC WHISTLEBLOWER OR TO RECEIVE A MONETARY AWARD FROM ANY OTHER
FEDERAL OR STATE AGENCY PURSUANT TO A SIMILAR WHISTLEBLOWER
PROGRAM.

 

 

 

6542371.7

4

 

 

 

8.            

VACATIONS; LEAVE

 

8.1.           The
Employee shall be entitled to an aggregate of five (5) weeks
vacation time during the Term, the time and duration thereof to be
determined by mutual agreement between the Employee and the CEO.
Any vacation time not used by the end of the Term shall be
forfeited without compensation. In addition, the Employee shall not
be entitled to carry over or use any vacation time that is unused
as of the end of the Term. Further, the Employee shall be entitled
to the number of sick, personal, family and other days off during
the Term as set forth in KICO’s employee
handbook.

 

9.            

PARTICIPATION IN EMPLOYEE BENEFIT PLANS; RESTRICTED STOCK
GRANT

 

9.1.           The
Employee shall be accorded the right to participate in and receive
benefits under and in accordance with the provisions of any
pension, profit sharing, insurance, medical and dental insurance or
reimbursement (with family coverage) or other plan or program of
the Company or KICO, either in existence as of the Effective Date
or thereafter adopted for the benefit generally of its executive
employees. Additionally, in the event of termination of the
Employee's employment by the Company without Cause, or by the
Employee for Good Reason, the Company or KICO shall continue to
provide to the Employee health, dental, and vision insurance
coverage at no cost to the Employee (with family coverage) until
the Expiration Date or such time as the Employee becomes eligible
for similar coverage, whichever is sooner.

 

9.2.           In
the event the Company elects to discontinue any term life insurance
policy purchased by it during the Term with respect to the
Employee, prior to any such discontinuance and/or in the event the
Employee’s employment with the Company ceases for any reason,
the Employee shall be offered the opportunity to have such policy
transferred to him without cost, it being understood that the
Employee shall be responsible for the payment of any and all
premiums thereafter due.

 

9.3.           Concurrently
herewith, pursuant to the Company’s 2014 Equity Participation
Plan and a Stock Grant Agreement of even date between the Company
and the Employee, the Company is granting to the Employee
thirty-five thousand seven hundred fifteen (35,715) shares of
restricted common stock of the Company, such shares to vest in
three (3) equal annual installments commencing one (1) year from
the date of the grant, subject to the provisions of the Stock Grant
Agreement.

 

10.            

SERVICE AS OFFICER AND DIRECTOR

 

10.1.                      During
the Term, the Employee shall, if elected or appointed, serve as (a)
an officer of the Company and/or any subsidiaries of the Company in
existence or hereafter created or acquired and (b) a director of
the Company and/or any such subsidiaries of the Company in
existence or hereafter created or acquired, in each case without
any additional compensation for such services. During the Term the
Company shall maintain in effect a directors and officers liability
insurance policy of not less than $10 million in coverage limits,
and the Company will include the Employee therein as a named
insured.

 

11.            

EARLIER TERMINATION

 

11.1.                      The
Employee’s employment hereunder (a) shall automatically
terminate upon his death, (b) may terminate at any time during the
Term at the option of the Company upon written notice to the
Employee for Cause or without Cause, (c) may terminate at any time
during the Term at the option of the Employee upon written notice
to the Company for Good Reason or without Good Reason and (d) may
terminate at the option of the Company in the event the Employee
becomes Disabled, as provided for in Article 6.

 

11.2.                      As
used in this Agreement, “Cause” shall mean (a) the
Employee’s conviction by a court of competent jurisdiction of
the commission of any act in the performance of his duties
constituting common law fraud or a felony, (b) the Employee’s
commission of any act involving moral turpitude which the
Company’s Board of Directors reasonably believes may have a
material adverse effect on the Company and its subsidiaries taken
as a whole (“Material Adverse Effect”), (c) any
misrepresentation by the Employee (including, without limitation, a
breach of any representation set forth in Section 13.1 hereof)
which the Company’s Board of Directors reasonably believes
may have a Material Adverse Effect, (d) any breach of any material
covenant on the Employee’s part herein set forth (which
breach, if curable, is not cured by the Employee within thirty (30)
days of the Employee’s receipt of written notice thereof from
the Company), or (e) the Employee’s engagement in gross
negligence or willful misconduct which the Company’s Board of
Directors reasonably believes may have a Material Adverse Effect.
The parties agree that the term “Material Adverse
Effect” includes the loss or suspension of any license for
the Company or KICO to operate or any disqualification or
suspension for the Employee to serve as an officer or director
thereof under applicable law. No act or failure to act by the
Executive shall be considered “Cause” if the
Executive’s act or failure to act was based on authority or
express direction given by the CEO or the advice of counsel for the
Company.

 

11.3.                      As
used in this Agreement, “Good Reason” shall mean (a)
any breach of any material obligation on the Company’s part
(which breach, if curable, is not cured by the Company within
thirty (30) days of the Company’s receipt of written notice
thereof from the Employee), (b) a material diminution in the
Employee’s duties and responsibilities (other than following
an event constituting Cause) in his capacity as Chief Operating
Officer of the Company, (c) a change in the Employee's current
reporting structure (other than following an event constituting
Cause), or (d) a decrease in the compensation payable to the
Employee from the compensation payable pursuant to this
Agreement.

 

 

5

 

 

11.4.                      In
the event of the termination of the Employee’s employment by
the Company for Cause or by the Employee without Good Reason, the
Company shall have no further obligations to the Employee, and the
Employee shall be entitled to no further compensation from the
Company, except for any pro-rata amounts due to the Employee at
such date of termination, as provided for in Section 4.2 hereof. In
the event of the termination of the Employee’s employment by
the Company for Cause or by the Employee without Good Reason, the
amount to be paid to the Employee pursuant to this Section 11.4
shall constitute the sole and exclusive remedy of the Employee, and
the Employee shall not be entitled to any other or further
compensation, rights or benefits hereunder or
otherwise.

 

11.5.                      In
the event of the termination of the Employee’s employment by
the Company without Cause or by the Employee for Good Reason, as
liquidated damages, the Employee shall be entitled to receive the
compensation to which he would have been entitled until the
expiration of the Term pursuant to Section 4.2. The compensation
payable pursuant to this Section 11.5 shall be payable to the
Employee in accordance with the Company’s standard payroll
practices as if his employment had continued. The amount to be paid
to the Employee pursuant to this Section 11.5 shall constitute the
sole and exclusive remedy of the Employee, and the Employee shall
not be entitled to any other or further compensation, rights or
benefits hereunder or otherwise other than as provided in the
concurrently executed Stock Grant Agreement.

 

11.6.                      In
order to protect the Employee against the possible consequences and
uncertainties of a Change of Control of the Company and thereby
induce the Employee to remain in the employ of the Company, the
Company agrees that:

 

(a)           If,
during the Term, the Employee’s employment is terminated
within eighteen (18) months subsequent to a Change of Control by
the Company other than for Cause or by the Employee for Good
Reason, the Company shall pay to the Employee an amount in cash
equal to one and one-half (1.5) times the Base Salary (as reduced
pursuant to Section 4.2) (the “Change of Control
Payment”). The Change of Control Payment shall be payable in
one lump sum payment within ten (10) days following the date of
termination of employment. In addition, in such event, the Company
shall continue to pay for the Employee's health insurance premiums,
including family coverage, for the remainder of the Term. The
Change of Control Payment shall be in lieu of the amount payable to
the Employee pursuant to Section 11.5 hereof. The amount to be paid
to the Employee pursuant to this Section 11.6 shall constitute the
sole and exclusive remedy of the Employee, and the Employee shall
not be entitled to any other or further compensation, rights or
benefits hereunder or otherwise other than as provided in the
concurrently executed Stock Grant Agreement.

 

(b)           As
used in this Section 11.6, a “Change of Control” shall
be deemed to have occurred if:

 

(i)           any
“person” or “group of persons” (as such
terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)
(other than the Employee or any “group of persons” that
includes the Employee), becomes the “beneficial owner”
(as defined in Rule 13d-3 promulgated under the 1934 Act), directly
or indirectly, of securities of the Company representing more than
twenty-five percent (25%) of the Company’s then outstanding
securities having the right to vote on the election of directors
(“Voting Securities”);

 

(ii)           when
individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or

 

(iii)           the
Company consummates (A) a reorganization, merger or consolidation
of the Company, with respect to which in each case all or
substantially all of the Persons who were the beneficial owners of
the Voting Securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly
and indirectly, more than 50% of the then combined voting power of
the then outstanding voting securities entitled to vote generally
in the election of directors of the corporation or other Person
resulting from such reorganization, merger of consolidation, or (B)
the sale or other disposition of all or substantially all of the
assets of the Company.

 

Notwithstanding
the foregoing, no transaction or event shall constitute a Change of
Control hereunder unless such transaction or event also constitutes
a change in ownership or effective control of the Company within
the meaning of Treasury Regulation Section 1.409A-3(i)(5)(v) or
(vi)(A)(2).

 

11.7.                      In
the event of the death of the Employee during the Term, as
liquidated damages, the Employee’s estate (the
“Estate”) shall be entitled to receive the Base Salary
to which the Employee is entitled until the date of death of the
Employee pursuant to Section 4.2. The amount to be paid to the
Estate pursuant to this Section 11.7 shall constitute the sole and
exclusive remedy of the Estate and any beneficiaries thereof, and
neither the Estate nor any beneficiaries thereof shall be entitled
to any other or further compensation, rights or benefits hereunder
or otherwise, including pursuant to this Article 11 other than as
provided in the concurrently executed Stock Grant
Agreement.

 

11.8.                      The
termination or expiration of this Agreement shall not affect the
continuing operation and effect of Article 7 hereof, which shall
continue in full force and effect according to its terms. In
addition, the termination or expiration of this Agreement will not
result in a termination or waiver of any rights and remedies that
the Company may have under this Agreement and applicable
law.

 

 

6

 

 

12.            

INJUNCTIVE RELIEF; REMEDIES

 

12.1.                      The
Employee acknowledges and agrees that, in the event he shall
violate or threaten to violate any of the restrictions of Article 3
or 7 hereof, the Company will be without an adequate remedy at law
and will therefore be entitled to enforce such restrictions by
temporary or permanent injunctive or mandatory relief in any court
of competent jurisdiction without the necessity of proving monetary
damages.

 

12.2.                      The
Employee agrees further that the Company shall have the following
additional rights and remedies:

 

(i)           the
right and remedy to require the Employee to account for and pay
over to the Company all monies and other consideration derived or
received by him as the result of any transactions determined by an
arbitrator or a court of competent jurisdiction to be a breach of
any of the provisions of Section 7.1, and the Employee hereby
agrees to account for and pay over such monies and other
consideration to the Company; and

 

(ii)           the
right to recover attorneys’ fees incurred in any action or
proceeding in which it seeks to enforce its rights under Article 7
hereof and is successful on any grounds; provided, however, that,
in the event the Employee is the prevailing party in any such
action or proceeding, the Company will pay to the Employee all
reasonable attorneys’ fees and costs incurred by the Employee
in defending such action or proceeding.

 

12.3.                      Each
of the rights and remedies enumerated above shall be independent of
the other, and shall be severally enforceable, and all of such
rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or
in equity.

 

13.            

NO RESTRICTIONS

 

13.1.                      The
Employee hereby represents that neither the execution of this
Agreement nor his performance hereunder will (a) violate, conflict
with or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under the terms, conditions or
provisions of any contract, agreement or other instrument or
obligation to which the Employee is a party, or by which he may be
bound, or (b) violate any order, judgment, writ, injunction or
decree applicable to the Employee. In the event of a breach hereof,
in addition to the Company’s right to terminate this
Agreement, the Employee shall indemnify the Company and hold it
harmless from and against any and all claims, losses, liabilities,
costs and expenses (including reasonable attorneys’ fees)
incurred or suffered in connection with or as a result of the
Company’s entering into this Agreement or employing the
Employee hereunder.

 

14.                       

ARBITRATION

 

14.1.                      Except
with regard to Section 12.1 hereof and any other matters that are
not a proper subject of arbitration, all disputes between the
parties hereto concerning the performance, breach, construction or
interpretation of this Agreement or any portion thereof, or in any
manner arising out of this Agreement or the performance thereof,
shall be submitted to binding arbitration, in accordance with the
rules of the American Arbitration Association. The arbitration
proceeding shall take place at a mutually agreeable location in
Nassau County, New York or such other location as agreed to by the
parties.

 

14.2.                      The
award rendered by the arbitrator shall be final, binding and
conclusive, shall be specifically enforceable, and judgment may be
entered upon it in accordance with applicable law in an appropriate
court in the State of New York, with no right of appeal
therefrom.

 

14.3.                      Each
party shall pay its or his own expenses of arbitration, and the
expenses of the arbitrator and the arbitration proceeding shall be
equally shared; provided, however, that, if, in the opinion of the
arbitrator (or a majority of the arbitrators if more than one), any
claim or defense was unreasonable, the arbitrator(s) may assess, as
part of their award, all or any part of the arbitration expenses of
the other party (including reasonable attorneys’ fees) and of
the arbitrator(s) and the arbitration proceeding against the party
raising such unreasonable claim or defense; provided, further,
that, if the arbitration proceeding relates to the issue of Cause
for termination of employment, (a) if, in the opinion of the
arbitrator (or a majority of the arbitrators if more than one),
Cause existed, the arbitrator(s) shall assess, as part of their
award, all of the arbitration expenses of the Company (including
reasonable attorneys’ fees) and of the arbitrator(s) and the
arbitration proceeding against the Employee or (b) if, in the
opinion of the arbitrator (or a majority of the arbitrators if more
than one), Cause did not exist, the arbitrator(s) shall assess, as
part of their award, all of the arbitration expenses of the
Employee (including reasonable attorneys’ fees) and of the
arbitrator(s) and the arbitration proceeding against the
Company.

 

15.            

CODE
SECTIONS 409A, 280G AND 4999.

 

15.1.                      The
intent of the parties is that payments and benefits under this
Agreement comply with Section 409A of the Code (together with the
regulations and guidance promulgated thereunder, “Code
Section 409A”), and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance
therewith. To the extent that any provision hereof is modified in
order to comply with Code Section 409A, such modification shall be
made in good faith and shall, to the maximum extent reasonably
possible, maintain the original intent and economic benefit to the
parties hereto of the applicable provision without violating the
provisions of Code Section 409A. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that
may be imposed on the Employee by Code Section 409A as a result of
the Company’s compliance with the terms of this
Agreement.

 

 

7

 

 

15.2.                      A
termination of employment shall not be
deemed to have occurred for purposes of any provision of this
Agreement providing for the payment of any amounts or
benefits constituting deferred compensation under Code Section
409A upon or following a termination of employment unless such
termination of employment is also a “separation from
service” within the meaning of Code Section 409A and, for
purposes of any such provision of this Agreement, references to a
termination of employment or like terms shall mean
“separation from service.” If the Employee is deemed on
the date of termination to be a “specified employee”
within the meaning of that term under Code Section 409A(a)(2)(B),
then with regard to any payment or the provision of any benefit
that is considered deferred compensation under Code Section 409A
payable on account of a “separation from service,” such
payment or benefit shall be made or provided at the date which is
the earlier of (i) the expiration of the six (6) month period
measured from the date of such “separation from
service” of the Employee, and (ii) the date of the
Employee’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments and benefits delayed
pursuant to this Section 15.2 (whether they would have
otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Employee
in a lump sum, and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the
normal payment dates specified herein.

 

15.3.                      All
expenses or other reimbursements under this Agreement shall be made
on or prior to the last day of the taxable year following the
taxable year in which such expenses were incurred by the Employee
(provided that if any such reimbursements constitute taxable income
to the Employee, such reimbursements shall be paid no later than
March 15th of the calendar year following the calendar year in
which the expenses to be reimbursed were incurred), and no such
reimbursement or expenses eligible for reimbursement in any taxable
year shall in any way affect the expenses eligible for
reimbursement in any other taxable year.

 

15.4.                      For
purposes of Code Section 409A, the Employee’s right to
receive any installment payments pursuant to this Agreement shall
be treated as a right to receive a series of separate and distinct
payments. Whenever a payment under this Agreement specifies a
payment period with reference to a number of days (e.g.,
“payment shall be made within sixty (60) days”),
the actual date of payment within the specified period shall be
within the sole discretion of the Company.

 

15.5.                      In
no event shall any payment under this Agreement that constitutes
“deferred compensation” for purposes of Code Section
409A be offset by any other payment pursuant to this Agreement or
otherwise.

 

15.6.                      Notwithstanding
any other provisions of this Agreement to the contrary, in the
event that any payments or benefits received or to be received by
the Employee in connection with the Employee’s employment
with the Company (or termination thereof) would subject the
Employee to the excise tax imposed under Section 280G or 4999 of
the Code (the “Excise Tax”), and, if the net-after tax
amount (taking into account all applicable taxes payable by the
Employee, including any Excise Tax) that the Employee would receive
with respect to such payments or benefits does not exceed the
net-after tax amount the Employee would receive if the amount of
such payment and benefits were reduced to the maximum amount which
could otherwise be payable to the Employee without the imposition
of the Excise Tax, then, to the extent necessary to eliminate the
imposition of the Excise Tax, (i) such cash payments and benefits
shall first be reduced (if necessary, to zero) and (ii) all other
non-cash payments and benefits shall next be reduced. The
determination of whether any reduction in such payments or benefits
to be provided under this Agreement or otherwise is required
pursuant to the preceding sentence will be made at the expense of
the Company by independent accountants or benefits consultants
selected by the Company, and the Employee shall have the right to
review such determination.

 

16.            

ASSIGNMENT

 

16.1.                      This
Agreement, as it relates to the employment of the Employee, is a
personal contract and the rights and interests of the Employee
hereunder may not be sold, transferred, assigned, pledged or
hypothecated.

 

 

8

 

 

17.            

NOTICES

 

17.1.                      Any
notice required or permitted to be given pursuant to this Agreement
shall be deemed to have been duly given when delivered by hand or
sent by certified or registered mail, return receipt requested and
postage prepaid, overnight mail or courier, e-mail, or fax as
follows:

 

If
to the Employee:

 

212
Third Street

Milford,
PA 18337

Dale.thatcher@atherstonepartners.com

 

with
a copy to:

 

Sidley
Austin LLP

787
Seventh Avenue

New
York, NY 10019

Attention:
Eric Hoffman, Esq.

Eric.hoffman@sidley.com

Fax
Number: (212) 839-5599

 

If
to the Company:

 

c/o
William Yankus

Chairman,
Compensation Committee

10
Pheasant Hill Road

Farmington,
Connecticut 06032

wyankus@comcast.net

 

with
a copy to:

 

Certilman
Balin Adler & Hyman, LLP

90
Merrick Avenue

East
Meadow, New York 11554

Attention:
Fred Skolnik, Esq.

fskolnik@certilmanbalin.com

Fax
Number: (516) 296-7111

 

or
at such other address as any party shall designate by notice to the
other party given in accordance with this Section
17.1.

 

 

9

 

 

18.            

GOVERNING LAW

 

18.1.                      This
Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely in New York without
regard to conflicts of laws principles.

 

19.            

WAIVER OF BREACH; PARTIAL INVALIDITY

 

19.1.                      The
waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach. If any provision, or part thereof, of this
Agreement shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision
and not in any way affect or render invalid or unenforceable any
other provisions of this Agreement, and this Agreement shall be
carried out as if such invalid or unenforceable provision, or part
thereof, had been reformed, and any court of competent jurisdiction
or arbitrators, as the case may be, are authorized to so reform
such invalid or unenforceable provision, or part thereof, so that
it would be valid, legal and enforceable to the fullest extent
permitted by applicable law.

 

20.            

ENTIRE AGREEMENT; AMENDMENT

 

20.1.                      This
Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and there are no
representations, warranties or commitments except as set forth
herein. This Agreement supersedes all prior agreements,
understandings, negotiations and discussions, whether written or
oral, of the parties hereto relating to the subject matter hereof.
This Agreement may be amended, and any provision hereof waived,
only by a writing executed by the party sought to be charged. No
amendment or waiver on the part of the Company shall be valid
unless approved by its Board.

 

21.            

COUNTERPARTS

 

21.1.                      This
Agreement 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.

 

22.            

FACSIMILE AND EMAIL SIGNATURES

 

22.1.                      Signatures
hereon which are transmitted via facsimile or email shall be deemed
original signatures.

 

23.            

EXPENSES

 

23.1.                      The
Company agrees to pay the reasonable fees and expenses of legal
counsel and a compensation consultant incurred by the Employee in
connection with the drafting and negotiation of this Agreement;
provided, however, that the amount payable pursuant to this Section
23.1 shall not exceed $5,000.

 

23.2.                      In
addition to the right to indemnification conferred in Article
Thirteenth of the Restated Certificate of Incorporation of the
Company, as amended (the “Certificate of
Incorporation”), and Article VII, Section 7 of the By-Laws of
the Company, as amended (the “By-Laws”), the Employee
shall have the right to have his expenses (including reasonable
attorneys’ fees) incurred in defending any action or
proceeding as to which the Employee is entitled to be indemnified
in advance of its final disposition advanced and paid promptly as
set forth below upon incurring such expenses; provided, however,
that an advancement of expenses incurred by the Employee shall be
made only upon delivery to the Company of an undertaking by the
Employee to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no
further right to appeal that the Employee is not entitled to be
indemnified for such expenses under the Certificate of
Incorporation or the By-Laws. The Company shall make advance
payments of such expenses (including reasonable attorneys' fees)
incurred within thirty (30) days of the Employee’s
presentation of an invoice for such expenses.

 

 

10

 

 

24.            

CONSTRUCTION

 

24.1.                      All
references in this Agreement to “includes” and
“including” shall be construed to include the words
“without limitation.

 

25.            

REPRESENTATION BY COUNSEL; INTERPRETATION

 

25.1.                      The
Employee acknowledges that he has been represented by counsel in
connection with this Agreement. Accordingly, any rule of law or any
legal decision that would require the interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has
no application and is expressly waived by the Employee. The
provisions of this Agreement shall be interpreted in a reasonable
manner to give effect to the intent of the parties
hereto.

 

26.            

HEADINGS

 

26.1.                      The
headings and captions under articles and sections of this Agreement
are for convenience of reference only and do not in any way modify,
interpret or construe the intent of the parties or affect any of
the provisions of this Agreement.

 

[Remainder of page intentionally left blank. Signature page
follows.]

 

 

11

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year above written.

 

KINGSTONE
COMPANIES, INC.

 

 

By:                                                                 

      Barry
B. Goldstein

      Chief
Executive Officer

 

 

 

Dale
A. Thatcher

 

12

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