THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “Employment Agreement”), dated June 27, 2022 (the “Contract Date”), by and between KINGSTONE
COMPANIES, INC., a Delaware corporation (the “Company”), and BARRY B. GOLDSTEIN (the “Employee”).
RECITALS
WHEREAS, the Company and the Employee entered into that certain employment agreement dated January 20, 2017 (the “Employment Agreement”), which set forth the terms and conditions upon which the Employee was employed by the Company
and upon which the Company compensated the Employee for his services through December 31, 2018; and
WHEREAS, the Employment Agreement was amended and restated (the “Amended Employment Agreement”) effective January 1, 2019 to set forth the terms and conditions
upon which the Employee was employed by the Company and upon which the Company compensated the Employee for his services through December 31, 2021; and
WHEREAS, effective as of July 19, 2019, the Employee was appointed as the President and Chief Executive Officer of the Company; and
WHEREAS, the Amended Employment Agreement was amended and restated (the “Second Amended Employment Agreement”) effective as of January 1, 2020 to set forth the terms and conditions upon which the Employee is employed by the
Company and upon which the Company compensates the Employee for his services through December 31, 2022; and
WHEREAS, the Company and the Employee mutually desire to amend and restate the Second Amended Employment Agreement effective as of January 1, 2023 (the “Effective Date”) to provide for the
continued services and employment of the Employee by the Company from and after the Effective Date, upon the terms and conditions hereinafter set forth; and
WHEREAS, except as otherwise provided herein, all amounts earned, and other obligations, for periods prior to the Effective Date shall be controlled by the Second Amended Employment Agreement.
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 continue to employ the Employee in its business, and the Employee will continue to perform duties for the
Company, as its President, Chief Executive Officer and Executive Chairman of the Board of Directors of the Company (the “Board”), and as the President of COSI Agency, Inc. (“COSI”), for a term continuing from and after the Effective Date and
terminating on December 31, 2024 (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, Chief Executive Officer and Executive Chairman of the
Board, and as the President of COSI. As the President and Chief Executive Officer of the Company, the Employee 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 or the Executive Committee of the Board. As Executive Chairman of the Board, the Employee shall represent and promote the Company to the investment
community and maintain relationships with existing shareholders, investment bankers and analysts and such further duties of an executive character as shall, from time to time, be delegated or assigned to him by the Board consistent with the
Employee’s position. As President of COSI, the Employee shall seek to expand the relationships of COSI with other insurance carriers, national and online agencies, and other intermediaries.
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 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 Third Amended and
Restated Employment Agreement between Kingstone Insurance Company (“KICO”) and the Employee, dated ___________, 2022 (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 KICO’s Chief Investment Officer and Chairman of the Board.
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 not to be unreasonably withheld), serve on the board of
directors of, or advisor to, other business organizations (including up to two for-profit boards, in addition to the Company and its related entities), in each case (i.e., (a) through (d) above), provided that such activities do not interfere or
conflict with his substantially 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 The Employee shall be entitled to receive a salary at the rate of five hundred thousand dollars ($500,000) for each of the
calendar years of the Term (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 for the same
period.
4.3 (a) Subject to the terms and conditions hereof, the Employee shall also be entitled to receive from the Company, for each calendar year during the Term, a bonus (the
“Bonus”) equal to three percent (3%) of the Company’s Net Income (as hereinafter defined) for such calendar year, not to exceed one hundred twenty-five percent (125%) of the Base Salary (the “Bonus Payments”).
(b) For purposes hereof, the term “Net Income” for any particular calendar period shall mean the Company’s consolidated income
from operations before taxes for such period determined in accordance with generally accepted accounting principles consistently applied, as audited and reported upon by the independent auditors of the Company, except that the Company’s
consolidated net investment income (loss), net unrealized gains (losses) on equity securities and net realized gains (losses) on investments shall be excluded.
(c) For purposes hereof, in the event that this Agreement shall terminate on a date other than December 31 of any calendar year
and for such calendar year, pursuant to the terms of this Agreement, the Employee is entitled to receive a Bonus through the termination date (the “Termination Date”), then the Company’s Net Income for such calendar year shall be determined for the
period from the first day of such calendar year (the “Termination Year”) until the Termination Date by multiplying the Company’s Net Income for the period from the first day of the Termination Year until the end of the calendar quarter in which the
Termination Date falls (the “Termination Quarter”) by a fraction, the numerator of which shall be the number of days from the first day of the Termination Year until the Termination Date and the denominator of which shall be the number of days from
the first day of the Termination Year until the end of the Termination Quarter. In the event the Termination Quarter shall be other than the last calendar quarter of the Termination Year, notwithstanding that the term “Net Income” shall have the
meaning ascribed to it by paragraph (b) hereof (as adjusted by the provisions of this paragraph (c)), the application of such term to this paragraph (c) shall not be subject to any adjustment based upon an audit or report of the Company’s
independent auditors with respect to the Termination Year but instead shall be calculated and paid as provided for in paragraph (d) hereof.
(d) The Bonus for any calendar year shall be payable in the following calendar year within thirty (30) days following the
receipt by the Company of the report of its independent auditors with regard to the Company’s Net Income for such calendar year, calculated in accordance with paragraph (b) hereof and otherwise consistent with the consolidated financial statements
of the Company for the calendar year (the “Audited Financial Statements”), as set forth in any Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”); provided, however, that, in the event the Audited Financial
Statements are not available by February 28 of any calendar year, an interim Bonus payment, if any, shall be made based upon the unaudited consolidated financial statements of the Company for such calendar year, as determined by the Company’s chief
financial officer and approved by the Company’s Compensation Committee. Following receipt of the Audited Financial Statements, an appropriate adjustment will be made to the Bonus amount, and the Company will pay any underpayment, or the Employee
will return any overpayment, within fifteen (15) days of receipt of the Audited Financial Statements. Notwithstanding the foregoing, with respect to any Termination Year in which the Termination Quarter is other than the last calendar quarter of
the Termination Year, the Bonus shall be payable within thirty (30) days following the determination by the Company’s chief financial officer of the Company’s Net Income through the end of the Termination Quarter, if any, calculated in accordance
with paragraph (c) hereof and otherwise consistent with the consolidated financial statements of the Company for the period ended with the end of the Termination Quarter, as set forth in any Form 10- Q filed by the Company with the SEC.
4.4 The Employee shall not be eligible to participate in any employee incentive compensation plan other than as expressly
provided in this Agreement.
4.5 The Employee has agreed to forego any long-term compensation amount that may be payable pursuant to Section 4.4, 6.4, 11.5,
11.6 or 11.7 of the Second Amended Employment Agreement and has advised the Company that he does not seek to receive any long-term compensation pursuant to this Agreement.
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 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 the day prior to the Contract Date.
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 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 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 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 (other than disability coverage through the New York State Insurance Fund), 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 severance, 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, with 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”) (the “Territory”), engage or participate in a business which, as of the Cessation Date, is competitive with the business in which the Company is then engaged (“Competitive Business”) (it being understood and
agreed that, without limiting the generality of the foregoing, Heritage, Ocean Harbor, US Coastal, United Insurance Holdings, TypTap and HCI are currently engaged in a Competitive Business and “Competitive Business” includes the business of a
Coastline Homeowner’s Insurance Provider (as defined below) and/or the provision of automobile insurance for the ridesharing industry), and shall not make any investments in any such Competitive Business, except that the foregoing shall not
restrict the Employee from (A) 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 or (B) engaging or participating in the business of a Person which
is not a Coastline Homeowner’s Insurance Provider. For purposes hereof, the term “Coastline Homeowner’s Insurance Provider” means a Person which, directly or indirectly, derives at least twenty-five percent (25%) of its gross premiums written for
personal property insurance from policies as to which the insured premises are located (I) within two (2) miles of the nearest coastline and/or (II) in areas, such as Long Island and Cape Cod, typically avoided by carriers that focus on
preferred/standard business, such as State Farm Insurance, due to hurricane exposure;
(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 Rofsky, 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; or
(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.
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, in the event that the Employee’s employment is terminated 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 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) Notice Under Defend Trade Secrets Act: Notwithstanding the requirements contained in this Agreement, in accordance with the
Defend Trade Secrets Act, Employee will not be held criminally or civilly liable under any federal or state trade secret law if Employee discloses a Trade Secret in confidence to federal, state or local government officials, to Employee’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 Employee files a lawsuit alleging retaliation by the Company for
reporting a suspected violation of law, Employee may disclose the Trade Secret to his attorney and use the Trade Secret information in the court proceeding if Employee: (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.
(d) 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.
(e) 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.
(f) This Section 7.3 shall not be construed to unreasonably restrict the Employee’s ability to disclose confidential information
in an arbitration proceeding or a court proceeding in connection with the assertion of, or defense against any claim of breach of this Agreement in accordance with Articles 12 and 14. In addition, nothing in this Agreement prohibits the Employee
from reporting possible violations of federal or state law or regulation to any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation.
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.
8. VACATIONS; LEAVE
The Employee shall be entitled to an aggregate of five (5) 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 KICO’s employee handbook. The Company acknowledges that the Employee has complied with his obligations under this Article 8 through the Contract Date.
9.
PARTICIPATION IN EMPLOYEE BENEFIT PLANS; STOCK AWARDS
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, 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 KICO 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 through a successor employer, whichever is sooner (provided that the cost of such
coverage shall be treated as taxable income to the Employee monthly to the extent necessary to enable the health plan to continue to satisfy applicable nondiscrimination requirements of Section 105(h) of the Internal Revenue Code of 1986, as
amended (the “Code”), and the Patient Protection and Affordable Care Act (the “Affordable Care Act”).
9.2 For each calendar year of the Term, the Employee will be eligible to participate in the Kingstone Companies, Inc. Amended
and Restated 2014 Equity Participation Plan (the “Equity Plan”) on such basis as determined in the discretion of the Board or an authorized committee thereof in accordance with the terms of the Equity Plan.
9.3 Pursuant to a letter agreement of even date between the Company and the Employee, the parties are agreeing to change the
vesting date for the unvested stock grants made pursuant to those certain Stock Grant Agreements, dated as of January 3, 2020, January 4, 2021 and January 3, 2022, between the Company and the Employee.
10. SERVICE AS OFFICER AND DIRECTOR
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. 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 Article 13 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 KICO 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 material breach of this Agreement 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 the Company’s President, Chief Executive Officer and Executive Chairman of the Board, and as President of COSI Agency, Inc., (c) a material adverse change in the Employee’s current reporting structure (other
than following an event constituting Cause), (d) a material decrease in the compensation payable to the Employee from the compensation payable pursuant to this Agreement, (e) the Employee’s termination under the KICO Employment Agreement by KICO
other than for Cause, or (f) 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 Chairman of the Board of KICO). Good Reason shall only exist if (i) notice is given within
ninety (90) days of the initial event, (ii) such event is not cured within thirty (30) days of the giving of such notice, and (iii) Employee terminates employment within sixty (60) days of the end of the cure period.
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 calendar 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 calendar 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, 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 or thereafter, the Employee’s employment is terminated by the Company other than for Cause or by the
Employee for Good Reason within eighteen (18) months subsequent to a Change of Control that occurs during the Term, the Company shall pay to the Employee an amount in cash equal to the sum of (i) one and one-half (1.5) times the Base Salary (as
reduced pursuant to Section 4.2) and (ii) the Bonus through the Termination Date, calculated pursuant to Section 4.3(c) (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 the Employee except for the Bonus through the Termination Date, which shall be payable within thirty (30) days following the determination by the Company’s chief financial officer of the Company’s Net Income
through the end of the Termination Quarter, if any, and otherwise consistent with the consolidated financial statements of the Company for the period ended with the end of the Termination Quarter, as set forth in any Form 10-Q filed by the Company
with the SEC. In addition, in such event, if the Employee is covered by the Company’s health, dental, or vision insurance, the Company shall continue to pay, on a monthly basis, for the Employee’s health insurance premiums, including spousal
coverage, for the remainder of the Term, and thereafter the Employee and the Employee’s spouse shall continue to be provided, for the remainder of their lives, with the same access to the Company’s health, dental, and vision insurance to which the
Employee was accorded during the Term, at COBRA premium rates, which will be paid for by the Employee or the Employee’s spouse (provided that the cost of such coverage attributable to Employer contributions shall be treated as taxable income to the
Employee monthly to the extent necessary to enable the health plan to continue to satisfy applicable nondiscrimination requirements of Section 105(h) of the Code and the Affordable Care Act). 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. In addition,
in such event, following the Expiration Date, the Employee and the Employee’s spouse shall continue to be provided for life with the same access to the Company’s health, dental, and vision insurance to which the Employee was accorded during the
Term, at COBRA premium rates which will be paid for by the Employee. 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 the
Company representing more than thirty-three and one-third percent (33-1/3%) of the Company’s then outstanding securities 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 the Company with respect to which the Employee gave his approval as a member of the Board;
(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 severance, 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.
11.8 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.
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:
(a) 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
(b) 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.
13. NO RESTRICTIONS
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.
15.5 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, reduction shall occur in the following order unless the Employee elects in writing a different order to the extent permitted under Code Sections 409A, 280G and 4999: (i) severance payment based on multiple of Base Salary and/or Bonus; (ii)
other cash payments; (iii) any pro-rated Bonus paid as severance; (iv) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are not permitted
to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (v) any equity awards accelerated or otherwise valued at full value, provided such equity awards are not permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A –
24(c); (vi) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option provided such options are permitted to be valued under Treasury Regulations Section 1.280G – 1 Q/A –
24(c); (vii) acceleration of vesting of all other stock options and equity awards; and (viii) within any category, reductions shall be from the last due payment to the first.
16. ASSIGNMENT
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.
NOTICESAny 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
If to the Company:
Chairman, Compensation Committee
William Yankus
wyankus@comcast.net
or at such other address as any party shall designate by notice to the other party given in accordance with this Article 17.
18. GOVERNING LAW
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
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
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 Second Amended Employment Agreement, with regard to the Employee’s employment with the Company effective as of January 1, 2023. 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
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
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 incurred by the Employee in connection with the
drafting and negotiation of this Agreement.
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.
24. CONSTRUCTION
All references in this Agreement to “includes” and “including” shall be construed to include the words “without limitation”.
25. REPRESENTATION BY COUNSEL; INTERPRETATION
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
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.]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year above written.
KINGSTONE COMPANIES, INC.
By: /s/
Meryl S. Golden
Chief Operating Officer
/s/
Barry B. Goldstein
Approved:
/s/_______________________
William Yankus
Chair, Compensation Committee