RECITALS
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 XXXXX X. XXXXXXXXX (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.
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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, Xxxxxx Xxxxxxxxx, 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;
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(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.
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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).
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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
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(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.
15.1 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:
X.X.
Xxx 000
Xxxxxxx, Xxx Xxxx
00000
xxxxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Fax
Number: (000) 000-0000
with a
copy to:
Dentons
US LLP
1201
Avenue of the Americas
Xxx
Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X.
Xxxxxx, Esq.
Xxxxx.Xxxxxx@Xxxxxxx.xxx
Fax
Number: (000) 000-0000
8
If to
the Company:
c/o
Xxxxxx Xxxxxxx
Chairman,
Compensation Committee
00 Xxxx
Xxxx
Xxxxxxxx, Xxx Xxxx
00000
xxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Fax
Number: (000) 000-0000
with a
copy to:
Certilman Balin
Xxxxx & Xxxxx, LLP
00
Xxxxxxx Xxxxxx
Xxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx
Xxxxxxx, Esq.
xxxxxxxx@xxxxxxxxxxxxxx.xxx
Fax
Number: (000) 000-0000
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:
Xxxxxx
X. Xxxxxxx
Chief
Financial Officer
Xxxxx
X. Xxxxxxxxx
11
