Employment Agreement, dated January 30, 2018, by and between Heritage Insurance Holdings, Inc. and Kirk Lusk

Exhibit 10.1

Heritage Insurance Holdings, Inc.

A DELAWARE CORPORATION

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into on January 30, 2018, by and between HERITAGE INSURANCE HOLDINGS, INC., and its subsidiary companies (collectively, the “Company”), and Kirk H. Lusk (the “Executive”).

RECITALS

NOW. therefore. in consideration of the mutual promises contained herein, and for other good and valuable consideration, the Company and Executive agree as follows:

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties hereby agree as follows:

Section I. Employment

1. Employment. The Company shall employ Executive as its Chief Financial Officer and Executive accepts such employment and agrees to perform the services and duties specified herein or as assigned to Executive from time to time by the Board.

2. Term of Employment. The Company shall continue to employ the Executive and the Executive shall continue to serve the Company and its Subsidiaries, until this Agreement is terminated as set forth herein (the “Term”).

Section II. Compensation and Benefits

1. Base Salary. During the Employment Term, the Executive shall receive a base salary at the annual rate of $850,000.00. The base salary shall be payable in substantially equal installments consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes.

2. Annual Bonus. The Executive shall be eligible to receive an annual cash bonus of up to $50,000, payable by February 28^th of each calendar year. Such cash bonus shall be discretionary and shall be based on (i) the approval of an EBITDA bonus pool by the Board, (ii) the approval of the bonus paid to the Executive by the Board, and (iii) the Executive’s performance during the calendar year.

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3. Additional Cash Bonus. The Executive shall receive, as an incentive under the Heritage Insurance Holdings, Inc. Omnibus Incentive Plan, a cash bonus of $100,000.00 for each point that the consolidated combined ratio of the Company and its subsidiaries is below 91 during the preceding calendar year. The cash bonus shall not exceed $500,000. In calculating the combined ratio, net investment income and other income shall be deducted from operating expenses. The incentive bonus shall be paid in quarterly installments on the last day of each calendar quarter, provided the Executive is employed by the Company at the time of such payment.

4. Restricted Stock Award. Executive is hereby granted a restricted stock award of 15,000 shares of Heritage common stock per year for the first five years of Executive’s employment with Heritage. Executive shall receive a separate restricted stock agreement that sets forth the terms, conditions and vesting schedule for the restricted stock award.

5. Expense Reimbursement. During the Employment Term, the Company, upon the submission of supporting documentation by the Executive, and in accordance with Company policies for its executives, shall reimburse the Executive for all expenses actually paid or incurred by the Executive in the course of and pursuant to the business of the Company and the Subsidiaries.

6. Benefits. During the Employment Term, the Company shall provide, at its sole expense, medical, dental, prescription and disability insurance coverage for the Executive.

7. Vacation. Executive shall receive up to thirty paid vacation days every calendar year. Accrued but unused vacation days may not be rolled over to the following calendar year.

8. Clearwater Office. Not including vacation, holiday and sick days, Executive shall be present in the Clearwater office for a minimum of fifteen business days per month.

9. Temporary housing. The company will reimburse or provide the employee for reasonable lodging expenses incurred for a period not to exceed 6 months. The Company shall cooperate with the Executive and use reasonable efforts to structure the benefit provided for in this Section (9) in as tax efficient a manner as possible, subject to applicable law. In the event that any benefit constitute taxable income to the Executive for any tax period, the Company shall pay to the Executive an additional amount equal to the federal state income tax on the benefit provided. After an initial transition period ending April I, 2018 the Employee is responsible for meals and transportation expenses with respect to travel to and from Florida.

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Section III. Termination.

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Section IV. Restrictive Covenants

a. Internal business information (including but not limited to information relating to strategy, staffing, financial data, training, marketing, promotional and sales plans and practices, costs, bidding activities and strategies, rate and pricing structures, and accounting and business methods);

b. Identities of, negotiations with, individual requirements of, specific contractual arrangements with, and information about, the Company’s or its Subsidiaries’ suppliers, distributors, customers, investors, partners and/or other business associates, their contact information, and their confidential information;

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c. Compilations of data and analyses, underwriting process and parameters, material processes, technical data, specific program information, trade or industrial practices, computer programs, formulae, systems, research, records, reports, manuals, documentation, customer and supplier lists, data and databases relating thereto, and technology and methodology regarding specific projects; and

d. Intellectual Property not generally available to the public, or published by the Company or its Subsidiaries. “Intellectual Property,” or “IP,” shall mean (1) inventions or devices, whether patentable or not; (2) original works of authorship produced by or on behalf of the Company or its Subsidiaries; (3) trade secrets; (4) know-how; (5) customer lists and confidential information; and (6) any other intangible property protectable under federal, state or foreign law. Other examples of Intellectual Property include, but are not limited to, patent applications, patents, copyrighted works, technical data, computer software, knowledge of suppliers or business partnerships, documentation, processes, and methods and results of research.

a. The Executive acknowledges and agrees with the representations of the Company that Confidential Information and IP is proprietary and valuable to the Company, and that any disclosure or unauthorized use thereof may cause irreparable harm and loss to the Company. It is further acknowledged by the Executive that if the general public or competitors (now existing or to be created in the future) learn of these ongoing discussions and negotiations with potential investors and of the formation of the Company, the Insurance Entity and other Subsidiaries as a result of the Executive’s failure to comply hereunder, irreparable harm and substantial financial loss may occur to the Company’s, the Insurance Entity or other Subsidiary’s viability and future revenues. The Executive acknowledges and agrees that the knowledge and experience the Executive shall acquire by virtue of assisting with the formation of the Insurance Entity and application to the FOIR for approval of the Insurance Entity to write homeowner’s insurance coverage in the State of Florida during the Employment Term and by virtue of employment by the Company during the Employment Term is of a special, unique and extraordinary character and that such position allows the Executive access to Confidential Information and Intellectual Property.

b. The Executive acknowledges and agrees that (a) the nature and periods of restrictions imposed by the covenants contained in this Agreement are fair, reasonable and necessary to protect and preserve for the Company and its Subsidiaries their viability and future revenues; (b) the Company or its Subsidiaries would sustain great and irreparable loss and damage if the Executive were to breach any of such covenants set forth herein; (c) the Company and its Subsidiaries intend to conduct business actively in the entire territory that is the subject of this Agreement (as defined below) and beyond; and (d) the covenants herein set forth are made as an inducement to and have been relied upon by the Company in entering into this Agreement. The Executive acknowledges and agrees this Agreement is binding on the Executive’s heirs, executors, successors, administrators, representatives and agents.

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c. The Executive agrees to receive and to treat Confidential Information and the knowledge of IP on a confidential and restricted basis and to undertake the following additional obligation with respect thereto:

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Section V. Miscellaneous

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