EXHIBIT 2(b)
EXHIBIT A
CONSULTING, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT
THIS CONSULTING, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT ("Agreement")
is made and entered into as of the ______ day of _______, 200____ by and between
ProAssurance Corporation, a Delaware corporation ("ProAssurance"), and
_______________(the "Consultant").
WITNESSETH:
WHEREAS, ProAssurance desires to retain Consultant for the period set forth
in this Agreement to obtain services from the Consultant, and Consultant is
willing to be retained by ProAssurance pursuant to this Agreement; and
WHEREAS, Consultant acknowledges (i) that Consultant's expertise will
contribute significantly to the financial success of the business of
ProAssurance and (ii)that the compensation, covenants not to compete and
confidentiality provisions in this Agreement are reasonable.
NOW, THEREFORE, in consideration of the premises, as well as for other good
and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined in this Agreement
shall have the meanings given to them in the Agreement and Plan of Merger dated
as of February 27, 2005, among ProAssurance, NCP Merger Corporation, a Delaware
corporation and a wholly-owned subsidiary of ProAssurance, and NCRIC Group,
Inc., a Delaware corporation ("NCRIC").
2. Consulting Relationship. ProAssurance hereby retains Consultant to
provide Consulting Services (as defined in Section 3 of this Agreement) for a
term commencing on the date hereof (the "Effective Date") and ending on that
date that is the earlier of the date this Agreement is terminated or December
31, 2006 (the "Expiration Date").
3. Consulting Services. Consultant agrees to provide such services to
ProAssurance as may be reasonably requested from time to time by the Chairman of
the Board or the Vice-Chairman of the Board of ProAssurance, consistent with
Consultant's skills, background and experience. Consultant shall not be required
to devote a specific amount of time each year to the performance of his duties,
but shall spend that amount of time reasonably necessary to accomplish the
assigned tasks (including Board, advisory board and committee service)
faithfully and completely. The services of Consultant as described above are
collectively defined as the "Consulting Services."
4. Compensation.
a. In consideration of Consultant's Consulting Services and
Consultant's covenants regarding confidentiality and noncompetition,
ProAssurance shall pay Consultant a monthly consulting fee of $2,500 (the
"Consulting Fee").
b. ProAssurance shall reimburse Consultant, within 30 days after
Consultant submits expense receipts to the Company, for all reasonable
out-of-pocket travel expenses that are paid by Consultant in performing the
Consulting Services, in accordance with the reimbursement policies adopted from
time to time by ProAssurance.
c. It is understood and agreed that Consultant is responsible for
all tax payments. If ProAssurance, in its sole discretion, shall determine that
ProAssurance or any of its subsidiaries has incurred or will incur any liability
to withhold any federal, state or local income or other taxes by reason of any
remuneration payable to Consultant, then ProAssurance may effect such
withholding.
5. Right of Employment. Neither this Agreement nor any action taken or
not taken pursuant to this Agreement shall be construed as giving Consultant any
right to be retained, as an employee or otherwise, by ProAssurance or any of its
subsidiaries.
6. Termination. This Agreement may be terminated as follows:
a. This Agreement shall terminate one day after Consultant's death.
b. ProAssurance may terminate this Agreement if, by reason of a
disability, Consultant has been unable to perform Consulting Services for a
period of 180 consecutive days.
c. ProAssurance may terminate this Agreement for Cause at any time.
For purposes of this Agreement "Cause" shall mean, and this Agreement shall be
deemed to have been terminated for Cause if such termination results from, (i)
willful gross misconduct on the part of Consultant that is materially and
demonstrably injurious to ProAssurance or any of its subsidiaries as determined
by the Board of Directors of ProAssurance; provided however, that no act, or
failure to act, on the part of Consultant shall be considered willful gross
misconduct unless Consultant acted, or failed to act, other than in good faith
and with a reasonable belief that such action, or failure to act, was in the
best interest of ProAssurance and its subsidiaries; or (ii) Consultant commits
any act that constitutes a felony and that results, or is intended to result,
directly or indirectly, in Consultant's substantial personal gain or personal
enrichment at the expense of ProAssurance or any of its subsidiaries.
d. Consultant may terminate this Agreement with cause or without
cause at any time.
7. Compensation Upon Termination. Upon termination of this Agreement
ProAssurance shall have no further obligation under this Agreement to make any
payments to Consultant or to bestow any benefits on Consultant after the date
this Agreement is terminated (the "Termination Date"), other than payments and
benefits accrued and due and payable to Consultant prior to the Termination
Date.
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8. Confidentiality.
a. Consultant acknowledges (i) that as a result of Consultant's
prior service as a director of NCRIC and Consultant's engagement by
ProAssurance, Consultant has and will become informed of, and has had and will
have access to, valuable and confidential information of ProAssurance and its
subsidiaries including, but not limited to, trade secrets, technical
information, know-how, plans, specifications, marketing and sales information,
claims handling information, investment information, and the identity of
policyholders and reinsurers (collectively, "Confidential Information"), (ii)
that the Confidential Information is the exclusive property of ProAssurance and
its subsidiaries, and (iii) that the Confidential Information is to be held by
Consultant in trust and solely for the benefit of ProAssurance and its
subsidiaries. Accordingly, Consultant shall not at any time subsequent to the
date of this Agreement, use, reveal, report, publish, transfer or otherwise
disclose to any person or entity any of the Confidential Information without the
prior consent of ProAssurance, except to officers and employees of ProAssurance
and its subsidiaries, and other persons or entities whom ProAssurance agrees are
in a contractual or fiduciary relationship with ProAssurance or any of its
subsidiaries. This provision does not prohibit Consultant from disclosing
information which legally is or becomes of general public knowledge from
authorized sources other than Consultant.
b. If the Confidential Information known to Consultant or in
Consultant's possession is subpoenaed, is subject to a demand for production, or
is subject to any other form of legal process, by any judicial, regulatory,
administrative, legislative or governmental authority, or any other person or
entity, Consultant agrees to notify ProAssurance promptly that such subpoena,
demand or other legal process has been received. Consultant agrees to use
Consultant's best efforts, consistent with the requirements of applicable law,
to protect the Confidential Information from disclosure and to cooperate with
ProAssurance and its subsidiaries in seeking protection from disclosure of the
Confidential Information. If Consultant is required to disclose the Confidential
Information, Consultant agrees, at Professional Group's request and expense, to
use Consultant's best efforts to obtain assurances that the Confidential
Information will be maintained on a confidential basis and not be disclosed to a
greater degree than legally required.
c. Upon the termination of this Agreement, Consultant shall promptly
deliver to ProAssurance all originals and all copies that are in Consultant's
possession or control of the following: all customer lists, stockholder lists,
lists of names of beneficial owners, policyholder lists, manuals, letters,
notes, notebooks, reports and all other materials relating to the business of
ProAssurance and its subsidiaries. Consultant shall represent to ProAssurance
that Consultant has complied with the provisions of this Section 8 at the time
the Consultant ceases to be a consultant to ProAssurance.
9. Noncompetition and Nonsolicitation.
a. During the term of this Agreement, Consultant agrees that
Consultant shall not, directly or indirectly, engage, participate, or assist in
any business organization by performing services related to the providing of
malpractice insurance to physicians, dentists and other persons or entities
insured by ProAssurance or any of its subsidiaries (the "Proscribed
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Activities") in the states in which ProAssurance or any of its subsidiaries is
then conducting the Proscribed Activities, whether as owner, part-owner,
stockholder, partner, director, officer, trustee, employee, agent, consultant or
in any other capacity, on Consultant's own behalf or on behalf of any person or
entity. Consultant may make passive investments in a competitive enterprise the
voting equity interests of which are publicly traded, provided that Consultant's
holdings in such enterprise, together with the holdings of any of the
Consultant's affiliates (as that term is defined in Rule 405 of the Rules under
the Exchange Act) do not exceed 3% of the outstanding voting equity interests of
such enterprise.
b. During the term of this Agreement, Consultant agrees that
Consultant shall not (i) directly or indirectly solicit any person or entity in
the states in which ProAssurance or any of its subsidiaries is then conducting
the Proscribed Activities to purchase insurance products or services competitive
with the Proscribed Activities, (ii) directly or indirectly solicit any person
or entity to purchase or sell insurance products or services relating to the
Proscribed Activities, or (iii) recruit or otherwise solicit or induce any
person who is at the time an employee or consultant with ProAssurance or any of
its subsidiaries to terminate such person's employment or consulting
relationship with ProAssurance or any of its subsidiaries.
10. Restrictions Reasonable. The restrictions against competition and
solicitation set forth above are considered by the parties to be reasonable for
the purposes of protecting the business of ProAssurance and its subsidiaries. If
any restriction is found by a court of competent jurisdiction to be
unenforceable because it extends for too long a period of time, or over too
broad a range of activities, or in too large a geographic area, then that
restriction shall be interpreted to extend only over the maximum period of time,
or range of activities, or geographic area, as to which it may be enforceable.
11. Remedies. Consultant and ProAssurance acknowledge that ProAssurance
and its subsidiaries would not have an adequate remedy at law for money damages
if the covenants contained in Sections 8 or 9 of this Agreement were not
complied with in accordance with their terms. Because the breach or threatened
breach of any of the covenants in Sections 8 or 9 of this Agreement will result
in immediate and irreparable injury to ProAssurance and its subsidiaries,
Consultant agrees that ProAssurance and its subsidiaries shall be entitled to an
injunction restraining Consultant from violating Sections 8 and 9 of this
Agreement to the fullest extent allowed by law. Nothing in this Agreement shall
prohibit ProAssurance or any of its subsidiaries from pursuing all other legal
or equitable remedies that may be available to it for a breach or threatened
breach, including the recovery of damages.
12. Survival. The provisions of Sections 8, 9, 10, 11, 12 and 18(b) shall
survive the termination of this Agreement and shall inure to the benefit of
ProAssurance, its successors and assigns.
13. Third-Party Agreements and Rights. Consultant confirms that Consultant
is not bound by any agreement with any other person or entity that would
restrict engagement of Consultant in any business or Consultant's use or
disclosure of information. Consultant represents that Consultant's execution of
this Agreement, engagement by ProAssurance and performance of duties pursuant to
this Agreement will not violate any obligations Consultant
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may have to any other person or entity. Consultant shall not disclose or make
use of information in violation of any agreements with or rights of any other
person or entity.
14. Further Assurances. Consultant and ProAssurance agree to execute,
acknowledge, deliver and file, or cause to be executed, acknowledged, delivered
and filed, all further instruments, agreements or documents as may be necessary
to consummate the transactions provided for in this Agreement and to do all
further acts necessary to carry out the purpose and intent of this Agreement.
15. No Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with the waiver or estoppel. No written waiver shall be deemed a continuing
waiver unless specifically stated therein, and each waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
the term or condition for the future or as to any act other than that
specifically waived. The waiver by a party of any other party's breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach, and the failure of any party to exercise any right or remedy
shall not operate or be construed as a waiver or bar to the exercise of such
right or remedy upon the occurrence of any subsequent breach. No delay on the
part of a party in exercising a right, power or privilege hereunder shall
operate as a waiver thereof. No waiver on the part of a party of a right, power
or privilege, or a single or partial exercise of a right, power or privilege,
shall preclude further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies of this Agreement are cumulative and
are not exclusive of the rights or remedies that a party may otherwise have at
law or in equity.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to its
conflicts of law principles.
17. Notices. Notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail (return
receipt requested), or delivered by an express courier (with confirmation), to
the parties at the addresses below (or at such other address for a party as
shall be specified by like notice):
a. If to ProAssurance:
ProAssurance Corporation
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
b. If to Consultant:
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_____________________________________
_____________________________________
_____________________________________
18. Assignment.
a. This Agreement and all of Consultant's rights, duties and
obligations under this Agreement are personal in nature and shall not be
assignable by the Consultant. A purported assignment shall not be valid or
binding on ProAssurance.
b. This Agreement shall inure to the benefit of and be legally
binding upon all successors and assigns of ProAssurance. ProAssurance will
require a successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of ProAssurance by agreement in form and substance satisfactory to the
Consultant, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that ProAssurance would be required to perform it
if no such succession had taken place. For purposes of this Section 18,
"ProAssurance" shall mean ProAssurance as defined above and all successors to
its business or assets that execute and deliver the agreement provided for in
this Section 18 or that otherwise become bound by the terms and provisions of
this Agreement by operation of law.
19. Attorneys' Fees. If litigation is brought concerning this Agreement,
the prevailing party shall be entitled to receive from the non-prevailing party,
and the non-prevailing party shall upon final judgment and the expiration of all
appeals immediately pay upon demand all reasonable attorneys' fees and expenses
of the prevailing party.
20. Entire Agreement. This Agreement constitutes the entire understanding
of the parties and supersedes all prior discussions, negotiations, agreements
and understandings, whether oral or written, with respect to its subject matter.
This Agreement may be modified only by a written instrument properly executed by
Consultant and ProAssurance.
21. Severability. If any one or more of the provisions of this Agreement
is held invalid, illegal or unenforceable, the remaining provisions of this
Agreement shall be unimpaired, and the invalid, illegal or unenforceable
provision shall be replaced by a mutually acceptable valid, legal and
enforceable provision which comes closest to the intent of the parties.
22. Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
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The parties have executed this Agreement effective as of the day and year
first written above.
PROASSURANCE CORPORATION CONSULTANT
By:
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Xxxxxx X. Xxxxx, President Name:
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Taxpayer Identification Number
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