EXHIBIT 99.1: CONSULTING AND CONFIDENTIALITY AGREEMENT
CONSULTING AND CONFIDENTIALITY AGREEMENT
THIS CONSULTING AND CONFIDENTIALITY AGREEMENT ("Agreement") is made and
entered into effective as of the 13th day of September, 2006 (the "Effective
Date") by and between ProAssurance Corporation, a Delaware corporation
("ProAssurance"), and Xxxxxxx X. Xxxxxxx (the "Consultant").
W I T N E S S E T H :
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.
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. Consulting Relationship. ProAssurance hereby retains Consultant to
provide Consulting Services (as defined in Section 2 of this Agreement)
commencing on the Effective Date and ending on the date that is the earlier of
the date this Agreement is terminated pursuant to Section 5 herein or the one
year anniversary of the date of this Agreement. This Agreement shall renew
automatically each year for one year terms until it is terminated pursuant to
Section 5 herein.
2. Consulting Services. Consultant agrees to provide nonexclusive
services to ProAssurance relating to review of insurance cases, facilitating
ProAssurance's relationship with the Wisconsin Medical Society, serving as chair
of ProAssurance's Wisconsin underwriting and claims committees, and other
services as may be necessary to carry out the aforementioned services,
consistent with Consultant's skills, background, experience and professional
judgment. Consultant shall provide such services at such times and places as
shall reasonably be required, as determined by Consultant, to allow for
consultation with employees of ProAssurance and its subsidiaries and to
otherwise perform the services contemplated hereunder. The services of
Consultant as described above are collectively defined as the "Consulting
Services."
3. Compensation.
a. In consideration of Consultant's availability to perform the
Consulting Services as may be needed and Consultant's covenants regarding
confidentiality, ProAssurance shall pay Consultant an annual retainer in the
amount of $44,000.
b. Consultant shall be reimbursed for expenses incurred for travel
outside of the State of Wisconsin.
c. It is understood and agreed that Consultant is responsible for
payment of all federal, state, and local income taxes on the remuneration
payable hereunder. 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
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remuneration payable to Consultant, then ProAssurance may effect such
withholding.
4. Independent Contractor. The relationship between ProAssurance and
Consultant shall be that of independent contractor, and nothing contained in
this Agreement shall be deemed or construed to create an employment or agency
relationship between ProAssurance or any of its subsidiaries or affiliates and
Consultant. Consultant is not an employee of ProAssurance and is not entitled to
participate in any pension plan, unemployment insurance, bonus, worker's
compensation insurance, stock, or similar benefits that ProAssurance provides
for its employees.
5. Termination. This Agreement may be terminated as follows:
a. This Agreement shall terminate one day after Consultant's death.
b. This Agreement may be terminated by either party upon ninety (90)
days written notice prior to the end of an annual term.
c. 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.
6. 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
accrued and due and payable to Consultant prior to the Termination Date.
7. Confidentiality.
a. Consultant acknowledges (i) that as a result of Consultant's
prior service as a director of Physicians Insurance Company of Wisconsin, Inc.
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
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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 ProAssurance'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 7 at the time
the Consultant ceases to be a consultant to ProAssurance.
8. 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 Section 7 of this Agreement were not complied with
in accordance with their terms. Because the breach or threatened breach of any
of the covenants in Section 7 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 Section 7 and 8 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.
9. Survival. The provisions of Sections 7, 8 and 15. shall survive the
termination of this Agreement and shall inure to the benefit of ProAssurance,
its successors and assigns.
10. Third-Party Agreements and Rights. ProAssurance recognizes that
Consultant may, and does, perform services that are similar to the Consulting
Services for other persons or entities. However, 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 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.
11. 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
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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.
12. 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.
13. 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.
14. 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:
Xxxxxxx X. Xxxxxxx
[Home Address]
[Home Address]
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15. 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 except as provided in subparagraph 15c hereof. A
purported assignment other than as permitted herein 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 15,
"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 15 or that otherwise become bound by the terms and provisions of
this Agreement by operation of law.
c. Consultant shall have the right to assign this Agreement to a
corporation or limited liability company that is wholly owned by Consultant so
long as Consultant personally performs all services to be provided hereunder in
his capacity as an officer, employee, member, manager or agent of such assignee.
ProAssurance acknowledges and agrees that Consultant shall be deemed to be
serving as a consultant at the request of ProAssurance in the performance of his
services hereunder, whether directly or indirectly through a permitted assignee,
for purposes of the Indemnification Agreement between ProAssurance and
Consultant, and that Consultant shall be eligible to make claims for indemnity
arising from such services under the terms of said Indemnification Agreement.
ProAssurance further agrees that Consultant's permitted assignee shall be
entitled to indemnification under said Indemnification Agreement to the same
extent as the Consultant with respect to any services personally performed by
the Consultant for or on behalf of the assignee under this Agreement.
16. 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.
17. 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.
18. 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.
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19. 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.
The parties have executed this Agreement effective as of the day and year
first written above.
PROASSURANCE CORPORATION CONSULTANT
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxx, President Name: Xxxxxxx X. Xxxxxxx
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