INDEPENDENT CONTRACTOR CONSULTING AGREEMENT
Exhibit 10.2
EXECUTION VERSION
This INDEPENDENT CONTRACTOR CONSULTING AGREEMENT (this “Agreement”) is entered into as of September
1, 2011, by and between HealthMarkets, Inc., a Delaware company (“HealthMarkets”)
and B. Xxxxxx Xxxxxx, an individual residing at 000 Xxxxxxxxxxxxx Xxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000 (“Consultant”).
1. Engagement and Services. HealthMarkets engages Consultant on an “as needed” basis, and
Consultant accepts such engagement with HealthMarkets, for the Term (as defined in Section 6), to
perform legal consulting services (the “Services”). Consultant shall perform the Services in a
competent and professional manner and upon the terms and subject to the conditions set forth in
this Agreement.
2. Compensation. In consideration for Consultant’s performance of the Services pursuant to
this Agreement, HealthMarkets shall pay Consultant seventeen thousand and forty dollars ($17,040)
per week for each week of the Term. Consultant shall xxxx Healthmarkets at the end of each
calendar month for the total amount then owing for Services. Payment will be due within fifteen
(15) days of receipt of the invoice from Consultant. HealthMarkets shall reimburse Consultant for
all reasonable and documented out-of-pocket expenses incurred in furtherance of the Services. Such
expenses shall be reimbursable in accordance with established business expense policies of
HealthMarkets and shall be paid by HealthMarkets within thirty (30) days of receipt of satisfactory
documentation. Except as specifically provided above, Consultant shall be entitled to no other
compensation or benefits from HealthMarkets with respect to the Services, shall not be eligible to
participate in any employee benefit plans of HealthMarkets or any HealthMarkets Affiliate (as
defined below) and shall not be credited with service or age credit for purposes of eligibility,
vesting or benefit accrual under any employee benefit plan of HealthMarkets or any HealthMarkets
Affiliate.
3. Records. Consultant shall maintain complete, true and correct records relating to all
Services performed under this Agreement for a period of at least seven (7) years or such longer
period as may be required by law or regulations. Consultant shall provide to HealthMarkets, at
HealthMarkets’ request and at no cost to HealthMarkets, copies of documents supporting all fees and
expenses invoiced to HealthMarkets. For the avoidance of doubt, this Section 3 does not imply any
required level of Services during the Term.
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4. Audit. HealthMarkets will also have the right, at HealthMarkets’ expense and
from time to time during the Term of this Agreement and thereafter, to audit all records of
Consultant in connection with fees and expenses invoiced to HealthMarkets. For the avoidance of
doubt, this Section 4 does not imply any required level of Services during the Term.
5. Taxes. HealthMarkets shall not be obligated to pay any taxes based on Consultant’s
income, capital, franchise, or investment, or on any property owned by Consultant.
6. Term. The term of this Agreement (the “Term”) shall commence on August 13, 2011 (the
“Effective Date”) and shall continue until December 31, 2011, unless earlier terminated pursuant to
Section 9 of this Agreement. The Term of this Agreement may be extended upon mutual written
agreement of the parties.
7. No Agency. The parties expressly intend and agree that Consultant shall not be, and
shall not hold himself out as being, an agent of HealthMarkets. Consultant shall have no authority
to bind HealthMarkets to any agreement or obligation, express or implied.
8. Independent Contractor. The parties expressly intend and agree that Consultant is
acting as an independent contractor and not as an employee, affiliate or agent of HealthMarkets.
This Agreement shall not be construed as creating a partnership, joint venture, agency or
employment relationship. Consultant retains sole and absolute discretion, control, and judgment in
the manner and means of carrying out the assignments hereunder. Consultant understands and agrees
that he shall not be entitled to any of the rights and privileges established for HealthMarkets’
employees, including, but not limited to, the following: retirement benefits, medical insurance
coverage, life insurance coverage, disability insurance coverage, severance pay benefits, paid
vacation and sick pay, overtime pay, or any other benefit which HealthMarkets may offer to full or
part-time employees. Consultant understands and agrees that HealthMarkets will not pay or withhold
from the compensation paid to Consultant pursuant to this Agreement any sums customarily paid or
withheld for or on behalf of employees for income tax, unemployment insurance, social security,
workers’ compensation or any other withholding tax, insurance, or payment pursuant to any law or
governmental requirement, and all such payments as may be required by law are the sole
responsibility of Consultant. Consultant agrees to hold HealthMarkets harmless against, and
indemnify HealthMarkets for, any of such payments or liabilities for which HealthMarkets may become
liable with respect to such matters. HealthMarkets shall have no responsibility for any of
Consultant’s debts, liabilities or other obligations, or for the intentional, reckless, negligent
or unlawful acts or omissions of Consultant.
9. Termination.
(a) Termination for Breach. In the event of a material breach of this Agreement by
either party, the other party may terminate this Agreement immediately upon delivery of written
notice to the party in breach.
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(b) Fees. Upon the expiration or termination of this Agreement,
HealthMarkets shall pay to Consultant any unpaid and undisputed fees due for Services rendered
by Consultant as of the date of termination. Fees for any partial week in which Services are
performed during the Term will be pro-rated. Consultant shall not have any further entitlement to
compensation hereunder.
(c) Return of Materials Upon Termination of Agreement. Upon termination or expiration
of this Agreement, Consultant will promptly deliver to HealthMarkets originals and copies of all
materials, property, documents, data and other information developed or created in connection with
the performance of the Services, belonging to HealthMarkets or pertaining to any Confidential
Information (as defined below). Consultant shall not retain any Confidential Information unless
specifically authorized to do so in writing by HealthMarkets. Consultant shall not remove from
HealthMarkets’ premises or otherwise transfer in any way, including without limitation by
electronic means, any materials, property, documents or other information, or any reproduction or
excerpt thereof, belonging to HealthMarkets or containing or pertaining to any such Confidential
Information.
(a) Definition. For purposes of this Agreement, “Confidential Information” means all
information, regardless of the format in which it is provided, of HealthMarkets or its current or
future parents, subsidiaries, affiliates (collectively, “HealthMarkets Affiliates”) or its or their
suppliers, customers or other parties with whom they do business, which is provided, disclosed, or
developed in connection with the parties’ obligations pursuant to this Agreement, whether or not
such information is marked “Confidential.” Confidential Information shall include, without
limitation (i) HealthMarkets’ trade secrets, methodologies, business plans, supplier, customer and
provider lists, customer and provider data, plan or product design, cost and price data, marketing
information, software, computer and telecommunications systems, memoranda, papers, letters, e-mail,
notes, plans, documentation, records, analyses, studies and all copies thereof, relating to the
existing or planned business or technology of HealthMarkets or any HealthMarkets Affiliate; (ii)
any Work Product (as hereinafter defined), software in source code or object code, deliverables,
processes, specifications, or data developed by Consultant in connection with this Agreement; and
(iii) this Agreement and the terms contained herein, including, without limitation, the terms
regarding compensation set forth in this Agreement and the Schedules hereto, except to the extent
that Consultant is required to disclose such information in accordance with Section 12(f) of this
Agreement.
(b) Consultant Obligations. In performing the Services, Consultant may be exposed to
Confidential Information. Consultant agrees not to sell, license, transfer, publish, disclose,
display or otherwise make available to others, or to use any Confidential Information except for
the purpose of providing Services, unless Consultant first obtains the prior written consent of
HealthMarkets, or, as applicable, the owner of such Confidential Information. Consultant shall not
make, or permit to be made, any copies of Confidential Information, except in connection with the
Services. Consultant shall not, and shall not permit, the removal of any Confidential Information
(or any copy or summary thereof) from any HealthMarkets site or any other location at which the Services
are performed.
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(c) HIPAA Business Associate Agreement. Unless and until the parties execute such
documents and agreements as may be required to comply with the Health Insurance Portability &
Accountability Act of 1996 (“HIPAA”), including without limitation the Standards for Privacy of
Individually Identifiable Health Information codified at 45 CFR part 160 and part 164, subparts A
and E (the “Privacy Rule”), and other laws controlling the disclosure of health information,
Consultant shall not request of or accept from HealthMarkets, and HealthMarkets shall not provide
to Consultant, “protected health information” (as defined in the Privacy Rule) unless such
information is de-identified in compliance with 45 CFR §164.514.
11. Proprietary Rights.
(a) All results of any Services performed under this Agreement, including without limitation
any and all plan or product design, software (including object and source code), deliverables,
computer system designs, documentation, know-how, trade secrets, inventions (whether or not
patentable or reduced to practice), discoveries, methods, improvements, processes, developments,
works of authorship, materials, or data that Consultant makes, conceives, or devises, either solely
or jointly, as a result of Services performed hereunder (whether or not such service is completed)
(collectively, the “Work Product”), shall be deemed to be a work made for hire and made in the
course of the Services rendered hereunder.
(b) All right, title, and interest in and to the Work Product shall vest in HealthMarkets, and
Consultant shall have no right, title, or interest in or to such Work Product. To the extent that
title to any Work Product may not, by operation of law, vest in HealthMarkets or such Work Product
may not be considered work made for hire, all rights, title and interest therein are hereby
irrevocably assigned to HealthMarkets. All Work Product shall belong exclusively to HealthMarkets,
with HealthMarkets having the right to obtain and to hold in its own name, copyrights,
registrations or such other protection as may be appropriate to the subject matter, and any
extensions and renewals thereof. Consultant agrees to give HealthMarkets and any person designated
by HealthMarkets, reasonable assistance, in connection with any efforts by HealthMarkets to perfect
the rights defined in this Section 11(b). Such assistance shall include, without limitation,
Consultant’s assistance in the preparation of, and the execution of, any papers that HealthMarkets
may deem necessary or helpful for HealthMarkets to obtain, at HealthMarkets’ expense, any patents,
copyrights, trademarks or other proprietary rights. HealthMarkets shall reimburse Consultant for
reasonable and documented out-of-pocket expenses incurred by Consultant under this provision.
(c) Unless otherwise requested by HealthMarkets, upon the completion of the Services to be
performed hereunder or upon the earlier termination of this Agreement, Consultant shall immediately
turn over to HealthMarkets all Work Product developed hereunder. All Work Product reduced to
tangible form shall bear HealthMarkets’ copyright and trade secret notices, or such other
proprietary notice as HealthMarkets may specify.
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12. Consultant Warranties. Consultant warrants that:
(a) Consultant has full rights and authority to execute, deliver and perform his obligations
under this Agreement.
(b) During the Term of this Agreement, all Services will be performed in accordance with the
highest professional standards and in accordance with this Agreement.
(c) HealthMarkets shall receive free, good and clear title to all Work Product provided under
this Agreement.
(d) No Work Product provided hereunder, or process or methodology used in performing the
Services, infringes or shall infringe on any third party intellectual property right or contractual
right.
(e) Consultant shall comply with all applicable federal, state and local laws, regulations,
and ordinances, and HealthMarkets’ standards and specifications (as communicated in writing to
Consultant), in the performance of his obligations hereunder.
(f) The Consultant hereby represents to HealthMarkets that Consultant is not subject to any
employment agreement, non-competition agreement, non-disclosure agreement or other agreement,
covenant, understanding or restriction that would prohibit Consultant from executing this Agreement
or providing services hereunder, or which would in any manner limit or affect his obligations
hereunder. The Consultant further represents to HealthMarkets that he has disclosed his
relationship with HealthMarkets to any other person or entity to whom Consultant may be required to
disclose in accordance with the terms of any agreement or understanding, implied or otherwise.
13. Indemnity.
(a) Consultant agrees to indemnify, defend, and hold harmless HealthMarkets and its parents,
subsidiaries, affiliates, officers, directors, and employees, from any and all claims, actions,
liabilities, losses, damages, costs and expenses (including, but not limited to, reasonable
attorneys’ fees) to the extent based on:
(i) infringement of any patent, copyright, trademark, trade secret or other third party
intellectual property right or contractual right based on any Work Product or deliverable furnished
to HealthMarkets by Consultant pursuant to the terms of this Agreement or the use thereof by
HealthMarkets;
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(ii) any breach of this Agreement by Consultant; and
(iii) personal injury or damage to property arising out of the fault or negligence of
Consultant.
(b) HealthMarkets agrees to indemnify, defend, and hold harmless Consultant from any and all
claims, actions, liabilities, losses, damages, costs and expenses (including, but not limited to,
reasonable attorneys’ fees) to the extent based on any breach of this Agreement by HealthMarkets.
14. Non-Solicitation. During the term of this Agreement and for twelve (12) months
following the expiration or termination of this Agreement for any reason, Consultant shall not,
whether on his own behalf or on behalf of some other person or entity, (i) hire or seek to hire any
person who is at that time an employee of HealthMarkets or any HealthMarkets Affiliate, or who had
left the employ of HealthMarkets or any HealthMarkets Affiliate within six (6) months prior
thereto, to whom Consultant was introduced as a result of the Services or (ii) directly or
indirectly induce or encourage any such employee to leave the employ of HealthMarkets or any
HealthMarkets Affiliate. Notwithstanding the foregoing, Consultant may employ in the future any
such individuals currently employed or affiliated with HealthMarkets or any HealthMarkets Affiliate
who make initial contact by their volition, instead of by initial contact instituted by Consultant,
or whose initial contact is through indirect solicitation by general advertisement to the industry
at large.
15. Remedies. Consultant acknowledges and agrees that the violation of Sections 10, 11 and
14 above would result in a material detriment to HealthMarkets and would cause irreparable harm to
HealthMarkets, and that HealthMarkets’ remedy at law for any such violation would be inadequate.
In recognition of the foregoing, Consultant agrees that, in addition to any relief afforded by law
or this Agreement, including damages sustained by a breach of this Agreement and without the
necessity of proof of actual damages, HealthMarkets shall have the right to enforce this Agreement
by specific remedies, which shall include, among other things, temporary and permanent injunctions,
it being the understanding of the undersigned parties hereto that damages and injunctions all shall
be proper modes of relief and are not to be considered as alternative remedies.
16. Section 409A. This Agreement is intended to comply with the provisions of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury regulations relating
thereto or an except to Section 409A of the Code. For purposes of compliance with Section 409A of
the Code, each payment of compensation under this Agreement shall be treated as a separate payment
of compensation, and in not event may Consultant, directly or indirectly, designate the calendar
year of any payment under this Agreement. All reimbursements provided under this Agreement shall
be provided in accordance with the requirements of Section 409A of the Code, including, where
applicable, the requirement that (a) the amount of expenses eligible for reimbursement during one
calendar year shall not affect the amount of expenses eligible for reimbursement in any other
calendar year; (b) reimbursement of an eligible expense shall be made no later than the last day of
the calendar year following the
calendar year in which the expense is incurred; and (c) the right to any reimbursement shall not be
subject to liquidation or exchange for another benefit.
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17. Governing Law and Venue. The validity, interpretation, construction and performance of
this Agreement will be governed by and construed in accordance with the substantive laws of the
State of Delaware, without giving effect to the principles of conflict of laws of such State.
HealthMarkets and Consultant agree that any dispute or claim arising from this Agreement shall be
heard in the appropriate state or federal court in the State of Delaware, and the parties hereby
irrevocably submit to the jurisdiction of such courts.
18. Amendments. No amendment or modification of the terms or conditions of this Agreement
shall be valid unless in writing and signed by the parties hereto.
19. Successors and Assigns. The rights and obligations of HealthMarkets under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of
HealthMarkets. Consultant shall not be entitled to assign any of Consultant’s rights or
obligations under this Agreement in whole or in part, and any attempt to make such assignment shall
be void. HealthMarkets may assign this Agreement, or any right or obligation hereunder, upon
written notice to Consultant, to any HealthMarkets Affiliate without the consent of Consultant.
20. Entire Agreement. This Agreement (including any attached Schedules and Exhibits),
along with the Separation Agreement, dated as of August 25, 2011, sets forth the complete
understanding of the parties with respect to the appointment of Consultant and supersedes any and
all prior or contemporaneous communications, discussions, agreements, understandings, promises,
and/or representations made by either party to the other, whether oral, written, or in any other
form, not expressly included herein.
21. Notices. All notices, requests, demands and other communications provided for herein
shall be in writing, shall be delivered by hand, mailed by registered or certified first-class
mail, return receipt requested, postage prepaid or by telecopier or overnight courier (with proof
of delivery requested), shall be deemed given when received and shall be addressed to the parties
hereto at their respective address listed below or to such other persons or addresses as the
relevant party shall designate as to itself or himself from time to time in writing delivered in
like manner:
If to HealthMarkets, to:
If to Consultant, to:
B. Xxxxxx Xxxxxx
At the address last on the records of HealthMarkets
At the address last on the records of HealthMarkets
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22. Severability. If any provision of this Agreement is adjudged by any court to be void
or unenforceable in whole or in part, the remainder of the Agreement shall remain valid and
enforceable and the invalid portion shall be amended only to the extent necessary to render it
valid and enforceable.
23. Counterparts. This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and the same agreement.
24. Waiver. A failure of either party to exercise any right provided for herein shall not
be deemed to be a waiver of any right hereunder.
25. Survival. Sections 3, 4, 8, 9(b) and (c), 10, 11, 13, 14, 17, 21 and this Section 25
shall survive any termination or expiration of this Agreement.
_____________________________
B. Xxxxxx Xxxxxx
B. Xxxxxx Xxxxxx
By: | ______________________ | ||
Name: | ______________________ | ||
Title: | ______________________ | ||
Date: | ______________________ |
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