CONSULTING AGREEMENT
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This Consulting Agreement (this "Agreement") entered into and
effective as of November 1, 2002 (the "Effective Date"), is between FPIC
Insurance Group, Inc. ("FPIC"), a Florida corporation, and Xxxxx X. Xxxxx
("Consultant"). FPIC and Consultant may hereinafter be referred to individually
as the "Party" and together as the "Parties."
WITNESSETH:
WHEREAS, FPIC recognizes that Consultant has experience, knowledge
and background that are valuable in the operation of its and its affiliates'
professional liability insurance business; and
WHEREAS, Consultant has resigned his positions and employment, as of
November 1, 2002, as Director, President and Chief Executive Officer of First
Professionals Insurance Company, Inc. ("First Professionals"), as Director of
Anesthesiologists Professional Assurance Company ("APAC"), as Director of
Employers Mutual, Inc. ("EMI"), as Director of FPIC Insurance Agency, Inc.
("Agency"), and as Director of The Tenere Group, Inc. ("Tenere"), each such
resignation being evidenced by a Letter of Resignation; and
WHEREAS, subject to the terms and conditions hereinafter set forth,
FPIC desires to retain the services of Consultant as an independent contractor,
and not as an employee, and Consultant is willing to make his services available
to FPIC as a consultant, acting as an independent contractor and not as an
employee, subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the Parties agree as follows:
AGREEMENT
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The Parties hereby acknowledge and agree that this Agreement fully
replaces in their entirety any employment agreements or related agreements
heretofore in effect between the Parties, including the Employment Agreement
dated May 1, 2000 between the Parties, as amended and extended from time to time
(all such previous employment and related agreements together hereinafter
referred to as the "Employment Agreements") and the Parties hereby further
acknowledge and agree that neither Party has any future obligations under such
Employment Agreements, and further in consideration of the foregoing, and of the
mutual promises set forth herein, and intending to be legally bound, the Parties
hereto agree as follows:
1. Consultant Engagement.
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a. Agreement to Retain. FPIC hereby agrees to engage Consultant,
effective as of November 1, 2002, to render, as an independent
contractor, consulting services on such projects or programs
as directed from time-to-time by the President of FPIC, or
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his designee. While Consultant will have no set schedule or
required hours of services, Consultant shall devote such time,
attention and energy to the business and affairs of FPIC as
necessary for the satisfactory completion of the services as
set forth herein, which days shall not exceed ten business
days per month. Notwithstanding any other provision of this
Agreement, in performing services under this Agreement,
Consultant shall report solely to the President of FPIC or his
designee until otherwise directed by the President of FPIC.
b. Acceptance. Consultant hereby accepts the engagement to
provide consulting services to FPIC on the terms and
conditions set forth herein. Consultant will personally
perform these consulting services.
2. Compensation and Other Benefits.
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a. Compensation. Subject to the termination provisions set
forth in Section 3 below, in consideration of the premises and
Consultant's agreement to enter into this Agreement and the
performance of the consulting services, more particularly
described herein, FPIC hereby agrees to pay Consultant a
monthly fee for each of the twenty months of the term of this
Agreement, as set forth in Section 3 below, in the amount
of Nineteen Thousand United States Dollars (US $19,000.00) per
month, payable in arrears, due on the last day of each
calendar month, commencing with the end of the first month
following the Effective Date.
b. Cellular Phone. In addition, Consultant shall be entitled to
use of the cellular telephone and telephone number
(000) 000-0000, previously provided to Consultant by First
Professionals for his use during his prior employment, at the
expense of FPIC, until the termination of this Agreement.
c. Automobile Allowance. During the term of this Agreement, FPIC
shall pay Consultant $2,000.00 per month as an allowance for
automobile and automobile expenses. FPIC also agrees to pay
Consultant a one-time payment for automobile expenses of
$5,000.00, payable prior to November 15, 2002. Consultant
agrees that the payment of such amounts constitutes
compensation under this Agreement and further agrees to assume
responsibility for all taxes due and payable as a result of
such taxable event; and notwithstanding any other provisions
of this Agreement, in the event of early termination of this
Agreement, Consultant acknowledges that payment of such
monthly amounts will be immediately discontinued.
d. Travel Expenses. FPIC shall reimburse Consultant for
reasonable travel expenses incurred in providing the
consulting services provided for under this Agreement.
e. Office Space. Consultant acknowledges that FPIC will not
provide Consultant office space or administrative support.
f. Benefits. FPIC shall provide Consultant a complete accounting
of all retirement benefits to which he is entitled as a result
of his resignation of his positions and employment effective
as of November 1, 2002, including vested balances in FPIC's
qualified retirement plans (defined contribution (401K) plan
and defined benefit
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plan), an accounting of payroll deductions under FPIC's
Employee Stock Purchase Plan, and an accounting of stock
option grants under FPIC's Omnibus Incentive Plan. FPIC shall
assist Consultant where appropriate in rolling funds into
personal XXX accounts.
g. Other Remuneration. Consultant acknowledges that he will not
receive any additional wages, bonuses, vacation, severance or
any other form of remuneration or benefits of any nature as a
result of his previous status as an employee of FPIC.
3. Term and Termination.
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a. Term. FPIC shall retain Consultant and Consultant shall render
consulting services to FPIC for a period of twenty (20)
months, commencing as of November 1, 2002; provided, however,
that this Agreement may be terminated prior to such time (and
therefore, the amounts payable as described in Section 2 above
shall not be paid) if any one of the following shall occur:
(i) Consultant refuses to perform in a timely
manner the consulting services described in
Section 1 above, and Consultant shall have
failed to cure the same to the reasonable
satisfaction of FPIC within twenty (20) days
after receiving notice of or otherwise
knowing of any such refusal; or
(ii) Consultant fails to perform in a reasonably
satisfactory manner any material consulting
services described in Section 1 above, and
Consultant shall have failed to cure the
same to the reasonable satisfaction of FPIC
within thirty (30) days after receiving
notice of or otherwise knowing of any such
failure; or
(iii) Except as provided in clause (iv) below,
Consultant is in breach of any other
provisions of this Agreement, and Consultant
shall have failed to cure the same to the
reasonable satisfaction of FPIC within
thirty (30) days after receiving notice of
or otherwise knowing of any such breach; or
(iv) Consultant is in breach of any provisions of
Section 5, 7 or 8 of this Agreement.
b. Amendments. This Agreement shall continue under the terms and
conditions set forth herein until terminated as set forth
above. This Agreement may be amended or modified only by a
written instrument executed by each of the Parties that states
specifically that it is intended to amend or modify this
Agreement.
c. Renewal. This Agreement shall terminate under the terms and
conditions set forth herein. This Agreement may be renewed
only by a written instrument executed by each of the Parties
that states specifically that it is intended to renew the
Agreement at the end of its term.
d. Termination Due to Disability or Death. Consultant hereby
agrees that disability for a period of sixty (60) days or more
or death of Consultant during the term of this
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Agreement shall cause termination of this Agreement and
cessation of any obligations of FPIC hereunder, including any
future payment obligations.
4. Independent Contractor.
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Consultant is retained by FPIC only for the purpose and to the
extent herein set forth and Consultant's relationship to FPIC shall,
during the period of Consultant's services hereunder, be that of an
independent contractor under a "work for hire" arrangement. All work
product developed by Consultant in performance of his duties under
this Agreement shall be deemed owned and assigned to FPIC. This
Agreement is not authority for Consultant to act for FPIC as its
agent or to bind or make commitments for FPIC or its affiliates.
Consultant will not be eligible for any employee benefits, nor will
FPIC make deductions from fees to the Consultant for taxes,
insurance, bonds or the like. Consultant retains discretion in
performing the tasks assigned, within the scope of work specified.
5. Noncompetition.
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a. Confidential Information. FPIC and its affiliates own and have
developed and compiled, and will develop and compile, certain
trade secrets, proprietary techniques and other confidential
or proprietary information that have value to its business,
hereinafter referred to as "Confidential Information." This
Confidential Information includes not only information
disclosed to Consultant by FPIC and its affiliates, but also
information developed or learned by Consultant during the
course of his relationship with FPIC. FPIC acknowledges,
however, that Consultant had extensive experience in and
knowledge of insurance matters, particularly physician
professional liability insurance, prior to his employment by
FPIC.
Confidential Information shall include, by example, without
limitation, the following:
(i) Trade secrets, computer software, programming
methods, innovations, trademarks, data, formats,
survey results, and research projects;
(ii) Information about costs, profits, markets,
sales, claims, reserves, contracts, pending
litigation and lists of current and
prospective clients or insureds, agents,
endorsees or agencies;
(iii) Business, marketing, advertising and strategic
plans;
(iv) Forecasts, unpublished financial information,
budgets, projections and pro-forma information,
correspondence, analyses; and
(v) Employee personnel files and compensation
information.
For purposes of this Agreement, the term "affiliates" of a Party
shall mean any person or entity controlling, controlled by or under
common control with such Party.
b. Consultant's Duty Regarding Confidential Information.
Consultant hereby agrees that all Confidential Information
owned, developed or compiled by FPIC or its
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affiliates and relating solely to FPIC or its affiliates is
and shall continue to be the exclusive property of FPIC,
whether or not prepared in whole or in part by Consultant or
on behalf of the Consultant. Consultant shall not, at any
time following the execution of this Agreement, divulge or
disclose, directly or indirectly, in any manner, to any
persons, corporations or other entities or use or cause or
authorize any persons, corporation or other entities to use,
any Confidential Information known to Consultant (not already
or hereafter otherwise made public) about the affairs and
business of FPIC or its affiliates, or make the same available
to any person or entity without the prior written consent of
the President of FPIC, or his designee, unless the Consultant
is required to make such disclosure pursuant to a valid
subpoena or court order or otherwise under applicable law. The
provisions of this subparagraph b. shall be breached only if
the disclosure of Confidential Information has caused or would
cause material damage or material harm to FPIC or its
affiliates.
c. Remedies for Breach of Duty Regarding Confidentiality.
Consultant understands and agrees that the covenants,
restrictions and prohibitions against disclosure of
Confidential Information in this Agreement are in addition to,
and not in lieu of, any rights or remedies that FPIC or its
affiliates may have available pursuant to the laws of any
jurisdiction or at common law to prevent disclosure of trade
secrets or proprietary information, and the enforcement by
FPIC or its affiliates of their respective rights and remedies
pursuant to this Agreement shall not be construed as a waiver
of any other rights or available remedies that any of them may
possess in law or equity absent this Agreement.
d. Nondisclosure of Confidential Information Under Law. If
Consultant is required to disclose any Confidential
Information regarding FPIC or its affiliates pursuant to a
valid subpoena or court order or otherwise under applicable
law, Consultant will provide FPIC with written notice thereof,
a reasonable time prior to such disclosure, if possible, so
that FPIC may seek a protective order or other appropriate
remedy.
e. Nondisclosure of the Terms and Conditions of this Agreement.
Consultant hereby agrees that he will not disclose or cause to
be disclosed any of the terms or conditions of this Agreement,
except that Consultant may disclose this Agreement to his
spouse, personal attorney or tax preparer and as required by
law or a court of competent jurisdiction. If Consultant
breaches this confidentiality provision, FPIC may take any
action authorized by law to enjoin further unauthorized
disclosure and to remedy any damages caused by such breach.
f. Restrictive Covenants. Consultant expressly agrees that
during the term of this Agreement, Consultant shall not,
without the prior written consent of the President of FPIC,
directly or indirectly, own, operate, manage, have a
proprietary interest of any kind in, extend financial
assistance to, solicit, encourage or handle patronage for, be
employed by or serve as a consultant, officer, director,
employee, or in any other capacity for any person,
corporation, company, partnership or other entity or
organization in the medical professional liability insurance
business in the states of Florida, Alabama, Arkansas, Georgia,
New York, Pennsylvania, Ohio, Missouri or Kansas or the
business of providing management or other insurance services
in the
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states of Florida, Alabama, Arkansas, Georgia, New York,
Pennsylvania, Ohio, Missouri or Kansas for or with respect to
any medical professional liability insurer.
g. Inadequacy of Remedy at Law. Consultant acknowledges and
agrees that FPIC's or its affiliates' remedy at law from
breach of his duty and obligations under this Section 5 may be
inadequate, and agrees and consents that temporary and/or
permanent injunctive relief may be entered enjoining him from
breaching this Agreement and further agrees that any
proceeding may be brought to enforce any provision of this
Agreement without the requirement that FPIC prove actual
damages as a result of the breach of this Agreement.
h. Reasonable and Necessary Restrictions. Consultant acknowledges
that the restrictions, prohibitions and other provisions of
this Section 5 are reasonable, fair and equitable in scope,
term and duration, are necessary to protect the legitimate
business interests of FPIC, and are a material inducement to
FPIC to enter into this Agreement.
i. Enforceability. In the event that any restriction contained
in this Section shall be held to be too broad or too long in
duration to allow enforcement of such restriction to its full
extent, then such restriction shall be enforced to the maximum
extent permitted by law, and Consultant hereby consents and
agrees that such scope or duration may be judicially modified
accordingly in any proceeding brought to enforce such
restriction.
6. Duty to Surrender Materials.
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Within ten business days after written request by FPIC, Consultant
will return to FPIC all materials of FPIC or any of its affiliates,
including copies thereof, in his possession or control, including
without limitation, all lists, books, records, data and other
information concerning FPIC or its affiliates recorded, stored,
maintained, or operated by electronic, mechanical or photographic
process, whether computerized or not, all management studies,
business or strategic plans, budgets, notebooks and all other
printed, typed or written materials, documents and data, including
data created from such materials by or on behalf of Consultant.
7. Wrongful Inducement.
--------------------
Consultant hereby acknowledges and agrees that any attempt on his
part to induce others to leave FPIC's employ or the employ of any
affiliate thereof, or any efforts by Consultant to interfere with
FPIC's relationships with its employees, or the relationships of any
affiliate with its employees thereof, would be harmful and damaging
to FPIC and its affiliates. Consultant expressly agrees that during
the term of this Agreement and for a period of two (2) years after
termination of this Agreement, Consultant will not, in any manner,
directly or indirectly, or through any means, persons or entities:
(i) induce or attempt to induce any employee of FPIC or any
affiliate, to terminate his or her employment; (ii) interfere with
or disrupt FPIC's or any affiliate's relationship with its
employees; (iii) solicit, entice, take away or employ any person
employed by FPIC or its
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affiliates; or (iv) induce or attempt to induce any party to
terminate its relationship with FPIC or its affiliates, if such
relationship is known to Consultant.
8. Nondisparagement.
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a. Nondisparagement. During the term of this Agreement,
Consultant shall not knowingly make materially false,
disparaging, or derogatory statements of a material nature
regarding FPIC or its affiliates or their current or former
shareholders, directors, officers, employees, agents,
policyholders or representatives.
b. Mutuality. During the term of this Agreement, FPIC shall not
knowingly make materially false, disparaging, or derogatory
statements of a material nature regarding Consultant.
c. Inquiries. Consultant agrees that he will not act as a
spokesperson for FPIC or its affiliates unless instructed to
do so by the President of FPIC, and that Consultant shall
refer all business inquiries regarding FPIC or its affiliates
to the President of FPIC or his designee in writing.
9. Assignability.
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Neither this Agreement nor the rights nor duties arising hereunder
shall be assigned by either Party without the prior written consent
of the other Party, except FPIC may assign its rights, obligations
and responsibilities under this Agreement to (i) a successor or
assign all of or substantially all of its business or assets or (ii)
any corporation with which it merges or with which it may be
consolidated.
10. Binding on Successors.
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This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, representatives and
permitted assigns.
11. No Waiver.
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No provision of this Agreement shall be deemed waived by course of
conduct unless such waiver is made in a writing signed by both
Parties stating that it is intended specifically to modify this
Agreement, nor shall any course of conduct operate or be construed
as a waiver of any subsequent breach of this Agreement, whether of a
similar or dissimilar nature.
12. Superseding Agreement.
---------------------
This Agreement supersedes any other agreements, either written or
oral, that may have been made or entered into by the Parties (or by
any director, officer, agent, or other representative of such
Parties) relating to the matters contemplated hereby.
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13. Separable Provisions.
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In the event that any provision contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall
not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provisions
had never been contained herein and, in lieu of each such illegal,
invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be
possible but still be legal, valid and enforceable.
14. Governing Law.
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This Agreement and the legal relations between the Parties shall be
governed by and construed in accordance with the substantive laws of
the State of Florida without regard to the principles of conflicts
of laws.
15. Counterparts.
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
16. Prevailing Party.
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In the event of a dispute under this Agreement, the prevailing Party
shall be entitled to recover from the other Party its or his
reasonable attorneys' fees and related costs (whether in preparation
for or at trial, on appeal, in bankruptcy or otherwise).
17. Entire Agreement.
----------------
This Agreement contains the entire understanding and agreement
between the Parties with respect to its subject matter and
supersedes any prior or contemporaneous written or oral agreements,
representations or warranties between them respecting the subject
matter hereof.
18. Rights Cumulative.
-----------------
The rights and remedies provided by this Agreement are cumulative,
and the exercise of any right or remedy by either Party (or by its
successors), shall not preclude or waive its right to exercise any
or all other rights and remedies.
19. Remedies for Breach.
-------------------
The Parties agree that, in the event of breach or threatened breach
of this Agreement, by either Party, the non-breaching Party shall
have all remedies, including legal and equitable remedies, available
under the law.
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20. Agreement to Perform Necessary Acts.
-----------------------------------
Consultant agrees to perform any further acts and to execute and
deliver any further documents as may reasonably be necessary to
further evidence or carry out the provisions of this Agreement.
21. Compliance with Law.
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In connection with the services rendered hereunder, Consultant
agrees to abide by all federal, state, and local laws, ordinances
and regulations.
22. Taxes.
-----
Consultant agrees to pay all applicable local, state and federal
taxes arising from the compensation or benefits received by
Consultant under this Agreement.
23. Captions.
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The headings in this Agreement are for convenience only and do not
affect the interpretation of this Agreement
24. Interpretation.
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No provision of this Agreement shall be construed against or
interpreted to the disadvantage of either Party by any court,
governmental or judicial authority by reason of that Party's having,
or being deemed to have, structured, written, drafted or dictated
such provisions.
25. Consultant's Acknowledgement and Representation regarding
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Consultation with Attorney.
--------------------------
Consultant hereby acknowledges and represents to FPIC that he
engaged an attorney, having appropriate knowledge and expertise, to
review this Agreement on his behalf and advise him with respect to
this Agreement in advance of its execution.
26. Survival.
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Notwithstanding any other provisions of this Agreement, the
provisions of Sections 2g, 5 (except subparagraph f), 6, 7, 14, 16,
18, 19, 20, 22, 26 and 27 of this Agreement shall survive
termination of this Agreement. In addition, notwithstanding any
other provisions of this Agreement, the provisions of Sections 5, 7
and 8 of this Agreement and the remedies for the breach of Sections
5, 7 and 8 shall be in effect and apply from October 11, 2002,
through October 31, 2002.
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27. Notices.
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All notices, demands, requests and other communications hereunder
shall be in writing and shall be deemed to be duly given and shall
be effective upon receipt if delivered by hand, or sent by certified
United States mail, postage prepaid and return receipt requested or
by prepaid overnight express service or by facsimile transmission
with confirming answer back. Notices shall be sent to the Parties at
the following addresses (or at such other addresses for a Party as
shall be specified by like notice; provided that such notice shall
be effective only upon receipt thereof):
a. If to FPIC:
Xxxxxxx Goes Xxxx, Corporate Counsel
FPIC Insurance Group, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
b. If to Consultant:
Xxxxx X. Xxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000
With copy to:
Xxxxxxx X. Xxxxxxxx, Xx., Esquire
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
FPIC INSURANCE GROUP, INC.
/s/ Xxxxxxx Goes Xxxx /s/ Xxxx X. Xxxxx
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Witness By: Xxxx X. Xxxxx
Its: Director, President and Chief
Executive Officer
CONSULTANT
/s/ Xxxxxxx X. Xxxxxxxx, Xx. /s/ Xxxxx X. Xxxxx
---------------------------- -----------------------------------------
Witness Xxxxx X. Xxxxx
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