exv10w1






Exhibit 10.1




Consulting Agreement




     This Consulting Agreement (the “Agreement”) is entered into effective as of January 1, 2010
(the “Effective Date”), by and between HCCS Corporation dba HCC Service Company, a Delaware
corporation (the “Company”), and Edward H. Ellis, Jr. (the “Consultant”). The Company and the
Consultant are each a “party” and together are the “parties” to this Agreement.



Recitals




     WHEREAS, the Company desires to engage the Consultant to provide certain Services (as
hereinafter defined) on the terms provided herein; and



     WHEREAS, the Consultant desires to provide such Services to the Company.



Agreement




     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:



Article I.

Services to be Provided.




     The Company hereby retains the Consultant to provide, and the Consultant hereby agrees to
provide to the Company, for the Term (as defined below), or any extension thereof, certain services
(the “Services”) as set forth on Exhibit A to this Agreement.



Article II.

Consultant Compensation.




     For and in consideration for the Consultant’s performance of the Services and subject to the
terms and conditions of this Agreement, the Company shall pay the Consultant the compensation as
set forth on Exhibit A (the “Compensation”).



Article III.

Reimbursable Expenses.




     Notwithstanding any provision herein, the Company shall remain directly and primarily
responsible for all reasonable expenses incurred in connection with the Consultant’s discharging
the Services in accordance with the Company’s expense reimbursement policies. The Consultant shall
be entitled to reimbursement, in cash at the time incurred, for reasonable expenses incurred by or
on behalf of the Consultant for the benefit of the Company and attributable to the business of the
Company.



 









 





Article IV.

Effective Date, Term and Termination.




     This Agreement shall take effect on the 1st day of January, 2010, and shall
continue in effect for one (1) year (the “Term”); provided, however, that (a) this Agreement may be
terminated at any time by the Company or the Consultant upon sixty (60) days prior written notice
and (b) this Agreement will be automatically and immediately terminated upon Consultant’s breach of
the restrictive covenants described in Article X and Article XI.



Article V.

Independent Contractor Relationship.




     The Company retains the Consultant only for the purposes and to the extent set forth in this
Agreement. The Consultant’s relationship to the Company during the term of this Agreement shall be
that of an independent contractor. This Agreement shall not be construed to create any employment
relationship, partnership, trust, joint venture or other cooperative agreement between the Parties.
Except as otherwise agreed by the Company, the Consultant will have no authority or power to bind
the Company with respect to third parties or to represent to third parties that the Consultant has
authority or power to bind the Company. It is not the intention of the parties to this Agreement
to make them legal representatives or agents of each other or to create any fiduciary relationship
or additional contractual relationship between them. As an independent contractor, the Consultant
is not eligible for any Company-provided benefits, including, without limitation, short term
disability and long term disability, except as provided for in Exhibit A. Additionally, the
Consultant understands and agrees that the Employment Agreement executed on March 1, 2007, between
the Consultant and HCC Insurance Holdings, Inc. (the “Employment Agreement”), expired as of the
Effective Date.



Article VI.

Tax Responsibility.




     It is understood and agreed by the parties that each party shall be responsible for the
payment of its or his own taxes, licenses and fees (the “Taxes”) in connection with this Agreement.
Neither party shall be responsible or liable for the other party’s Taxes in connection with this
Agreement.



Article VII.

Confidential Information.




     Section 7.01 As used herein, “Confidential Information” means all technical and business
information (including financial statements and related books and records, personnel records,
customer lists, identities of customers and prospective customers, arrangements with customers and
suppliers, databases, computer programs and software, computer software methods and documentation,
graphic designs, hardware, analytical information, manuals, communications and reports, internal
policies, procedures, identity or other information about insurance claims, contract terms,
marketing data, premiums, costing data or other information, the Company’s or its Affiliates’
methods of operation, the procedures, forms and techniques used in servicing accounts, the
Company’s long range plans and other information or documents that



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the Company requires to be maintained in confidence for the Company’s continued business
success) of the Company whether patentable or not, which is of a confidential, trade secret and/or
proprietary character and includes information which is either developed by the Consultant (alone
or with others) or to which the Consultant has had access during his provision of the Services.
Confidential Information shall include, but is not limited to, all of the Company’s information of
a technical or business nature such as ideas, discoveries, inventions, improvements, trade secrets,
know-how, manufacturing processes, specifications, writings and other works of authorship, computer
programs, financial figures and reports, marketing plans, customer lists and data, and/or business
plans or data which relate to the actual or anticipated business of the Company or its actual or
anticipated areas of research and development or any actual or possible litigation or
administrative or governmental matter to which the Company is or may be a party, or in which the
Company may be engaged. Confidential Information shall also include but is not limited to
confidential evaluations of, and the confidential use or non-use by the Company or the Consultant
of technical or business information whether or not in the public domain. Confidential Information
shall not include information which is: (1) publicly known or becomes publicly known through no
unauthorized act of the Consultant; (2) lawfully received from a third party without restriction on
use or disclosure where such third party had the legal right to disclose such information; (3)
pre-approved in writing by the Company for disclosure; or (4) disclosed as required by law,
governmental agency or rule, or court order, so long as the Consultant provides the Company with
timely prior notice of such requirement and the ability to contest on a timely basis such
requirement.



     Section 7.02 The Consultant acknowledges and agrees that all Confidential Information about
Company that was previously provided in the course of employment with Company and Confidential
Information that will be provided to him in the course of the Term of this Agreement are and will
continue to be the exclusive property of Company. The Consultant shall, both during and after his
Services are completed with the Company, protect and maintain the confidential, trade secret and/or
proprietary character of all Confidential Information. The Consultant shall not, during or after
termination of his Services, directly or indirectly, use (for itself or another) or disclose any
Confidential Information, for so long as it shall remain proprietary or protectible as confidential
or trade secret information, except as may be necessary for the performance of Consultant’s duties
under this Agreement.



     Section 7.03 All writings, records, and other documents and things comprising, containing,
describing, discussing, explaining, or evidencing any Confidential Information, and all equipment,
components, parts, tools, and the like in the Consultant’s custody or possession that have been
obtained or prepared in the course of Executive’s Services with the Company shall be the exclusive
property of the Company and shall be delivered to the Company, without the Consultant’s retaining
any copies, upon notification of the termination of the Consultant’s employment or at any other
time requested by the Company.



     Section 7.04 Each of the Consultant’s obligations in this Article VII shall also apply to the
confidential, trade secret and proprietary information learned or acquired by it during his
Services with the Company from others with whom the Company or the Consultant has a business
relationship.



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     Section 7.05 The obligations set forth in this Article VII do not affect nor limit any other
confidentiality obligations by the Consultant set forth in any other agreement, and such
obligations are herein ratified and affirmed.



Article VIII.

Indemnification.




     Section 8.01 Except as provided in Section 8.02, the Company, including its transferees,
successors and assigns, agrees to defend, indemnify and hold the Consultant harmless from and
against any and all losses, liabilities, damages, demands, claims, litigation, defenses, suits,
proceedings, obligations, actions, judgments, causes of action, assessments, penalties, payments,
costs, reimbursements and expenses of any kind or nature whatsoever (“Indemnified Losses”), arising
in connection with or out of the Services performed by the Consultant whether or not occasioned by
the negligence, carelessness or want of skill of the Consultant.



     Section 8.02 By entering into this Agreement and receiving the Services provided by Consultant
under this Agreement, but subject to the other terms of this Agreement, neither the Company nor its
Affiliates shall be liable for any Damages (hereinafter defined) caused by the intentional
dishonesty, willful misconduct or gross negligence of Consultant or Consultant’s breach of this
Agreement. Consultant shall indemnify and hold harmless the Company and its Affiliates from and
against all losses, judgments, damages, expenses (including, without limitation, reasonable fees
and expenses of counsel), liabilities, judgments, and amounts paid in settlement (collectively
“Damages”) incurred by or asserted against the Company or any of its Affiliates arising as a result
of, in connection with or relating to the intentional dishonesty, willful misconduct or gross
negligence of Consultant in the performance of this Agreement or Consultant’s breach of this
Agreement.



Article IX.

Ideas, Inventions or Discoveries.




     Section 9.01 The Consultant shall promptly disclose to the Company all ideas, inventions or
discoveries, whether or not patentable, of which he may conceive or make, alone or with others,
during the term of his Services with the Company, and which directly or indirectly are based on his
knowledge of the information or the actual or anticipated business or interests of the Company.
The Consultant hereby assigns to the Company, or the Company’s nominee, without further
compensation, all of the Consultant’s right, title and interest in all such ideas, inventions or
discoveries, and any improvements or modifications therein, in all countries of the world.



     Section 9.02 Without further compensation but at the Company’s expense, the Consultant shall
give all testimony and execute all patent applications, rights or priority, assignments and other
documents and in general do all lawful things requested of the Consultant by the Company to enable
the Company to obtain, maintain, and enforce protection of such ideas, inventions and discoveries,
and any improvements or modifications therein, for or in the name of the Company, or the Company’s
nominee, in all countries of the world. However, should the Consultant render any of these
Services following termination of his Services, the



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Consultant shall be compensated at a rate per hour equal to the basic fee the Consultant
received from the Company at the time of termination and shall be reimbursed for reasonable
out-of-pocket expenses incurred in rendering the Services.



Article X.

Non-competition.




     The Company agrees to provide the Consultant with Confidential Information, which the
Consultant has not had access to or knowledge of before the execution of this Agreement. The
Consultant agrees that to protect the Company’s Confidential Information, it is necessary to enter
into the following restrictive covenant, which is ancillary to the enforceable promises between the
Company and Consultant in this Agreement: The Consultant agrees that during the Term and for a
period of two (2) years following any termination or expiration of the Term (the “Non-Compete
Period”), neither the Consultant nor any Affiliate (as hereinafter defined) of the Consultant
shall, unless acting on behalf of the Company, directly or indirectly, as owner, partner, joint
venturer, member, manager, employee, consultant, stockholder, broker, agent, principal, trustee,
director, licensor or in any capacity whatsoever engage in, become financially interested in, be
employed by, render any consultation or business advice with respect to, contribute knowledge to,
or have any connection with any business engaged in (a) activities in competition with the Company
in any geographic area or market in which the Company or any of its Affiliates is operating, or (b)
activities in any geographical area or market in which the Company or any of its Affiliates is
actively pursuing or formulating a plan to pursue operations during the Consulting Term
(collectively, a “Competitive Market”); provided, however, that the Consultant may own any
securities of any corporation which is engaged in such business and is publicly owned and traded
but in an amount not to exceed at any one time two percent (2%) of any class of stock or securities
of such corporation. The restrictive covenant contained in this Article X is a covenant
independent of any other provision of this Agreement, and the existence of any claim which the
Consultant may allege against the Company, whether based on this Agreement or otherwise, shall not
prevent the enforcement of this covenant. For purposes of determining the termination of the
Non-Compete Period, the length of time for which this covenant not to compete shall be in force
shall not include any period of violation or any other period required for litigation during which
the Company seeks to enforce this covenant. In the event that this covenant not to compete shall
be determined by any court of competent jurisdiction to be unenforceable by reason of its extending
for too long a period of time or over too large a geographical area or by reason of its being too
extensive in any other respect, it shall be interpreted to extend only over the longest period of
time for which it may be enforceable, and/or over the largest geographical area as to which it may
be enforceable and/or to the maximum extent in all other aspects as to which it may be enforceable,
all as determined by such court in such action. As used in this Agreement, “Affiliate” of any
person means any person, directly or indirectly, controlling, controlled by or under common control
with such person, and includes any person who is an officer, director or employee of such person,
any person who would be deemed to be an “affiliate” or an “associate” of such person, as those
terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, and, in the case of the Consultant, any of his family members. As used in
this definition, “controlling” (including, with its correlative meanings, “controlled by” and
“under common control with”) means possession, directly or indirectly, of power to direct or cause
the direction of management or policies (whether through ownership of securities, partnership or



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other ownership interests, by contract or otherwise). Following the expiration of the
Non-Compete Period, Consultant shall continue to be obligated under Article VII not to use or
disclose Confidential Information of the Company so long as it shall not be publicly available.



Article XI.

Non-solicitation.




     The Company agrees to provide the Consultant with Confidential Information, which the
Consultant has not had access to or knowledge of before the execution of this Agreement. The
Consultant agrees that to protect the Company’s Confidential Information, it is necessary to enter
into the following restrictive covenant, which is ancillary to the enforceable promises between the
Company and Consultant in this Agreement: The Consultant agrees that during the Term and for a
period of two (2) years following any termination or expiration of the Term, neither the Consultant
nor any Affiliate (as hereinafter defined) of the Consultant shall, unless acting on behalf of the
Company, (a) solicit, employ, retain as a consultant, interfere with or attempt to entice away from
the Company or its Affiliates, any individual who is, or has agreed to be, within one (1) year of
such solicitation, employment, retention, interference or enticement, employed or retained by the
Company or its Affiliates in any capacity whatsoever; or (b) interfere with, disrupt or attempt to
disrupt any relationship or prospective relationship, contractual or otherwise, existing prior to
or at the time of the termination of the Consulting Period, between the Company or any of its
Affiliates and any customers, clients or other persons with whom the Company or its Affiliates
deal.



Article XII.

Amendments.




     This Agreement may be amended or modified only by written agreement of the parties.



Article XIII.

No Assignment or Waiver.




     This Agreement is personal in nature and may not be assigned, sold, pledged as security or
otherwise transferred, nor may any provision hereof be waived by either party without the prior
written consent of the other party.



Article XIV.

Delegation of Duties.




     The Consultant may not delegate or assign any of his duties or obligations hereunder.



Article XV.

Governing Law; Jurisdiction.




     This Agreement shall be governed by and construed in accordance with the internal law, and
not the law of conflicts, of the State of Texas. The parties hereto irrevocably consent to, and
waive any objection to the exercise of, personal jurisdiction by the state and federal courts
located in the State of Texas with respect to any action or proceeding arising out of this
Agreement and agree that all disputes arising out of this Agreement shall be adjudicated in such
courts.



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Article XVI.

Attorneys’ Fees.




     In the event that any party finds it necessary to bring an action at law or other proceedings
against the other party to enforce any of the terms hereof, the party prevailing in any such action
or other proceeding shall be paid by the other party its reasonable attorneys’ fees as well as
court costs.



Article XVII.

Notices.




     All notices given hereunder shall be considered as properly given when delivered by hand or
sent by first class mail to the parties at addresses set forth on the signature page. Each party
shall have the right to change its address for notice by giving of fifteen (15) days prior written
notice thereof to the other party hereto.



Article XVIII.

Captions.




     The captions of the sections herein are for convenience of reference only and shall be
accorded no substantive significance in the construction hereof.



Article XIX.

Binding Effect.




     This Agreement shall be binding upon and inure the benefit of the Consultant, the Company and
their respective successors and assigns. This Agreement or a similar agreement providing in
substance for the same Consultant compensation and reimbursement rights to the Consultant and his
Affiliates shall remain in effect upon any reconstitution and continuation of the Company after a
dissolution, merger or liquidation of the Company.



Article XX.

Remedies, Modification and Severability.




     The Consultant acknowledges that the restrictions contained in this Agreement Article X and
Article XI, in view of the nature of Company’s business, are reasonable and necessary to protect
Company’s legitimate business interests. Therefore, the Consultant and the Company agree that the
Consultant’s breach of this Agreement will result in irreparable harm to the Company, that no
adequate remedy at law is available, and that the Company shall be entitled to injunctive relief;
however, nothing herein shall prevent the Company from pursuing any other remedies at law or at
equity available to the Company. Should a court of competent jurisdiction declare any of the
covenants set forth in this Agreement unenforceable, the court shall be empowered to modify or
reform such covenants so as to provide relief reasonably necessary to protect the interests of the
Company and the Consultant and to award injunctive relief, or damages, or both, to which the
Company may be entitled. If any provision of this Agreement is declared by a court of last resort
to be invalid, the Company and the Consultant agree that such declaration shall not affect the
validity of the other provisions of this Agreement. If any provision of this Agreement is capable
of two constructions, one of which would render the



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provision void and the other of which would render the provision valid, then the provision
shall have the construction which renders it valid.



Article XXI.

No Third Party Beneficiary.




     Any agreement to pay an amount or any assumption of liability herein contained, express or
implied, shall be only for the benefit of the undersigned parties and their permitted successors
and assigns, and such agreements and assumptions shall not inure to the benefit of the obligees of
any other party, whomsoever, it being the intention of the undersigned that no one shall be deemed
to be a third party beneficiary of this Agreement.



Article XXII.

Entire Agreement.




     This Agreement constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all previous proposals, both oral and written, negotiations,
representations, commitments, writings and all other communications between the parties. No oral
statements or prior written material not specifically incorporated in this Agreement shall be of
any force and effect. Consultant acknowledges and represents that in executing this Agreement, he
did not rely, and has not relied, on any communications, promises, statements, inducements, or
representation(s), oral or written, by Company or any of its Affiliates, except as expressly
contained in this Agreement. This Agreement may not be released, discharged, changed or modified
except by an instrument in writing signed by a duly authorized representative of each of the
parties.



Article XXIII.

Survival.




     The covenants contained in Article VII, Article VIII, Article IX, Article X, Article XI, and
Article XX shall survive the conclusion of the Consultant’s term of service to the Company.
Further, all provisions which may reasonably be interpreted or construed to survive the expiration
or termination of this Agreement shall survive the expiration or termination of this Agreement.



Article XXIV.

Counterparts.




     This Agreement may be executed in multiple counterparts, each of which shall be an original
but all of which shall constitute one and the same instrument.



[signature page follows]





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     EXECUTED effective as of the 1st day of January, 2010.



	 	 	 	 	 
	 	COMPANY:

HCCS Corporation dba HCC Service Company

 	 
	 	By:  	/s/  John N. Molbeck, Jr. 	 
	 	 	Name:  	John N. Molbeck, Jr. 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 	 	Address: 	13403 Northwest Freeway

Houston, Texas 77040 	 
	 	 	Date: 	November 19, 2009	 


	 	 	 	 	 
	 	CONSULTANT:

 	 
	 	/s/ Edward H. Ellis, Jr.
 	 	 
	 	Edward H. Ellis, Jr. 	 	 
	 	Address: 	 	 	 
	 	Date: 	11/18/09 	 
	 




Consulting Agreement

Signature Page





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EXHIBIT A

Services





     Consulting services (“Services”) as requested by the Company from time to time.



     Reporting to the Executive Vice President and Chief Financial Officer of the Company.



     Consultant shall provide up to 1100 hours of Services per year during the Consulting Period,
as required by the Company. In general, Consultant shall be available three (3) days per week
during the Company’s normal business hours.



     Subject to the other provisions of this Agreement, Consultant shall provide the Services under
this Agreement with the same degree of care, skill and prudence that would be customarily exercised
for what he reasonably believes to be in the best interest of the Company.



Compensation




     $200,000 per annum, payable in equal, semi-monthly installments.



     Consultant shall be eligible for consideration for a discretionary bonus at the sole
discretion of the Company. Any discretionary bonus payment, if any, shall be payable on or before
March 15 of the year following the year for which such bonus is to be paid.



Exhibit A to

Consulting Agreement